Pursuing efficiency

The European Green Deal launched in 2019 established the roadmap for reducing emissions in the EU by at least 55%.

To align with these objectives, Portugal developed the National Energy and Climate Plan 2030 (Plano Nacional de Energia e Clima - “PNEC 2030”), which is the main national policy instrument for energy and climate for the coming decade. PNEC 2030 establishes clear goals for scaling up renewable energy capacity. By the end of the decade, it aims to install: 20.8 GW of solar power capacity, and12.4 GW of wind power capacity. These two sources alone will contribute more than 33 GW of intermittent renewable capacity, in addition to the power already generated from other existing sources.

To manage this rapid growth and ensure reliable grid operations, the PNEC also plans for 1.5 GW of battery storage capacity. This is vital for stabilizing the public electricity grid (known as the Rede Elétrica de Serviço Público, or RESP). Intermittent renewables like solar and wind naturally fluctuate, creating periods of excess supply (surplus) and insufficient supply (deficit) compared to demand. Batteries help smooth these imbalances, preventing disruptions and supporting a more resilient energy system.

The Portuguese National Electricity System Law, enacted by Decree-Law No. 15/2022 includes the licensing of storage facilities.

A storage facility may take one of the two forms:

• Standalone Storage: when the facility is directly connected to the RESP without being associated with a power generation plant or a self-consumption production unit (Unidade de Produção para Autoconsumo – “UPAC”); or
• Co-located Storage: when the facility is combined with a power generation plant or a UPAC, both sharing the same grid connection point to the RESP.

In the period from January to August 2025, Portugal generated 33,107 GWh of electricity, with renewables accounting for 76.9% of total generation—the fourth-highest share in Europe, following Norway, Denmark, and Austria. This strong renewable performance highlights the growing need for energy storage solutions, which will be critical to achieving a resilient and sustainable energy transition.

Portuguese storage as of today

Portugal’s energy-storage market is entering a new stage of maturity, combining grid-scale standalone batteries and hybrid (co-located) systems with renewable plants. As of mid-2025, total installed and near-operational capacity amounts to roughly 120 MW, with several hundred megawatts in development.

The first co-located projects are already in operation, including Galp’s Alcoutim hybrid PV plant (5 MW/20 MWh, operational since April 2025) and EDP’s Alqueva floating solar system (1 MW/2 MWh, in service since 2022). Additional hybrid capacity is being deployed, namely by Iberdrola, Greenvolt, Akuo, EDP and GALP, supported by Portugal’s Recovery and Resilience Plan (PRR) programme under the “Flexibility and Storage” incentive call.

Under this PRR scheme, 41 projects were approved, totalling around 500 MW of new storage capacity and € 99.75 million in grants. The main beneficiaries include Akuo (80 MW), Iberdrola (80 MW), GALP (55 MW) and EDP (30 MW)—mostly co-located solar or wind hybrid plants.

On the standalone side, the Casal da Cortiça facility in Leiria, developed by Infraventus Energy Storage is Portugal’s first fully merchant large-scale battery using lithium technology with a power output of 12 MVA and a charging capacity of 24 MWh. Commissioned in June 2025, it trades energy on the spot and ancillary system services. Industrial behind-the-meter storage is also emerging, exemplified by Bondalti’s 12 MWh system in Estarreja developed by EDP.

The next milestone is EDP’s BigBATT project at Carregado (180 MW / 360 MWh), a stand-alone grid-connected battery co-funded by the EU Innovation Fund, designed to deliver fast-frequency response and other ancillary system services to the public electricity grid from 2026 onwards.

Public incentives have so far focused on co-located storage projects, while standalone capacity — around 24 MWh currently operational and several hundred megawatts planned — is expected to grow rapidly following the 750 MVA system-services auction announced by the Portuguese Government scheduled for early 2026.

THE PRIOR CONTROL MECHANISM

Prior control FOR standalonestorage

The production and/or standalone storage of electricity is subject to a prior control scheme, as follows:

• Production and Operation Licence: for facilities with an installed capacity exceeding 1 MW;
• Prior Registration and Operation Certificate: for facilities with an installed capacity above 30 kW and up to 1 MW;
• Prior Communication: for production facilities with an installed capacity above 700 W and up to 30 kW.

The issuance of the Production Licence depends on the prior allocation of a capacity reservation title (Título de Reserva de Capacidade - “TRC”), which is subject to the provision of a financial deposit.

