Diagnostic Toolkit for Reducing Regulatory Barriers to Solar, Wind and Pumped Hydro Storage in the European Union

14. Algarve Region

14.1. PV solar potential in the Algarve, Portugal

The Algarve, Portugal’s southernmost NUTS2 region, occupies a strategic position in Portugal’s energy transition and serves as a valuable case study for understanding regulatory barriers to renewable energy deployment. In recent years, the Algarve has emerged as an important hub for PV solar deployment, not least given its high solar irradiance. With on average 300 days of sunshine per year and solar irradiation averaging between 1 600-1 800 kWh/kW per year1, there is enormous potential for different types of PV solar, including utility‑scale PV solar, floating solar.

1. The Algarve region shows significant promise for floating PV (FPV) solar development. Research from the University of Évora in 2023 indicated substantial potential in the Algarve, similar to the neighbouring Alentejo region, which leads Portugal in FPV suitability.2 The study found that, even after applying an 85% reduction to the total water surface available at national level, and with the selection criteria including some technical and environmental issues, the potential of FPV systems can reach a minimum estimated national capacity of 10.8 GW.

2. The Algarve's agricultural landscape also presents opportunities for agrivoltaics PV solar. Research indicates that such systems in Portugal can achieve payback periods of less than five years while generating more combined value than either standalone solar installations or agricultural production alone. This dual-use approach could be valuable in the Algarve, where agricultural land is both economically important and environmentally sensitive.

This case study focuses on utility-scale PV solar (and not on FPV or agrivoltaics) as requested and agreed with the regional authorities. Although significant utility-scale PV solar projects have been developed and/or approved in recent years, several regulatory barriers seem to hinder continued growth in the region. OECD fieldwork and industry feedback has highlighted preliminary regulatory barriers (Table 14.1).

Table 14.1. Identified regulatory barriers and in the Algarve

Barrier type	Regulatory barrier
Spatial planning	Outdated and ambiguous spatial plans at regional and municipal level result impede renewable siting
Spatial planning	Renewable siting with focus on proximity to high-voltage transmission lines may come with insufficient consideration of social and environmental impacts, prompting local opposition
Spatial planning	Limited reference to renewable energy development in spatial plans
Permitting	Overlapping competencies between national/regional/local authorities, creating bureaucratic inertia and permitting delays
Permitting	Insufficient clarity and transparency about procedures
Grids	Grid connection delays as a result of saturated grids

Source: OECD analysis

14.2. Utility-scale PV solar deployment in the Algarve: status and future potential

14.2.1. Current deployment of utility-scale PV solar in the Algarve

As of 2024, the region hosts 551 MW of installed utility-scale PV capacity, equivalent to approximately 110 kW/km², the highest density in Portugal and among some of the highest in Southern Europe. This represents approximately 16% of Portugal’s total utility-scale solar capacity, which equals 3.5 GW in 2024.

Figure 14.1. Utility-scale installed capacity and distribution in Europe at NUTS-2 level (kW per km²)

Note: The heatmap uses Fisher breaks to define 9 categories. Fisher (1958) applied an algorithm to group continuous data samples into groups where data points are as similar as possible within a given group, and as different as possible from other groups.

Source: OECD database

When considering Portugal and Spain, the Algarve continues to rank relatively high in terms of density of installed utility-scale PV (see Figure 14.2).

Figure 14.2. Utility-scale installed capacity and distribution in Portugal and Spain at NUTS-2 level (kW per km²)

Note: : The heatmap uses Fisher breaks to define 9 categories. Fisher (1958) applied an algorithm to group continuous data samples into groups where data points are as similar as possible within a given group, and as different as possible from other groups.

Source: OECD database

If one compares the Algarve’s installed capacity with the other NUTS-2 regions in Portugal, the Algarve trailed only Alentejo in terms of installed PV capacity from 2019-2022. However, in 2024, despite operations beginning in 3 of the 4 Alcoutim PV parks3, additions of installed capacity in Oeste e Vale do Tejo and Centro (PT) brought these regions to parity with total installed capacity in the Algarve.

Figure 14.3. Utility-scale PV solar installed capacity at NUTS-2 level in Portugal (MW)

Source: OECD database

14.2.2. Future potential and projects under development

When looking at the future deployment of PV solar, one can look at (i) the technical potential (the maximum amount of PV solar capacity that can be installed based on the physical and technological constraints of the area), and (ii) the projects that are publicly announced or currently in (pre-)construction (projects “in the pipeline”). Moreover, it would be interesting to compare the current installed capacity and the projects in the pipeline with the nationally set objectives and the technical potential.

