A report published this week by Portugal’s energy regulator, the Direccao Geral de Energia e Geologia (DGEG), says the country added 33 MW of new solar photovoltaic installations from January to June 2014. Cumulative photovoltaic capacity in Portugal has now reached 330 MW.
PV sector driven by micro and mini installations
A rather worrying element of the data released this week though is the low number of new micro-generation and mini-generation installations. Specifically, the country added only 2.553 MW of new micro PV systems and 2.429 MW of new mini photovoltaic installations.
Portugal’s photovoltaic sector is mainly driven by small installations. Of the 55 MW new installations added in 2013 for instance, 31.896 MW came from micro and mini systems. Similarly, in 2012, of the 68 MW newly solar PV systems installed, around 40 MW came from micro and mini installations too.
Market orientated micro and mini system FITs
A reason for 2014’s low number of new micro and mini installations might be that in December 2013 Portugal’s energy regulator announced feed-in tariff (FIT) cuts for these types of installations starting January 2014 onwards.
Maria José Espírito Santo, of the DGEG, told pv magazine at the time that traditionally the DGEG applies FIT cuts "to adjust the tariffs to the market evolution of the price of PV power plants and their main components. Nowadays though, since the price of renewable energy for solar PV is approaching grid parity value, the main purpose is to discourage the FIT regimes for microproduction and miniproduction programs."
Specifically, Espírito Santo said, "the non-FIT regime of microproduction sets a price for the electricity delivered to the grid in the order of 140 per megawatt hour (varies annually). While for mini-production, the non-FIT regime, which is an almost market regime, provided in 2013 an average price for electricity in the peak hours between 47.80 and 53.20 per megawatt hour (high voltage-low voltage)."
It is apparent Portugal aims to bring micro and mini generation FIT prices down to market prices. From one point of view this is very positive because it shows that PV technology can fully compete today in the market. From the other point of view though, the transition to market based pricing needs to be designed and implemented carefully so that Portugal’s micro and mini PV sector is not threatened.
"Additionally," Espírito Santo told pv magazine, "the new self-consumption regulatory regime is being prepared to respond to the evolution of market prices, to reduce the electric system costs and to improve energetic efficiency."
The DGEG wants the self-consumption program to compete with micro and mini production and therefore FITs for these systems might continue getting reduced, Espírito Santo said.
To date the net metering installations are not allowed yet in Portugal’s regulatory regimes, and self-consumption installations are only possible if it is guaranteed that there is no injection of energy in the grid. Portugal rather needs to hurry implement a fair net metering regime which promotes solar PV installations further.
The DGEG report notes that Portugal is one of the European Union countries performing the best towards commonly agreed EU 2020 targets for renewable energy generation. Its success stems primarily from the 5.535 GW of hydro and the 4.802 GW of wind power currently installed in the country. In sharp contrast, Portugal aims 670 MW of solar PV by 2020.