Lisbon, May 29, 2026 (Lusa) - The Portuguese government is set to launch an auction for 750 megavolt-amperes (MVA) of battery capacity and draw up contracts for difference (CfDs) to stabilise energy prices and boost investment in the sector, the minister for the environment and energy announced on Friday.
Maria da Graça Carvalho revealed, during the “Energy that Moves the Country” conference organised by the newspaper ECO, that the auction model will be presented on 29 June and will include additional renewable generation capacity already available in the electricity system.
She explained that the tender will provide for compensation mechanisms for the local authorities where the projects are installed, through the sharing of revenues associated with the activity of the power generation centres.
The minister said that the government is working with the regulator on medium- and long-term contracts, specifically CfDs, to reduce consumers’ exposure to the volatility of energy markets and provide greater stability for investors’ revenues, whilst safeguarding the proper functioning of the market.
The mechanisms are intended to apply primarily to technologies involving higher risk and investment, such as wind power, whilst also allowing for an upgrade of existing wind farms to increase production capacity and efficiency.
For Maria da Graça Carvalho, increasing wind power production by leveraging existing projects will be essential to meeting the targets of the 2030 National Energy and Climate Plan (PNEC).
In the area of electricity demand, she noted that applications for connection to the National Transmission Grid have reached record levels, with around 30 gigavolt-amperes (GVA) of pending applications as of June 2025 and a further 9 GVA already allocated but not yet operational.
In view of the pressure on the grid, the government decided to extend the High Demand Zone (ZGP) scheme to the entire mainland, a move which has resulted in expressions of interest equivalent to 4.6 GVA.
According to the minister, grid operator, REN, has already indicated to the government the need for an investment of around €400 million to reinforce the electricity grid in order to meet the increase in demand.
During her speech, the minister also stated that the transposition of the Renewable Energy Directive (RED III) is “in its final stages”, being divided into three main pieces of legislation: one relating to renewable energy integration targets, another establishing the organisation and operation of the National Electricity System regime, and a third concerning the technical specifications for fuels.
According to the minister, the legislative texts relating to renewable energy targets and technical specifications for fuels are already public, although they have not yet been approved, as they were subject to a ‘stand-still’ period with the European Commission.
In the case of the fuel legislation, this period ended on 18 May and the text now awaits approval by the Cabinet.
The legislation on targets, however, remains in a ‘stand-still’ period until 22 July, after which it will follow the same process.
As for the legislation on the National Electricity System, approved by the Cabinet on 19 March, it is awaiting promulgation by the country's president.
Among the measures set out in the latter decree, the minister highlighted the "overriding public interest" mechanism, applicable to planning, construction and operation of renewable power generation centres and storage facilities.
The minister assured that the priority will continue to be the development of projects in coordination with all relevant authorities, but acknowledged that the government may resort to this instrument “in duly justified cases”.
PYR/MYAL // AYLS
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