In addition, storage activity is subject to a prior verification procedure concerning the charging capacity from the RESP, carried out by the grid operator and the global manager of the national electricity system. For this purpose, before granting the TRC, the Portuguese Directorate of Energy (Direção Geral de Energia e Geologia - “DGEG”) requests opinions from both these entities, which sets out the maximum power from the RESP.

The TRC may be obtained through one of the following three modalities:

• General Access: Applicable when there is available reception capacity in the RESP. Subject to the payment of a financial deposit to DGEG in the amount of EUR 10,000/MVA for a minimum period of 30 months, or until the storage facility enters into operation.
• Agreement with the Grid Operator: Applicable when there is no available reception capacity in the RESP and the Government has set the maximum annual injection capacity to be allocated under this modality, by 15 January of each year. Subject to the payment of a financial deposit to the grid operator in the amount of EUR 10,000/MVA for a minimum period of 30 months.
• Competitive Procedure: Applicable when the Government decides to launch a competitive procedure for the allocation of TRC. The terms and conditions governing the allocation of the TRC and the provision of financial deposits are defined in the procedure documentation.

PRIOR CONTROL FOR CO-LOCATED STORAGE

The licensing of a storage facility co-located with a power generation plant may occur under one of the following circumstances:

• Ab Initio: when the licensing processes for both the generation and the storage facilities are initiated simultaneously; or
• A Posteriori: when the storage facility is to be installed at an existing generation plant.

In the case of Ab Initio storage, the applicable prior control procedure is that which governs the generation facility and encompasses both activities (generation and storage) simultaneously.

Conversely, A Posteriori storage follows the hybridization procedure, in which a new prior control title (Production License or Prior Registration) is issued for the storage project.

In hybridization, a new prior control title explicitly identify the injection capacity in the RESP allocated to the new storage unit and entail an amendment to the pre-existing TRC.

The application for the Production Licence is submitted by the relevant holder to DGEG, accompanied by the documents listed in Annex I of Decree-Law No. 15/2022, insofar as applicable, since DGEG notifies the applicant of the elements initially submitted in connection with the generation project’s Production Licence that remain valid. Within ten days of receiving the request, DGEG may request additional information, to be provided within a maximum period of 30 days.

If the hybridization concerns a project previously subject to Environmental Impact Assessment (AIA), no new consultation with the competent environmental authority is required, provided that the new storage project does not involve:

• Any change to the AIA decision or its underlying grounds;
• Any modification to the location of the generation facility or a reduction in its implementation area.

 Prior control SUMMARY

	Standalone Storage	Co-located Storage
Prior control scheme	•Production and Operation Licence: > 1 MW; •Prior Registration and Operation Certificate: > 30 kW and ≤ 1 MW; •Prior Communication: > 700 W and ≤ 30 kW	•Ab Initio: joint licensing with the generation facility (generation + storage under the same procedure); •A Posteriori: installation at an existing generation facility (hybridization procedure, in which a new prior control title is issued for the storage project)
TRC	Mandatory when energy injection into the RESP exceeds 1 MW	Not required for storage facilities, but mandatory for generation plants where energy injection into the RESP exceeds 1 MW
TRC Modalities	•General Access; •Agreement with the Grid Operator; •Competitive Procedure	Follows the TRC of the generation facility
Deadlines and Decision	Prior control title issued within a 30-day period following the expiry of a 20-day consultation period with external entities
AIA	Applicable if the legal thresholds are exceeded	Exemption from a new AIA if the amendment does not entail any change to the AIA decision or to the implementation area of the generation facility

 

PRIOR CONTROL DEADLINES

Title	Deadline for Obtaining	Extension	Exclusions from the Deadline
Production License	One year after obtaining the TRC	No limit, by order of the Government member responsible for the energy sector, in exceptional circumstances and upon duly justified request	N/A
Operation License	One year after obtaining the Production Licence		Periods related to the construction of the facility, grid infrastructures upgrades and administrative or judicial appeal proceedings
Prior Registration	N/A	N/A	N/A
Operation Certificate	Nine months after obtaining the Prior Registration	No limit, by order of the Government member responsible for the energy sector, in exceptional circumstances and upon duly justified request	The deadline is suspended in the event of delays in the availability of grid connection conditions by the RESP operator

 

USE OF RESERVE CAPACITY

DGEG established (Order No. 1857/2025) a specific procedure applicable to the processing of licensing requests for electricity storage facilities that use previously allocated injection capacity reservations in the RESP, in the following cases:

• Technology change of a solar generation facility with a TRC, where construction has not yet begun;
• Standalone or co-located storage making use of injection capacity previously allocated to a renewable energy generation facility.

