Portugal Shuts Down Last Coal Plant, Shows Renewable Energy Transition Is Possible
Published · Updated · 6 min read
Portugal has officially closed its last coal-fired power plant, marking a historic shift in how the nation generates electricity. The closure puts Portugal on track to run entirely on renewable energy by 2040, proving that rapid decarbonization is both achievable and economically viable.
The country now generates more than 70 percent of its electricity from renewable sources. In just over a decade, Portugal transformed from relying on fossil fuels for 80 percent of its energy in 2010 to becoming a global leader in clean power.
Coal Plants Closed Ahead of Schedule
Portugal originally planned to phase out coal by 2030. Instead, the transition happened years early.
The Pego power station, Portugal’s last remaining coal plant, shut down in November 2021. The facility had a capacity of 628 megawatts and was one of the country’s largest sources of carbon dioxide emissions. Its closure eliminated approximately 2.8 million tonnes of annual carbon emissions.
The closure followed the shutdown of the Sines coal-fired power station in January 2021, which had previously emitted 7.4 million tonnes of carbon annually. Together, these closures ended coal-based electricity generation across the entire country.
Portugal became only the fourth European Union member state to completely phase out coal, joining Austria, Belgium, and Sweden.
Renewable Energy Powers the Nation
The rapid transition away from coal was made possible by massive investment in renewable infrastructure. Portugal now operates 8.8 gigawatts of hydroelectric capacity, 13.3 gigawatts of onshore wind, and nearly 3,900 megawatts of solar power.
Together, these renewable technologies represent 87 percent of Portugal’s total installed electricity capacity. In 2024, renewable sources supplied 71 percent of overall electricity demand.
Wind and Solar Leading Growth
Wind power has become a cornerstone of the energy system. In November 2024, Portuguese wind farms produced an extraordinary 110.4 gigawatt-hours in a single day, covering 86 percent of national consumption.
Solar energy expansion accelerated dramatically in recent years. Solar generation increased by 27 percent in September 2025 compared to the previous year. The government has set an ambitious target of installing 20.4 gigawatts of solar capacity by 2030, roughly five times the capacity from 2023.
Record-Breaking Clean Energy Production
Portugal achieved a remarkable milestone in March 2024 when renewable sources generated more electricity than the country consumed for an entire month. Renewable energy produced 4,647 gigawatt-hours against total demand of 4,477 gigawatt-hours, reaching 103.6 percent renewable supply.
During this historic month, renewable energy accounted for 100 percent of electricity supply for consecutive periods lasting 70 and 69 hours respectively. The achievement prevented approximately 1.8 million tonnes of carbon emissions that month alone.
These periods of high renewable generation also produced economic benefits. When renewables covered all electricity supply on March 9-12, the average daily wholesale market price fell to 39.75 euros per megawatt-hour, compared to 43.94 euros during the same period the previous year when renewables accounted for only 62 percent of consumption.
Grid Challenges and Solutions
The transition to renewable energy has not been without obstacles. In April 2025, Portugal and Spain experienced a major blackout that exposed vulnerabilities in aging grid infrastructure struggling to manage high renewable penetration.
The Portuguese government responded with a comprehensive strengthening plan. Environment and Energy Minister Maria da Graça Carvalho presented 31 targeted actions focused on five key areas: grid resilience, strategic planning, renewable energy acceleration, critical infrastructure readiness, and international cooperation.
Central to this strategy was doubling the number of black start power stations from two to four by January 2026. These facilities can independently restart the grid following major outages.
Major Investment in Grid Modernization
The government announced a 137 million euro investment to modernize grid operation and control systems. Additionally, officials plan to launch a 750 megavolt-ampere battery storage auction by January 2026.
Energy storage technology has become critical for managing the variability of wind and solar generation. Battery storage costs fell from $150 per megawatt-hour in 2020 to $117 by 2023, making the technology economically competitive.
The government also announced 25 million euros in support for hospitals, utilities, and other critical services to improve emergency response capabilities.
Ambitious Targets for the Future
Portugal is not slowing down. By 2026, the government aims to achieve 80 percent renewable power generation, ahead of the previously established 2030 target.
For 2030, Portugal has increased its renewable energy target to 51 percent of total energy consumption, while aiming for 85 to 93 percent renewable electricity generation. Achieving this goal requires installing approximately 42.4 gigawatts of renewable capacity, more than 2.5 times the capacity installed in 2022.
Looking further ahead, Portugal envisions achieving 100 percent renewable electricity generation by 2040. This ambitious target would make Portugal one of the first major economies to achieve complete decarbonization of its electricity sector.
Broader Carbon Neutrality Goals
The renewable energy transition supports Portugal’s goal of achieving carbon neutrality by 2045, slightly ahead of the European Union’s 2050 objective. Reaching this target requires decarbonization across all economic sectors, not only electricity generation.
The government expects more than 60 billion euros of investment in new renewable projects across the country by 2030. Private investment in renewable energy and hydrogen projects was expected to reach 40 billion euros as of October 2024.
Green Hydrogen for Hard-to-Electrify Sectors
Portugal recognizes that achieving complete energy decarbonization requires solutions beyond renewable electricity. The government has developed a hydrogen strategy to address carbon emissions in sectors difficult to electrify directly, particularly heavy industry and maritime transport.
A major project at the Sines Industrial and Logistic Zone aims to produce 70,000 tonnes of green hydrogen annually by 2030, creating 500 direct and indirect jobs. The facility will use renewable electricity from Portuguese wind and solar installations.
Portugal’s National Energy and Climate Plan includes a target of integrating 8 percent of green hydrogen into energy consumption, transport, and industrial sectors by 2030.
Global Leadership and Lessons for Other Countries
Portugal’s achievement positions the country as a global leader in energy transition. According to the World Economic Forum’s Fostering Effective Energy Transition 2025 report, Portugal ranks tenth out of 118 nations evaluated on clean energy transition progress.
The Portuguese experience offers valuable lessons for countries at all stages of renewable energy transitions. The nation demonstrates that rapid coal phase-out does not require decades of preparation. Once political commitment solidifies and renewable alternatives become economically competitive, coal plants can cease operations relatively quickly.
Portugal also illustrates the importance of diverse renewable energy portfolios. By developing hydroelectric, wind, and solar capacity alongside grid modernization and energy storage, the country created a resilient system capable of managing generation variability.
Challenges Remain
Despite significant progress, obstacles remain. Complex bureaucratic processes and staff shortages at regulatory agencies create delays in licensing new renewable projects. Industry experts identify permitting bottlenecks as major constraints on development.
Grid connection constraints also slow progress. Portugal’s transmission and distribution network was designed decades ago for centralized power generation, not distributed renewable sources. Network congestion in certain regions prevents connection of new generation capacity.
The clean energy sector is projected to create approximately 20,000 jobs in Portugal over the next decade. However, developing the technical workforce required for this transition requires sustained investment in education and training programs.
A Model for the World
Portugal’s closure of its last coal plant while achieving 70 percent renewable electricity generation provides concrete evidence that high renewable penetration does not threaten grid stability or economic competitiveness.
The country’s success demonstrates that the solutions to climate change exist and can be implemented with political will. Portugal transformed its electricity system in roughly a decade, proving that other nations can achieve similar results.
As Portugal advances toward 100 percent renewable electricity by 2040, the path forward is clear. With appropriate political commitment, strategic investment, and supportive policies, countries worldwide can replicate this success.
The solutions exist. Implementation requires only the will to deploy them. Portugal has shown the world it can be done.
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