STRATEGIC EVALUATION ON ENVIRONMENT AND RISK

STRATEGIC EVALUATION ON ENVIRONMENT AND RISK

PREVENTION UNDER STRUCTURAL AND COHESION FUNDS

FOR THE PERIOD 2007-2013

Contract No. 2005.CE.16.0.AT.016.

National Evaluation Report for Portugal

Main Report

Directorate General Regional Policy

A report submitted by in association with

Catarina Roseta Palma, Henrique Monteiro, Mónica Meireles, Francisco Mestre, Gustavo

Sugahara

Dinâmia – Centre for Socioeconomic Change

Date: November 10th, 2006

GHK Brussels

Rue de la Sablonnière, 25

B-1000 Brussels

Tel: +32 (0)2 275 0100; Fax : +32 (2) 2750109

GHK London

526 Fulham Road

London, United Kingdom SW6 5NR

Tel: +44 20 7471 8000; Fax: +44 20 7736 0784 www.ghkint.com

Strategic Evaluation of Environment and Risk Prevention – Country Report – Portugal

TABLE OF CONTENTS

EXECUTIVE SUMMARY ................................................................................................................ 1

1 INTRODUCTION AND METHODOLOGY ................................................................................ 2

2 OVERVIEW AND HORIZONTAL ISSUES ............................................................................... 4

2.1

General facts of the country................................................................................................... 4

2.2

State of the environment........................................................................................................ 6

2.3

State of the environmental infrastructure............................................................................... 7

2.4

Implementation status of the European environmental acquis.............................................. 7

2.5

Environmental policy.............................................................................................................. 8

2.6

Environmental expenditure (general)..................................................................................... 8

2.7

Insights on past programming................................................................................................ 8

2.8

Administrative capacity issues ............................................................................................. 10

3 WATER SUPPLY.................................................................................................................... 11

3.1

Current Situation .................................................................................................................. 11

3.1.1

Summary data table.......................................................................................................... 11

3.1.2

Current state of provision.................................................................................................. 12

3.1.3

Drinking water demand ..................................................................................................... 13

3.1.4

Drinking water quality........................................................................................................ 13

3.1.5

State of infrastructure........................................................................................................ 14

3.1.6

Water prices ...................................................................................................................... 14

3.1.7

Institutional issues............................................................................................................. 15

3.1.8

Experience of previous investment programmes.............................................................. 16

3.1.9

Conclusions....................................................................................................................... 18

3.2

Needs for the Future ............................................................................................................ 19

3.2.1

Review of policy objectives and targets............................................................................ 19

3.2.2

Demand scenarios ............................................................................................................ 21

3.2.3

Drinking water quality........................................................................................................ 25

3.2.4

State of Infrastructure – Need for improvement / replacement......................................... 26

3.2.5

Physical investment needs ............................................................................................... 26

3.2.6

Unit investment & operating costs .................................................................................... 27

3.2.7

Indicative investment requirement and comparison – Water Supply................................ 28

3.2.8

Summary........................................................................................................................... 29

3.3

Field Priorities ...................................................................................................................... 30

3.3.1

Initial ranking ..................................................................................................................... 30

3.3.2

Feasibility of managing and delivering ERDF/CF Programmes to meet needs ............... 30

4 WASTEWATER TREATMENT (WWT) .................................................................................. 33

4.1

Overview .............................................................................................................................. 33


4.1.1

Summary Data Table ........................................................................................................ 33

4.1.2

Current State of Provision................................................................................................. 34

4.1.3

Surface water quality ........................................................................................................ 34

4.1.4


4.1.5

Prices of the waste water service ..................................................................................... 38

4.1.6


4.1.7


4.1.8

Conclusions....................................................................................................................... 39

4.2

Needs for the future ............................................................................................................. 39

4.2.1


4.2.2

State of infrastructure – Need for improvement/replacement........................................... 40

4.2.3


4.2.4

Demand scenarios ............................................................................................................ 43

4.2.5


4.2.6

Indicative investment requirement and comparison – Wastewater Treatment................. 48

4.2.7

Summary........................................................................................................................... 49

4.3


5 MUNICIPAL SOLID WASTE .................................................................................................. 52

5.1


5.1.1


5.1.2

Current state of provision.................................................................................................. 54

5.1.3


5.1.4

Waste fees/taxes............................................................................................................... 55

5.1.5


5.1.6


5.1.7

Conclusions....................................................................................................................... 58

5.2

Needs for the Future ............................................................................................................ 58

5.2.1

Review of policy and targets ............................................................................................. 59

5.2.2

State of infrastructure and predicted waste flows ............................................................. 60

5.2.3

Review of future trends ..................................................................................................... 61

5.2.4


5.2.5

Unit Investment & Operating Costs................................................................................... 64

5.2.6

Indicative Investment Requirement – Municipal Solid Waste........................................... 64

5.2.7

Summary........................................................................................................................... 65

5.3


5.3.1

Initial ranking ..................................................................................................................... 65

5.3.2



6 RENEWABLE ENERGY SOURCES...................................................................................... 68

6.1


6.1.1


6.1.2

Current state of provision and state of infrastructure........................................................ 68

6.1.3

Renewable energy pricing and support issues ................................................................. 71

6.1.4

Institutional and public support issues .............................................................................. 73

6.1.5

Experience of Previous and Other Ongoing Investment Programmes............................. 74

6.1.6

Conclusions....................................................................................................................... 75

6.2

Needs For the future ............................................................................................................ 76

6.2.1


6.2.2

Supply and Demand Forecasts......................................................................................... 77

6.2.3


6.2.4

Enabling and hampering factors to meet needs ............................................................... 83

6.2.5

Investment Calculation and Comparison .......................................................................... 84

6.2.6

Summary........................................................................................................................... 85

6.3


6.3.1

Initial ranking ..................................................................................................................... 86

6.3.2


7 NATURAL RISKS................................................................................................................... 89

7.1


7.1.1

Existing risk assessments................................................................................................. 89

7.1.2


7.1.3


7.1.4

Conclusions....................................................................................................................... 95

7.2

Needs for the future ............................................................................................................. 95

7.2.1

Review of policy objectives and targets – and supporting instruments ............................ 95

7.2.2

Risk Forecasts .................................................................................................................. 97

7.2.3

Costs of Infrastructure / Technologies (Unit Investment & Operating Costs)................... 99

7.2.4

Instruments and Support Schemes – Enabling/hampering factors to meet needs ........ 101

7.2.5

Investment Calculation and Comparison – Natural Risk Management .......................... 101

7.2.6

Conclusions..................................................................................................................... 102

7.3

Field Priorities .................................................................................................................... 103

7.3.1

Initial ranking ................................................................................................................... 103

7.3.2

Feasibility of managing and delivering ERDF/CF Programmes to meet needs ............. 103

8 CROSS FIELD PRIORITY ASSESSMENT .......................................................................... 104

8.1

General Assessment.......................................................................................................... 104

8.2

Regional issues.................................................................................................................. 109

9 CONCLUSIONS.................................................................................................................... 111

9.1

Key points from current situation ....................................................................................... 111


9.2

Summary of environmental investment needs................................................................... 112

9.3

Overall National priorities................................................................................................... 120

10 CONSULTEE AND REFERENCE LIST ............................................................................. 125

11 ANNEXES........................................................................................................................... 130

11.1

Water supply .................................................................................................................... 130

11.2

Waste water treatment..................................................................................................... 134

11.3

Municipal Solid Waste...................................................................................................... 140

11.4

Renewable Energy Sources ............................................................................................ 140

11.5

Natural Risks.................................................................................................................... 144


EXECUTIVE SUMMARY

See separate document.


1 INTRODUCTION AND METHODOLOGY

This report is a part of the project “Strategic Evaluation on Environment & Risk Prevention Under

Structural & Cohesion Funds for 2007-2013”, European Commission project No.

2005.CE.16.0.AT.016, attributed to GHK in association with Ecolas – Environmental Consultancy and Assistance, IEEP – Institute for European Environmental Policy, and Cambridge

Econometrics. The project’s overall aim is to provide the strategic evaluation of the needs and priorities for environmental investment under the structural and cohesion funds for the period

2007-2013. It covers 5 fields of environmental investment: water supply, waste water treatment, municipal solid waste, renewable energy sources and natural risk management. In order to identify and evaluate needs in the selected fields, and to select investment priorities for the

Structural and Cohesion Funds for the 2007 – 2013 period, the project analyses the current situation in each field and the financial allocations during the current programming period (2000-

2006). The regional scope of the project is 15 countries, comprising the 10 new Member States

(NMS) plus Bulgaria, Romania and 3 ‘old’ cohesion Member States (Greece, Portugal and

Spain). This report focuses on Portugal and was prepared by Dinâmia – Research Centre for

Socioeconomic Change.

The report is structured by fields. There is an initial chapter on horizontal issues, then for each field the following sections are presented: overview, needs and priorities. A priority assessment across fields is provided and the final section concludes.

The overview sections review the available information in Portugal in each field. The information was drawn from Eurostat, the National Statistics Office – INE, EU Funding Program Reports, field-specific databases, various reports regarding the environmental situation in Portugal and available investment plans. Key stakeholders in each field were also contacted and in some cases provided additional information. Although there are some information asymmetries between the fields, each overview assesses the current state of provision and infrastructures, the institutions involved, the past investment plans and their funding by Community support programmes in the relevant field.

The needs chapters assess the needs for environmental investment over the period 2007-2013, taking into account the requirement to ensure compliance with the environmental acquis (the body of environmental regulations and directives), the consistency between environmental and other policies and priorities, and where applicable, the regional development benefits. The needs chapters aim to indicate the main policy objectives and targets for each field and, if possible, to quantify physical investment needs based on legislative environmental requirements, demand estimations and scenarios, the current state of infrastructure and the possibility of complementary flanking measures (such as user charges) which might reduce the need for investment. However, such complete information was rarely available, either because it was not disclosed or because it simply did not exist. Here the information asymmetries between fields are larger, with a great deal of information for renewable energy sources, some for water supply and waste water systems, and much less for municipal solid waste and natural risk management.

The priorities chapters draw on the information gathered about the current situation and the identified needs to provide an independent assessment of the priority needs in each field and across fields. This is, however, a somewhat conditioned exercise, due to the lack of reliable information. Nonetheless, the general ideas included in the priority assessment were also

Strategic Evaluation of Environment and Risk Prevention – Country Report – Portugal discussed with a representative of the Environment Ministry who is in charge of collecting information for the National Strategic Reference Framework.

The methodology implemented for preparing this report consisted in collaboration between a core team, who provided guidelines, and the several national evaluators to guarantee the consistence across the national reports. Each country reported back to the core team at each step in the research project and got feedback on how to proceed with the work. In Portugal, as mentioned above, the reference to official documents and statistics was complemented by direct contacts with the institutions in charge of environmental and investment management in each field.

Namely, the following institutions were contacted: INAG – National Water Institute; AdP – Águas de Portugal (public holding company with major participations in companies related to water supply, wastewater treatment and municipal solid waste); EGF – Empresa Geral de Fomento

(part of the AdP group, handling participations in municipal solid waste companies); INR –

National Waste Institute; REN – National Electric Grid Operator; and DPP – Department of

Prospective and Planning (currently integrated in the Environment Ministry). The degree of cooperation from these institutions varied from suspicious to very cooperative, with some providing very useful information to complete the report while others refused to disclose information regarding national investment plans. We would particularly like to thank Alexandra

Serra and Rosário Cancelino at AdP, Vitória Mira da Silva, at INAG, Francisco Saraiva and

Helena Azevedo, at REN, António Branco and Nuno Pinto, at EGF and Félix Ribeiro and

Ascenção Gonçalves, at DPP, for their help.

The national strategic reference framework for European fund application (QREN 2007-2013) should be finished by this summer, to present and negotiate with European Commission. The

Council of Ministers resolution 25/2006 of March 10 th

establishes main strategic options, institutional setup, and operational organization. Sectoral studies have been done to identify gaps and provide an evaluation of past investments. All public administration agents have already indicated investment needs and major axes and operational programmes (thematic and regional) are being created now, but this information is restricted. The general unavailability of data regarding physical investment needs was the major obstacle to implementing a proper independent assessment on the levels of financial investment required for the period 2007-2013.

Nevertheless, the following report brings together a great deal of information which can contribute to an understanding of the needs for investment in environmental infrastructure in Portugal in the following years.


2 OVERVIEW AND HORIZONTAL ISSUES

2.1

Indicator

General facts of the country

Area of country (sq km) a

GDP per capita (Euro) a

Population (thousand) a

Number of households (thousand) a

Value (latest year)

92 117,5 km

2

€13985 (2005)

10529 (2004)

3651 (2001)

Trend n.a.

Average real growth 1,85% p.a. (1995-2005)

Average growth 0,53% p.a.

(1995-2004)

Average growth 1,49% p.a.

(1991-2001)

Average real growth 1,85% p.a. (1995-2000)

Average household income (Euro) a

€16 189 (2000)

€21 948 (2002)*

7,6% (2005) Unemployment rate (%) (ILO definition) a

Sector employment (thousand) a

Agriculture, forestry and fisheries

Industry, construction, energy and water

606,2

1 566,6

Decrease from 1995 to 2000

(lowest value 4,0%), increase thereafter

Comparison 1998-2005:

Agriculture decreases from

14% to 12% of employment,

Industry decreases from

35% to 31% of employment,

Services increase from 51% to 57% of employment

Sector GVA 2005 (%) a

Total (2005)

Agriculture, forestry and fisheries

5122,6

2,8%

Comparison 1998-2005:

Industry, construction, energy and water

24,6%

Agriculture GVA decreases from 4,3%, Industry GVA decreases from 29,1%,

Services GVA increases from 66,7%

Services 72,6%

Source: a

INE (Instituto Nacional de Estatística), except * which we calculated based on 2002 household income and number of households (Eurostat). The lower 2000 value is based on a direct survey of households.


