Onshore wind in Portugal: History, supporting policies, economic viability and future perspectives

Abstract

Onshore wind energy is currently playing a crucial role in Europe’s decarbonization efforts. Among other European countries, Portugal is recognized as a successful example of large-scale wind energy implementation thanks to its supportive policies in the 00 s. However, the government's financial support for onshore wind technologies has faced criticism, with accusations that feed-in tariffs were set too high and that farm owners were overpaid for their energy production. As the end of feed-in tariff regimes approaches for onshore wind farms in Portugal, it is unclear whether farm owners will choose to pursue repowering and life extension strategies, or opt to shut down operations. The present paper provides a techno-economic assessment to onshore wind farms in Portugal to assess their historical financial performance based on power production estimates and applicable feed-in tariff legal regimes. Based on the estimated investment costs, farm yield and established feed-in tariffs, the results suggest that there is no evidence of exceptional profits in onshore wind projects in Portugal. The results also suggest significant economic benefits for Portugal in prioritizing future investments in onshore wind, by pointing towards a strategic focus on life extension and repowering strategies as key components of this forward-looking approach.