Renewable Energy Sources in Portugal: Green Hydrogen, Geothermal Energy and Biomass

Portugal has taken a leading role in Europe’s energy transition, committing to ambitious targets for decarbonisation and energy independence. Among the various renewable sources under expansion, green hydrogen, geothermal energy and biomass are emerging as strategic pillars for a more sustainable future, supported by government initiatives and private investment.

Green Hydrogen: The Promise of Clean Energy for the Future

Green hydrogen, produced through the electrolysis of water using electricity from renewable sources, represents one of the most promising solutions for hard-to-abate sectors such as heavy industry, heavy transport and energy storage. Portugal, with its strong solar and wind generation capacity, is particularly well positioned to become a competitive producer of this energy source.

The National Hydrogen Plan (PNH₂), launched in 2023, sets out a roadmap to 2030 with concrete goals: installing 2 GW of electrolysis capacity, producing 100,000 tonnes of green hydrogen per year, and attracting more than €3.5 billion in investment. Flagship projects are already under way, such as the partnership between Galp and Siemens Energy to develop an electrolysis unit at the Sines industrial complex, and the H2Sines initiative, approved under the Connecting Europe Facility (CEF) with €31 million in EU support.

In addition, Portugal is part of the European Hydrogen Backbone and actively participates in the IPCEI Hy2Use, a European consortium aimed at boosting industrial hydrogen value chains. Companies such as EDP, Galp and REN are leveraging this opportunity through hydrogen blending trials in natural gas networks and feasibility studies for exports to Central Europe.

Geothermal Energy and Biomass: Exploring Other Renewable Sources in Portugal

Although less visible than solar or wind power, geothermal energy and biomass play a crucial role in the stability of Portugal’s energy mix, particularly in regions with specific geological and forestry potential.

In the Azores, geothermal energy already supplies around 25% of the region’s electricity consumption, with power plants in São Miguel, such as Pico Vermelho and Ribeira Grande, operated by Electricidade dos Açores. On the mainland, low-enthalpy geothermal energy (for heating and cooling) shows strong potential, especially in the Alentejo and Central regions. The GeoBioTec project, supported by the FCT and the European Union, is researching geothermal applications in public buildings, while the Environmental Fund and the Operational Programme for Sustainability and Efficient Use of Resources (POSEUR) have financed feasibility studies and pilot installations.

As for biomass, Portugal benefits from extensive forestry resources, including eucalyptus, pine and cork residues, which can be converted into thermal energy, electricity or biofuels. The Mortágua biomass power plant, for example, uses residual forest biomass to generate electricity for around 170,000 people. The National Biomass Utilisation Programme (PNAB) and the Circular Economy Action Plan promote the energy recovery of forestry and agricultural waste, in line with the objectives of the European Green Deal.

The Permanent Forestry Fund and the Recovery and Resilience Plan (PRR) include support measures for creating local biomass value chains, with incentives for community-scale biomass plants, anaerobic digestion of agro-industrial waste and the production of advanced biofuels. In parallel, companies such as The Navigator Company and Altri are investing in integrated biorefineries, converting pulp and paper residues into bioenergy and green chemicals.

Government and Private Strategies for a More Sustainable Future

Investment in these energy sources is reinforced by a set of public policy instruments. The National Energy and Climate Plan 2030 (PNEC 2030) foresees that 47% of gross final energy consumption will come from renewables, with significant contributions from hydrogen, biomass and geothermal energy. The EU’s Carbon Border Adjustment Mechanism (CBAM) also encourages Portuguese industries to adopt clean technologies, such as green hydrogen, to remain competitive.

Public–private partnerships are key. The Portuguese Environment Agency (APA), DGEG and ADENE regularly promote incentive schemes, while Portugal 2030 and the European Structural and Investment Funds (ESIF) continue to support innovative projects.

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