As of the latest available information, the Portuguese government has announced intentions to proceed with developing offshore wind power, specifically in the regions of Viana do Castelo, Leixões, and Figueira da Foz. This initiative aims to harness the potential of deep waters for the implementation of offshore wind farms, with a combined capacity of up to 3.5 GW.
To initiate this process, the government has outlined its plan to launch a call for demonstrations of interest from relevant stakeholders in the offshore wind energy sector. These demonstrations are non-binding in nature, allowing potential participants to express their intention to contribute to the development of offshore wind projects in the designated regions. This initial phase seeks to gauge the level of interest.
The call for demonstrations of interest is set to be opened soon and is expected to remain open until the end of the year. This duration is estimated to be around three months, suggesting that the call may potentially extend into the beginning of the following year, 2024. This extended timeline provides ample opportunity for interested parties to thoroughly evaluate the possibilities and complexities of offshore wind projects in the designated region.
Preparing for auction
Preparations for the upcoming auction encompass a range of efforts undertaken by both governmental bodies and relevant entities within the industry. These initiatives aim to ensure a well-structured and informed auction process that maximizes the potential for successful offshore wind farm developments.
One crucial aspect of the preparations involves the government and relevant authorities working collaboratively to refine the competitive procedure models for the auction. This involves a comprehensive assessment and adjustment of the competitive processes that will be employed. The group responsible for this task is engaged in dialogue with potential stakeholders who have already demonstrated their interest in participating.
Particularly, the government is in the process of defining the strategic approach to ownership and responsibility for the installation of the electricity transmission infrastructure. These decisions are vital as they establish the framework within which the auction participants will operate. This strategic delineation will impact various aspects, including the structure of ownership, investment responsibilities, and regulatory aspects of the offshore wind farms.
In parallel, entities such as WavEC Offshore Renewables are actively contributing to preparations by supporting interested parties who seek to enhance understanding of the auction process, by offering expertise in legal, economic, and technical aspects.
Proposed projects and future strategies
To date, only a limited amount of information has been released by developers regarding potential projects/technologies. To better define their projects and strategies, developers are waiting for more information to be delivered from various sources. In this framework, a Working Group was created by the government, in September 2022, with the purpose of defining:
- a set of spatialized areas under the terms of the Allocation Plan, that is being prepared, with an indication of the interconnection points to the National Electricity Transmission Network (RNT), to be allocated to the offshore renewable power generation plants, within the scope of the National Maritime Spatial Planning Situation Plan (PSOEM).
- a temporal sequencing of these areas, establishing offshore wind power capacity indications to be assigned to each area.
- the model for assigning capacity reserve titles (TRC) for electricity injection in the Public Service Electrical Network (RESP), and the associated titles of private use of the maritime space (TUPEM).
- the technical and investment model for the development of electrical infrastructure offshore and onshore necessary for the entry into operation of the electricity generation plants, considering the expected increased demand for green electricity because of the industrial investments foreseen for the national territory, namely hydrogen production and derivatives.
- the development needs of port infrastructures, whether for the construction of power generation plants or for the development of an industrial sector national based on FER-offshore.
A preliminary proposal of the report was in public hearing between January 30 and March 10, 2023, to secure feedback from all stakeholders. The final version was released in July 2023, serving as a basis for developers to start defining projects and choosing technologies.
Additionally, the Working Group also recommended a pre-qualification phase, with criteria not yet known, but will certainly impact on the definition of projects. The pre-qualification phase relies on the technical and financial solvency of promoters to minimize risks in projects of great complexity, with at least 70% of the classification linked to cost to guarantee the best possible price for the system and the final consumer, and 30% of non-price criteria (NPC) that assess the sustainability of projects from an environmental and social perspective.
Eventually, the definition of the projects also depends on geophysical survey and geotechnical site investigation in the areas of interest to developers, which will be carried out in the first auction (3.5 GW, as stated previously) in order to launch successive auctions for a total of 10 GW.