Five years ago, when 17% of Portugal’s energy came from renewable energy – about like California now – the government made a bold decision to aim for 45% during the next five years – by 2010.

Sounds impossible, right? Yet, according to Elizabeth Rosenthal at the NYT, they will have achieved their goal by the end of this year.

“You cannot imagine the pressure we suffered that first year,” said Manuel Pinho, Portugal’s minister of economy and innovation from 2005 until last year, who largely masterminded the transition, adding, “Politicians must take tough decisions.”

The new power plants, mostly wind and hydro, will add a small percentage to ratepayers bills (about 5% more than the US average electricity rate rises of around 6% a year) but within a decade that initial investment expense should be gone, and ongoing rates will be much lower, due to the fuel-free nature of renewable energy. As a result the nation’s electricity rates should drop within ten to fifteen years and then remain low.

Like China, the Portuguese government restructured and privatized former state energy utilities to create a grid better suited to renewable power sources.

Like the rest of Europe, under Europe’s cap and trade system the nation is subject to a price on carbon, making it cheaper to build clean energy than dirty energy. In 1990, the base year for the Kyoto accord that Europe signed, Portugal had a simple agrarian economy.

Now, along with Scotland, Portugal has shot to leadership in enabling the development of wave energy. It set a feed-in tariff for wave energy that will pay 260 euros per megawatt-hour for the first 20 MW installed. The government has a very practical approach to radical innovation. They say, “Let’s do it: then we’ll see.This a problem; this is not”, says WaveRoller CEO John Liljelund. Portugal nurtured the first ocean power testing centers near Peniche, off the coast in Europe for wave and tidal energy.

Since the very capital-intensive first prototypes of wave and tidal power are still largely at the R&D stage, ocean power has yet to bring much power to the grid. But a thriving wind industry, created from scratch in the formerly agrarian society, is not only supplying the nation, along with hydro power, but now exporting wind farms to less developed nations such as the USA.

Energias de Portugal, the country’s largest energy company, owns wind farms in Iowa and Texas, through its American subsidiary, Horizon Wind Energy.

Portugal’s next goal is 60% by 2020. They should find that easy. When you consider the extraordinary feat of adding 28% in only 5 years to get to 45%, adding another 15% more over 10 years looks like a walk in the park.

Image: An Oyster prototype
Susan Kraemer@Twitter

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