Portugal’s GDP growth, having been higher than EU average from 1995-2000, with an average annual rate of around 4%, slowed markedly in the following years (average annual rate only

0,6%). In the latter period, the distance to average EU GDP per capita widened. Regional analysis shows that only the LVT (Lisboa – Vale do Tejo) and the Algarve regions (which together comprise 30,1% of the population) have values above 75% of EU-25. The evolution of unemployment has reflected GDP growth trends, but it should be noted that Portugal maintains one of the highest employment rates in the EU, at 67,8% of working-age population.

Population trends denote a slight increase in the last few years, which can almost entirely be attributed to immigration. However, within each region there are major variations in population distribution, with most people concentrated in the large cities in the coastal areas as can be seen in the following map, which shows population density in 2002 (thick lines denote regional boundaries). This asymmetric distribution entails significant differences in environmental pressures between the coastal and the inner areas of the country. (INE, 2004) Moreover, these imbalances grew from 1991 to 2001, with strong population increases in large metropolitan areas

(Lisboa, Porto, Faro) and decreases in the eastern areas of Norte and Centro as well as practically the whole of Alentejo. Given such heterogeneity within regions, this report generally does not provide regional analysis.

Figure 2-A Population density (2002)


Sectoral analysis shows the growing importance of the Service sector, both in terms of employment and in terms of GVA. However, the impact of both industry and agriculture in environmental quality remains extremely significant. Agricultural water consumption, for example, accounts for 75% of estimated water consumption (PNA, 2001).

2.2 State of the environment

The most recent State of the Environment Report for Portugal (REA 2004) singles out the most problematic areas in terms of environmental quality. In general, the energy consumption indicators remain below EU averages, except for GDP energy intensity, which has continued to grow throughout the past decade (from 216,67 toe/million € in 1991 to 251,32 toe/million € in

2003). The country has also experienced continuing growth of materials consumption, generally above GDP growth, which is a worrying trend. Another worrying area is greenhouse gas emissions: the 2003 value stands 37% above the 1990 level, when the Kyoto target is a 27% increase. This result is especially inadequate considering that 2003 was a record year for hydropower, the most significant source of renewable energy in the country, due to exceptional rainfall in the 2002/2003 hydrological season (see chapter 6). Although REA 2004 considers that the country is on course to achieve the renewable energy target in 2010 (Directive 2001/77/CE), this outcome will require significant investment (see section 6.2.2). The latest National

Programme for Climate Change (PNAC 2004) recognizes these problems and emphasizes, among other things, that effective improvements in energy efficiency and increased investment in renewable energy sources will be essential. However, it recommends that emergency measures be implemented in 2008 if there isn’t a major improvement in the next couple of years. Another area where progress has not been forthcoming is ozone precursor emissions. There was a 1,5% increase between 1990 and 2003, which means that the country is now even farther away from the defined targets (Directive 2001/81/CE).

Looking at water supply, the situation seems generally positive in terms of access and quality, reflecting years of investment in the sector (see chapter 3). However, water consumption is growing, which increases water stress potential and worsens the outlook for drought episodes, which are bound to occur as Portugal’s climate is naturally characterized by extremely variable rainfall levels (see chapter 7). The role of agricultural water consumption, which comes mainly from origins outside urban supply systems, and local pressures from increased tourism in some areas (notably the Algarve) are growing concerns which will require better demand management measures.

On the other hand, waste water services are still far below target levels (UWWT Directive

91/271/EEC), both in terms of collection and in terms of treatment. The mainland region with the worst results is Norte, where in 2003 only 59,6 % of the population was connected to a sewage network and 49,3% to a treatment plant. (see chapter 4) This sector will undoubtedly require additional, and better targeted, infrastructure investment in the coming years.

The above-mentioned concentration of the Portuguese population in coastal areas has been associated with several negative indicators in terms of land occupation. Results from Corine Land

Cover 2000 show an increase of 70000 ha in artificial land (41% above the 1985 result), mainly at the expense of natural vegetation and agriculture. Housing in particular has grown strongly, especially in the Algarve and in the coastal Norte. Forested land also increased, although this indicator includes very different types of soil occupation. Serious concerns can be raised about the observed increase in forest fire occurrences (see chapter 7).


Finally, municipal solid waste services show a positive evolution, with 100% collection coverage and proper disposal (see chapter 5). Considering that in 1995 73% of MSW was deposed in open-air waste dumps, this is definitely a major improvement. However, per capita (total and packaging) waste generation has increased, with attainment of the recovery and recycling targets of Directive 94/62/CE but not the differentiated targets of its amended version (Directive

2004/12/CE).

2.3 State of the environmental infrastructure

The most developed infrastructures over the previous programming period were those associated with water supply and municipal solid waste, especially landfills and selective collection equipment. The investments in MSW are recent developments, as the country went from 41% of service coverage to 100% in under 15 years. Some improvements have also been obtained in wastewater treatment through new infrastructure, but this is one area where more will have to be invested in the next programming period as targets (such as those in the UWWTD) are far from being achieved. At any rate, network rehabilitation rates for both water and waste water are generally lower than recommended, and this may be one of the reasons for unduly high water losses. Lack of coordination between bulk and retail investments has meant that in some cases new infrastructure does not fulfil its potential because it is not appropriately integrated in the system. The Norte region stands out for its distance to water supply and waste water targets, just as Lisboa-Vale do Tejo stands out for the opposite reason.

Significant investment has also gone into several types of renewable energy sources, with installed capacity picking up strongly in 2004 and 2005. However, growth rates vary greatly among different energy types, with no major investments in hydroelectricity and a huge increase in wind energy. In the area of Natural Risk many current problems cannot be related to infrastructure conditions, but rather to poor risk assessments and inadequate planning.

2.4 Implementation status of the European environmental acquis

In 2004 about 7% of environment-related European Directives had not been written into national law (REA 2004). This brought on several cases of legal action from the Commission, of which a significant one concerned the lack of transposition of the Water Framework Directive, for which

Portugal was taken to the EU Court of Justice. The first draft of the Portuguese Water Law was done in 2002, but successive changes in the Environment Ministry the following years prevented the presentation of a definitive version until December 2005, when it was finally approved in

Parliament (Lei 58/2005). The latest information available from the European Commission 1 indicates only 3,5% of environmental Directives as being currently delayed.

Portugal has also received several warnings regarding lack of attainment of the UWWT Directive objectives (described in section 4.1.4), along with other warnings relating to industrial waste, nature protection, environmental impact assessment and air pollution, which are not direct concerns of this report.

1 http://europa.eu.int/comm/secretariat_general/ , reference date March 8 th

2006


In the past the main environmental policy driver has been the requirement to comply with EU legislation. A significant part of funding comes from Structural and Cohesion Fund programmes and projects, as can be seen in the following sections.

For the next programming period, it is expected that environmental policy be more integrated into other policies, as that has not often been the case in the past. The process of designing a

National Strategy for Sustainable Development (ENDS) began in 2002 but last year the government chose a team to write an updated version that explicitly considers as key instruments for implementation the National Strategic Reference Framework (QREN), the National Action

Programme for Growth and Employment (PNACE), the National Programme of Spatial Planning

Policy (PNPOT) and the National Programme for Climate Change (PNAC), as well as specific sectoral strategies. Environmental policy goals are presented alongside other objectives.

Although this shows an effort in policy compatibility, the existence of conflicting objectives is not generally recognized, so that potential trade-offs are never discussed.

The potential contribution of environmental policy to regional convergence and competitiveness goals is acknowledged but not quantified in several publications (Amorim et al, 2004; Mateus et al, 2005, Borrego et al, 2005). Improvements in basic services (water supply, waste water treatment and solid waste collection) are assumed to be essential in attracting people to poorer areas, and renewable energy investment can create new opportunities. For the next programming period, only the Portuguese regions of Norte, Centro, Algarve and Açores will be fully eligible for “Convergence” Objective funds. Moreover, it is expected that regional operational programs take an increasing proportion of structural funds in 2007-2013

2

.

2.6 Environmental expenditure (general)

Data on environmental expenditure in Portugal is published yearly by INE ( Estatísticas do

Ambiente 2004 ). The total amount of public sector environmental expenditure for 2004 was 852 million euros, of which the largest amounts went to Waste (365 million), Biodiversity and

Landscape (211 million) and Waste Water Systems (211 million). As regards investment expenses, the amount was 72 million euros of National and Regional funds and 143 million euros of Municipal funds, which yields a total public investment expense of 215 million euros, whereas environmental investment by firms was 257 million euros for the same year. This data does not, however, specify the investment financing sources.

Another source of data on environmental investment is the National Investment and Development

Expense Programme of the Central Administration (PIDDAC), which accompanies the Budget every year. For the year 2006, the planned investment expenditure for Environment and Spatial

Planning has increased to 132 million euros, of which 65 million (49%) is attributed to EU funds.

2.7 Insights on past programming

2

A global increase of nine percentage points has been announced for Mainland Regions. The largest chunk of ROP funds goes to Norte (47%), then Centro (30%), Alentejo (15%), Lisbon

(5%) and Algarve (3%). Council of Ministers Communication, 31 st

August 2006, in http://www.portugal.gov.pt


In the period 2000-2006, the whole of Portugal benefited from Objective 1 funding, through 12 sectoral programmes and 7 regional programmes. Each programme has specific objectives and criteria. There were also funds from other community initiatives and, more significantly, from the

Cohesion Fund. The following table presents the total amount available from EU funding sources in the previous programming period.

Table 2-A Total structural assistance for Portugal (planned)

Structural assistance (2000-2006), in millions of EUR, at 2004 prices

Interreg Urban Equal Leader+ Cohesion fund Objective 1 Total

388 25 994

Source: c DG Regio

Although it is not easy to separate environmental expenses from other structural assistance for all the EU funding sources, some information can be collected. The sectoral Environment

Programme (POA), financed by the European Regional Development Fund (ERDF), includes investments in natural resource conservation as well as measures to integrate environmental concerns in social and economic activities. For the specific cases of Water Supply (WS), Waste

Water (WW) and Solid Waste (SW), most local (ie. municipal) projects get funding through the regional structural funds programmes (POR), whereas multimunicipal systems apply to the

Cohesion Fund. For renewable energies, funding comes through the sectoral Economy Program

(POE/PRIME). Specific sections of this report analyse relevant EU funding whenever the data allows it. Complete information on projects is not readily available, so that many times only measure-level data exist. The most serious data deficiencies for the purpose of this report were in POR programmes (where the numbers presented are almost certainly underestimates) and

INTERREG III-A (where the opposite occurs). The latter was not included in any of the report’s sections as the level of aggregation did not allow the distribution of funds among the areas at stake.

Table 2-B Planned environmental investment and structural assistance for specific funds, 2000-2006, in millions of EUR at 1999 prices

EU funding All National funds

Total investment

Average % EU funding

Cohesion Fund d 1327 660 1987 67%

ERDF – WS,

WW, SW (POR) e

ERDF (POA) f

455 178 633 72%

333 111 444 75%

ERDF

(POE/PRIME) y

INTERREG-A z

330 579 909 36%

158 53 211 75%

Total 2603 1581 4184 62%

Sources: d DGDR-FC,

(Measures 2.1 and 2.3) e IRAR, f MAOTDR-POA, y MEI-POE/PRIME (Measure 3), z INTERREG-A


2.8 Administrative capacity issues

In general, past experience from EU structural funds indicates that the administration is prepared to manage available funds appropriately, in the sense that institutions are in place and fund distribution and control mechanisms exist. The last III Community Support Framework intercalary evaluation indicates good financial efficiency for most funds (although the Environment

Operational Program, POA, was one of the few programs below 50% financial execution on the

30 th

of June 2005).

In terms of institutional capacity in specific fields, the main problems in water supply and waste water are in retail systems, where recent surveys indicate that appropriate data often does not exist and management skills range from proficient to inexistent. Implementation of common accounting rules and regular updating of physical and economic data by INAG (the National

Water Institute), two recent developments, should contribute to administrative improvement.

Nonetheless, bulk systems were the main beneficiaries of previous funds so that the next period will be more focused on retail systems. Capacity building at municipal level is thus paramount.

Similar concerns can be expressed on municipal solid waste. Another field where there appear to be relevant administrative failings is in renewable energy licensing, where processes are complicated and morose, preventing timely development of new production sources.


