Energy Storage: The Key to the Stability of Portugal’s Power Grid
Portugal’s energy transition, driven by ambitious decarbonization goals and its European leadership in renewable energy production, faces a critical challenge: the intermittency of renewable sources. Solar and wind energy, although clean and increasingly cost-competitive, are not constantly available: the sun doesn’t shine at night and fluctuates in intensity during the day, and the wind doesn’t always blow — or changes speed abruptly. Every time wind speed doubles (from 2 m/s to 4 m/s), generation increases eightfold, creating major variability in power output. For these reasons, energy storage has moved from being a strategic option to becoming the central pillar of power grid stability in Portugal.
Currently, the main form of large-scale storage in Portugal is pumped hydroelectricity. Facilities such as Alqueva and Vila Nova de Foz Côa store energy by pumping water into higher reservoirs during periods of low demand and low prices (when there is surplus solar or wind production), and releasing it during peaks of demand and higher prices. This proven, mature system accounts for over 90% of the country’s storage capacity. However, with renewables already providing more than 60% of annual generation, current capacity is reaching its limits, particularly in times of high production combined with low demand, such as spring and summer months.
It is in this context that the Portuguese Government announced a €100 million investment in 43 new energy storage projects, which will add 500 MW of capacity by 2026. These projects include lithium-ion batteries, compressed air energy storage (CAES), and emerging technologies such as green hydrogen and thermal storage. More than simply adding capacity, this represents a qualitative shift in grid management — moving from a model dominated by large, traditional power plants to a decentralized, flexible, and intelligent ecosystem.
The importance of this effort was made clear during the blackout of September 13, 2023, which affected much of the Iberian Peninsula. For several minutes, the power grid collapsed, leaving millions of homes and businesses without electricity. The cause? The sudden loss of a large generation unit, combined with insufficient grid inertia. Inertia — the ability to resist rapid frequency changes — is naturally provided by the rotating turbines of thermal and nuclear plants. As these are replaced by solar and wind inverters, which have no rotating mass, the grid becomes more fragile. Without inertia, even small disturbances can trigger cascading failures.
That is why, in addition to storage, it is urgent to integrate solutions that provide artificial inertia. Here, biogas micro-thermal power plants play a role. Typically located in landfills, farms, or wastewater treatment plants, these units convert organic waste into energy through controlled methane combustion. Unlike solar panels, they operate continuously and on-demand, delivering backup power immediately while also maintaining rotational inertia through their turbines. In Portugal, where only about 15% of the country’s biogas potential is currently exploited, these microplants represent a double opportunity: reducing methane emissions (a greenhouse gas 80 times more potent than CO₂) and strengthening grid resilience.
Another essential advance is the integration of storage batteries with advanced forecasting algorithms, enabling operators to anticipate demand peaks and smooth out solar production fluctuations, preventing overloads. In remote or island regions, such as Madeira and the Azores, where interconnection with the mainland grid is limited, these solutions are vital to avoiding supply disruptions.
The future of Portugal’s power grid lies not only in generating more clean energy but in managing it intelligently. Storage is both the brain and the muscle of this new grid. The €100 million investment is a necessary step, but insufficient without policies that incentivize artificial inertia and decentralized generation. Biogas microplants, batteries, pumped hydro, and emerging technologies like green hydrogen form a stability ecosystem that will allow Portugal not only to maintain its leadership in renewables but also to guarantee energy security in an increasingly unstable world.
In an era where extreme weather events and geopolitical tensions threaten energy supply, the ability to store and control energy is synonymous with sovereignty. Portugal has the technology, the resources, and the political will. Now, it needs to accelerate — because grid stability is not a luxury: it is the foundation of our modern society.
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