New Laws To Speed Up Solar Plant Construction In Portugal

• Portugal has published a decree through which it has eased permitting process for solar projects
• It has also increased compensation for PV projects awarded in 2019 and 2020 auctions
• The government cites a number of reasons for this increase in compensation including inflation and impacts related to Russian invasion of Ukraine

In a boost for the solar PV industry, Portugal has taken steps to ease permitting processes required for the installation of solar power plants in the country, and announced increased compensation for PV projects awarded in the 2019 and 2020 auctions on account of inflation.

Through the Decree-Law 72/2022 published in the national gazette Diario da Republica Eletronico, the government has exempted solar power projects with less than 1 MW capacity from securing permissions in the urban planning operations.

"For installations with an installed capacity of more than 1 MW, a prior control procedure for urban planning operations with a deadline is applied, which enables the commencement of works without the need for any express licensing decision. There was no express rejection by the municipality," reads the decree.

Compensation for projects auctioned in 2019 and 2020 has also been increased through the decree. The government has cited a number of reasons for this increase for projects that were contracted for very low tariffs (see Portugal Awarded 1.15 GW Capacity In Solar Auction).

The reasons range from impacts related to COVID-19 pandemic, the Russian invasion of Ukraine and the global shortage of raw materials for solar that led to significant price hikes. These had such 'impactful effects that led to the unfeasibility of the allocation of the financing of projects' awarded. This in turn 'dictated the unfeasibility of bank financing' for these projects.

Such projects have also been allowed an extension of 12 months to sell electricity generated at market prices during the trial period, which is the time before these start commercial operations, instead of the tariff at which these were contracted.