In the case of a technology change, the TRC granted under the general access regime for a solar generation facility may be amended for a standalone storage installation, provided that, at the time of the request, the generation facility has not yet started construction.

The amendment request must be submittef by the TRC holder to DGEG, accompanied by the following information: (i) identification of the existing TRC, (ii) summary of the intended operation conditions, (iii) maximum injection capacity in the RESP, and (iv) maximum apparent power for charging from the RESP.

The injection capacity granted under a TRC allocated to renewable energy generation plants can also be used to apply for a Production License for a standalone or co-located storage facility, provided that the connection is:

• In the case of the transmission grid: at the same interconnection point;
• In the case of the distribution grid: within the same circuit.

The application must be submitted by the TRC holder to DGEG (with the express authorisation of the storage facility owner) and include the documents listed in Annex I of Decree-Law No. 15/2022, as well as:

• The operation conditions of the storage facility (maximum injection and charging through the RESP); and
• A written agreement between the storage facility owner and the generation facility owner, coordinating the right to inject energy into the RESP

DGEG checks the completeness of the application and then forward it to the grid operator for an opinion. If it is favourable, DGEG issues the Production License.

Use of reserve capacity (summary)

Model	Required Documents	Procedure	Decision Period (DGEG)	Outcome
Technology change	•Identification of the of the existing TRC; •Summary of the operating conditions; •Maximum apparent power for charging through the RESP; •Justification confirming that construction of the generation facility has not yet started.	•Application submitted to DGEG; •Verification by DGEG; •Opinion from the Grid Operator (30 days); •Opinion from the Global System Manager (15 days).	Final decision after opinions from the Grid Operator and the Global System Manager (45 days in total, unless delayed).	Amended TRC issued
Standalone or Co-located Storage (previously allocated TRC)	•Supporting documents listed in Annex I of Decree-Law No. 15/2022; •Operating conditions (maximum injection and charging power through the RESP); •Written agreement between the storage facility owner and the generation facility owner.
				Production License issued

Use of reserve capacity with restrictions

Under the general access model for TRC allocation, the law distinguishes between restricted and unrestricted access.

The restricted access option allows the connection of standalone storage facilities to the RESP, subject to energy injection limits that depend on grid conditions and available capacity at any given time. The goal is to enable new connections through agreements that make use of existing infrastructure, even in areas with limited capacity.

In simple terms, restricted access applies when the grid operator, after a technical assessment of a new connection request, identifies the need for investment or reinforcement to ensure firm access.

The licensing process is the same for both general access modalities (restricted and unrestricted), and the developer must obtain: (i) a TRC, (ii) a Production Licence, and (iii) an Operation Licence.

ERSE Directive No. 3/2025 establishes the general conditions for restricted access agreements, setting out the contractual and technical framework for this modality.

Restricted access is formalised through a Restricted Access Agreement, entered into between the storage facility owner and the grid operator. The agreement consists of: (i) General Conditions, defined by ERSE and applicable to all cases; and (ii) Specific Conditions, which set out the particular terms for each facility.

The facility owner must have real-time communication systems in place to enable compliance with grid operator instructions regarding capacity limitation and/or reduction.

When restrictions apply to more than one facility under agreement, their activation follows a “Last in, First out” methodology, meaning that the most recent agreement is curtailed first, and so on, until the total restricted capacity is reached.

The term of the agreement is defined in its specific conditions and may terminate when the initially restricted capacity becomes firm (i.e., when the grid becomes fully available), by mutual agreement, in the event of material changes to contractual conditions, or if the owner fails to comply with curtailment orders issued by the grid operator.

Use of reserve CAPACITY withrestrictions (summary)

Access Type	Allocation of a TRC under general access, which may be subject to restrictions or not.
Purpose	To allow the connection of facilities in areas with limited capacity, making use of existing infrastructure.
When it applies	Whenever, following a technical assessment, the grid operator identifies the need for investment or reinforcement to enable firm access.
Licensing	Same as unrestricted access: (i) TRC, (ii) Production Licence, and (iii) Operation Licence.
Access Agreement	Entered into between the facility owner and the grid operator. It includes: •General conditions (defined by ERSE and common to all cases); and •Specific conditions (applicable to each facility).
Owner’s obligations	•Real-time communication systems; •Compliance with limitation or shutdown instructions; •Respect for the power limits defined in the TRC.
Restriction Management	Application of the “Last in, First out” methodology — the most recent agreements are curtailed first.
Duration and Termination	Defined in in the specific conditions. In any case, the agreement terminates when: •The restricted capacity becomes firm; •By mutual agreement of the parties; •In case of non-compliance with curtailment orders.

