BP-backed renewable energy company Lightsource BP will invest € 900 million ($ 1.1 billion) in solar company INSUN to fund the development of five utility-scale solar projects across Portugal.
The investment will add 1.35 GW of solar power capacity to Portugal’s power grid, the company said with projects in Moura, Castelo Branco, Mogadouro, Chamusca and Viseu.
Lightsource BP, which is owned through a joint venture with oil and gas company BP, now has a project development pipeline in Portugal and Spain with a total capacity of 3.5 GW. The projects that are currently in the early development phase will, according to the group, be in operation for around 30 years after they have been commissioned.
The company has endeavored this year to significantly increase its presence in Southern Europe, with a now 1.2 GW development pipeline in Italy and a more than 2 GW pipeline in Spain, having bought two utility portfolios from local developers earlier this year were years.
Miguel Lobo, Country Head of Lightsource BP in Portugal, said Portugal’s “excellent radiation levels” and its relatively low development costs show that solar energy can support the country’s growing renewable energy goals. The Portuguese government has set itself the goal of covering 80% of its electricity needs from renewable energy sources by 2030, by then 9 GW of solar power should be on the grid. In addition, authorities hope to install 2.5 GW of green hydrogen capacity by the end of the decade to help reduce emissions from heating and infrastructure.
“There really is so much potential for solar in the energy mix,” said Lobo, adding that the company sees future opportunities for investments in “growing technologies” like green hydrogen and battery storage.
“In addition to renewable energy generation, there are many additional economic opportunities to explore and local feedback will help shape our projects according to local priorities.”
Portugal’s renewable energy auctions in 2019 and 2020 resulted in record-low electricity prices, with last year’s tender being described as “quite remarkable” by Energy Foreign Minister João Galamba. Enerland paid € 11.14 / MWh ($ 13.12) or $ 0.0131 / kWh for a 10 MW lot at the September auction, below the previous industry record of $ 0.0135 / kWh set by the Al Dhafra project in Abu Dhabi in April 2020.
Portugal will now hold its third solar auction in September, which will include 500 MW allocated to floating solar panels to avoid potential future issues with the availability of land in the country.