The launch of Portugal’s floating offshore wind energy auction schedule marks a milestone in Iberia’s energy transition. Unlike the more ambitious proposals of previous years (10 and 8 GW), the Government has now set a revised target of 2 GW.

According to Rafael Menéndez Cuiñas, Senior Principal and offshore wind expert at AFRY Management Consulting, this figure aligns with the country’s capabilities. A higher target, he explains, would have resulted in overproduction without sufficient domestic demand to absorb the generated energy, leading to curtailment and impacting project profitability.

In conversation with Strategic Energy Europe, he notes that “curtailment already threatens the energy sector, and interconnections with Spain are limited,” reinforcing the need to adjust generation volumes to Portugal’s grid realities.

Centralised Sequential Model: A Strategy for Emerging Markets

Portugal has opted for a centralised sequential model, setting itself apart from Spain’s “all-in-one” approach, more common in mature markets like Germany or Denmark.

“Delaying the economic competition by a few years allows for capturing the expected short-term cost reductions,” explains the analyst. He points out that this approach—where maritime areas are awarded first, followed by financial support through CFDs (Contracts for Difference)—is better suited to avoiding speculative processes.

This delay is crucial for technologies like floating wind, where significant cost reductions are anticipated as industrialisation of components such as floaters progresses.

Unlike Spain’s unified model, where early price-setting forces bidders to include higher uncertainty margins, the sequential model offers greater flexibility, reduces financial risk, and paves the way for cheaper energy.

Wind Farm Size: Balancing Scale and Industrial Capacity

Regarding wind farm sizes, Menéndez Cuiñas indicates that planned areas will range between 400 and 600 MW, describing it as “a reasonable size to balance investment and industrial capacity.”

If confirmed, each wind farm would require around 25 floaters, considering turbines between 15 and 20 MW. “Two floaters can be as large as a football stadium; building 10 or 15 within five years is no easy task,” comments the AFRY executive.

This scale is designed to attract significant investment and generate economies of scale without overwhelming current port infrastructure and manufacturing capacity.

For comparison, France has launched its floating wind development with 250 MW auctions, while Malta targets around 300 MW. A critical issue will be energy evacuation management, particularly in northern Portugal, where domestic projects may coincide with developments in Galicia. Grid capacity to absorb these flows will largely determine deployment efficiency.

LCOE: A Race Towards Competitiveness

The LCOE for floating offshore wind remains a key challenge for its consolidation. Current costs are estimated between €100 and €300/MWh, depending on factors such as sea depth, distance to shore, and interconnection design.

Menéndez Cuiñas stresses that breaking the €100/MWh barrier will require mass industrialisation, likely achievable closer to 2050. He emphasises: “Today, floaters are almost handcrafted; without industrial demand, we won’t see real price reductions.”

Similarly, he notes that the anticipated 30% cost reduction by 2030, as discussed at the WindEurope forum, depends heavily on the sector’s industrialisation pace.

The most recent benchmark comes from France’s December auction, where two floating wind blocks between 230 and 280 MW were awarded: Narbonaise (50% Ocean Winds, 50% Banque des Territoires) and Golfe de Fos (50% EDF, 50% Maple Power). The CFD prices were €92.70/MWh and €85.90/MWh over 20 years, with average bids of €106.29/MWh and €103.24/MWh respectively.

However, the AFRY advisor explains that “these results exclude interconnection costs, making the prices artificially low.” Therefore, he warns that expecting Portugal to achieve similar figures would be misguided, as its process design will incorporate all associated costs.

Non-Economic Criteria: Sustainability and Social Acceptance

Following European Union guidelines, Portugal will include non-economic criteria in its bid evaluations. This increasingly common practice across European auctions ensures that price isn’t the sole determining factor, promoting projects with social, environmental, and industrial benefits.

Factors such as community engagement, support for local SMEs, environmental sustainability, and cybersecurity will influence awards. This approach not only improves social acceptance but also strengthens Portugal’s industrial and technological fabric.

France, Germany, and Malta already apply such criteria, allocating up to 30% of total evaluation weight to these aspects. Portugal aligns with this trend, fostering a more inclusive and resilient renewable development model.

“Developers who excel in local engagement see these criteria as a competitive advantage,” states the analyst, highlighting that this framework encourages more sustainable projects with positive community and industrial impacts.

A Strategic Move to Lead in Floating Wind

Beyond generation costs, Menéndez Cuiñas highlights floating offshore wind’s strategic value for Portugal: “These projects create industrial jobs that other renewables do not offer,” he notes.

With capacity factors exceeding 50%, floating offshore wind will provide grid stability while boosting sectors such as port logistics, component manufacturing, and anchoring technology.

The executive concludes that advancing with a 2 GW target under a flexible, tailored model positions Portugal as a leader in responsible offshore wind development.

The final auction schedule will be announced before July, in line with the deadlines set by the official decree, cementing Portugal’s place on Europe’s energy transition map.