3 WATER SUPPLY

Type of investment

Physical Indicators

Water supply

(general

Connection rate to drinking water supply (%) (2003) a issues)

92,0

Unit water supply (lts

/inh/day) (2003) a

189

Total drinking water demand 492,73 households (million m³)

(2004)

a

Total drinking water demand industry and other (million m³) (2004)

a

176,05

Water price (EURO/m

3

)

Water supply (2004) g

0,15-1,56

(average: 0,77)

Water price (EURO/m

Sewage disposal (2004)

3 g

)

(see section 3.1.6)

0-1,83

(average: 0,29)

Surface Water

Reservoirs

Volume in reservoirs (million m³) (2005 – annual average) i

6530 (80,6% of total capacity)

Total capacity of reservoirs

(million m³) j

8 100

Associated period of water reserve (days)

338

3

Drinking water

‘production’ ground/surface

(quality)

Drinking water production 1 031 (Surface capacity -by source (million water: 627; m³/year) (groundwater, surface water, other) (2002) h

Groundwater: 404)

Investment

Costs 2002

(10

6

EUR/year)

Operating

Costs 2002

(10

6

EUR/year)

126 h 323

3

See Table 3-A . Note that this indicator, as a national average, is not illustrative of water reserves throughout the country, where some areas are much more pressured than others.


Water transport -

Connection rate to drinking water supply (% population or households connected to systems) (2003) a

92%

Distribution of water (includes connections) Geographical variation (min

% - max %) (NUTS II)

(2002) a

82.8%-100.0% minimisation

Water losses (% of volume –

2003)

l

36%

Monitoring Drinking water sampling 97.29% points – meeting drinking water quality standards (%)

(2004) e

100% (not an issue) public water supply (%) households)

3.1.2 Current state of provision

Portugal is endowed on average with 40,5 km 3 of water per year (32,8 km 3 /year of surface drainage and 7,7 km 3 /year of water recharges). This endowment would normally be more than sufficient to cover water consumption, even including users that are outside the public water supply system (such as agriculture, self-supplying industry and energy production, see Table

3-A). However, Portugal has very high seasonal and annual variability of water availability.

Considering both available resources and estimated water consumption, the National Water Plan indicates that the water basins with greater water stress are Lis and Oeste (coastal Centro), Sado

(coastal Alentejo) and Algarve (south).

Table 3-A Water consumption by water source and by sector (2001)

Surface

Water

Groundwater Total Surface

(hm

3

) (hm

3

) (hm

3

Water

Groundwater Total

Urban

Industrial

Tourism 11 9 20

Agriculture 2341 4210 6551

Energy

Total

1237

4007

0 1237

4747 8754

Source: k PNA

Some water quality problems exist both in surface water and groundwater. The first are presented in section 4.1.3. As for groundwater, the main identified problems are nitrates and salts in agricultural areas, but also saltwater intrusion in coastal aquifers.

k

Finally, a particular issue in water management in Portugal relates to transboundary basins. In

2000 the Albufeira Convention on the Sustainable Development and Protection of the Water


Bodies of the Portuguese-Spanish River Basins, adopted in 1998, entered into force. This establishes flow regimes at the border and defines regular cooperation mechanisms to promote joint management approaches.

3.1.3 Drinking water demand

Total water abstraction for public water supply in Portugal in 2002 was 1 031 million m

3

, 61% from surface water and 39% from groundwater. Water abstraction has increased 23.5% from

1993 to 2003. In that year, 92% of the population was connected to the water supply system, which represents a significant increase from 79.6% in 1990 and 89.7% in 2000. The NUTS II region with the lower connection rate is Norte with 82.9%. All other regions have connection rates above 90%. However, this is still below the 95% target established in 1999 by the first Strategic

Plan for Water Supply and Waste Water (PEAASAR).

Water consumption in 2003 was above the European average, with per capita values of 189 lts/day. This is a 5% increase since 1998. Water consumption from public systems varied between 144-230 lts/inh/day with lower consumptions in the northern water basins (below 200 lts/day/inh) and higher consumptions in the south (above 200 lts/day/inh). This asymmetry points to heightened pressures in the latter basins, since they are also the ones where natural water availability is lower.

As indicated in the summary table, the household sector (which includes services) was the main consumer of drinking water from public water systems. The demand from industry for these systems is not as important since industry relies on own sources of water abstraction for 83,9% of its consumption.

3.1.4 Drinking water quality

The quality of drinking water has improved over the past decade, as can be seen in the following table, which shows both violations of quality standards and the percentage of required monitoring tests which were not performed (according to DL nº 236/98, which reflected Directive

80/778/CEE). The main MAV violations occurred in manganese, iron and total coliforms. Clearly, treatment deficiencies in purification still need to be addressed.

Table 3-B Drinking water quality violations

Required tests missing 47,7% 20,7% 17,3%

Results that violate maximum admissible values

4,2% 2,5% 2,1%

Source: l REA 2004

It should be noted that Directive 98/83/CE was transposed into national law through DL

243/2001, which fully took effect only in December 2003. Results for 2004 indicate slight improvements in most parameters, although MAV violations increase to 2,71% because of the different criteria (RASARP 2004). It should be noted that 85% of violations occur in systems that supply fewer than 5000 people, mainly in northeastern Portugal, so that only a small fraction of the country’s population is affected.


3.1.5 State of infrastructure

The development of new water supply infrastructures in the current programming period has led, as shown in previous sections, to improvements in both water availability and quality. The worst region is still Norte, with over 630,000 people (17% of the population) not connected to a public supply system. For the whole country, about 830,000 people (8%) are not connected. The infrastructure improvements have been most evident in the bulk, multimunicipal systems, even if some systems are not complete. The second Strategic Plan for Water Supply and Waste Water

(PEAASAR II) indicates 2008 as the deadline for completion of the infrastructure investments that were planned for 2000-2006 (total estimated value of 4300 million euros for water supply and waste water systems). Both PEAASAR II and RASARP emphasize the need to increase connection rates especially after bulk systems are built, to take advantage of scale economies and increased reliability. In 2003 there were 13 systems supplying over 100 000 inhabitants and over 3000 systems supplying less than 5000 people.

e

Information on service interruptions is not generally available except for regulated suppliers, where RASARP data shows that interruptions are rare (the two exceptions, Indaqua Fafe and Águas de Valongo, are both municipal systems in the Norte region).

As regards efficiency, results are not positive. In fact, water losses in supply systems have increased from 27% in 1991 to values between 35 and 36% in the years after 2000. Regulated suppliers, however, attain values of 23%, possibly due to the fact that their systems are more recent. Municipal supply systems often present losses over 50%.

g

This clearly constitutes a challenge for the next investment period. A National Programme for Efficient Water Use (PNUEA) was approved in 2005 with ten-year efficiency targets for urban consumption (80%) as well as targets for agriculture (65%) and industry (85%).

Water pricing is applied in the whole country, generally with explicit metering and billing for water supply. The average price is 0,77 €/m

3

, although extremely variable pricing values and multi-part tariff formulas can be found. The sewage charges for consumers were also included in the summary table, and are discussed in this section, because they are paid along with the water bill, and in most cases reflect water supplied as there are no discharge meters for urban supply.

Sewage charges are even more varied than supply charges, are generally lower (average value

0,29 €/m 3 ) and often do not exist at all. Regulated suppliers have to take costs into consideration in designing tariff schemes but most retail prices are set by municipalities, often with political objectives and no economic basis. The following table summarizes the percentage of population for different price ranges in water supply and waste water.

Table 3-C Population in each price range (2005)

Water Supply Waste Water

<0,20 €/m

3

0,2% 30%

0,20-0,40 €/m

3

4% 46%

0,40-1 €/m

3

77% 22%

>1 €/m 3 19% 1%

Source: g PEAASAR II


For the year 2002, the National Survey on Water and Waste Waster Systems (INSAAR) collected data on revenues and costs so as to calculate actual cost recovery levels, in accordance with the

Water Framework Directive. The quality of the data was not always ideal, but it is the only existing information (INSAAR is currently being updated for year 2005). National values for financial cost recovery are 99% for WS and 54% for WW, which translates into a total value of

82%. This includes all financial costs. There is some regional variation, with a maximum of 107% for WS in the Tejo/Oeste River Basin District (RBD) and a minimum of 22% for WW in the Douro

River Basin. It should also be noted that for most RBD household cost recovery levels are lower than those for other sectors (including industry).

m

Calculated average household water bills are 109€/year for WS and 26€/year for WW (for a relatively high consumption of 144 m

3

/year), which together still represent a negligible percentage of less than 1% of household income. This indicates that there is room for prices to rise in accordance with WFD efficient pricing principles. The new National Water Law (Lei 58/2005) also requires adequate consideration of environmental and resource costs, and creates a new charge on water resources, which has not yet been implemented. Specific affordability issues must still be analysed, in particular areas and for poorer households.

Many different authorities/entities are involved in the water sector, and significant institutional changes came from the new Water Law. The following table summarizes the authorities and each one’s role in the new, not fully implemented, institutional setting.

Table 3-D Water sector players (2006)

Authority Level of intervention Responsibility

INAG – National Water Institute National

ARH – River Basin Administration Regional

National

National Water Authority

(planning, monitoring, reporting, economic analysis, definition of the water resource fee, drought and flood management)

Planning, licensing, monitoring and economic analysis

Economic regulation and drinking water quality monitoring

IRAR – Institute for the

Regulation of Water and Solid

Waste

CCDR – Coordination and

Regional Development

Commissions (NUTS II level)

Regional

CNA – National Water Council

CRH – River Basin Councils

National

Regional

Articulation of the water law and water plans with other environmental policies and with spatial planning plans; environmental protection

Consulting body for the government, representing water users

Consulting body for the ARH, representing water users


Municipalities Local Water supply and wastewater drainage and treatment; licensing and surveillance of private groundwater systems

Water supply and wastewater drainage and treatment

Public and private companies; public-private partnerships

National, regional and local

Source: Law 58/2005 and PNA

As regards water supply provision, information is summarized in Table 3-E, where it can be seen that the role of private companies as providers in the sector is still very low. It should be mentioned that under current legislation there is no private sector participation in the bulk systems, either in the water sector or in the municipal solid waste sector. That area is covered by public companies, with participation from the Águas de Portugal (AdP) group.

Table 3-E Types of water utilities in urban water supply (2006)

Types of utilities in water supply

Number % Number %

Municipalities 210 75.5% 3,500,000 38.9%

Municipalities

(autonomous services)

Municipal companies

2,900,000 32.2%

33 11.9%

Concessions

(public-private)

Total

1,700,000 18.9%

26 9.4%

278 100.0% 9,000,000 100.0%


3.1.8 Experience of previous investment programmes

As referred in earlier sections, a national infrastructure plan (PEAASAR) was developed to prepare investment decisions for 2000-2006. However, investment in bulk water and waste water systems in the current programme period overshot the initial estimates from PEAASAR, due to the initial lack of needs assessment studies and the stricter environmental legislation enacted since the beginning of the programme. On the other hand, in retail systems, for estimated needs of 1900 million euros (1999 prices) only 900 million were in fact programmed.

The main sources of financing for the water sector (water supply and wastewater) are: subsidies

(government budget; specific support contracts between the Central and the Local governments;

European structural funds), loans (commercial banks; European Investment Bank); and user charges and tariffs. As existing funding instruments do not always separate between support for

WS and WW, the following tables contain results for both.


Source of funding

EU

Table 3-F Water Supply and Waste Water

Funding instrument EUR (million)

Cohesion Fund

Planned

2000-2006

Approved Executed

2000-2004 2000-2004

Water Supply

Waste Water

WS+WW

172,1

312,7

506,7

146,2

268,5

405,4

49,1

77,1

86,0

National funds

Regional funds

Water Supply (CF)

(WS+WW)

70,9

Waste Water (CF)

WS+WW (CF)

184,9

232,5

-

-

-

-

17,3

43,2

31,5

- n.a.

All sources of funding

(WS+WW, ERDF)

Water Supply

Waste Water

243

497,6

- 66,3

120,4

WS+WW 1633,7

Total 2374,3

Note: Joint WW+WS CF projects are not separable. ERDF funds are within ROP and only aggregate planned values were available.

Sources: Structural Funds Reports, e RASARP


Cohesion fund (2000-2006)

The institutions which take part in the management of the Cohesion Fund are:

• Cohesion Fund Managing Authority (CF MA): DGDR

• Paying Authority (PA): DGDR - DGT

• Intermediate (IBs): Sectoral Managers

• Implementing bodies and final recipients: water service providers.

Table 3-G Overview of CF projects, 2000-2006 (planned)

Water Supply

Waste Water

WS+WW

EU-support

(€ million) (€ million) (%)

243.0 172.1 70.8

497.6 312.7 62.8

739.2 506.7 68.6

Structural funds (European Regional Development Fund) (2000-2006)

The institutions which take part in the management of the ERDF in this case are:

• Programme Managing Authority (CF MA): DGDR

• Paying Authority (PA): DGDR - DGT

• Intermediate Bodies (IBs): CCDR

• Implementing bodies and final recipients: water service providers.

Table 3-H Overview of ERDF projects, 2000-2006 (planned)

EU-support


894.5 621.8 69.5 Water Supply +

Waste Water

(through ROP)

3.1.9 Conclusions

Major infrastructure investments have been made in water supply during the previous programming period, with very positive results. Some investment will still be required in the future, as coverage needs to be improved in specific regions. The highest needs will likely be concentrated in retail water supply. Improved quality monitoring is also required to comply with

EU legislation. Reducing water losses should also be a major concern. Local availability issues and scarcity problems will be discussed in chapter 7.

It appears that a key issue during the next programming period will be the role of price incentives in water supply management. Public awareness of water as a scarce good is high due to the recent two-year drought, and prices are expected to rise in line with WFD requirements of cost

Strategic Evaluation of Environment and Risk Prevention – Country Report – Portugal recovery. Ideally, efforts should be focused on efficient tariff structures to reduce the complex variety of schemes that currently persist. The new charge on water resources is also expected to play a role.

