PORTUGAL WON'T MEET RENEWABLE ENERGY TARGETS

C O N F I D E N T I A L LISBON 001898 SIPDIS E.O. 12958: DECL: 07/31/2018 TAGS: ENRG KGHG TRGY ECON PO SUBJECT: PORTUGAL WON'T MEET RENEWABLE ENERGY TARGETS Classified By: POL CHIEF TROY FITRELL, REASONS 1.4 (B,D) SUMMARY -------------- ¶1. (C) Portugal is falling short on efforts to expand biofuels production due to tender problems this year. Portugal continues a broadbased effort to diversify energy sources, wooing potential new suppliers for petroleum and natural gas while expanding renewable energy generation capacity. Although there is some concern that lower Spanish fuel taxes are enticing Portuguese customers into cross-border fillups, the concern has not translated into concerted investigation or action. RENEWABLES STILL THE POPULAR WAVE... -------------- ¶2. (C) Bento de Morais Sarmento, Deputy Director General for Energy and Geology, briefed us on a range of energy issues. He reiterated Portugal's support for the International Renewable Energy Agency (IRENA) proposed by Germany, but said the meeting planned for this fall had been pushed back to next year, possibly to await a new and potentially more favorable US administration. He confirmed Portugal's continuing commitment to expanding renewable energy generation capacity from wind, solar, wave, biofuels, and other sources. Sarmento said problems with a recent biofuels tender will keep the country from meeting its biofuels production targets this year, but Portugal continues to strive to replace 10 percent of transport sector fuel requirements from biofuels production by 2010. He also mentioned a possibility for import of wind-power generated electricity from North African nations, but commented this is clearly just an idea for discussion at this point. ...BUT ON THE "CONVENTIONAL SIDE"... -------------- ¶3. (SBU) As for petroleum and natural gas, Sarmento referred to recent well-publicized talks with Venezuela, Libya, and other nations as proof of the GOP's determination to diversify sources. Regarding recent fuel price increases, Sarmento said it was interesting that Portugal gasoline and diesel consumption remained relatively constant. Sarmento speculated that the increased prices were causing more Portuguese, particularly commercial transporters, to cross the border and purchase fuel in Spain, where prices are 20-30 cents lower per liter due to lower fuel taxes. He noted, however, this possibility has not been researched. Regarding the liberalization of Portugal's energy industry, Sarmento said competition was a reality on the supply side, but the distribution sector still had far to go. ¶4. (C) Sarmento sees no probability for any expansion of nuclear power generation due to negligible political or public support. The knowledge-base for skilled technical personnel is also dwindling because there has been so little nuclear power activity in Portugal over the last several decades. COMMENT -------------- ¶5. (SBU) Portugal's commitment to renewables remains strong, but translating this into action has been problematic. The GOP will look for high-profile ways to demonstrate its achievements in this sector. Stephenson