Public–private partnerships for wind power generation: The Portuguese case

Today’s portfolio of energy production, based mostly on fossil fuels, and increasing energy consumption go against a sustainable vision for the world’s development. Governments are shifting their energy policies towards renewable, nonpollutant sources of energy, developing large investment plans to ensure an adequate response to energy demand growth while keeping the environmental impact within reasonable boundaries. As in many other infrastructure-related sectors, new models for the provision of these facilities, and services, are being developed. Over the past 20 years, highways, hospitals, social housing, airports and dams have been developed in close collaboration with the private sector, not only in a contractor–supplier relation but also in deeper partnerships where the private sector assumes a substantial responsibility in managing and running the business. These models are known as public–private partnerships (PPPs). This research will look at the Portuguese experience in the application of PPP arrangements in the energy sector, particularly as far as the development of wind power plants is concerned. The evaluation procedures for selecting the private partner, the contract structure and the risk-sharing agreement are some of the issues deserving special attention.

Research highlights
► Feed-in remuneration scheme can foster the development of wind power plants.
► Criteria for selecting the winner bid are politically driven.
► Contracts may improve if incentives to guarantee efficiency gains over time are provided.
► There is no effective risk transfer to private partners concerning commercial risk.