Portugal, Photovoltaic technology status and prospects - Contribution to the Annual report 2005

Portugal
Photovoltaic technology status and prospects
Pedro Sassetti Paes, EDP S.A.

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General Framework

Fig. 1 - INETI installation: 12 kWp BIPV at INETI's Solar XXI Building (photo courtesy of INETI).

The national PV policy is part of the general strategy and framework on Renewables established by the government. In 2005, the major change at the national energy policy level was the publication of a new government Cabinet Resolution (169/2005), which stressed the strategy for the country's sustainable development. Improving energy efficiency, reducing CO2 emissions and increasing the use of renewable energy sources (RES) are some of the most significant objectives under this framework.
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National Programme

The government established ambitious goals for RES-E to be reached by 2010, allowing Portugal to be able to meet the targets agreed to under the 2001/77/CE Directive - 39 % of the gross electricity consumption from renewables by 2010. Wind power will form the bulk of the new installed capacity (from the current 1 000 MW to about 5 100 MW by 2010), while PV's contribution is set to increase from the current level of about 3 MW to 150 MW. The PV market development mechanisms are mainly based on a favourable feed-in tariff, together with a financial incentive system (PRIME, 2000- 2006), as well as other indirect market instruments (taxes).

The main legal and incentive framework related to PV is:

Decree-Law 312/2001 defining the conditions regulating the awarding and management of grid interconnection points for Independent Power Producers (IPP).
Decree-Law 33-A/2005 establishing a range of favourable feed-in tariffs for RES electricity.
Decree-Law 68/2002 regulating the delivery of electrical energy into the low-voltage grid (micro-generators, including PV).
PRIME (Incentive Programme for the Modernisation of the Economy), which provides financial incentives, namely for energy efficiency and endogenous energies projects.

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Research, Development and Demonstration

Fundamental research activities are focused on amorphous and nano-crystalline thin film silicon technologies and involve mainly public bodies (Universities):

CENIMAT: Department of Materials Science, Faculty of Sciences and Technology (New University of Lisbon).
LAFS: Laboratory of Photovoltaic Applications and Semiconductors (University of Lisbon).
Department of Ceramics and Glass Engineering/UIMC (University of Aveiro).

Other institutions, such as Public Research Laboratories (INETI –National Institute for Engineering Technology and Innovation), Energy Agencies (ADENE and regional agencies), utilities (EDP) and private research institutions (INEC Porto - Institute for Systems and Computers Engineering), are performing applied research and implementing PV demonstration projects. Besides these institutions, associations such as SPES (National Solar Energy Society) and APISOLAR (manufacturer and installer association) are also involved in dissemination activities.
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Implementation

In 2005, the government agency DGGE (Directorate General for Geology and Energy), which manages the IPP licensing process, decided to close the quarterly allocation of grid interconnection points for PV. This was due to the huge amount of requests received (more than 3 000) which exceeded largely the national target by 2010 (150 MWp).

From 2002 to 2004, about 104 MWp PV capacity had already been licensed (see national statistics Portugal). The remaining 46 MWp will likely be allocated through a tender process, to be launched yearly from 2006 on.

Furthermore, the feed-in tariffs for PV were revised in 2005, decreasing about 17 %: 0,28 EUR/kWh for systems with installed power above 5 kWp (0,32 EUR/kWh in 2004) and 0,45 EUR/kWh for systems up to 5 kWp (0,54 EUR/kWp in 2004), guaranteed for the first 15 years of operation or the first 21 GWh/MW provided to the grid (whatever comes first). Before this amendment, the tariff was guaranteed for the lifetime of the plant.

Financial incentives are available under the PRIME programme (2000-2006) - III EC Framework Programme. Grants are provided on the basis of energy and environmental value of the projects, up to 40 % of the total eligible cost, with a maximum grant of 150 kEUR per application. So far, only four PV projects applied and only two received support.

Indirect market development mechanisms for renewables consist of: reduction of VAT rate from 21 % to 12 % on renewable equipment, custom duties exemption and income tax reductions (up to 730 EUR for solar equipment).

In 2005 only a few of the already licensed grid-connected installations were realized: six small-scale (5 kWp) systems. Besides these, the following projects were also implemented:

The first Portuguese building integrated project, at the Renewable Energy Department of INETI - the Solar Building XXI – consisting of 12 kWp multi-crystalline PV modules mounted on its vertical south facade (see Figure 1). This innovative project uses PV for power generation (mainly self-consumption) as well as for space heating (heat recovery from the modules back surfaces).
The project was partly funded by the PRIME programme. Another PV system, composed of amorphous silicon modules with 6 kWp power, was also installed to provide shaded parking for the building's car parking lot.
25 kWp grid-connected system (multi-crystalline and amorphous) at the Lisbon German School (see Figure 2). This project is part of an initiative launched by the German Energy Agency (DENA) - Renewable Energy Export Initiative -, which aims at installing solar roofs on German schools and other institutions, both in country and abroad. Also in 2005, two large power plants got the so called “establishment permit” or licence to construct:
The world's largest centralized PV plant (~50 MWp), to be installed in east Alentejo (Moura municipality). BP Solar, one of the main stakeholders, will build a new module factory in the region. The project is likely to start in 2006 (civil works, factory, 1st stage of the power plant).
The PSIA power plant, a 2,15 MWp system to be installed in south Alentejo (Almodovar municipality), the modules being mounted on 2 axis tracking systems. The system is planned to start operation by the end of 2006.

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Industry Status

So far there is no silicon/wafers production in Portugal. Lobo Solar is manufacturing Shell Solar module (mono- and multi-crystalline) in its assembly plant located in Evora. The maximum annual production capacity is 17 MWp. The factory employs about 90 people. Batteries for PV stand-alone applications (solar type and stationary) are also manufactured in Portugal (Tudor and Autosil).

A dozen companies are supplying and installing PV modules and BOS components imported from the EU, USA and Japan. A few of these companies produce power electronics for stand-alone PV applications. The estimated sales of the national PV industry was about 22,5 MEUR in 2005.
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Market Development

Fig. 2 - German School: 25 kWp grid-connected PV system at the Lisbon German School (photo courtesy of Jayme da Costa).

The Portuguese PV market presents a yearly steady growth of about 30 % rate, but remains based on off-grid applications. Only a few of the grid-connected installations approved so far were realized in 2005. For this reason, the market structure compared to previous years did not change significantly (~80 % off-grid and ~20 % on-grid), the total installed capacity reaching about 3 MWp by the end of 2005.
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Future Outlook

The PV market in Portugal is expected to expand significantly in the next few years, from the current 3 MWp to about 100 MWp, provided all the already licensed plants will be carried out. The Moura power plant will represent half of this capacity. Furthermore, the market structure will switch from the current off-grid applications, with about 80 % market share, to a structure strongly based on grid-connected systems.

The confidence of the investors and PV promoters is decreasing due to the successive changes of the legal framework in the past 3-4 years, affecting namely the feed-in tariff conditions. Besides the need of a stable framework, other measures need to be adopted aiming at accelerating the permit procedures, especially for small grid-connected systems, which are currently too time consuming.

The development of the building integrated market (BIPV), almost inexistent, will require the establishment of specific building codes and regulations as well as information campaigns in order to increase the awareness of PV among the main building actors.
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