3.2 Needs for the Future

3.2.1 Review of policy objectives and targets

As mentioned in the previous section, the Portuguese government has recently presented a plan for investment in water supply and wastewater for the programme period 2007-2013 called

PEAASAR II – Strategic Plan for Water Supply and Waste Water, which replaces the previous plan for the period 2000-2006, PEAASAR. PEAASAR II has three main strategic objectives, within each of which there are three operational targets:

1) Universality, reliability and quality of the service (ensuring adequate quality coverage at appropriate prices, through national and regional solidarity mechanisms);

A) To reach a national connection rate to the water supply systems of 95% (90% in each integrated system) and a connection rate to the wastewater disposal and treatment system of 90% (85% in each integrated system). The global targets were already present in the first PEAASAR for 2000-2006, but they haven’t been reached and some regions (namely, Madeira, Azores and the North) are lagging significantly behind. This justifies the separate targets aimed at integrated systems, which are expected to increase territorial coverage.

B) To improve drinking water quality, complying with maximum admissible values

(Directive 98/83/CE);

C) To move towards tariffs that are compatible with the paying capacity of the populations;

2) Sustainability of the water sector (improving management efficiency in articulation with the

PNACE – National Programme of Action for Growth and Employment 2005-2008 and the

National Technological Plan [national implementation of the Lisbon Strategy]);

A) To guarantee full cost recovery;

B) To improve operational management efficiency;

C) To contribute to the promotion of private regional and national entrepreneurial environments;

3) Environmental protection (in articulation with the Water Law [2005 transposition of the Water

Framework Directive], the National Water Plan [PNA 2001], the National Programme of

Spatial Planning Policy [PNPOT] and the European and the National Strategies for

Sustainable Development [ENDS]);

A) To comply with National and European environmental regulations;

B) To guarantee integrated pollution control;


C) To increase the productivity and competitiveness in the sector through eco-efficiency solutions (in line with the goals of the National Program for Efficient Water Use

(PNUEA), presented in 2001 but only approved in 2005).

Clearly, there is an effort to emphasize Acquis compliance, to strengthen consistency between different national policies, and to promote regional development. Objective 1) also focuses specifically on social cohesion. However, some objectives can in practice present conflicts which will need to be addressed. For instance, full cost recovery is desirable to promote efficiency and it is in accordance with WFD principles, but it may imply significant price differences throughout the country, possibly higher for poorer rural communities (with low population densities and higher costs of service). The principle of regional cross-subsidization is explicitly mentioned in

PEAASAR II, and the provision of water below cost for initial consumption blocks is already prevalent throughout the country, but the integration of cost recovery and efficient pricing goals into tariff structures has not been sufficiently addressed. In particular, the Economic and Financial

Dispositions established in the 2005 Water Law still have not been published.

Another issue is the clear preference given throughout the document to integrated (vs. municipal) systems. This is expected to improve management efficiency through scale economies, improved regulator control and better management practices, as well as to reduce pricing disparities in nearby areas. However, this will further increase concentration and reduce the possibility for competition in concessions (the Portuguese Competition Authority is currently investigating the

Águas de Portugal – AdP group for anti-competitive practices).

4

Also, during the 2005 drought one of the measures taken in many areas of the country was to re-activate smaller water origins which had been abandoned for the larger infrastructures which supposedly had higher levels of reliability.

Some of the specific measures that are planned are:

• To continue investment efforts in the expansion of water supply and wastewater collection and treatment systems; to define eligibility criteria related to the Plan’s objectives for access to European and National funding for these investments;

• To increase the range of admissible management models; to promote the integration of neighbouring systems; to create a framework law for concessions in retail water supply;

• To implement the Water Framework Directive and to promote the efficient use of water and integrated pollution control;

• To broaden the scope for economic and environmental regulation, monitoring and inspection, increasing the powers of the regulating authorities.

Many of the objectives, targets and even measures are similar to those presented in PEAASAR I.

One policy change between the two plans is the focus shift from bulk water to retail water systems, with integration recommendations. This reflects the insufficiencies still present in the retail systems and the difficulty experienced in coordinating investments in the previous period.

4

It should be mentioned that PEASAAR II was actually written by a team from AdP.


Demographic and economic trends and projections

According to the National Institute for Statistics (INE), the population is expected to be roughly stable over the program period (from 2007 to 2013) in the base scenario (-0.05%), although with regional variations as explained below. The projection of Cambridge Econometrics is similar, forecasting only a slight decrease of the country’s population (-0.14%) in the period. Detailed scenarios for population and economic sector data can be found in Annex 11.1.

Unit water demand

The unit water demand per inhabitant is expected to keep rising during the program period. If we apply the average annual growth rate of 1998-2003 (1.02%) to the latest value of per capita consumption (189 lts/inh/day

5

) we get a value of 209 lts/inh/day by 2013. This is a base case scenario. To evaluate potential price influences on water demand, it should be noted that in one of the very few calculations of price-elasticity of water demand in Portugal, Martins and Fortunato

(2005)

6

use a sample of Portuguese municipalities to arrive at the value of -0.558 for a combined water supply and waste water bill, which they consider to be within the range found in the literature. This means that for each percentage point increase in water price, water demand would fall 0,56%.

Drinking water quality still has problems in some regions of the country, especially for human consumption, leading people to distrust the quality of the public system and to exchange tap water for bottled water in drinking (newspaper articles periodically advertise the bad results). The number of missing required sampling analyses is above 15% in many municipalities, especially in the Norte (Trás-os-Montes) and in the Azores, and the number of noncompliant results is above

5% in many municipalities, especially in the Norte, in the Centro (Beira Interior) and in the

Azores. Nonetheless, water quality levels are expected to increase as they have been doing in the past, with continued investment in water treatment plants.

As for industry, GVA per m

3

of water consumed is 49 €/ m3 in Mainland Portugal. The values for each river basin district vary from 9 €/ m3 to 148 €/ m3.

m

The National Water Plan includes forecasts of industrial water consumption and the number of workers employed. One can calculate from the data that they have two assumptions regarding industrial water demand per worker, one for each scenario. In one scenario the unit industrial water demand rises from 2006 to 2012. In the other, the unit water demand decreases. PNA scenarios were mostly based on trend extrapolation and expert interviews. Raising the water prices for industry may reduce the demand of industries for water from the public system, but its impact may be limited due to the fact that the manufacturing sector in Portugal relies on own sources of water abstraction for

83.9% of its consumption. On the other hand, the 2005 Water Law created a (yet to be implemented) water resource charge that will be paid for all abstractions in the public domain, which could influence industrial demand. Unfortunately, there are no studies on the price-

5

189 lts/inhabitant/day is the value from INE - National Institute for Statistics. INAG, the National

Water Institute, in its National Inventory of Water Supply and Waste Water Systems presents a value of 169 lts/inhabitant per day in 2002 (the value of INE for 2002 was 188).

6

Martins, R. and A. Fortunato (2005), “Residential Water Demand Under Block Rates – a

Portuguese Case Study”, Estudos do GEMF , n. 5.

Strategic Evaluation of Environment and Risk Prevention – Country Report – Portugal elasticity of industrial water demand in Portugal. Renzetti (2002)

7

provides a review of the few available studies performed on this subject from 1969 to the present. With the exception of a single 1969 study, all price-elasticities reviewed fall within the range of -0.98 to 0.00, indicating an inelastic industrial water demand. Output-elasticity of industrial water demand estimations fall within the range of 0.130 to 1.359.

Another significant factor in Portugal is water losses (which the 2005 Drought Commission calls

“The great unexploited water source”). The National Programme for the Efficient Use of Water

(PNUEA) proposes a variety of measures such as the adoption of more efficient equipment, water recirculation devices, reutilization for other uses, and rainwater storage. The programme considers not only educational campaigns, but also economic instruments. Total estimated investment needs in 2001 amounted to 1011 million € over a ten-year period, although it is not yet clear how much of this will actually be approved as financial support. The PNUEA also includes measures to reduce water losses, which is a specific objective of PEAASAR II, through the investment in renewing and rehabilitation of the water supply network, especially in retail water were water losses are greater. Although this kind of measures does not reduce water demand by households, it can reduce the need for water withdrawal, thus diminishing the pressure on water resources.

As noted above, the per capita water consumption given by INE in 2002 is 10% higher than the value found through the National Inventory of Water Supply and Wastewater Systems. The per capita urban water demand scenarios of PNA seemed somewhat exaggerated given the current trend in per capita consumptions, and they do not include the possible impact of existing programs or expected price increases. PEAASAR II does emphasize the role of water pricing but it does not disclose the demand scenarios which were taken into account. On the other hand, the scenarios for industrial water seem to be based on a value (around 530 m

3

/worker) which is far below the values we can calculate from the Synthesis Report on the Characterization of River

Basin Districts published in 2005 (2552 m

3

/worker).

User charges

As noted earlier, the recent Water Law (2005), which reflects the Water Framework Directive, has introduced a water resource charge which, among other things, is meant to recover the scarcity and environmental costs of the water services. The charge is imposed on users of water resources in the public domain, on uses which may deteriorate water quality and on beneficiaries of public hydraulic works. It leaves out the users of water on private domain, like groundwater drills. The water fee will be reinvested in the improvement of the quality of the water bodies and the efficiency of water use through the recently created River Basin Authorities.

There have also been calls for the implementation of a water pricing regulation document, to guarantee some harmonization between regions and the sustainability of the water supply sector.

The regulation is expected to be created during the programme period 2007-2013. PEAASAR II explicitly calls for measures to expand the regulatory powers of IRAR – Institute for the

Regulation of Water and Solid Waste, which are currently limited to utilities with concessions.

These are only a small portion of the total, especially in retail water supply.

All things considered, water tariffs are expected to increase in the future programming period.

They are on average below the investment and operating costs of the service. One of the main focuses of PEAASAR II is precisely the reforming of the water tariffs to ensure the financial sustainability of the sector, although the plan calls for sustainable social tariffs, relying partly on

7

Renzetti, S. (2002), “The Economics of Water Demands”, Kluwer Academic Publishers.

Strategic Evaluation of Environment and Risk Prevention – Country Report – Portugal the subsidization of investment to avoid relying solely on tariffs to render the investments profitable. As noted above, The Art. 5 Report on the Characterization of River Basin Districts points to a current level of financial cost recovery of 99% in Water Supply and 54% in Waste

Water, with an overall level of cost recovery of 82% across both sectors, for 2002. The 2005

Inventory still has not finished, so current values are not available. For the total water bill, which in Portugal includes the wastewater fee, to reflect cost recovery we may expect an average 22% rise in the water bill. The increase may be even higher to reflect the introduction of the water resource charge. The Art. 5 Report on the Characterization of River Basin Districts indicates an average household water bill of 111 €/year (for a 120m

3

/year consumption). To achieve cost recovery, an average 22% increase in the water bill would take it to values around 135-165

€/year at constant prices.

There are important regional differences in user charges. For an average water consumption of

120 m

3

/year, the average annual water bill (including water and waste water) was, as noted above, 111 €/year. However, River Basin Districts average values ranged from 70 €/year to 124

€/year, and the full range of annual average water bills was 0-318 €/year. The implementation of full cost recovery would have very differentiated regional impacts. This would also follow from the fact that the increase in connection rates to the water and waste water supply systems in the following programme period will come from investments in less populated rural regions.

Nevertheless, the PEAASAR II proposal for a national and regional solidarity mechanism in implementing cost recovery may smooth the different regional impacts. The following maps show the situation in 2001 regarding estimated cost recovery at a municipal level

k

.

Figure 3-A Regional Differences in Revenue-Cost Relationship

Residential Water Supply Waste Water Disposal and Treatment

Source: INAG (2001) - National Water Plan, chap. II-11, pp. 27-28


Although specific pricing policies vary from municipality to municipality, there are in many cases exemption or price reduction policies. There is also widespread use of increasing blocks, with the first block (typically up to 5 m

3

) significantly cheaper. Industries do not generally benefit from any such exemptions, and generally have higher cost-recovery values than households. As discussed above, there are no official data on the price-elasticity of water demand in Portugal, but the

Martins and Fortunato (2005) finding of a price elasticity of -0.558 for combined water supply and waste water bill, suggests inelastic demand. Still, if the price were to rise as much as noted above, water demand could decrease around 10%.

Considering that there were 3651 thousand households in Portugal in 2001, and this number was growing at an yearly rate of 1.49%, we may expect to have something like 4360 thousand households in Portugal by 2013. Multiplying this number by the forecasted average water bill we may anticipate a yearly revenue from residential water bills in the range of 588 to 719 million euros at constant prices.

On the other hand, for industrial water users, price rises in supply systems could promote the increasing use of other water sources which is not necessarily a positive development unless effective licensing and monitoring schemes are implemented.

Total drinking water need

In this section, we forecast the average annual water demand for 2013, by extrapolating the current trends and defining intervals around such trends to create pessimistic and optimistic scenarios. Total drinking water demand is expected to rise between 10% and 35% between 2004 and 2013 (see Table 3-I). Domestic water demand is expected to increase in an interval from 6% to 30%, while industrial water demand is expected to increase between 2% and 20%. Other water uses (such as fire fighting, street washing, and garden sprinkling) are expected to grow much more, in an interval between 71% and 109%. Some of the latter outdoor uses are, however, considered to be more price-elastic than residential water demand, leaving more room for water demand management policies like water pricing to curtail the expected increase.