Portugal has approximately 6 GW of PV (utility-scale) solar projects in the pipeline.4 While the objective in Portugal is to install 20.8 GW of PV solar by 2030, according to the 2030 National Energy and Climate Plan (NECP), approximately three-quarters – 15.1 GW – is expected to come from utility-scale projects and the remainder – 5.7 GW – from rooftop and decentralised PV solar. Hence, despite Portugal’s ambitious objectives for PV solar deployment, the current project pipeline is projected to deliver only a part of the required capacity by 2030, and a substantial acceleration in the deployment of utility-scale projects will be necessary to achieve the NECP target.

Within the national project pipeline, 21% of projects have been announced, two-thirds are in pre-construction, and the remaining 13% have reached the construction phase. This distribution highlights the importance of streamlining administrative procedures, including permitting and environmental impact assessments (EIAs), to ensure that projects progress efficiently from planning to operation. Without such improvements, there is a risk that many projects will not be completed in time to contribute to the 2030 targets.

Focusing on the Algarve, the region currently has 95 MW of PV solar capacity in pre-construction and 43 MW under construction, for a total pipeline of 138 MW. Moreover, estimates of the Algarve’s technical potential for utility-scale PV solar suggest a capacity of up to 4 182 MW under conservative land-use assumptions.5 With 551 MW currently installed, the Algarve has exploited only 13% of its estimated technical potential. Even if all pipeline projects in the Algarve are completed, the region will still remain only at around 16% of its potential.

This means that the Algarve has a 7.6:1 ratio of remaining potential to current deployment, a figure that is consistent with patterns across most European NUTS-2 regions. From a strategic perspective, accelerating PV solar deployment in the Algarve is critical for meeting Portugal’s NECP ambitions. To achieve the national goal of 20.8 GW of solar capacity by 2030, Portugal must increase annual installations from the current rate of approximately 1 GW per year to around 2.5 GW per year. For the Algarve, this means scaling up the project pipeline (138 MW) to enable the deployment of roughly 1 800 MW by 2030 – a more than 13‑fold increase from current levels.6

Figure 14.4. Utility-scale PV projects in the pipeline in Portugal (MW)

Note: Data available distinguished between three types of projects in the pipeline, with increasing likelihood of realisation: projects (publicly) announced, projects in pre-construction and projects in construction. In this chapter, a distinction is being made between “announced projects” and projects in pre-construction and construction (which are considered to be “in the pipeline”).

Source: Pipeline data: GEM, OECD database

Addressing regulatory barriers in the Algarve would significantly increase the likelihood that the Algarve could close the gap between current trajectories and policy ambitions and as a result contribute to meeting the national targets for the deployment of PV solar, and the rest of the report will analyse the current regulatory framework and the existing barriers to deployment.

14.3. Legal and regulatory framework

14.3.1. The Portuguese legal system

Portugal is a unitary state, with three levels of governance: national, regional and local. Portugal has a tradition of centralised governance. While two autonomous regions (Azores and Madeira), municipalities and parishes exist, most legislative and regulatory powers, including on energy policy, remain with the central government. The national government sets the main frameworks, and regional and local authorities implement them within relatively narrow parameters.

The Portuguese Constitution assigns the State a duty to protect the environment and preserve natural resources, as well as ensuring correct town and country planning.7 The State shall also, via appropriate bodies and the involvement and participation of citizens, promote the integration of environmental objectives into the various policies with a sectoral scope.8 Finally, a priority duty of the State is to adopt a national energy policy that preserves natural resources and ecological balance.9

Key institutions responsible for implementing energy and environmental policy at national level include the Ministry of Environment and Energy Transition – and more specifically the Directorate-General for Energy and Geology – as well as the Energy Services Regulatory Authority (ERSE) (see section 1.3.2 for more details). Portugal’s climate and energy strategy is articulated in the 2024 National Energy and Climate Plan (NECP), outlines Portugal’s energy transition and climate policy from 2021 to 2030. It aligns national objectives with EU objectives and sets targets for decarbonisation and renewable energy deployment.

Although energy and environmental governance is centralised, regional and local authorities play important roles in territorial development. Since 2003, five Commissions for Coordination and Regional Development (CCDRs) have served as deconcentrated bodies of the central government. Decision-making at subnational level has been further reinforced by the transfer of additional competencies to local authorities and Inter-Municipal Communities (OECD, 2023[1]), including on spatial planning.

