Portugal needs stronger grid infrastructure, expanded system flexibility and faster electrification across transport, buildings, and industry to sustain its renewable energy transition and reduce reliance on imported energy, the International Energy Agency said in its report on Friday.
The report highlights the remarkable strides the country has made in renewables in recent years, particularly in solar energy, which has since resulted in it having "one of the lowest carbon intensities" among IEA member countries.
"Portugal has built a strong foundation through rapid progress in renewable electricity," IEA Deputy Executive Director Mary Burce Warlick said.
Yet, to reach its ambitious target of achieving carbon neutrality by 2045, Portugal has to improve coordination among stakeholders, align investments, and provide greater clarity, the report said.
The agency said rising renewable penetration, particularly from solar and wind, is increasing the need for system flexibility measures such as battery storage, demand-side response and other balancing resources capable of stabilizing the grid in real time.
It also noted that additional investment in both transmission and distribution infrastructure will be required to integrate new renewable generation, support broader electrification, and cross-border trade within the Iberian power market.
The report also highlighted the stagnant share of electric vehicles in the country's total fleet size, while recommending the expansion of state support for the sale of new EVs, alongside the rollout of charging infrastructure.