Table 3-I Forecast Annual Water Demand in 2013

Low Demand

Scenario

8

Medium Demand

Scenario

9

High Demand

Scenario

10

Population (-)

11

10,056,127 10,610,502 10,714,419

Households (-)

12

4,131,966 4,359,753 4,402,452

8

The low demand scenarios regarding drinking water demand are defined as 90% of the medium demand scenarios.

9

The medium demand scenarios regarding drinking water demand result of applying the specific average annual growth rate 1998-2004 to forecast demand in 2013.

10

The high demand scenarios regarding drinking water demand are defined as 110% of the medium demand scenarios.

11

Source: INE – National Institute for Statistics, Resident Population Forecasts, Portugal and

NUTS II 2000-2050.

12

The medium demand scenario for the number of households results from applying the 1991-

2001 trend (growth rate of 1.49%) until 2013, which would imply an average household size of


Low Demand

Scenario 8

Unit water supply (l per inh. per day)

200 (6% increase relative to 2003)

Total domestic water demand

(million m³ per year)

13


Economic gross product

(million euro) 14 relative to 2005)

Specific water consumption per gross product (m³/euro)

15

4.23 (11% decrease relative to 2004)

Total industrial water demand


16

98 (2% decrease relative to 2004)

Other drinking water demand


17


Total drinking water demand



Medium Demand

Scenario 9



178,515 (21% increase relative to 2005)

4.58 (3% decrease relative to 2004)




High Demand

Scenario 10



180,962 (23% increase relative to 2004)

4.97 (5% increase relative to 2004)




3.2.3 Drinking water quality

In 2003, 2.1% of sampling results showed that maximum admissible values were violated, as mentioned in section 3.1.4. An effort is still required to improve drinking water treatment. Surface water quality requires an even larger effort. In 2003, 33.3% of surface drinking water sources had quality classifications of bad or very bad. The effort to improve surface water quality will have to be made from the waste water point of view, with larger investments in preventing and controlling point source and diffuse pollution. For example, the connection and treatment targets for waste water are still far from being reached. PEAASAR II reports that in 2004, violations of the Directive about 2.43 individuals. The other two scenarios result from assuming these household sizes in each of the population scenarios.

13

Domestic Water Demand: Consumption by households and services, including local governments, schools, all State establishments (except industrial ones) and Non-Profit

Organizations.

14

Growth rates taken from:

- “Government Budget 2006” for 2006;

- DPP (2005) “Grandes Opções do Plano 2005-2009”, Department of Prospective and

Planning, Ministry of Finance [Main Planning Choices] for 2007-2009;

- Rodrigues (2002), Social Security in Portugal: An Update of Long-Term Projections, DGEP

Working paper no. 27, for 2010-2013.

For the low and high demand scenarios, the average annual growth rate for 2010-2013 of 2.65% was changed to 2% and 3%, respectively.

15

The demand scenarios regarding unit water supply result from: dividing the total forecasted drinking water demand by the forecasted annual GDP.

16

Industrial Water Demand: consumption by industry, including hotels and restaurants and all consumptions equivalent to industrial activity.

17

Other Drinking Water Demand: includes consumptions with fire fighting, street washing, public garden sprinkling, among others.


91/271/ EEC on Urban Waste Water Treatment were 16% (down from a value of 38% in 2001).

This issue will be further discussed in section 4.1.4

The State of the Environment Report mentions that in 2002, the water basins with the worst quality problems were Lis and Ribeiras do Oeste on the West Coast of Portugal. The Art. 5

Report on the Characterization of River Basin Districts indicates that the river basin districts in which they are included suffer greatly from three types of pressures: Industry and Landfills (point source pollution); Agriculture (diffuse pollution); and water withdrawals. Another river basin district with similar significant pressures is the Algarve. Sado and Mira in the southwest have significant pressures from diffuse pollution, while Guadiana has significant pressures from point source pollution.

The Art.5 Report also identifies the river basin districts with the greater percentage of water bodies at risk of non-complying with WFD standards. For surface water these are: Minho-Lima and Douro in the North (with more than 50% of water bodies at risk), possibly reflecting the fact that Norte is one of the regions were waste water targets are further from being reached. For groundwater the river basin districts with greater percentage of water bodies at risk are

Cávado/Ave/Leça (25%) in the North, Guadiana (11.1%) and Algarve (9.7%) in the South.

3.2.4 State of Infrastructure – Need for improvement / replacement

Retail water supply systems lose on average 36% of the water withdrawals in the system due to leakages, which is a value above the European average. This problem is more serious in the retail network where in the majority of municipalities water losses represent half of the water withdrawals, forcing the over dimensioning of the bulk water systems which support them.

.PNUEA sets a target of 20% for losses in 2015.

The investment in the renewing and rehabilitation of the water supply network, considered essential to reduce water losses and leakage, is one of the three priority investment areas defined in PEASAAR II for retail water supply, for the period 2007-2013. Moreover, RASARP– the Report on Water Supply, Sewage and Waste Water of IRAR indicates the average percentage of the water supply network which should be subject to rehabilitation every year, pointing out that a good performance for a utility would be to rehabilitate 1%-2% of the water supply network. The report points out that most of the regulated utilities currently perform insufficient levels of rehabilitation activities on the network. The report recommends that, although many networks are recent, rehabilitation programs should be set in place, because the current level of rehabilitation, if continued, would lead to a fast ageing of the water supplying system and to the unsustainability of the network infrastructure. The analysis and recommendations are similar for bulk water systems and retail water systems.

PEAASAR II does not mention any physical investment indicators to support the financial amount it puts forward. The contact established with AdP – Águas de Portugal (the public holding company for most bulk water supply, waste water and solid waste companies in Portugal) enabled us to obtain data which disaggregated the financial investment required by type of investment, as can be seen in section 3.2.7, but no data was provided on the physical investments which justify the financial amount. According to AdP, the method for obtaining the investment values for the period 2007-2013 was based on the intended change in connection rates and not on actual detailed physical investment needs.


3.2.6 Unit investment & operating costs

PEAASAR II aims at increasing the connection rate to the systems in a situation where the large urban centres are already served. Increasing the connection rate means that water supply and wastewater disposal will be provided in regions with lower population densities and more dispersed urban centres. Therefore it is likely that the unit cost of investment will rise in the programme period 2007-2013, relative to the programme period 2000-2006.

Table 3-J provides data on the average unit investment cost for some types of investment, such as reservoirs, drinking water treatment plants and the drinking water distribution network. Not all data provided by AdP for Portugal are comparable to the default values obtained from Ecolas,

Environmental Consultancy and Assistency. For the cases where comparability is possible, the value provided by AdP can be either consistent with the default values (long distance distribution), lower (local distance water network) or higher (drinking water production). No data was available for operating and maintenance costs.

Table 3-J Unit investment costs

Type of investment Indicators Investment cost surface water

Drinking water production

Transport and connection

Cost per volume needed in reservoirs (Euro per meter of dam height) 18

100,000-250,000 n.a.

Cost to provide drinking water quality from surface water (Euro per m

3

)

19

180-270 210

Cost for the treatment of groundwater to drinking water quality (Euro per million m³)

20 n.a. n.a.

Cost for the installation of a long distance drinking water network (Euro per km) 21

20,000-467,500 29,750-391,000

Cost for the installation of a local drinking water network (Euro per km)

22

37,500-75,000 45,000

Source: AdP - Águas de Portugal

18

A default value of the cost per volume needed in reservoirs would be €1.5/m

3

(source:

Ecolas). However, this is not directly comparable to the value for Portugal provided by AdP.

19

A default value of the cost to provide drinking water quality from surface water (Euro per production plant) would be €1.1*10 6 per production plant or €60 per m 3 /day (source: Ecolas), which is much lower than the value for Portugal provided by AdP.

20

A default value of the cost for the treatment of groundwater to drinking water quality would be

€50/10

3

m

3

or €40 per m

3

/day (source: Ecolas). No data was provided for Portugal.

21

The available information is disaggregated by the diameter of the pipe. See Annex 11.1. A default value of the cost for the installation of a long distance drinking water network would be

€300 000/km (source: Ecolas). The default value is within the range provided for Portugal by

AdP.

22

A default value of the cost for the installation of a local drinking water network would be €200

000/km (source: Ecolas). The values for Portugal by AdP are much lower than this default value.


3.2.7 Indicative investment requirement and comparison – Water Supply

For the programme period 2007-2013, PEAASAR II plans 1061 million euros worth of investment in water supply systems, an average of around 152 million euros per year. This represents an average share of investment in Water Supply of around 0.09% of GDP. This is higher than the

126 million euros per year of investment costs in water supply in 2002, mentioned in the summary data table, but the values are not strictly comparable because the latter value is an annualised value considering the useful life of different infrastructures, while the former is a simple average across the years of the programme period. Operating cost levels are not identified but are expected to be recovered through tariffs.

Table 3-K Planned Investment in Water Supply 2007-2013

Type of water systems

Bulk Water Systems

Retail Water Systems

Planned Investment 2007-2013

(Million Euros)

23

320

741

Total 1061

Source: PEAASAR II – Strategic Plan for Water Supply, Sewage and Waste Water 2007-2013.

The average European funding of water supply investment in 2000-2006 was 70,8%.

PEAASAR

II plans to fund only 50% of investment from investment support programmes (European

Regional Development Fund, Cohesion Fund, Government Budget) in 2007-2013, calling for a greater proportion of self-financing. Table 3-L disaggregates the data from PEAASAR by type of investment. It should be referred that 40% of the investment is aimed at the rehabilitation of existing infrastructures.

Table 3-L Summary of investment cost – water supply

Type of investment Indicative Investment Cost (10 3 Euro)

52 400 Construction of new drinking water treatment plants

(bulk water)

Construction of new drinking water treatment plants

(retail water)

Rehabilitation of existing drinking water treatment plants (bulk water)

Rehabilitation of existing drinking water treatment plants (retail water)

Construction of new water distribution networks

(bulk water)

Construction of new water distribution networks

(retail water)

0

34 800

0

138 500

420 200

23

The values in the table are in constant prices of 2005 and include rehabilitation investment.


Type of investment

Rehabilitation of existing water distribution networks

(bulk water)

Rehabilitation of existing water distribution networks

(retail water)

Total investment

24

Total investment (% of GDP)

Indicative Investment Cost (10 3 Euro)

49 800

322 675

1 018 375

0.09%

Source: AdP – Águas de Portugal.

3.2.8 Summary

PEAASAR II – Strategic Plan for Water Supply and Waste Water will guide the investment to be done in water supply systems in the programme period 2007-2013. The document points out the overall levels of needed investment and the strategic objectives to be reached (namely the increase in connection rates to 95%, the improvement of the reliability of the system and the quality of drinking water, as well as the sustainability of the water sector and environmental protection) but it gives no detail on the specific investments to support, although the major priorities of completing the retail systems, integrating them with the bulk water systems, are highlighted.

Demand scenarios point to moderate increases in water consumption due to the increase in the connection rate (with a stable population) and to the requirements of economic growth, although the biggest increases in demand are not forecasted to come from households or industry but from other uses like street washing or garden sprinkling. This leaves some room for flanking measures like water pricing (in spite of the price-inelastic nature of water demand) and measures to promote the efficient use of water. The forecasted demand increase may not be a national problem, because average surface drainage and groundwater recharges are above water demand in Portugal, sustaining further increases in demand. However, region-specific and seasonal water scarcity problems (related to drought periods) could be worsened in a status quo situation (see also Chapter 7).

A large part of the investment set out for the 2007-2013 programme period is aimed at rehabilitation of existing infrastructures (40%). The improvement of water quality, through the construction or rehabilitation of water treatment plants, represents 9% of total investment. The investments put forward by PEAASAR II were calculated based on the intended changes in connection rates and some available data for unit costs. Despite our insistence, the methodology for this calculation was not provided. Likewise, no data was provided on the physical investment needs.

24

The totals for the disaggregated data provided by AdP are not exactly equal to the values presented in PEAASAR II. Total investment in water supply systems is 1 061 million euros in

PEAASAR II and 1 018 million euros in AdP data. Total investment in bulk water supply systems is 320 million euros in PEAASAR II and 276 million euros in AdP data. Total investment in retail water supply systems is 741 million euros in PEAASAR II and 743 million euros in AdP data.


3.3.1 Initial ranking

Considering the needs identified in the previous section, our ranking of the different types of investment is presented in Table 3-M.

Table 3-M Ranking Types of Investment within Field (Rank most important as 1)

Field Type of Investment Ranking

Water Supply Reservoirs

Drinking water production

4 plant 3

Transport (inc leakage) – long 2

Transport (inc leakage) – local

Metering

1

5

3.3.2 Feasibility of managing and delivering ERDF/CF Programmes to meet needs

Alternative Funding Sources

The investment in water supply and wastewater disposal and treatment systems in Portugal is practically all public. Both fields are discussed in this section. The sources of funding for investment in water supply in 2000-2006 have been the EU (CF: 42%; ERDF: 26%), the National

Government Budget (21%) and the municipalities (11%), which are responsible for retail water supply. According to PEAASAR II, only 50% of the planned investment for 2007-2013 is to be funded from investment support programmes (ERDF, CF, and the Government Budget). No division between these is proposed. Therefore alternative funding sources are called for, either through the foreseen changes in water and wastewater pricing to implement full cost recovery or through the greater involvement of the private sector, which is explicitly mentioned in PEAASAR

II.