The Portuguese spatial planning framework exemplifies this model of centralised strategic control with subnational coordination. The national government maintains primary authority in terms of land-use policies (Öko-Institut e.V., 2024[2]). It performs four main functions: (i) providing a legal framework regulating planning at national, regional and local level, (ii) defining national and sectoral strategic policies to ensure an integrated, cohesive and sustainable territorial development of the country, (iii) allocating national and EU funds to specific territories and projects, and (iv) providing technical assistance at regional and local level (OECD, 2017[3]).

The Programa Nacional da Política de Ordenamento do Território (PNPOT) is Portugal's overarching spatial planning policy framework. It sets strategic guidelines for land-use, sustainable development, and territorial cohesion. Under the revised Renewable Energy Directive (RED III), Portugal is required to designate Renewable Acceleration Areas (RAAs) by February 2026. While to date, no RAAs have been officially designated yet in Portugal, the preparatory work is advanced.10 The National Laboratory for Energy and Geology (LNEG) has published studies on potential sites11 and in December 2023, the government established a Working Group for the Definition of Renewable Energy Acceleration Areas (GTAER).12

At subnational level, CCDRs are responsible for implementing national spatial policies through strategic regional plans and for coordinating municipal spatial planning. Municipalities, in turn, also play an important role in the spatial planning process, as they are responsible for preparing their local land-use plans which serve as legally binding instruments and play a critical role in renewable energy project siting and grid infrastructure deployment.

14.3.2. The Portuguese legal framework on energy

Legislation

The regulatory framework governing the electricity sector in Portugal is set out primarily in Decree-Law No. 15/2022. 13 This governs the organisation and operation of the National Electricity System (NES), including the production, licensing and integration or renewable energy sources. This legislation (the “SEN Framework Law”) entered into force on 14 January 2022 and consolidates and updates the legal provisions for electricity generation, self-consumption, energy storage, grid access, and market participation.

The SEN Framework Law was recently amended by Decree-Law 99/2024. This partially transposes the RED III Directive into Portuguese law. In force since 18 December 2024, the amending decree aims to accelerate renewable energy deployment by simplifying permitting processes and enhancing investor certainty. It introduces firm deadlines for permit-granting procedures (see Box 14.1), establishes a full legal regime for energy storage, mandates the submission of an EIA scoping document prior to launching the EIA process, and provides updated rules for compensating municipalities hosting renewable infrastructure. It also establishes a presumption of public interest in the permit-granting process for renewable energy plants.14

Other relevant legislation and regulatory instruments include:

• Despacho n.º 1859/2025 – specifies the administrative procedures for licensing energy storage facilities under Decree-Law 15/2022.15

• Decree-Law 151-B/2013 – Environmental Impact Assessment Law, amended by Decree-Law 99/2024 and that transposes the EU EIA Directive.

• ERSE (Energy Services Regulatory Authority) regulations

Box 14.1. Revised deadlines for permitting procedures

Portugal has taken a significant step towards streamlining its permitting procedures for renewable energy project by adopting Decree-Law 99/2024 establishing new, shorter deadlines applicable to permitting procedures.

Under this Decree, the attribution of new generation and operation licences should not exceed 2 years for renewable energy projects, except for offshore wind, where three years is the maximum deadline.

The Decree also introduces expedited timelines for prior registration procedures.

For solar power generation units with an installed power equal to or less than 100kW, developers will benefit from a tacit approval mechanism, also known as administrative positive silence, if authorities do not respond within one year. For other solar power generation and energy storage power unit, the timeline is three months.

Repowering projects also face new deadlines. The repowering of offshore renewable energy projects should not exceed two years. For onshore repowering projects, including energy storage facilities and the relevant connection infrastructure, the maximum deadline is one year. Finally, for repowering plants that does not extend its installed capacity of more than 20%, licensing should be granted within maximum three months.

Source: Morais Leitao analysis of Decree-Law 99/2024, Cuatrecasas analysis of Decree-Law 99/2024

Stakeholders

The deployment of utility-scale PV solar projects in the Algarve requires close co-ordination across national, regional, and local governance levels. Stakeholders involved span policy design, permitting, regulatory oversight, and environmental governance – play distinct yet interconnected roles in advancing PV solar projects. The actors participating in the procedure vary depending on several factors, including the type of activity, size of the project and the phase of the process (MACEDO VITORINO, 2023[4]; Cristas and Almeida Filipe, 2025[5]).

