Portugal's rush to renewables places it in front line of EU's energy makeover

Mar 11, 2008 - Barry Hatton - The Associated Press

Broad fields of giant solar panels as big as houses tilt toward the sun in this torrid patch of the Iberian peninsula.

Arranged in tidy rows, like the vineyards and olive groves that quilt the typical Portuguese landscape, the panels belong to a solar power plant that comes on line this month and is due to be the world's largest when it is completed later this year.

Portugal, one of the European Union's least conspicuous countries, is in the vanguard of the continent's rush to harness renewable energy. Despite its frail economy, it is one of eight EU countries whose push into clean technology has enabled a double-digit share of electricity consumption from green sources.

The EU wants clean power sources to furnish 20 percent of the bloc's energy by 2020, up from 8.5 percent in 2005 - and the Amareleja project is at the forefront of that mission.

More than 2,500 gray-blue solar panels are being assembled over 250 hectares - roughly 350 soccer fields - in this town of about 3,000 people that sits in one of Europe's hottest spots. Each panel measures 13 meters by 8 meters (43 by 26 feet) and weighs more than 2 tonnes (2.2 US tons). Like sunflowers the panels follow the sun, swiveling on thick metal stems. When complete, the euro260 million (US$396 million) project will provide power for some 30,000 homes.

Not far from Amareleja, a dam that will create Europe's largest man-made lake when it fills up is already pumping electricity into the national grid. Ten other new dams are planned. On Portugal's Atlantic coast, a pioneering wave energy project waits to be deployed within months.

In the country's hilly north, Europe's largest wind farm will be ready by the end of the year. Portuguese authorities claimed the highest EU growth rate in wind energy production between 2005-06, when the country posted a fourfold increase. Approved wind farm projects are slated to power 750,000 homes.

By the end of last year energy from renewable sources accounted for just over 40 percent of the electricity consumed in Portugal, a country of 10.6 million people with plenty of sunshine, big rivers and a long coastline.

"Not taking advantage of our resources such as water and the wind would be like Venezuela not taking advantage of its oil," Economy and Innovation Minister Manuel Pinho said.

Portugal didn't need much encouragement. With no coal, oil or gas of its own, the country imports more than 80 percent of its energy needs, including for transport. High oil prices have further squeezed an already pinched economy.

The government has made renewable energy a priority. It is providing grants and subsidies to companies investing in the sector.

Anticipated rewards of the clean energy sector include an expected 10,000 new jobs and forecast investments of euro8 billion (US$12.1 billion) between 2007 and 2012.

That's welcome news in this easygoing nation which at the turn of the century discovered it was an analogue country in a digital age. Gross domestic product per capita has dropped to around 71 percent of the European Union average, down from a peak of 80 percent in 2000, as Portugal failed to keep pace with a changing world. Its jobless rate of 8.3 percent is the fifth-highest in the EU.

Portuguese companies, traditionally viewed as international lightweights, are getting a lift from the rising tide of clean energy investments. Utility company EDP Energias de Portugal SA last year agreed to pay $2.15 billion (euro1.4 billion) to buy Houston-based Horizon Wind Energy LLC, making it an intercontinental player.

The 27-nation bloc's progress in harnessing alternative energy sources has been "patchy," says Oliver Schaefer, policy director of the Brussels-based European Renewable Energy Council, an industry group.

"Some countries are clearly lagging behind," he said.

A few bigger European countries, such as Britain and Italy, currently tap renewables for only around five percent of their needs.

Countries which have embraced the makeover include Sweden, Denmark, Spain and Austria.

Investors in expensive new technology will likely need state-funded incentives for some time, analysts say. In the Netherlands, for example, electricity produced by renewable sources slipped back to 2.4 percent of the national total last year, down from 2.7 percent the previous year, after the government scrapped state grants for new projects.

In Amareleja, a town previously best known for its rustic solitude, the local council got the ball rolling with public funds and later sold the project to Spanish company Acciona.

The plant has brought 200 jobs and has given a new lease of life to one of Europe's poorest regions.

"It's given the whole town a lift," says Manuel Cipriano Ramalho, president of the Amareleja parish council. "We're all for it."

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