Oceanic Renewables in Portugal: What Path Ahead?

A week ago today, in Lisbon, I spoke at a Conference on “Oceanic Renewable Energies: An Industrial and Exporting Strategy”, organized under the auspices of the Portuguese Ministry for the Sea. This Conference flows from an extensive report – “Energy at Sea: Roadmap for an Industrial Strategy for Oceanic Renewable Energies” – issued last November by a WG chaired by HE the Minister for the Sea, Ana Paula Vitorino.

One of the potential goals for Portugal is that oceanic renewables could in the future account for 25% of the annual electricity consumption. From an economic standpoint, other interesting figures concerning oceanic renewables are being targeted. By 2020, a GVA of €280M for the Portuguese economy, a direct investment of €254M, and the creation of 1,500 direct jobs.

A critical aspect of the strategy being devised concerns financing and investment attraction. Speakers were invited to outline 3 proposals or suggestions for the financing of projects in oceanic renewable energy. The challenge was put forward for speakers to ‘brainstorm’ and to ‘think outside the box’. References were made inter alia to EU / State support, the involvement of multilaterals, project financing and PPPs, grants, private equity, as well as a combination of some of the foregoing. As could be expected, the requirement of ‘stability’ of terms for investors and financiers was also emphasized as crucial.

My presentation, while endorsing much of what had been said (advantage for the last speaker), focused on a few other financing approaches. A preliminary point was made: financing depends on the stage of the project to be funded (i.e. research, testing or ‘proof-of-concept’, pre-commercial, development, or operation). In addition to all those already mentioned, I argued, other approaches could be considered. One is the possibility of setting up a neutral (or quasi-neutral) carbon tax, earmarked entirely for financing the transition into a ‘decarbonized economy’ based on oceanic renewables. Another is the involvement of ‘big oil’ in the transition to a ‘decarbonized economy’ by demonstrating the sustainability of the underlying economics of oceanic renewables (which is already being considered in some projects). A third possible approach was the recourse to community-based non-profit companies for furthering specific oceanic renewables projects (which in a country with two archipelagos might be no minor issue).

The technologic challenges, fraught with uncertainty, are more than a few. But so are the environmental and economic gains potentially ahead. Portugal is currently at the forefront of oceanic renewable energies. Remaining there will be no minor test, but it is an achievable one. The geographical context is unique. Legal and economic requirements can be shaped. If the ‘ocean-driven economic policy’ continues to be pursued, companies involved in oceanic renewable energies should look into Portugal as their ‘natural lab’.