At the national level, the principal authorities responsible for policy development, permitting, and regulatory oversight include:

• Ministry of Environment and Energy Transition (MAET) –MAET formulates and implements policies aligned with Portugal’s decarbonisation targets, including the NECP 2030. It integrates energy transition objectives with spatial planning, environmental protection, and territorial cohesion, ensuring PV solar deployment aligns with broader sustainability frameworks such as the EU’s Green Deal.

• Directorate-General for Energy and Geology (DGEG) – Under the authority MAET, DGEG is the primary entity responsible for licensing utility-scale solar projects. It evaluates technical feasibility, grants exploitation permits and oversees compliance with national energy regulations.

• Energy Services Regulatory Authority (ERSE) – regulates market access, grid access and tariff structures, supervises compliance with grid codes and resolving disputes. ERSE also approves grid connection agreements, which are critical for utility-scale projects given the Algarve’s congested transmission network.

• Portuguese Environment Agency (Agência Portuguesa do Ambiente, APA) – conducts EIAs for solar projects, and issues binding decisions regarding environmental compliance.

Important regional and local stakeholder are, respectively, the CCDRs and municipal authorities. CCDRs are the regional arm of the Ministry of Territorial Cohesion, operating as a coordinating body for licensing processes involving multiple entities. It implements regional development strategies. CCDRs also oversee spatial planning frameworks, balancing solar deployment with tourism (critical for the region) and agricultural land-uses. Finally, local municipalities manage zoning permits and land-use approvals, often requiring solar projects to align with municipal master plans. While not directly involved in energy policy, their decisions on urban-rural boundaries and agricultural land conversion significantly influence project siting. Some municipalities (proactively) integrate solar zones into local plans, while others lag due to capacity constraints or competing priorities.

14.3.3. Algarve’s regulatory framework

The Algarve is composed of 16 municipalities and 67 parishes, all organised within a single Inter-Municipal Community (OECD, 2023[1]). Within Portugal’s centralised governance structure, the region’s regulatory framework involves distinct responsibilities between CCDR Algarve, acting as the regional coordinating authority, and individual municipalities. The region’s regulatory framework – operating within Portugal's broader energy legal framework – encompasses multiple interconnected elements, including spatial planning requirements, permitting procedures, environmental impact assessments, grid connection protocols, and land-use regulations.

Spatial planning

All regions in Portugal are required to adopt a regional spatial plan. The Algarve’s plan –Programa Regional de Ordenamento do Território do Algarve (PROT Algarve) – was last approved in 2007 (via Resolução do Conselho de Ministros n.º 102/2007). While monitoring reports, such as a 2010 assessment, have evaluated its implementation, the core regional spatial strategy remains unchanged. Its priorities include sustainable development, tourism diversification, and environmental protection but is not fully aligned with recent EU mandates on renewable energy and climate adaptation. A revision process is underway, initiated in May 2023, with a stipulated 24-month period for completion.16

In parallel with the regional spatial plan, municipalities prepare their own hierarchical territorial instruments. These include the Municipal Master Plans (Planos Diretores Municipais, PDM), Urbanisation Plans (Planos de Urbanização, PU), and Detailed Plans (Planos de Pormenor, PP). Among these, PDMs serve as the legally binding strategic and regulatory land-use instruments at municipal level and are directly relevant to renewable energy development.17 The PDM defines the boundaries and permitted uses for urban, rural, and mixed zones within the municipality. However, special protection and natural preservation zones are designated by national authorities and may overlap or override municipal plans. CCDR Algarve operates an online interactive map that provides access to the different territorial plans within the region.18

Following national requirements in the early 1990s, most municipalities in the Algarve adopted PDMs between 1994 and 1995. At that time, municipalities without an approved PDM were ineligible for EU funds, programme contracts, or to declare projects as of public interest for expropriation. This triggered widespread adoption of PDMs in the Algarve and across Portugal.19

Permitting and environmental impact assessment

Permitting requirements for utility-scale PV solar projects vary significantly depending on their installed capacity. While PV solar projects at or below 1 MW benefit from simplified procedures, fewer administrative requirements, and generally faster implementation, unless they are in sensitive locations. By contrast, projects exceeding 1 MW face a full licensing regime with seven key licensing steps involving multiple authorities and procedures (see Figure 14.5):

Figure 14.5. Licensing roadmap for PV solar plants with 1MW+ in Portugal

Source: (MACEDO VITORINO, 2023[4])

1. Grid Capacity Title (reserva de capacidade de injeção) in the Portuguese Electricity System (RESP), grants grid access rights at a specified substation and voltage level. This can be obtained through:

• General Access – requested directly to DGEG , if grid capacity is publicly available;

• Agreement with the Grid Operator, where the promoter co-finances grid expansion;

• Tender Procedures, organised by the government for capacity allocation.