Use of Flanking Measures

As noted in section 3.1.6, cost recovery for Portugal in 2002 was 99% for Water Supply and 54% for Waste Water Disposal and Treatment, with an overall level of cost recovery of 82% across sectors. Assuming a 22% increase in the average water bill (including waste water fees) to ensure full cost recovery, we estimated in section 3.2.2 a yearly revenue from residential water bills in the range of 588 to 719 million euros at constant prices (2002). In 2002, operating costs were estimated to be 323 million euros for water supply and 198 million euros for wastewater treatment and disposal. There may be some room for funding a part of the investment from water tariffs, especially due to the low price-elasticity of water and to the fact that it represents only a small part of the average family budget. The fact that the price-elasticity of water demand is low (-

0.558, see section 3.2.2) makes water pricing a somewhat limited tool in reducing water demand, yet an effective tool in raising funds for investment. However, public investment support will always be necessary for the investments planned for the period 2007-2013.

The new water resource charge may also contribute to investment funding because it is destined to fund the also recently created River Basin Administrations, which must reinvest its revenues in water management and water quality improvement.


Average household disposable income in Portugal for 2002 was €21948

25

. If households spent

5% of this income on domestic WS/WW/SW user charges, each household would pay €1097 per year for these services. As implementing full cost recovery would raise the average household tariff for WS/WW services per year only up to €165, it is obvious that planned charges will keep the weight of water tariffs on average family budget well below the 5% threshold.

The actual implementation of the measures set out in the National Programme for the Efficient

Use of Water (PNUEA), such as the adoption of more efficient equipment, water recirculation devices, reutilization for other uses, rainwater storage, educational campaigns and economic instruments might also reduce the need for further investments in increasing water supply.

Assessing the capacity to deliver investment programmes

Portugal has already prepared the second version of PEAASAR, the strategic plan that guided the investments in water supply and waste water disposal and treatment during 2000-2006, and which will be the basis of the negotiations with the European Commission for the period 2007-

2013. The creation of operational programmes to include these investments should therefore not pose major problems. The information we have from AdP – Águas de Portugal is that, especially for bulk water, the values put forward are based on “mature” projects present in investment plans of companies. The values for retail water are more uncertain because they were estimated based on connection rates and per capita unit costs.

As presented in section 3.1.8, 82,7% of the planned investment support for water supply and waste water from the Cohesion Fund for the period 2000-2006 had already been approved by

2004. Although at that date only 21,4% had been executed, many investments are due to be finished by 2008. PEAASAR II is clear in indicating that actual investment in the period 2000-

2006 for bulk water supply and waste water (€4200*10

6

) significantly overshot the initial planned investment (€2370*10 waste water (€900*10

6

6

) by 77%. On the other hand, the investments in retail water supply and

) fell below the planned investments (€1860*10

6

), while the actual needs to meet targets were later updated to a value 67% higher (€3100*10

6

).

The Execution Report 2004 of the Cohesion Fund makes two special recommendations:

- one for the European Commission: “to reinforce the methodological support to the member-states in terms of the reference values for the main parameters – development of a common base of results and impact parameters and of information on costs to enable the creation of uniform databases”;

- the second for the managing authorities: “to increase the requirements in terms of maturity and quality of the projects, to ask for risk assessments before approval, to anticipate public consultation processes, not to allow the signing of additional contracts, to require the identification of quantified indicators of objectives, results and impacts, to favour the integration of strategies and of viability studies, to guarantee, at the level of project execution and of fund management, the adequate institutional and professional capacity”

The promotion of private sector involvement and the qualification of staff resources in utilities are explicitly mentioned in PEAASAR II.

25

Net disposable income for Portugal in 2002: €80 127 * 10 6 (source Eurostat). Number of households in Portugal: 3 650 757 (Source: INE – National Institute for Statistics, Census 2001).


The indicative investment needed in water supply and waste water treatment and disposal should not present a particular challenge for Portugal, given the fact that planned investment levels are lower than in the period 2000-2006. However, PEAASAR II puts its main focus on retail systems, which had a lower level of execution of planned investment in the previous programme period and where administrative and financial capacity is more limited. This could be a relevant hindering factor, especially in waste water, where needs are more acute.

Table 3-N Estimate of Financial Requirements for Water Supply, 2007-2013

Stage in the Field Assessment Qualitative Judgements Based on Review

A: Indicative Total Investment

Needs (Meuro)

Based on PEAASAR II, given the lack of other available data

Quantitative Estimates

1061

B: Investments likely to be covered by market schemes

Approximate share of A:

0%

C: Amount recovered from

Approximate share of A existing user charges not

50% (indicative value from included in investment need

PEAASAR II)

D: Further amount that could Approximate share of A be recovered from higher rates for existing or new charges to fund investment

0% (tariff increases included in

C)

E: Financing Requirement

Before Absorption Review (A-

B-C-D) (Meuro)

0

530.5

0

530.5

F: Absorptive Capacity (% of

Financing Requirement (E))

G: Financing Requirement

After Absorption Review

(Meuro)

90%

(E multiplied by F) 477.45


4 WASTEWATER TREATMENT (WWT)

4.1 Overview

4.1.1 Summary Data Table

(see acronyms in Annex 11.2)


Indicators

Sewage networks and

Sewage connection rates (% of population connected) (2003)

l connections

(eg households, small industry) Km of sewer networks h

73,5

Trunk sewers / collectors

Km of trunk sewers/collectors h

626

Treatment plant

% of country surface area classified as sensitive area for the UWWTD

35 agglomerations

See map

(DL 149/2004)

Share of population or households connected to STPs (2003) l

Number of agglomerations that have been defined for the implementation of the UWWTD (2004) g

Number of STP in place that comply with the UWWTD standards (y) e

Number of STP in place that are not fully compliant (z) e ,

26

60,4

112

776

43

Sludge management

(waste)

Total biodegradable capacity of the above (y + z) plants in PE

Quantity of sludge produced [tons

DS/year] (2002) h n.a.

298 828

Type of sludge treatment used

(dewatering, digestion; drying; n.a. other);

Investment

Costs 2002

(10

6

EUR/yr)

Operating

Costs 2002

(10

6

EUR/yr)

89 h 198 h

26

See sections 4.1.4 and 4.2.2.


Disposal or reuse route used Agriculture, landfill,

(agriculture; soil; landfill; incineration; other) e,g cement production

Storm drains Number of CSO’s and reservoirs

1500-1700 (70% side weirs; 15-25% stilling ponds; 5%-

15% surcharge relief overflows)

27

4.1.2 Current State of Provision

In Portugal in 2003, 526 million m

3

of waste water were produced, of which 93 million (17,7%) were returned to the environment without any kind of treatment.

l

This is clearly an unsatisfactory result even if it represents a large improvement from the values of 50,6% in 1998 and 35,3% in

2000.

a

The sewage connection rate, at 73,5% of the population, and the population served by

STP, at 60,4%, are likewise insufficient (especially considering the PEAASAR targets of 90%).

l

Values in 2000 were 69,2% and 49,9%, respectively. There is still no region attaining the goal for

STP connection, and Lisboa - Vale do Tejo is the only region where the goal is reached for sewage connection rates (at 96,5%). The regions with the worst figures are the Azores (36,3%-

19,5%) the North (59,6%-49,3%) and Madeira (54,8%-50%).

Data from PEAASAR II indicates that in 2001 non-compliance with the UWWTD was 38%, although that should have been reduced to 16% in 2004. It is expected that, with programmed

2000-2006 investment, at least bulk systems will be fully compliant by 2008. Nonetheless, as

RASARP points out, it is not enough to have adequate bulk STP if the sewage retail network does not collect the waste water, just as it is not appropriate to provide good collection networks without an associated STP (this will only increase in point source pollution discharges). Clearly, better coordination between bulk and retail systems is required to assure that investments yield desirable results.

4.1.3 Surface water quality

The latest sensitive area designation, in accordance with UWWTD as amended by Directive nº98/15/CE, is shown in the map in Figure 4-A. More detail is given in the following section.

The general evolution of surface water quality classifications, which is based on a set of readings for 94 selected sampling points (out of a much larger network), has been stable with some positive tendencies in terms of the worst results, as shown in Table 4-A.

27

Estimation by INAG – National Water Institute.


Figure 4-A UWWTD Sensitive Areas (dark green)

Source: INAG


Table 4-A Surface Water Quality

Quality classification

28

A – Excellent

B – Good

C – Reasonable

D – Bad

E – Very bad

17

26

19

Number of sources % of sources

1995 2000 2003 1995 2000 2003

0

11

6

25

0

22

0.0%

15.1%

6.1%

25.5%

0.0%

23.7%

31

17

19

40

23

8

23.3%

35.6%

26.0%

31.6%

17.3%

19.4%

43.0%

24.7%

8.6%

Total

Source: i

SNIRH


As discussed in section 4.1.2, current infrastructure does not provide for an adequate waste water service. Coverage is far from universal both for sewerage connection and for treatment, although there are significant regional differences.

On the 31 st December 2005, for agglomerations above 2000 PE, 30 out of 469 STP (6,4%) did not comply with the requirements of the UWWTD (data obtained from INAG, National Water

Institute – Annex 11.2). These data must be analysed with caution because the data for the agglomerations ranging from 2000 PE to 15000 PE was being updated at the time the information was gathered and they include 352 STP (only 3 of which were reported as noncompliant). Furthermore, this data is not directly comparable with the summary data table, because it does not consider the STP serving agglomerations with less than 2000 PE. Of the 466 agglomerations above 2000 PE, 16 had no STP.

Table 4-B shows the agglomerations in situations of non-compliance with the UWWTD for sensitive areas. The limit date for Directive compliance was 31 December 1998. Several written warnings about non-compliance with the European laws, have already been issued. They are the last step before the Commission issues a formal complaint to the European Court of Justice.

28

See parameter list in Annex 11.2.


Table 4-B Agglomerations in sensitive areas in non-compliance with the UWWTD

Agglomerations > 10

000 PE

PT23 Chaves

PT14 Viseu

PT141

Montijo/Afonsoeiro

PT142

Montijo/Seixalinho

PT16 Barreiro/Moita

PT21 Seixal

PT15

Corroios/Quinta da

Bomba

PT37 Armação de

Pêra/Albufeira

Size (PE)

38 500

47 000

41 000

43 400

170 000

123 600

142 900

134 000

Utility

Águas de Trás-os-

Montes e Alto

Douro, S.A.

Municipality

SIMARSUL

SIMARSUL

SIMARSUL

Existing treatment

Secondary

Secondary

No treatment

Required treatment

+ Phosphorous removal +

Denitrification +

Disinfection


Denitrification

Secondary +

Disinfection

+ Disinfection Secondary treatment

Secondary +

Disinfection

No treatment

Secondary +

Disinfection

SIMARSUL

Águas do Algarve

Secondary

No treatment

+ Disinfection

Secondary +

Phosphorous removal

Source: INAG

The agglomerations which were included in sensitive areas by the DL 149/2004 and do not have the level of wastewater treatment required by the UWWTD are listed in Table 4-C. These agglomerations cannot be considered non-compliant because the deadline for compliance for these newly added agglomerations is 31 December 2011. However, they will have to comply with the UWWTD requirements before the end of the IV Community Support Programme. Therefore, investment will also be required in this programme period to upgrade the existing STP in these agglomerations.

Table 4-C Agglomerations in sensitive areas added in 2004

Agglomerations >

10000 PE

PT133 Amarante

PT97 Braga

PT136 Paços de

Ferreira/Freamunde

Size (PE)

16 500

110 000

14 500

Utility

Municipality

AGERE, EM

Municipality

Existing treatment Required treatment

Secondary +

Nutrient removal

Secondary

+ Disinfection

+ Denitrification +

Disinfection

Secondary + Disinfection


Agglomerations >

10000 PE

PT123 Vila Real

PT47 Castelo Branco

PT52 Figueira da Foz

PT53 Guarda

PT145 Alcochete

PT63

Almeirim/Alpiarça

PT89 Tomar

PT129 Beja/Sado

PT2 Elvas

PT32 Évora

PT35 Portalegre

PT135 Torralta

Source: INAG

Size (PE)

58 000

63 500

52 800

33 000

18 000

27 000

28 500

37 100

16 000

47 500

31 700

15 000

Utility

Águas de Trás-os-

Montes e Alto

Douro

Existing treatment

Secondary

Águas do Centro

Águas da Figueira

Águas do Zêzere e Côa

SIMARSUL

Comunidade

Urbana da Lezíria do Tejo

Águas do Centro

AMALGA

Águas do Norte

Alentejano

Águas do Centro

Alentejo

Municipality

Sonae Turismo

Secondary

Secondary

Secondary

Secondary

Secondary

Secondary +

Nutrient removal

Secondary +

Nutrient removal

Secondary

Secondary +

Disinfection

Secondary

Required treatment


Denitrification +

Disinfection

+ Phosphorous removal

+ Disinfection


+ Disinfection

+ Disinfection

+ Disinfection

+ Disinfection



+ Disinfection

4.1.5 Prices of the waste water service

Waste water pricing was analysed with water pricing, in section 3.1.6. A specific issue which can be discussed here is the potential incentive role of WW pricing in reducing loads. For the household sector, this incentive is not present at all since WW charges are either fixed, dependent on water consumption, or dependent on some other variable such as property value.

