BP-backed renewables group Lightsource BP is set to invest €900 million (US$1.1 billion) in solar company INSUN to fund the development of five utility-scale solar projects across Portugal.
The investment will add 1.35GW of solar power capacity to Portugal’s electricity grid, the company said, with projects based in Moura, Castelo Branco, Mogadouro, Chamusca and Viseu.
Lightsource BP, which is part-owned by oil and gas major BP through a joint venture, now has a project development pipeline in Portugal and Spain with a total 3.5GW capacity. The projects, which are currently in early development stage, will be in operation for roughly 30 years when they come online, according to the group.
The company has made efforts to significantly increase its presence across southern Europe this year, with a now-1.2GW development pipeline in Italy, and a more than 2GW pipeline in Spain having bought two utility-scale portfolios from local developers at the start of the year.
Miguel Lobo, Lightsource BP’s country head in Portugal, said that Portugal’s “excellent irradiation levels” and its relatively low development costs show that solar can support the country’s growing renewable energy targets. The Portuguese government has set a target of sourcing 80% of its power demands from renewable energy resources by 2030, by which time 9GW of solar is expected to be on the grid. In addition, authorities hope to install 2.5GW of green hydrogen capacity by the end of the decade in order to help lower emissions in heating and infrastructure.
“There really is so much potential for solar within the energy mix,” Lobo said, adding that the company is taking note of future opportunities to invest in “growing technologies” such as green hydrogen and battery energy storage.
“There are lots of additional economic opportunities to explore in addition to the renewable energy generation and local feedback will help shape our projects to local priorities.”
Portugal’s 2019 and 2020 renewables auctions resulted in record-low power prices, with last year’s tender being noted as “quite remarkable” by secretary of state for energy João Galamba. Enerland had paid €11.14/MWh (US$13.12), or US$0.0131/kWh, for a 10MW lot in September’s auction, below the previous industry record tariff of US$0.0135/kWh set by the Al Dhafra project in Abu Dhabi in April 2020.
Portugal is now set to carry out its third solar auction this September, which will include 500MW allocated to floating solar installations to avoid potential future issues around the availability of land in the country.