2. Environmental clearance: evaluated by APA or CCDRs depending on project location and size; either:

• A DIA (Declaração de Impacte Ambiental or Environmental Impact Statement), if they exceed 50 MW or affect sensitive areas; or

• A DINCA (Declaração de Incidências Ambientais or Simplified Environmental Impact Assessment) for projects in protected zones.

3. Production license: issued by DGEG and requires a financial deposit (EUR 10,000/MVA). The application must be submitted within:

• 1 year of receiving the Grid Capacity Title (if EIA is required); or

• 6 months otherwise.

4. Municipal Construction Approval: mandatory for all PV projects, as solar plants qualify as “urbanistic operations”. The process includes assessment of land-use compatibility and consultation with external authorities.

5. Gird connection. the promoter must build and secure infrastructure, validate it through the DSO E-Redes or the TSO REN, depending on whether it is less than or more than 50 MVA. Connection is subject to:

• Technical validation by the grid operator (E-Redes or REN);

• Securing land rights or easements;

• Providing performance guarantees.

6. Municipal Compensation Protocol. If the project has a capacity over 50 MVA, the developer must provide one of the following:

• a small self-consumption unit (UPAC), a storage facility for installation in municipal buildings or collective use equipment, and EV chargers for public use with an equivalent capacity; or

• a financial compensation of EUR 1 500/MVA.

  This agreement must be formalised in a protocol with the municipality and is a condition for receiving the final license.

7. Operation License – issued by DGEG once the plant meets with technical, environmental, and legal requirements. While projects can start operating early under exceptional measures, a formal license must be obtained within three years.

The Environmental Impact Assessment (EIA) regime in Portugal is governed by Decree-Law No. 151-B/2013. This has been amended, most recently by Decree-Law No. 11/2023 of 10 February, under the "Environmental SIMPLEX" (SIMPLEX Ambiental) (Servulo & Associados, 2023[6]). This reform included reduction in the number of projects subject to mandatory EIA, streamlined procedures, and introduced tacit approval mechanisms.

The revised regime narrows the use of case-by-case screenings and further limits mandatory EIA requirements. Case-by-case assessments are now reserved for projects located outside sensitive areas that do not meet established thresholds or fall under specific exceptions. The list of projects subject to mandatory EIA has been further reduced. For example, in addition to the longstanding exemption for projects with an installed capacity of less than 50 MW, EIA is no longer mandatory for PV solar projects occupying less than 100 hectares (or for wind farms comprising fewer than 20 turbines (or fewer than 10 turbines if located in sensitive areas)).20

Decree-Law No. 99/2024 introduced additional modifications to the EIA legal framework. Modifications included, amongst others, a requirement for renewable energy production facilities subject to an EIA to submit a proposal defining the scope of the EIA and exemptions from the EIA process for rooftop installations, installations on artificial surfaces, and repowering of existing projects.21

Where an EIA is required, the APA co-ordinates the evaluation process. A key part of this process is the formation of an Evaluation Commission (Comissão de Avaliação).22 This Commission is an inter-institutional commission convened by the APA to assess the environmental and territorial impacts of projects subject to EIA. Its role is to evaluate the Environmental Impact Study (EIS) submitted by the developer and issue a co-ordinated opinion that will inform the final Environmental Impact Statement (DIA). It plays a decisive role in whether and how a project moves forward.

Key tasks of the Commission include (APREN, 2023[7]):

• Analysis of the Environmental Impact Study (EIS), assess its completeness, scientific quality, and relevance of the analysis.

• Review of impacts on land-use, biodiversity, water, landscape, noise, etc.

a) Request Clarifications or Additional Information

• The commission can ask the developer to provide further data or studies if the EIS is insufficient.

b) Propose Mitigation or Compensation Measures

• Suggest changes to project design or additional measures (e.g. buffer zones, habitat restoration, visual barriers) to reduce environmental harm.

c) Issue a Joint Technical Opinion

• Each participating body gives its sectoral opinion; APA consolidates these into a unified assessment that guides the DIA.

d) Inform the Public Consultation

• The Commission’s findings feed into the public consultation phase, ensuring transparency and responsiveness.

