Portugal is consolidating its position in renewable energy with 81.2% clean generation by February 2025, according to the latest report from the Portuguese Renewable Energy Association (APREN).

Hydropower and wind power lead electricity production , while solar energy continues to rise.

In this scenario, long-term power purchase agreements are making a difference , ensuring project stability and attracting key investments for the future of the sector.

“Portugal is demonstrating that it is possible to increase the share of clean energy in the energy mix and reduce dependence on fossil fuels,” highlights Hugo Silva, business development specialist at TreeEnergy, a Painhas Group company.

In an interview with Strategic Energy Europe, the advisor describes the growth of solar energy as largely due to the financial security provided by PPAs, which allow developers to sell their electricity at fixed, long-term prices.

The contracts have allowed the entry of new investors and the financing of large solar plants, “facilitating the viability of large-scale projects and reducing uncertainty in the sector,” Silva explains.

Pexapark Renewables Market Outlook 2025 report, 15.2 GW of PPAs were signed in Europe in 2024 , with a total of 316 long-term power purchase agreements.

This represents a 14% increase in the number of contracts compared to 2023, albeit with more conservative volumes.

Currently, the National Energy and Climate Plan (PNEC) of Portugal sets ambitious targets for 2030, with strong growth in installed renewable capacity:

• Solar: from 8.4 GW to 20.8 GW .
• Wind: from 6.3 GW to 10.4 GW .

To achieve these objectives, PPAs play a key role by providing revenue predictability and enabling access to competitive financing.

“The support of long-term contracts not only improves project profitability, but also ensures more stable prices for consumers,” the specialist emphasizes.

Energy Communities and new opportunities for distributed generation

Another factor transforming the sector is the creation of Renewable Energy Communities, promoted by Law 99/2024. This regulation allows citizens and businesses to generate, share, and consume their own energy, promoting the decentralization of the system.

“This legislation is a fundamental step toward the democratization of energy,” Silva asserts, adding that self-consumption and energy communities are encouraging greater participation by the private sector and consumers in the energy transition.

Thanks to the growth of renewable energy, Portugal has managed to significantly reduce its carbon footprint. In the first two months of 2025, electricity sector emissions were 0.46 MtCO₂eq, representing a 35.3% decrease compared to 2024.

Furthermore, the country has managed to cover 100% of its electricity demand with clean energy for 330 non-consecutive hours so far this year.

In this regard, Silva points out that “this demonstrates the resilience of the renewable electricity system and the positive impact that the energy transition has on market stability.”

Challenges and prospects for 2030

Despite the success of PPAs and the expansion of renewable capacity, the country still faces challenges in achieving a 100% clean mix.

The need for more energy storage and strengthening electrical interconnections with Spain are some of the key issues to be addressed.

“Energy storage and grid digitalization will be crucial in the next decade,” warns Silva.

Currently, reservoir storage capacity is 73.7%, but the integration of batteries and new management technologies will be critical to ensuring supply during times of low renewable generation.

With the support of solid policies, strategic investments, and tools such as PPAs, the analyst concludes that “if this pace continues, achieving 100% renewable generation by 2050 is a completely achievable goal.”