Portugal under austerity: from financial to renewable crisis?

Abstract

Abstract Portugal was hit hard by the global financial crisis, with concomitant effects upon the development of its renewable energy sector. The imposition of austerity has had negative impacts upon the further development of the Portuguese renewables sector, prompting the question of whether we have seen a critical juncture that will lead to a new policy trajectory. Historical institutionalist analysis demonstrates a range of unintended consequences arising from the pursuit of austerity in Portugal, yet no true critical juncture to the country’s commitment to renewable electricity. The path dependent structure of the Portuguese electricity market and the export bottleneck between the Iberian Peninsula and Central Europe are identified as critical variables explaining the sub-optimal policy trajectory. We conclude that resolving this bottleneck will be critical for Portugal to reduce current financial and electricity price pressures, and continue its renewable energy transition.