Worse, whereas in water supply there is at least a legal indication that costs should be taken into consideration when establishing prices, for waste water the Portuguese legal framework allows non-regulated systems to propose whatever charge they think of. Thus 63 municipal systems charge nothing at all for the service and many charge arbitrary fixed amounts. Nevertheless, the zero tariff option is often justified by utilities, who note that many households still aren’t connected to WWT systems, so that it might make sense to cross-subsidize WWT through higher supply rates in order to stimulate connection rates.

For the case of industry, which as noted earlier tends to pay a higher unit price for both WS and

WW than households, some systems charge according to load for large industrial customers or at least provide discharge meters. Thus the possibility for incentive pricing clearly exists and anecdotal evidence suggests it should be explored.


The relevant authorities for the sector are the same as those for water (see Table 3-D). Table 4-D presents the existing providers for WW. Again, the great majority are from the public sector.

Table 4-D Types of water utilities in waste water sewage (2006)

Types of utilities in water supply

Number of utilities % of utilities

Municipalities 227 81.7%

Municipalities

(autonomous services)

28 10.1%

Municipal companies

9 3.2%

Concessions 14 5.0%



This has been answered in section 3.1.8.


This sector shows one of the weakest results for programming period 2000-2006, with current service levels still far from established targets. Full compliance with the UWWTD has not been achieved and Portugal has received several warnings on this issue. Increased coordination between bulk and retail system construction is important to ensure that collection, treatment, and discharges are properly integrated. Furthermore, it is clear that significant investment will be required in the next few years if there is to be any chance of achieving existing targets.

Some surface water quality problems persist, although it is unclear how many can be attributed to

WW discharges. Pricing issues have potential mostly in cases of discharge-metered industry, working only through reduced water supply for residential users.

4.2 Needs for the future


As was previously mentioned in section 3.2.1, the national plan for investment in water supply and wastewater in the programme period 2007-2013 is PEAASAR II. The plan’s strategic objectives and operational targets as well as some of the proposed measures were pointed out in that section. Here we recall only the operational targets for waste water.

The main quantitative target is to reach a national connection rate to wastewater disposal and treatment systems of 90 % (with 85% in each integrated system). The global targets were already

Strategic Evaluation of Environment and Risk Prevention – Country Report – Portugal present in the first PEAASAR for 2000-2006, but they haven’t been reached and some regions

(namely, Madeira, Azores and the North) are significantly worst values. The evaluation of

PEAASAR I, made in PEAASAR II, points to the fact that, with the current investments due to be ready in 2008, the level of treatment should be 80% in that year, which would be a significant progress if compared with the values in the beginning of the programme period of the III

Community Support Framework, which were 69,2% for connection rate and 49,9% for population served with STP.

4.2.2 State of infrastructure – Need for improvement/replacement

In 2003, only 73.5% of the population was connected to the sewage system and only 60.4% were connected to STP l

. Clearly, the sewage system has been developed at a faster pace than the construction of sewage treatment plants, which began to pick up the pace in the programme period 2000-2006, at the end of which they are expected to no longer be lagging behind. But even in 2008, when all investments in waste water planned for the programme period are expected to be concluded, the predicted 80% treatment value is still far from the target set in

PEAASAR, the strategic plan for 2000-2006, which was to serve 90% of the population with appropriate waste water treatment and disposal.

In 2004, 5.25% of the 819 Sewage Treatment Plants existing in Portugal were non compliant with the treatment objectives of the Urban Waste Water Treatment Directive (Directive 91/271/EEC) e

.

Section 4.1.3 provided more detailed information about the nature of the gap between the present state of infrastructures and the requirements of the UWWTD.

Also, PEAASAR II points out the need to adapt the sludge treatment infrastructures to the requirements of the future directive regarding sludge management. The expected revision of the

EU Directive on Sewage Sludge in Agriculture (86/278/EEC) may enforce more stringent limits regarding sludge management, namely on the values for heavy metals in sludge. There are only a few countries which currently already have more stringent legislation on sludge disposal than

86/278/EEC and Portugal is not one of them

29

. A Strategic Plan for Sludge Treatment in Water

Treatment Plants and Waste Water Treatment Plants is being drawn, which may originate specific public investments in this area (none is currently planned according to AdP, see Table

4-J).

As far as network rehabilitation goes, RASARP – the Report on Water Supply, Sewage and

Waste Water of IRAR indicates similar recommended values for the rehabilitation of water supply and wastewater networks, of 1%-2% rehabilitation per year. Again, most of the regulated utilities do not perform sufficient rehabilitation activities and the report recommends that rehabilitation programs should be set in place. The analysis and recommendations are similar for bulk waste water systems and retail waste water systems.

In the retail waste water network there is a high vulnerability to storm water and infiltration due to the old age of the infrastructures and the lack of maintenance and rehabilitation. For this reason a

Plan to Minimize the Infiltration of Undue Flows into Sewage Collectors was drawn up. The separation of storm water from urban waste water is also one of the objectives of PEAASAR II, although again nothing is currently planned. On this topic, INAG has provided the following information: “It has been estimated that 65-75% of all collecting systems are either fully combined or are partially separate. Almost all of the older cities and major towns have combined systems.

At present time the general policy is for new systems to be separate (or partially separate) where

29

EU, European Commission, DG Environment (2002), Report “Disposal and recycling routes for sewage sludge”.

Strategic Evaluation of Environment and Risk Prevention – Country Report – Portugal possible.” According to INAG, the environmental problems caused by CSO are not a priority.

Storm water management is mainly targeted at flood control, with surface water sewers designed to prevent flooding from 5 or 10 year return period storms. Besides flood prevention, the main criteria for determining CSO settings are the mean dry weather flow (6 x mean DWF for new

CSO’s and 3-6 x mean DWF for existing CSO’s), the effects upon the receiving water (sensitive areas) and the quality of the discharge. INAG also pointed out that “it is expected that there will be increased acceptance of modelling procedures and a gradual move from fixed CSO design criteria towards a needs-based approach in order to meet the quality objectives of the receiving waters.”

As mentioned in section 3.2.5, PEAASAR II does not present any physical investment indicators to support the financial amount it puts forward. The contact established with AdP – Águas de

Portugal enabled us to obtain data which disaggregated the financial investment required by type of investment, as can be seen in section 4.2.6, but no data was provided on the physical investments which justify the financial amount. As for water supply, the method for obtaining the investment values for the period 2007-2013 was based on the intended change in connection rates and not on actual and detailed physical investment needs.

Table 4-E summarizes the situation of existing STP regarding the compliance with the UWWTD

91/271/EEC. As was mentioned in section 4.1.4, this data must be analysed with caution because the data for the agglomerations ranging from 2000 PE to 15000 PE was being updated at the time the information was gathered. More Tables in Annex 11.2 provide additional information on the existing sewage infrastructure.


Table 4-E Physical investment needs – STP

Nominal load of the agglomeration, expressed in

PE (population equivalent)

Number of

Agglomerations

Total nominal load of the agglomerations

, expressed in

PE (population equivalent)

[PE

30

]

2000-10000 307 1 354 000

10000-15000 30 375 400

Number of existing

STP

Compliant Non-

322

27

90 compliant

1

2

27

Organic biodegradable capacity of existing STP

Compliant Non-compliant

1 701 279

412 256

7 483 000

[PE]

24 000

31 000

3 633 700

439 30 9 596 535 3 688 700

Agglomerations without STP

Number

4

1

11

16

[PE]

16 500

13 000

1 263 600

1 293 100

Total number

469 Total capacity

13 285 235

Source: INAG, National Water Institute

30

PE : population equivalent = the amount of waste water produced by 1 person = 1 PE = 60 gBOD/day


4.2.4 Demand scenarios

Demographic and economic trends

As seen in section 3.2.2, population is expected to be relatively stable. Increases in water demand and domestic waste water requiring treatment will come mainly from the expected increase in per capita water consumption. The amount of waste water requiring treatment may also increase due to the future increase in the number of connections to the sewage system.

The percentage of population living in urban centres with 10,000 or more inhabitants has risen from 13.5% in 1911 to 37.71% in 2001 a . The inter-census growth rate of population living in urban centres with 10,000 or inhabitants has been persistently greater than the inter-census growth rate of total resident population (except for the 60’s). For the period 1991-2001, population grew 4.96% while the growth rate of population living in urban centres with 10,000 or inhabitants was 19.35% (almost fourfold!). Although urban centres and agglomerations are not the same, this urbanization trend coupled with the integration of wastewater systems (an explicit objective of PEAASAR II) may imply a growing weight of the larger agglomerations.

If we assume that the amount of industrial water requiring treatment is proportional to the amount of industrial water demand, we can use the forecasts provided in Table 3-I to say that industrial waste water requiring treatment will change in a range from -2% to +20% in the period 2004-

2013. The medium demand scenario forecasts a 1% average annual growth rate.

Unit demand for waste water treatment

Unit drinking water demand is expected to increase in a range of 6% to 22% (as seen in Table

3-I). A similar increase may be expected in unit demand for waste water treatment, although it may increase further due to the increase in the connection rate to the sewage systems. The medium demand scenario forecasts a per capita water supply of 211 l/inh/day in 2013, which we may assume to be equal to the unit waste water demand per capita. The scenarios for waste water demand published in the National Water Plan seem to indicate an assumption of maintaining a per capita demand for waste water treatment of 240 l/inh/day in 2006 and 2012, which are above our worst case scenario of 230 l/inh/day.

The policy regarding the disposal of industrial wastewater in the public sewers has been to identify the situations and to implement pre-treatment integrated facilities which assure that the discharge complies with legal parameters before it enters the public sewage system. The pretreatment facilities may be built and managed by the industries themselves or they may be built instead by the water company, charging the adequate tariff for the service according to the polluter-pays principle. This procedure is being implemented, for example in regions in the southwest of the country (Leiria, Oeste, Setúbal, Monchique) where waste water from pig farming companies poses a serious environmental threat. These regions will benefit from the measures of the Strategic National Plan for Agriculture and Pig Farming Flows, which is being created.

Table 4-F forecasts the unit demand for wastewater treatment in terms of pollution load.

GHK, ECOLAS, IEEP, CE 43


Table 4-F Unit demand for WWT of 1 PE

Unit demand In country

Present situation (year)

Volume (2004)

31

141

Organic biodegradable load

Nitrogen load

36

34

(2001)

35

61

Phosphorous load

38

Planned situation at the end of the design horizon

Benchmark

150 l/PE/d

60 g BOD/PE/d

10 g N/PE/d

2 g P/PE/d

User charges

This was addressed in section 3.2.2, because the water fee is included in the drinking water charge. The waste water fee is collected by the municipalities or other service providers and it is combined with the drinking water bill. There is no metering system for domestic wastewater, neither is there a plan to implement one, thus there is no way of relating the waste water tariff to each consumer’s flow of waste water. Significant industrial users, however, sometimes have discharge meters and can be charged by load.

The Water Law (58/2005) introduced a water resources fee. All the activities with the potential to change the quality of water may fall under the scope of the fee. PEAASAR II gives a great focus to the need of implementing full cost recovery which will have a greater impact on waste water systems than on water supply, as this is where cost recovery levels are lower. More details were provided in sections 3.1.6 and 4.1.5.

31

Calculations based on data from INE, http://www.ine.pt

on waste water production and population.

32


on waste water production and population.

33

Per capita water demand was 189 lts/inh/day in 2004, whereas per capita waste water demand was 141 lts/inh/day in 2004. We assume this 1.34 ratio for unit water demand to unit waste water demand to be constant throughout our remaining scenarios.

34

We assume a constant BOD load per litre.

35


on population and on INAG – National

Water Institute (2001), “National Water Plan” for BOD.

36

We assume a constant nitrogen load per litre.

37


on population and on INAG – National

Water Institute (2001), “National Water Plan” for BOD.

38

We assume a constant phosphorous load per litre.

39


on population and on INAG – PNA

(2001), “National Water Plan” for BOD.



Total need for waste water treatment

Table 4-G presents forecasts for wastewater treatment demand in 2013, in terms of volume and pollution load. It is based on the connection rates set out as objectives both in PEAASAR and

PEAASAR II. As mentioned before, the financial amounts of investment set out in PEAASAR II were calculated based on these connection rates, but despite our persistence, the full methodology was not disclosed by the AdP task force responsible for the elaboration of

PEAASAR. Therefore it is impossible to compare our forecasted values with the presumable forecasts behind PEAASAR II. Also, it should be noted that although seasonal variations assume significant proportions in some areas of the country (namely the Algarve, where peak tourist season can represent as much as 5 times the normal load), no data was available to estimate such variations.

Demand (PE)

Table 4-G Forecast wastewater treatment demand

Permanent Population (PE)

40

Target connection rate to drinking water supply

Target connection rate to sewage treatment

Permanent Population connected to sewage treatment (PE)

Seasonal Variations (PE)

Industry (PE)

41

Total demand (PE) excluding seasonal

Unit drinking water supply (l/PE/day)

Minimum scenario

Average scenario

Maximum scenario

10,056,127 10,610,502 10,714,419

95% 95% 95%

90% 90% 90%

9,050,514 9,549,452 9,642,977

1,793,333 1,986,667 2,186,667

10,843,848 11,536,118 11,829,644 increase relative to

2003) increase relative to

2003)

230 (22% increase relative to

2003)

Wastewater volume discharged (DWF) by permanent population (1000 m³/day) by permanent population connected to sewage treatment (1000 m³/day)

Seasonal Variations (1000 m³/day)

Economic growth scenario (%/year)

42

1,579 1,666 1,682

1,421 1,499 1,514

2.3% 2.7% 2.9%

40

The demand scenarios regarding unit water supply result from: dividing the total forecasted drinking water demand by the forecasted annual GDP.