ENVIRONMENTAL ASSESSMENT

The Environmental Impact Assessment Legal Framework applies to energy co-located storage (with a power generation facility), under the supervision of the Portuguese Environment Agency (Agência Portuguesa do Ambiente – “APA”).

For co-located storage, the addition of a storage facility to an existing power plant is subject to an Environmental Impact Assessment (Avaliação de Impacto Ambiental – “AIA”) according to the applicable thresholds for generation facilities. Projects subject to AIA include:

• Solar power plants: projects with an installed capacity above 50 MW, or occupying an area exceeding 100 hectares, or projects above 20 MW or covering more than 10 hectares when located in sensitive areas;
• Wind farms: projects with more than 20 turbines or installed capacity above 50 MW, or with more than 10 turbines or capacity above 20 MW when located in sensitive areas.

Changes or extensions to an existing power plant already subject to AIA do not require a new assessment, provided that the storage installation remains within the original project area.

In its turn, standalone storage projects are also subject to the supervision of APA. They are not subject to conduct an AIA if they do not exceed the following capacity thresholds:

• In general: installed power below 50 MW and storage capacity below 200 MWh;
• Sensitive areas: installed power below 20 MW and storage capacity below 80 MWh.

Whenever these thresholds are exceeded, the standalone storage project will require an AIA, pursuant to the general rules of the Environmental Impact Assessment Legal Framework.

Storage projects below AIA thresholds located in sensitive areas are subject to an Environmental Incidence Analysis (Avaliação de Incidências Ambientais – “AINCA”).

The AINCA is conducted by the local Regional Coordination and Development Commission (“CCDR”) and is based on an Environmental Incidence Study submitted by the project promoter.

Environmentalassessment (summary)

Project Type	AIA Conditions	Exceptions	AINCA
Co-located Storage	•Solar plants: > 50 MW or panel/inverter area > 100 ha; •Solar plants in sensitive areas: > 20 MW or area > 10 ha; •Wind farms: more than 20 turbines or installed capacity > 50 MW; •Wind farms in sensitive areas: more than 10 turbines or installed capacity > 20 MW	Modifications or extensions of a power generation facility already subject to AIA do not require a new assessment, provided the storage installation remains within the original project area.
Standalone Storage	Not subject to AIA if below the following thresholds: •General case: < 50 MW and capacity < 200 MWh; •Sensitive areas: < 20 MW and capacity < 80 MWh	If the thresholds are exceeded, AIA is required and the Environmental Impact Assessment Legal Framework applies.	Storage projects below AIA thresholds located in sensitive areas.

ADDITIONAL LICENSING

In accordance with the Framework for Urbanization and Building, the construction of storage facilities must obtain:

• A construction permit; or
• Approval of a prior notice request (“PIP”).

When a construction permit application is submitted, the project designs — namely the architectural project — must be reviewed to verify compliance with land-use and territorial planning instruments.

The final approval decision of the construction permit constitutes the authorizing title for the start of construction works.

The prior notice procedure consists of a declaration that, once duly completed and submitted, allows for the immediate commencement of construction works, without the need for any additional administrative act.

Upon completion of the works, the promoter must submit to the municipality a declaration of responsibility confirming that the works were carried out in accordance with the approved projects.

The project promoter bears the costs of building the infrastructure required to connect the storage facility to the RESP, including the costs related to the land occupation necessary for such infrastructure.

As a general rule, projects with an installed capacity above 50 MVA are connected to the transmission grid, while those below 50 MVA are connected to the distribution grid.

Once the TRC is obtained, the project promoter must request the grid operator to connect the project to the RESP. Upon receiving the request, the grid operator must inform the promoter about: (i) the infrastructure required to ensure the connection; and(ii) the estimated connection costs.

All costs and charges associated with the licensing process and construction of the connection infrastructure are the responsibility of the promoter, subject to technical validation of the project by the grid operator. After completion, the connection infrastructure becomes part of the RESP and falls under the concession of the respective grid operator.

MUNICIPAL GRANTS

The holder of a storage facility with an assigned connection capacity above 1 MVA is required to grant, once and free of charge, to the municipality (or municipalities) where the storage facility is located, one of the following:

• A self-consumption unit with an installed capacity equivalent to 1% of the storage facility’s capacity; or
• A storage installation to be installed in municipal buildings or public-use facilities, or, as indicated by the municipality, for the benefit of local communities located near the power generation or storage facility; or
• Electric vehicle charging stations located in public spaces and intended for public use, with an equivalent capacity.

