EDP abandons €169 million Alqueva floating solar project – Portugal Resident

Posted on August 9, 2026 by Now.Solar

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EDP has abandoned plans for a vast floating solar and wind development at Alqueva after environmental objections forced costly changes to a project already struggling to remain commercially viable.
The Grande Lago hybrid plant, awarded to EDP Renewables through a public tender in 2022, would have combined 70 megawatts of floating solar panels on Portugal’s largest reservoir with an onshore wind farm.

With a total planned capacity of 154MW, it was the largest of six floating solar projects awarded through the competition and was initially promoted as potentially the largest facility of its kind in the world.
EDP has now confirmed that it will relinquish the project following a detailed review.
“The conditions are not in place to proceed with the Grande Lago Hybrid Power Plant project, involving floating solar and wind technologies,” an official company source told Observador.
EDP attributed the decision to “a combination of several factors” preventing the scheme from being developed sustainably, predictably and in accordance with the company’s standards.

At the heart of the decision was the project’s deteriorating financial viability. Its estimated cost had risen from more than €100 million to €169 million, including the solar and wind installations and their electricity transmission lines.
Equipment and construction costs increased sharply after the pandemic, while wholesale electricity prices have fallen during periods of abundant renewable generation. The business model depended heavily on income from wind production to compensate for the exceptionally low — and initially negative — price proposed for its solar electricity.
The project had originally been expected to begin operating in 2025.
Environmental study rejected
The Portuguese Environment Agency (APA) ruled that the project’s environmental impact study was non-compliant after two years of discussions with EDP.
One of the principal concerns involved the effects on vulture habitats of the power line connecting the wind farm to the national grid. Addressing those concerns would have required EDP to reconsider the proposed transmission corridor.
Other measures needed to mitigate negative environmental effects would have left elements of the project more widely dispersed, increasing both its technical complexity and cost.
The environmental ruling was therefore not the sole reason for EDP’s withdrawal, but it contributed significantly to making an already finely-balanced project unviable.
The company said its decision did not alter its commitment to renewable energy in Portugal, including projects combining different generating technologies with battery storage and the modernisation of existing facilities.
It is not, however, expected to make use of a recent government measure allowing developers to transfer generating capacity awarded for reservoirs to alternative renewable energy or battery projects on land.
The Alqueva area already has a substantial number of renewable developments. Some have only secured approval after major alterations intended to protect biodiversity. Any replacement EDP project would also have to undergo an assessment of its cumulative effects alongside facilities already approved for the region.
Five of six projects fail to clear environmental hurdle
EDP’s withdrawal means only one of the six floating solar plants awarded in the 2022 competition has so far secured environmental approval.
Finerge projects at the Paredela and Salamonde dams received negative opinions from the Institute for Nature Conservation and Forests, largely because of their location within the Peneda-Gerês National Park.
A Voltalia project planned for the Cabril reservoir was also rejected following strong opposition from local communities.
Only Endesa has obtained a favourable environmental impact assessment, for a floating solar plant at Alto Rabagão. A further project awarded to Finerge at Tabuaço has yet to reach the assessment stage.
The figures leave the government’s ambitions for large-scale floating solar on Portuguese reservoirs severely diminished — and demonstrate that renewable energy projects are not automatically environmentally benign simply because of the technology involved.
Negative tariff helped EDP secure largest concession
EDP won the largest lot in the competition with an aggressive proposal involving a negative guaranteed tariff for solar electricity during the first 15 years of a 30-year concession.
In effect, the bid reflected EDP’s expectation that the associated wind farm and shared grid connection would make the overall hybrid development profitable. Wind production can complement solar power because it frequently peaks at different times of the day.
At the time, the scheme was presented as an unusual example of value being created by combining renewable technologies and making more efficient use of limited grid capacity.
It also anticipated a phenomenon that has since become increasingly common: wholesale electricity prices turning negative during hours when large quantities of solar power enter the grid and supply exceeds demand.
Those market conditions ultimately helped undermine the assumptions on which the project was based.
Source: Observador
Journalist for the Portugal Resident.

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