Policies in Portugal

In Portugal all the island territories follow the same national law, applicable to the electrical facilities in all country on matters related with the activities of generation, energy storage, auto-consumption, transmission, distribution, trading of electricity, as well as organization of markets, issue of guarantees of origin, unless when there is specific regional legislation on some specific matters. Decree-Law 15/2022, from January 2022, is the law of the national electric system (SEN – Sistema Elétrico Nacional).

The Relevant European Legislative Framework that was transposed into the Portuguese legislation correspond to: 

• Internal Electricity Market Directive: DIRECTIVE (EU) 2019/944
• Renewable Energy Directive: DIRECTIVE (EU) 2018/2001

The national grid code, where the requirements for generation are specified, is described in Portaria n.º 73/2020 from 16 March 2020. This legal document transposes and adapts the EU Regulation 2016/631 from 14 April 2016.

Additional updates as of 2023 include:

• Network Access and Interconnections (RARI): implemented under Regulation 818/2023, this code defines rules on network access, capacity management, and interconnection planning. It aims to increase transparency in grid operations and efficient capacity allocation across high, medium, and low-voltage networks.
   
• Self-Consumption and Renewable Energy Communities: expanded guidelines in Decree-Law n.º 15/2022 enable broader self-consumption rights, streamlined licensing, and the option to form energy communities, allowing multiple users to share renewable energy generation.
   
• Municipal Contributions: for facilities with over 50 MVA, operators must provide free public access to energy facilities or charging stations, or compensate municipalities proportionately.

Portugal has implemented a range of support mechanisms to enhance its electricity sector, focusing on financial incentives, non-financial assistance, and specific provisions for the Autonomous Regions of Madeira and the Azores. These initiatives are overseen by designated competent authorities to ensure effective implementation and regulation.

The Portuguese government has significantly revised its renewable energy targets since the initial NECP 2030 document. The updated plan now aims for renewables to constitute 85% of electricity production by 2030, an increase from the previous 80% target. Moreover, electricity generation from renewable energy sources in Portugal includes tax benefits such as corporate income tax deductions for research and development in renewable technologies, potential exemptions from municipal property taxes for renewable installations, and favourable energy taxation regimes for energy produced from renewable sources.

Financial Support Mechanisms

• Feed-in Tariffs and Auctions: The Portuguese government offers feed-in tariffs to encourage investments in renewable energy technologies. Additionally, competitive auctions, particularly in the solar energy sector, have been established to manage the high demand for electricity production permits and to optimise grid capacity allocation.
• Incentive Programmes: Programmes such as "More Sustainable Buildings", from the Environmental Fund, provide subsidies to promote the integration or enhancement of sustainable, energy-efficient features in buildings.

Non-Financial Support Mechanisms 

• Technical Assistance and Capacity Building: The Directorate-General for Energy and Geology (DGEG) offers technical support and develops regulations to promote energy efficiency and the integration of renewable energy sources.
• Policy and Regulatory Frameworks: The government has established comprehensive policies, such as the National Energy and Climate Plan (NECP) 2030.

Specific Support for Madeira and Azores Islands

• Madeira: In Madeira, efforts are underway to enhance energy storage and increase the penetration of renewable energy sources. The region is focusing on projects that promote energy efficiency, the transition to electric mobility, and the development of energy storage solutions to reduce reliance on thermal power plants.
• Azores: The Azores have implemented the PROENERGIA programme, an incentive system designed to boost energy production from renewable resources within the region.

• Energy Services Regulatory Authority (ERSE)
• Directorate-General of Energy and Geology (DGEG)
• Azores Regional Directorate of Energy (DREn)
• Ministry of Environment and Energy
• Environmental Fund

As of February 2025, the Portuguese government has updated its National Energy and Climate Plan (NECP) with more ambitious targets for renewable energy integration. The revised plan aims to achieve 93% renewable energy in electricity consumption by 2030, an increase from the previous target of 85% . Additionally, the government intends to meet 51% of the country's final energy needs with renewables by 2030, up from the earlier goal of 47%. In the heating and cooling sectors, the NECP has set an indicative target of 63% renewable energy share by 2030.

