Big ambition, low certainty: nation's giant floating wind plans face questions

Portugal is facing question marks over whether its planned flagship offshore wind tender can be completed this year, amid warnings about waning interest in a nation that hopes to become a major new European floating wind market.

The centre-right government led by Prime Minister Luís Montenegro called a review of the previous administration's offshore wind tender plan after taking office in April 2024, resulting in new public consultation process.

The country had heard a growing chorus of complaints that the fishing sector had not been adequately consulted when areas for offshore wind development were initially defined in the 2022-23 period.

“The public consultation that took place now was the first opportunity for the fishing industry to have real input on the process,” says Lisbon-based offshore wind consultant Carla Ribeiro.

The outcome was an overall reduction of about 15% in the total area on offer, compared with the previous government’s plans, and one of the most significant reductions was off the coast of Viana do Castelo, northern Portugal, which is considered the country's best area for offshore wind.

The removal of a southern subsection, along with some midwater areas left 229 square kilometres available for the planned offshore wind, reducing estimated capacity from Viana do Castelo to 800MW.

The Portuguese government reaffirmed its overall commitment to renewable energy targets but reduced the total area on offer by 470 sq km and lopped 600MW from the previous target of auctioning 10GW of capacity by 2030.

Apart from the reduced area for Viana do Castelo, an area off Ericeira was excluded.

The other areas to be included in the auction include 722km2 off Leixões (2.5GW), 1,325 sq km off Figueira da Foz (4.6GW) and 430 sq km off Sines (1.5GW).

'Harmonious coexistence'

Despite the reduction, Portugal’s trade association for renewable industries (APEN) supported the move.

“The energy transition is a path that must be followed by everyone together, without leaving anyone behind, and the zones now approved are the result of this, guaranteeing a harmonious and sustainable coexistence in the future,” commented APREN president Pedro Amaral Jorge.

Among developers, however, there were still more questions than answers about the process that is supposed to lead to Portugal’s inaugural offshore wind tender, which will need to lean on floating technologies due to the deep waters off its coasts.

“No dates for the auction have been defined, nor indeed if this is going to be an auction for the seabed lease or if it will also include some sort of pricing mechanism,” Ribeiro said.

She also noted a lack of clarity on the extent to which state authorities will take responsibility for maritime surveys, with little sign of pre-auction studies and assessments.

“With no G&G [geological and geophysical] surveys, environmental or wind and metocean measurement campaigns taking place, this seems to indicate that developers will have to bear all the burden of undertaking these surveys and assessments by themselves, as well as the risk of perhaps bidding without all this data to feed into their price limit,” Ribeiro commented.

Among developers, BayWa r.e has faced frustration in Portugal after applying for exclusive rights to develop a 600MW pilot project in a maritime zone off Viana do Castelo in 2021.

The project was proposed for an area that had been set aside for research and development, including commercial scale demonstrators.

The Technological Free Zone (ZLT), as it was called, was where the pioneering WindFloat Atlantic project is located, occupying about 20% of the total ZLT area.

The BayWa r.e. project advanced for a year, but then stalled due to a regulatory provision that gave rivals the right to trigger a competitive process.

It was then overtaken by the preparations for a full scale wind tender.

The newly announced offshore wind areas include a 5.6 sq km zone off Agucadoura that has been reserved for research and demonstrator projects.

Ricardo Rocha, offshore wind technical director with BayWa r.e. wonders why the government did not make use of an already-approved corridor for cables that is where the WindFloat Atlantic export cable reaches its grid connection.

"This could have been used for other cables, avoiding discussion with the fishermen. Instead, they pushed the areas further to the north, which is okay from a wind resource perspective, but (in terms of consenting) it was a case of reinventing the wheel," he says.

The result, Rocha fears, is that some prime areas for offshore wind resource and grid connection have been excluded or reserved for research and investigation.

“During the entire process, governments have worked closely with academics and scientists from the universities, but it is important to also listen to some advisors with experience of the offshore wind business,” he argues.

He also questions the logic of the decision to exclude a middle zone between the near shore and the limit of the continental platform, which, he says, is less important for large-scale fishing activities.

Cooling to Iberia?

Similar delays and uncertainties in Spain mean big developers such as Shell, Orsted, Equinor and RWE have either pulled out or publicly cooled to Iberia as a region to develop offshore wind.

While regional giants EDP Renewables and Iberdrola are expected to stay the course, there are growing questions about whether independent players such as BayWa r.e. will do so.

Rocha’s list of questions about the Portuguese process include doubts about the auction format, the presence or absence of a price ceiling, seabed rights and the revenue support to be offered.

He said this uncertainty is making rival markets look comparatively more attractive.

These include France, where preliminary studies were made to support the bidding and Italy, a market that offers less favourable wind conditions than Iberia or France but has opted for a developer led approach to facilitate greenfield projects.

In France's AO5 tender, BayWa r.e. partnered Belgium's Elicio to win the rights to build up to 270MW of floating capacity. The Pennavel project, as it is known, was hailed as the world’s first commercial-scale floating offshore wind project to secure a tariff through a competitive tender.

In Italy, the company's has a 9GW pipeline of greenfield projects in the early development phase.