How did Portugal assume such impressive leadership in the clean energy transition? The key, as usual, lies in ambitious supportive policies. Prior to 2000, Portugal's transmission lines were owned by private power companies that had no interest in investing in renewables, as the deployment of these technologies would require radical changes in the grid infrastructure and therefore raise costs. To address this barrier, the government bought the lines and began adapting the grid to renewables requirements, including more flexibility and a better grid connection in remote areas to allow the production and distribution of electricity from small generators, such as domestic solar panels.
A combination of incentives was implemented to attract investors. Feed-in tariffs (FIT) - which guarantee producers of renewable energy a specified price for every megawatt-hour of power fed into the grid - were first introduced in Portugal in 1988 and have increasingly evolved into a highly sophisticated system with individual prices for each renewable energy source. The latest tariff stipulations, issued in 2005 and 2007, take into account environmental considerations, the level of technology development, and the inflation rate. The government also integrated new technologies such as Concentrating Solar Power (CSP) and tidal power into the system.