These solutions are supported through subsidies and a tax regulation.

Financial Support Mechanisms

• More Sustainable Buildings Programme (Programa de Edifícios Mais Sustentáveis): This Environmental Fund programme supports energy efficiency improvements, including the installation of efficient heating and cooling systems.
• Energy Efficiency Fund (Fundo de Eficiência Energética - FEE): This public fund provides financial assistance to projects aimed at enhancing energy efficiency across various sectors, including residential heating and cooling.
• Tax Exemptions for Biofuels: To promote the use of renewable energy in heating and cooling, Portugal offers tax exemptions for biofuels utilized for energy purposes.
• PROENERGIA: an incentive programme aimed at increasing energy production from renewable resources in the Azores region.

Non-Financial Support Mechanisms

• Technical Training and Certification: Portugal mandates professional training and certification for installers of renewable energy systems, including solar thermal installations. This ensures high standards in the installation and maintenance of heating and cooling systems.
• Regulatory Frameworks: The country has implemented regulations requiring energy performance certification for buildings, promoting transparency and encouraging improvements in heating and cooling efficiency.
• Energy Saving Plans: The Portuguese government has moved beyond the 2022-2023 Energy Saving Plan, adopting the National Energy and Climate Plan 2030 to enhance renewable energy use and cut emissions.

• Ministry of Environment and Energy
• Environmental Fund
• Azores Regional Directorate of Energy (DREn)
• Directorate-General for Customs and Excise
• Directorate-General for Energy and Geology (Direção-Geral de Energia e Geologia - DGEG)
• Madeira Regional Directorate of Energy (DREn)

The National Energy Efficiency Action Plan includes measures targeting the transport sector, such as reducing the number of older light-goods vehicles, decreasing average CO2 emissions for new cars, and promoting the use of monitoring equipment in vehicles.

According to the updated goals set for the transportation sector in its National and Energy Climate Plan 2030, Portugal aims for renewables to account for 29% of final energy consumption in transport by 2030. Additionally, Portugal has set a more ambitious target of reducing greenhouse gas emissions by 55% compared to 2005 levels. 

The improvement in efficiency and the decarbonisation of the sector will be primarily achieved through fleet renewal, including grants, subsidies and incentives for individuals and businessess to acquire low-carbon and electric vehicles, as well as the expansion of charging infrastructure. 

Further measures include tax reductions for vehicles that meet low-carbon, sustainable standards and the implementation of quota systems to raise consumer awareness regarding the share of renewable energy in their final consumption.

• Subsidies and Grants

  Nationwide Incentives:

  • Grant for the acquisition of low-carbon, electric vehicles;
  • Grant for the acquisition of electric light goods vehicles;

  Regional Incentives:

  • Madeira Region: the Electric Mobility Incentive Programme in the Madeira Autonomous Region (PRIME-RAM) offers financial incentives for acquiring electric vehicles.
• Tax Regulations - reduction of taxes for vehicles with hybrid engines.
• Biofuel Quota - in order to promote transparency, certificates of guarantee of origin are issued to inform consumers about the proportion of renewable energy in their final energy consumption. This measure aims to raise awareness and encourage the use of renewable energy sources.
• Infrastructure Support - financial incentive for the acquisition of charging stations. 

• Ministry of Environment and Energy: Oversees national policies and incentives related to electric mobility.
• Regional Directorate of Energy (DREn): Manages energy-related initiatives in the Azores.
• Regional Directorate of Economy and Land Transport (DRETT): Responsible for economic and transport affairs in Madeira, including the PRIME-RAM program.
• Directorate-General for Customs and Excise: Handles tax regulations and exemptions for vehicle imports and registrations.
• Institute for Mobility and Transport (IMT): Regulates transport policies and vehicle certifications.
• Environmental Fund (EF): Provides financial support for environmental initiatives, including EV incentives.
• Energy Services Regulatory Authority (ERSE): Regulates energy services, ensuring compliance and overseeing the energy market.