Commission membership varies depending on project characteristics. These include the nature, location, and potential impacts of the project. The APA coordinates an also includes23 DGEG, CCDR Algarve, ICNF (Institute for Nature and Forest Conservation) – if protected species or areas are affected, Municipalities – especially those directly affected by the project, Regional Health Authorities – if public health concerns are relevant, Cultural Heritage Authorities – if archaeological or heritage sites are involved, INAG or ARH – for water resource management.

Additional institutions may be invited depending on the project’s scope (e.g. maritime authorities, geological agency). Although municipalities are formally part of the commission, stakeholders have reported cases where they are excluded in practice, limiting local input during the environmental assessment, wit possible implications further in the permitting phase.

14.4. Regulatory barriers in the Algarve

Despite the Algarve’s significant technical potential for utility-scale PV solar , multiple regulatory challenges continue to hinder deployment. These include outdated spatial plans, permitting inefficiencies, and grid infrastructure constraints, each of which is examined below.

14.4.1. Spatial planning

Outdated and unclear spatial plans remain a significant regulatory barrier in the Algarve. Clear, comprehensive and up-to-date spatial plans are essential for providing clear guidelines on land-use decisions, balancing competing priorities such as environmental protection, tourism, urban development, clean energy and agriculture (see Chapter Spatial Planning and Permitting). They help developers identify suitable sites efficiently and enable public authorities to issue permits with greater consistency and reduced administrative burden and resources. However, many spatial plans in the region are obsolete, complicating efforts for renewable energy deployment, particularly for utility-scale PV solar. This lack of clarity generates uncertainty for all stakeholders (including civil society, government authorities and project developers), hinders the region’s ability to attract investment and delaying project implementation, but may also result in suboptimal siting.

The Algarve’s regional spatial plan (PROT Algarve), approved in 2007, remains the overarching planning instrument but does not reflect EU and National climate and energy objectives. This misalignment also constrains the ability of municipalities to update their own local and binding plans. While several municipalities are either currently updating their spatial plan or have updated their spatial plan within the last few years, almost all municipal spatial plans have gone 20 to 25 years or more without significant revision. This is due to a combination of administrative complexity, legal procedures, co-ordination challenges and resource constraints at the local level. Updating a PDM requires strategic environmental assessments, public consultations, inter-institutional co-ordination and formal approval processes, making it a resource- and time-intensive exercise.

Even where local plans have been recently revised, important gaps remain. For example, Faro Municipality’s PDM – updated in 2024 (after it had been in effect since 1995) – still lacks provisions for renewable energy zoning, including the identification of suitable areas. It also makes no reference to dual-land-use for combining agricultural activities with PV solar installations. Stakeholders identified these omissions across the Algarve as significant obstacles. In the absence of clearer national guidance and specifically regional strategic guidance, local planning instruments risk overlooking critical provisions necessary to integrate renewable energy into broader territorial development strategies.

These planning gaps have tangible effects. As documented by (Öko-Institut e.V., 2024[2]) outdated or incomplete spatial plans complicate project siting, prolong environmental assessment processes, and increase the likelihood of local opposition. In the Algarve, according to stakeholders, opposition to solar projects has grown in recent years, with civil society groups criticising the lack of transparency and early engagement in project planning. This in turn increases can lead to legal challenges, delays and raises uncertainty for developers.

14.4.2. Permitting and environmental impact assessment

Lengthy and fragmented permitting processes further hinder the deployment of PV solar in the region. Some projects in Portugal report waiting periods exceeding two years – and sometimes stretching to four years, which is twice the EU’s recommended two-year limit.24

A key concern raised by stakeholders is the overlap of competencies among permitting authorities. DGEG, APA, and municipal authorities – each responsible for licensing, environmental impact assessments, and zoning, respectively – often operate in silos. While the CCDR Algarve acts as a coordinating body for projects involving multiple authorities, it does not function as a “one-stop-shop”. At the municipal level, there is no centralised or digitalised permitting system, for instance for tracking permitting progress, and coordination remains limited. As a result, developers often navigate separate processes with different stakeholders for the different stages of approval. These challenges are compounded by Algarve’s outdated spatial plans, with municipalities requiring ad hoc consultations and evaluations. This increases discretion, introduces inconsistencies across jurisdictions, and contributes to prolonged permitting timelines and greater investor uncertainty.