The municipality may opt, instead of the grant, for a one-time compensation of EUR 1,500 per MVA of assigned connection capacity.

The monetary compensation must be used to promote energy efficiency in municipal buildings, public-use facilities, or residential buildings serving local populations.

The holder of the storage facility is responsible for installing the infrastructures in the locations indicated and made available by the beneficiary municipalities, after these have obtained their respective prior control titles.

The grants are formalized through a protocol to be entered into between the storage facility holder and the municipality (or municipalities) where the facility is located, between the issuance of the Production License and the issuance of the Operation License.

The duly signed protocol is a prerequisite for the issuance of the Operation License.

Storage licensing steps

1. TRC

• General Access;
• Agreement with the Grid Operator;
• Competitive Procedure

2. Prior Control

• Standalone Storage: Production License / Prior Registration / Prior Communication
• Co-located Storage: Ab Initio (included in the generation facility’s licensing process) or A Posteriori (hybridization)

3. Environement Asessment

• AIA (if thresholds are exceeded;
• AINCA (if located in sensitive areas without exceeding thresholds)

4. Municipal Control

• Construction License or Prior Communication

5. Connection to thr RESP

 Sale of Energy

The holder of a storage facility is entitled to sell the stored energy and to receive remuneration through different channels, namely:

• Organized Market (MIBEL): The stored energy may be sold on the Iberian Electricity Market (MIBEL) at the prevailing spot price, through a duly qualified market agent.
• Bilateral Contracting (PPA): The sale of energy may take place under a bilateral power purchase agreement (PPA) with suppliers or directly with consumers, either under a physical modality (physical delivery of the stored electricity), a virtual modality (without physical delivery, through a financial agreement based on the market price of energy), or any other form freely agreed between the parties.
• Aggregators and Suppliers: The stored electricity may be sold to an aggregator or electricity supplier at a freely negotiated price.

In the absence of market-based aggregators, the energy may be sold to the last-resort aggregator, at a price defined according to the reference tariffs set by ERSE.

• Feed-in Tariff: If the storage facility benefits from a guaranteed remuneration regime, the stored energy is delivered to the entity legally responsible for acquiring electricity from renewable sources, in exchange for payment of the applicable tariff.
• Ancillary System Services: Storage facilities may also obtain additional revenue by providing system services, including:

1. Capacity and reserve services;
2. Frequency and voltage regulation;
3. Grid congestion management; and
4. Demand response and back-up services.

• Sale of Storage Capacity: The holder may also sell storage capacity to third parties, under terms freely agreed between the parties

Market Outlook

The lack of injection capacity in the RESP remains the main obstacle to the development of stand-alone storage projects, making it essential that the planned investments by the grid operators are effectively implemented. Otherwise, storage will remain limited to co-located systems, reducing flexibility and compromising the security and resilience of the national electricity system. Furthermore, the recent blackout in the Iberian Peninsula has highlighted the importance of strengthening system services, accelerating the integration of storage as an essential element to ensure supply stability in an energy system increasingly dependent on intermittent renewable sources.

The ancillary system services market, which remunerates resources that contribute to the balance between electricity generation and consumption, is currently undergoing profound transformation.

By the end of 2025, Portugal is expected to join the European PICASSO platform (Platform for the International Coordination of Automated Frequency Restoration and Stable System Operation), which will harmonize the operation of aFRR (automatic Frequency Restoration Reserve) — the service that automatically corrects, within minutes, deviations between generation and demand, preventing frequency instability in the power system.

With the implementation of PICASSO, the aFRR will operate within an integrated European market, featuring cross-border activation and 15-minute granularity. Activated energy will be remunerated based on performance in the European market, while availability payments in Portugal will continue to follow a pay-as-cleared model — meaning all participants receive the price of the highest accepted offer. In alternative models such as “pay-as-bid” — used in Austria, the Czech Republic, and Germany under the ALPACA scheme — each operator is paid the price it bids, which tends to increase competition and reduce system costs.

The capacity auctions for storage systems, announced by the Minister for Environment and Energy and expected to take place by January 2026, with a total capacity of 750 MVA, represent an important step towards rewarding the security and stability that batteries provide to the electricity grid, thereby strengthening system resilience.

Nevertheless, stand-alone storage projects continue to face high costs and a lack of predictable remuneration models. The creation of availability-based remuneration mechanisms, particularly long-term contracts, will therefore be essential to ensure minimum returns, attract private investment, and guarantee the economic viability of these projects.