Energy Policies of IEA Countries: Portugal 2000

International Energy Agency

The International Energy Agency's 2000 review of Portugal's energy policies and programmes. It finds that Portugal produces little energy, all of it from renewable sources. But Portugal’s energy consumption is growing apace, and the country is increasingly dependent on imported energy. Portugal’s energy companies have been restructured and the government has begun the process of privatising them. In April 1999, the government set up a holding company called “Petróleos e Gás de Portugal, SGPS, S.A.” (GALP) combining Gás de Portugal and Petrogal, the national oil and gas companies. The aim is to create an enterprise large enough to compete in the Iberian market, then gradually to privatise it. The electricity law of 1995 divided the electricity market into two segments: one competitive, the other centralised and non-competitive. By 1999, the competitive segment was still not functioning adequately. This report recommends measures to achieve effective competition. The addition of natural gas to the Portuguese energy mix in 1997 has helped diversify Portugal’s energy sources and contributes to the mitigation of environmental problems. Security of gas supply remains an important issue, since Portugal depends on only one single source. Because the gas market is so new, the European Directive permits Lisbon to delay making it a competitive market until 2008. The report recommends a clear schedule for the implementation of competition. Portugal is working to reduce the sharp growth in energy use and CO2 emissions. But both continue to increase rapidly. If Portugal is to limit the increase in greenhouse gas emissions to 27% above 1990, as it has undertaken to do under the Kyoto Protocol, it will need to take further measures.

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