IN Brief:
- Portugal will hold a 1.05GW energy storage auction on 14 September.
- The tender includes 750MW of standalone battery storage and 300MW linked to renewable projects using surplus grid capacity.
- The auction forms part of a national strategy targeting 3GW of battery storage by 2030.
Portugal’s Ministry of Environment and Energy has set a September auction for 1.05GW of electricity storage capacity as part of the country’s National Electricity Storage Strategy.
The auction is scheduled for 14 September and will be divided between 750MW of standalone battery energy storage and 300MW of surplus grid capacity associated with renewable energy projects that include storage. The strategy targets 3GW of battery storage and 3.9GW of pumped hydro by 2030, rising to 4.5GW of battery storage and 5.26GW of pumped hydro by 2040.
Projects are expected to be located at strategic grid nodes including Rio Maior, Abrantes, Sines-Santo André, Alcochete-Palmela, Pegões-Divor, Estremoz, and Tavira. By identifying named nodes, the auction links storage procurement to network planning, directing flexibility toward locations where it can support renewable integration and manage pressure on the system.
The auction structure includes a municipal revenue-sharing mechanism. Local authorities hosting standalone storage projects will receive 30% of revenue generated by the National Energy System through the auction, while projects using surplus grid capacity will allocate up to 70% of that revenue to municipalities. Developers will also be required to allocate 2.5% of net revenue to community benefit measures, with agrivoltaic projects receiving a 20% bonus during the tender process.
Portugal has also indicated support for fixed-price electricity supply contracts with minimum one-year terms, simplified rules for self-consumption and energy communities, stronger protection for vulnerable customers, and support for long-term power purchase agreements. The storage auction adds a grid-flexibility instrument to that broader electricity-market package.
The split between standalone storage and surplus-capacity allocation gives the tender technical depth. Standalone batteries can be dispatched around grid needs, price signals, and system balancing requirements. Storage linked to renewable projects can increase the practical utilisation of grid capacity that would otherwise be underused or constrained during certain operating periods.
Portugal’s strong solar resource creates a clear role for storage. Midday generation peaks can increase pressure on the network, particularly where local demand and export capacity do not align with renewable output. Batteries at strategic nodes can absorb electricity during high-output periods and discharge when the system has higher value for energy, capacity, or balancing services.
The approach follows the same policy logic now visible across Europe, where storage is increasingly treated as a way to raise grid utilisation rather than as a reserve technology. The European push for faster storage deployment, previously examined through coverage of EU-level storage coordination, depends on precisely this type of practical procurement mechanism: defined capacity, defined grid locations, and bankable tender structures.
Revenue sharing with municipalities also reflects the changing planning environment for large electrical infrastructure. Storage projects can often move faster than generation projects, but they still require land, substations, access routes, environmental assessment, drainage, cable works, and local consent. Giving host authorities a direct stake in project revenue may help reduce opposition where assets are seen to support the national system as well as local communities.
The strategic-node structure will require developers to optimise more than battery capacity. Projects will need to be designed around grid connection, power conversion, transformer configuration, protection, control logic, communications, metering, degradation management, and market participation. Storage built around constrained or high-value nodes often has a different operating profile from assets developed primarily for merchant arbitrage.
Future tenders for pumped hydro add a longer-duration layer to the strategy. Batteries are suited to fast response, intraday shifting, and high-cycle operation, while pumped hydro can support longer-duration balancing where geography, planning, and financing allow. Portugal’s 2030 and 2040 targets suggest the two technologies are being treated as complementary parts of the same flexibility portfolio.
The auction will therefore test whether structured storage procurement can accelerate investment while placing assets where the network can use them most effectively. For a market with strong renewable resources and increasing electrification pressure, that distinction will determine whether storage becomes a system asset or another queue of projects waiting for connection.