14.4.3. Grid congestion and infrastructure

Grid saturation represents a third increasingly relevant barrier to PV solar deployment in Portugal, including in the Algarve. Recent estimates indicate that approximately 10 GW of solar projects are awaiting grid connection agreements from the system operators (TSO and DSO) (Beyond Fossil Fuels; Ember; E3G; Institute for Energy Economics and Financial Analysis, 2025[8]). 25 This backlog is particularly striking given that total installed PV capacity in Portugal stood at around 6.1 GW in 2024 (OECD database). The Algarve’s grid is no exception. Originally designed to accommodate seasonal demand driven by tourism, the region’s grid is ill-equipped to absorb the rising volume of distributed solar generation, further exacerbating congestion. Recognising these challenges, grid connection has become a central consideration in the design and implementation of renewable energy auctions, as policymakers seek to ensure that awarded projects can be efficiently integrated into the electricity system.26

Grid access challenges are also linked to spatial planning. According to some stakeholders, in the absence of more strategic planning at regional level, often the primary criterion for locating utility_-scale plants appears to be proximity to high-voltage transmission lines, without sufficient consideration of social and environmental impacts. This siting approach can trigger more difficult EIA procedures, longer permitting timelines, and greater local resistance.

14.4.4. Strengthening Guidance

Stakeholders in the Algarve highlighted the need for clearer and more coordinated regional guidance to accelerate renewable energy deployment. Priorities included improved siting criteria for transmission lines – taking into account proximity to substations, grid congestion, and visual impact – and stronger coordination between APA, CCDR, and grid operators. Earlier involvement of environmental agencies and greater transparency in grid access procedures were also identified as essential to reducing delays.

Cross-municipality projects require coordination and/or standardised siting frameworks in the region. Stakeholders referred to the fact that renewable energy projects crossing multiple municipalities often face additional delays due to fragmented siting criteria and outdated or misaligned spatial plans. In the absence of clear and harmonised guidance, local authorities lack the tools to assess such projects consistently, increasing discretion and regulatory uncertainty.

Stakeholders also called for clearer guidance at national level on compensatory measures and project staggering to avoid thresholds. They referred to rigid environmental rules that may unduly delay or block projects, even when impacts can be mitigated or offset. Criteria could ensure compensation – such as habitat restoration or species reintroduction – is proportional, verifiable, and subject to monitoring was one suggestion made. Further, stakeholders expressed concern over the practice of fragmenting renewable energy projects to evade EIA thresholds, by submitting several adjacent solar installation requests by related entities. To address this gap, stakeholders called for clearer national guidelines requiring the joint assessment of geographically or commercially linked projects, ensuring that cumulative environmental effects are properly evaluated.

14.5. Preliminary policy recommendations

This assessment of regulatory barriers – based on stakeholder consultations in the Algarve and desk research – identifies several challenges that are not unique to Portugal but reflect broader issues across regions in the EU. While tailored solutions will depend on national and regional contexts, a set of preliminary recommendations can be proposed to support more effective deployment of renewable energy. At the regional level for the Algarve this would include:

• Update and align spatial plans to reflect renewable energy objectives. Spatial plans at both regional and municipal levels should be updated more regularly to reflect technology change and energy targets. This includes identifying suitable areas for renewable energy projects, integrating land-use, environmental, and grid planning. Where capacity is constrained, such as in the Algarve, updating plans in stages (e.g. by sector or geography) may provide a workable path. Spatial planning frameworks specific to renewable energy could be developed to guide municipalities.

• Strengthen transparency and procedural clarity. Increased transparency from public authorities – especially in permitting, spatial planning, and environmental assessment procedures – would improve predictability and reduce delays. This includes publishing clear guidelines on regulatory requirements, procedural timelines, and the roles of different authorities. Municipalities in particular would benefit from clear expectations and standardised guidance.

• Develop regional guidance to support local authorities. Many municipalities face resource and capacity limitations that constrain their ability to assess projects effectively – particularly those crossing multiple jurisdictions. Standardised regional guidelines could be developed to support consistent siting evaluations, especially but not only, when projects cross municipal boundaries. These could include land-use compatibility criteria, environmental and visual impact thresholds, and coordination procedures for inter-municipal projects.

