The Portuguese electricity system fleet has undergone a paradigm shift regarding integration of new supply sources in the last two decades. As of 2005, there was a gradual increase in the installed renewable capacity, being the renewable generation assets three times larger today when compared to that year, a fact that contributed to the increase in the total electricity generation capacity of 76.6%, compared to 2005. Conversely, the fossil fuel capacity has been decreasing since 2011, a trend that became more evident in 2021 with the deactivation of the Sines and Pego coal power plants.

The increased use of Portuguese endogenous and renewable energy sources as means to produce electricity has changed the composition of the electricity generation mix in Portugal and has, consecutively, played an increasingly determinant role in the satisfaction of demand. The graph shows that from 2005 onwards renewables began to gradually assume an important share of generation, especially with the growth of wind generation. Also noteworthy is the growth that solar energy has shown since 2019, having quadrupled its installed capacity.

The increase in renewable incorporation in electricity generation has led to a reduction in the use of technologies based on fossil fuels, having achieved 70.6% in 2023.

The increase in renewable electricity generation made it possible to reduce the country’s energy dependence in the first two decades of the 21st century. In short, energy dependence has fallen by 18 per cent since 2000. However, a stagnation trend can be observed between 2015 and 2019, as in opposition 2020 and 2021, which were years marked by the pandemic crisis, reversing again in 2022 because of the extreme drought that affected hydroelectric productivity. Nonetheless, by 2023 it is estimated that energy dependency will once again fall to 68.4%.*

The renewable electricity is a determinant factor to the reduction on fossil fuel import trade balance and to the decrease of external energy dependency. The avoided costs sum up to 16.6 billion euros since 2014.

The renewable electricity avoided, at the national level, the emission of 120 megatonnes of CO₂-eq between 2014 and 2023, which is equivalent to around 76.4% of the CO₂ emissions from the road transport sector for the same period. The value for the avoided CO₂ emission allowances was estimated at 780 million euros in 2023.

The investment on the renewable sector contributed significantly to the creation of specialized jobs (direct and indirect) and to territorial cohesion. It is estimated that, at the end of the year 2023, the renewable sector employed more than 66 thousand people.

The incorporation of renewable sources in the electricity generation accounted for 2.1% of the national GDP in 2023. The technology that contributed the most was wind power, given the existing a value chain that aggregates the industrial components production and a set of R&D and services activities.

It is estimated that the incorporation of renewable sources for the electricity generation has contributed, in the last six years, with 4,071 million euros for Social Security, 1,870 million euros for the Corporate Income Tax, 121 million euros for the Municipal Surtax, 3,414 million euros for the Personal Income Tax and 3,370 million euros for VAT.