January 4, 2024

ESG: Portugal's record-high renewable energy


In 2023, Portugal achieved a significant milestone in its renewable energy journey, recording the highest-ever contribution of renewable sources to its electricity consumption. According to Redes Energéticas Nacionais (REN), renewable energy sources provided 61% of the country's electricity needs, marking a remarkable achievement in the nation's drive toward sustainability.

Breakdown of Renewable Sources

The substantial share of renewable energy in Portugal's electricity mix was primarily driven by wind and hydropower, which contributed 25% and 23% respectively. These figures highlight the country's strong wind and hydropower infrastructure and favourable natural conditions. Solar energy and biomass also played crucial roles, contributing 7% and 6%, respectively, to the overall energy mix.

Growth in Renewable Energy Production

The year-on-year growth figures for renewable energy production in Portugal are particularly impressive. Hydropower production saw a 70% increase compared to the previous year, reflecting the favourable hydrological conditions and investments in hydroelectric infrastructure. Solar energy production also surged by 43%, underscoring the rapid expansion of solar capacity in the country.

Decline in Non-Renewable Energy Sources

As renewable energy sources reached new heights, the reliance on non-renewable sources hit a historic low. In 2023, non-renewable energy sources accounted for only 19% of Portugal's electricity consumption. This significant reduction underscores the country's successful transition towards cleaner energy and its commitment to reducing carbon emissions.

Reduction in Natural Gas Consumption

Portugal's natural gas consumption, particularly in electricity production, decreased by 21% in 2023. Most of Portugal's natural gas is imported via sea, the Sines LNG terminal played a crucial role in meeting the country's gas needs, supplying 95% of the natural gas, primarily sourced from Nigeria and the United States. The reduction in natural gas usage highlights Portugal's shift towards more sustainable energy sources and the country's decreasing dependence on other country's natural resources.

Renewable Energy Dominance in December

December 2023 was a standout month for renewable energy in Portugal, with renewables covering 73% of the country's energy needs. During this month, gas consumption further declined by 11.5%, reinforcing the trend of decreasing reliance on fossil fuels. These increases in renewable energy supply solidify Portugal as a European leader in green energy.

Investment Attractiveness for ESG-Conscious Operators

Portugal's continued drive for sustainability and its impressive achievements in renewable energy production significantly enhance its attractiveness to ESG-conscious investors. The country's proactive approach to expanding renewable energy capacity and reducing carbon emissions aligns well with the investment criteria of those seeking environmentally and socially responsible opportunities.

These achievements not only bolster Portugal's energy security but also position it as a leader in the global transition towards sustainable energy systems. The government's policies and incentives have been pivotal in fostering a favourable environment for renewable energy investments, making Portugal an appealing destination for investors focused on environmental, social, and governance (ESG) criteria.

We hope that Portugal's commitment to transitioning to renewable energy long continues, allowing the country to become not only a leading model for climate friendly energy production, but also giving the country greater energy stability through the reduction in reliance on international energy production that comes with the use of fossil fuel reliant power grids. A dependance that has been shown to be a great risk in recent years when there is geopolitical unrest.

For more detailed information on Portugal's energy supply, visit REN's official website: REN.

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