At the national level, and considering the regional concerns expressed by stakeholders operating in the Algarve, recommendations would include the introduction of national guidelines on cumulative impacts and compensatory measures. National authorities should issue clearer rules on the joint assessment of linked or adjacent projects to prevent fragmentation intended to bypass EIA thresholds. In addition, science-based guidelines on compensatory measures – such as habitat restoration or species reintroduction – should support case-by-case evaluations of reformulated projects. These measures would enhance environmental integrity while improving legal certainty for developers.

References

[7] APREN (2023), Guia de Licenciamento de projetos de energia renovável onshore.

[8] Beyond Fossil Fuels; Ember; E3G; Institute for Energy Economics and Financial Analysis (2025), How Europe’s grid operators are preparing for the energy transition: A snapshot of electricity transmission system operator practices and plans.

[5] Cristas, A. and J. Almeida Filipe (2025), Environment And Climate Change Law: Portugal.

[4] MACEDO VITORINO (2023), Solar Photovoltaic Plants Licensing Guide in Portugal.

[1] OECD (2023), Rethinking Regional Attractiveness in the Algarve Region of Portugal.

[3] OECD (2017), Land-use planning systems in the OECD: Country Fact Sheets.

[2] Öko-Institut e.V. (2024), Overview of Renewable Energy Spatial Planning and Designation of Accelerations Areas in Selected EU Member States.

[6] Servulo & Associados (2023), The Environmental Simplex has arrived: Decree-Law no. 11/2023.

Notes

← 1.  Global Solar Atlas.

← 2.  This capacity can produce an estimated 16 500 GWh of electricity annually. The Alentejo region accounts for the largest share of this potential, with up to 6.0 GW of FPV capacity identified. See https://dspace.uevora.pt/rdpc/bitstream/10174/35037/1/4BV.1.50_paper.pdf.

← 3.  https://www.portugalresident.com/e70-million-solar-park-inaugurated-in-alcoutim/

← 4.  According to the OECD database (see also Annex C).

← 5.  Under the ENSPRESO mid-range scenario

← 6.  This assumes that the Algarve is to maintain its current share of Portugal’s utility-scale PV capacity (16%) and that the share of rooftop PV remains at its current share of 45%.

← 7.  Article 9 of the Constitution.

← 8.  Article 66 of the Constitution.

← 9.  Article 81 of the Constitution.

← 10.  A 2023 report by the National Laboratory for Energy and Geology (LNEG) has identified areas with low environmental sensitivity suitable for renewable energy projects, including preliminary maps cover approximately 12% of mainland Portugal, focusing on regions like Centro, Alentejo, and the North. The study also includes an online map. Moreover, Climate Action Network (CAN) Europe has indicated on 21 May 2025 that Portugal is one of the best-practice Member States with regards to the progress of the spatial mapping required to identify RAAs.

← 11.  https://www.lneg.pt/en/project/acceleration-areas-for-renewable-energy/?utm

← 12.  This group includes representatives from the Office of the Secretary of State for Energy and Climate, LNEG, APA, and DGEG. Additional stakeholders like the Institute for Nature Conservation and Forests (ICNF), REN (national grid operator), E-Redes (distribution network operator), and other relevant agencies participate as needed.

← 13.  Decree Law No. 15/2022 | DR,

← 14.  Decree Law No. 99/2024 | DR

← 15.  Portugal streamlines procedures for energy storage licensing - Strategic Energy Europe

← 16.  https://pcgt.dgterritorio.gov.pt/node/27877?utm

← 17.  PUs provide a comprehensive zoning set of regulations for a significant part or the entire urban territory of a municipality and PPs cover small neighbourhoods of specific importance for urban development.

← 18.  https://www.ccdr-alg.pt/site/info/mapa-interativo

← 19.  https://www.ccdr-alg.pt/site/info/planos-territoriais-municipais?utm

← 20.  Meet the Law - Energy & Climate Change

← 21.  Decree-Law 99/2024 amending article 42 and 62 of Decree-Law 15/2022.

← 22.  Decree-Law No. 151-B/2013, article 9.

← 23.  Decree-Law No. 151-B/2013, article 9.

← 24.  See for instance https://www.energymonitor.ai/sectors/power/could-too-much-permitting-reform-hurt-eu-renewables/?cf-view.

← 25.  Projects in the queue can be at various stages of development. Some may have secured land and permits, others may only have initial plans, but none can proceed to construction or operation until grid access is granted.

← 26.  See for instance https://www.iea.org/policies/6574-portugal-renewable-energy-auctions.