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
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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...
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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"...
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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
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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