41

Population Equivalent of Industry was calculated on tow assumptions: industrial waste water demand was assumed to be equal to industrial water demand. A benchmark of 150 lts/day was assumed to be the unit population equivalent.

42

Average annual growth rates for the period 2007-2013, based on the same assumptions than table 2A. Growth rates taken from:



Organic biodegradable load

Specific water consumption per gross product

(m³/1000 euro)

Total industrial water demand (1000 m³/day)

Total wastewater volume discharged (1000 m³/day)

Unit load (g BOD/PE/day)

Total organic biodegradable load (tonnes

BOD/day)

4.23 4.58 4.97

269 298 328

1,690 1,797 1,842

61 61 61

661 704 722

Nitrogen load

Total nitrogen load (tonnes N/day) 111 118

Phosphorous load

Total phosphorous load (tonnes P/day) 33 35

4.2.5 Unit investment & operating costs

Section 3.2.6 already mentioned the fact that PEAASAR II aims at increasing the connection rate to the systems in a situation where the large urban centres are already served, so that increasing the connection rate means a probable rise in the unit cost of investment in the programme period

2007-2013.

Table 4-H provides data on the unit investment costs for some types of investment in wastewater disposal. When we compare the data provided by AdP for Portugal with the default values obtained from Ecolas, we find the Portuguese values to be lower than the default values for STP, within range for collectors and higher for sewage pumping stations. No data was available for operating and maintenance costs.

Table 4-H Unit investment & operating costs

Type of investment Indicators Investment cost

121

36

New STP with a capacity below 2,000

PE for non-sensitive areas

Cost per PE [Euro per PE]

43 260 – 2 000

New STP with a capacity between

2,000-10,000 PE for non-sensitive areas


44

120 – 260 n.a. n.a.

- “Government Budget 2006” for 2006;

- DPP (2005) “Grandes Opções do Plano 2005-2009”, Department of Prospective and

Planning, Ministry of Finance [Main Planning Choices] for 2007-2009;

- Rodrigues (2002), Social Security in Portugal: An Update of Long-Term Projections, DGEP


For the low and high demand scenarios, the average annual growth rate for 2010-2013 of 2.65% was changed to 2% and 3%, respectively.

43

Inclusive of all associated costs, such as access road, fence, service buildings (if needed), utilities supply, etc.




Indicators Investment cost


10.000-100.000 PE for non-sensitive areas


45

60 – 120

New STP with a capacity above 100.000

PE for non-sensitive areas

Cost per PE [Euro per PE] 46 40 – 60 n.a. n.a.

New STP with a capacity below 2,000

PE for sensitive areas

Cost per PE [Euro per PE] 350 – 2 200


2,000-10,000 PE for sensitive areas


47

150 – 350


10.000-100.000 PE for sensitive areas


48

85 – 150

New STP with a capacity above 100.000

PE for sensitive areas

Cost per PE [Euro per PE] 49 50 – 85

Collector / trunk sewer Cost per km [Euro per km]

50

25 500 – 173 250

60 000 –115 000 Cost for the installation of a local sewage network

Cost per km [Euro per km]

Sewage pumping station

CSO

Cost per unit [Euro]

51

Cost per unit [Euro]

52

Sludge treatment Cost per PE [Euro per PE]

350 000 – 550 000

45 000 –165 000

80 000 n.a. n.a. n.a. n.a. n.a. n.a. n.a.

400 000 n.a.

44

A default value of the cost for a new STP with a capacity between 2,000-10,000 PE for nonsensitive areas would be €780/PE (source: Ecolas). This is higher than the range provided by

AdP.

45

A default value for a new STP with a capacity between 10,000-100,000 PE for non-sensitive areas would be €165/PE (source: Ecolas). This is higher than the range provided by AdP.

46

A default value for a new STP with a capacity above 100,000 PE for non-sensitive areas would be €160/PE (source: Ecolas). This is higher than the range provided by AdP.

47


48


49

A default value for a new STP with a capacity above 100,000 PE for non-sensitive areas would be €160/PE (source: Ecolas). This is higher than the range provided by AdP.

50

The available information is disaggregated by the diameter of the pipe. See Annex 11.2.

A default value for the installation of a long distance drinking water network would be €345 000/km

(source: Ecolas). This is within the range provided by AdP.

51

For a flow of 100 l/s, head of 15 m, entering collector at a depth of 4 m. A default value for the installation of a sewage pumping station would be €200 000 (source: Ecolas). This is lower than the range provided by AdP.

52

For an overflow discharge of 1000 l/s.




Indicators Investment cost

Sludge disposal or re-use Cost dehydrated tonne of sludge [Euro per dehydrated tonne of sludge]

€8-€22 (agriculture

53

)

€40-€90 (landfill) +

€20 for transportation n.a.

Source: AdP – Águas de Portugal.

4.2.6 Indicative investment requirement and comparison – Wastewater Treatment

For the programme period 2007-2013, PEAASAR II plans 1958 million euros worth of investment in wastewater disposal and treatment systems, an average of around 280 million euros per year.

This represents an average share of investment in Wastewater of around 0.18% of GDP. This is significantly higher the 89 million euros per year of investment costs in 2002, mentioned in the summary data table of the overview, but as noted before the values are not comparable because the latter is an annualised value considering the useful life of different infrastructures, while the former is a simple average across the years of the programme period. Significant investment in wastewater may be specially warranted by the fact that it is lacking behind water supply in the connection and treatment targets. The need to comply with the UWWTD within its deadlines (or as soon as possible for the cases when the deadlines have already passed) is a further justification. Operating cost levels are not identified but are expected to be recovered through tariffs.

Table 4-I Planned Investment in Waste Water Treatment and Disposal 2007-2013

Type of water systems Planned Investment

2007-2013 (Million Euros)

54

Bulk Water Systems

Retail Water Systems

480

1478

Total 1958

Source: PEAASAR II – Strategic Plan for Water Supply, Sewage and Waste Water 2007-2013.

Average European funding of waste water investment in 2000-2006 was 62.8%. PEAASAR II

2007-2013 plans to fund only 50% of investment from investment support programmes

(European Regional Development Fund, Cohesion Fund, and National Government Budget - No division between these is proposed), calling for a greater self-financing proportion of the programme.

53

Costs of reuse in agriculture (includes transport, spreading, analysis and administrative costs).

54

The values in the table are computed at constant prices of 2005 and include rehabilitation investment.



Table 4-J disaggregates the data from PEAASAR by type of investment. 26% of the investment is aimed at the rehabilitation of existing infrastructures.

Table 4-J Summary of investment cost – wastewater treatment

Type of investment Indicative Investment Cost

10

3

Euro

Construction of new STP (bulk water)

Construction of new STP (retail water)

190 450

0

Renovation / upgrading of existing STP (bulk)

Renovation / upgrading of existing STP (retail)

40 500

0

Construction of new sewage networks

(interception – bulk water)

Construction of new sewage networks

(interception – retail water)

Renovation / upgrading of existing sewage networks (interception – bulk water)

Renovation / upgrading of existing sewage networks (interception – retail water)

Sewage pumping stations

CSO upgrading

Sludge treatment

Sludge disposal

Total investment

55

Total investment (% of GDP)

Source: AdP

103 380

949 600

26 000

374 312 n.a. n.a. n.a. n.a.

1 684 242

0.18%

4.2.7 Summary

It should be recalled that PEAASAR II – Strategic Plan for Water Supply, Sewage and Waste

Water 2007-13 has as specific objectives for wastewater systems:

- To reach a national connection rate to the sewage systems of 90% (and of 85% in each integrated system).

55

The totals for the disaggregated data provided by AdP are not exactly equal to the values presented in PEAASAR II. Total investment in water supply systems is 1 958 million euros in

PEAASAR II and 1 684 million euros in the data from AdP. Total investment in bulk water supply systems is 480 million euros in PEAASAR II and 360 million euros in the data provided by AdP.

Total investment in retail water supply systems is 1 478 million euros in PEAASAR II and 1 324 million euros in the data provided by AdP.



- To comply with National and European environmental regulations;

- To guarantee integrated pollution control.

The demand for wastewater disposal and treatment is expected to increase not only due to the forecasted increase in water supply but also due to the effort which will continue to be made in increasing connection rates to the sewage system and the percentage of population served by wastewater treatment. There is some room for wastewater pricing because this it is far from financial break-even, even if the lack of metering in residential wastewater generation is an obstacle in reducing wastewater directly. As long as pricing is based on water supply, however, there can be an indirect effect through lower water consumption.

A relevant part of the investment set out for the programme period 2007-2013 is aimed at rehabilitation of existing infrastructures (26%). This is less than for water supply, possibly because of the fact that the wastewater network is, on average, more recent. The investment in wastewater treatment, through the construction or rehabilitation of wastewater treatment plants, represents 13% of total investment. Like for water supply, the investments put forward by

PEAASAR II were calculated based on the intended changes in connection rates and some available data for unit costs. Despite our insistence, the methodology for this calculation was not provided. No data was provided on the physical investment needs, which PEAASAR aims to support.

Considering the needs identified in the previous section, our ranking of the different types of investment is presented in Table 4-K.

Table 4-K Ranking Types of Investment within Field (Rank most important as 1)

Field Type of Investment

Waste Water New STPs

Renovation / upgrade STPs

New sewage networks

Renovation / upgrade sewage networks


CSO upgrading

Sludge treatment

Sludge Disposal

Ranking

1

2

3

4

5

8

6

7

Significant aspects of the priority assessment for Wastewater were discussed in section 3.3, together with Water Supply. It should be stressed that investment in this field should carry a higher priority than that in Water Supply, since the current situation is much worse, with connection and treatment rates far from existing targets and several agglomerations non compliant with the UWWT Directive.

Table 5B: Estimate of the Financial Requirement for Waste Water, 2007-2013

Stage in the Field Assessment Using Qualitative Judgements

Based on Review



Needs (Meuro) – from Table 3

Based on PEAASAR II, given the lack of available data

1958




Approximate share of A:

0%

0

Approximate share of A

C: Amount recovered from existing user charges not

50% (indicative value from included in investment need

PEAASAR II for investment subsidy support: 50%)

D: Further amount that could Approximate share of A be recovered from higher rates for existing or new charges to fund investment

0% (tariff increases included in

C)



B-C-D) (Meuro)

979

0

979





(Meuro)

90%

(E multiplied by F) 881.1



5 MUNICIPAL SOLID WASTE


Municipal

Waste

(general issues)

Waste collection

Physical Indicators

Investment

(EUR/year)

Operating &

Maintenance

(EUR/year)

Total mixed waste generated and destiny (2004) a

See section 5.1.6 mt/year 4.45 kg/year per capita 430

Landfills (mt/year)

Incineration (mt/year)

Composting (mt/year)

Selective Collection (mt/year)

Waste collection Coverage of waste collection equipment (e.g. transport system - % of population covered in urban/rural areas l vehicles)

Composition of municipal waste (%) (2003) s

100%

Organic Material (%)

Paper (%)

29.7

26.4

Plastic (%)

Glass (%)

Textiles (%)

Metal (%)

11.1

7.4

2.6

2.8

Wood (%)

Others (%)

Amount of selectively collected waste per capita (kg per capita) (2004) a

2.93

(65.8%)

0.99

(22.3%)

0.31

(6.9%)

0.22

(5.0%)

0.5

19.7

21



Recycling points for nonhazardous

Availability of on street facilities and more major collection points s municipal waste

(e.g. paper &

“Ecocentros” (bring-in sites) cardboard, glass, metals, batteries, textile, construction waste)

“Ecopontos” (curbside)

185

25569 deposit system recycling/ controlled deposit of

Waste

Treatment

Waste recycling municipal waste

(e.g. batteries, t waste oil products,

recycled 2005 (kg)* fluorescent lamps)

collected 2005 (kg)

591 400

Waste oil products collected

2005 (estimate) (t) e

425 515

50 000

Import/export of Amount of compliant waste collected import/export of municipal waste r

Sorting facilities

Exports (t)

Imports (t)

96 915

878

Capacity of manual/mechanical sorting facilities (tonnes/year) n.a.

Waste Sorting Facilities e

26

Recycling plant Packaging Total Amount (t)

(2005) u

348 593

Glass (t) 120 917

Composting

Paper (t)

Plastics (t)

Metal (t)

Wood (t)

164 473

32 114

24 926

6 163

Capacity of recycling facilities

(t/year) n.a.

Amount (mt) of biodegradable municipal waste composted a

0.31

Number of composting facilities s

8



Waste

(Final) disposal

Number of incineration facilities s 2

Incineration plant

(for MSW)

Capacity (10

3

tonnes/year and

MW/year) of incinerators e

1 027

76.1MW

0.99 Amount of municipal waste incinerated (mt) with energy recovery

(Municipal) – general and

v hazardous Remaining usable years

0 years

2 to 4 years

>4 years

Number of (illegal) waste dumps in use/not in use

36

3

7

26

0

* Ecopilhas started collecting batteries in 2004 but only began recycling in 2005.

5.1.2 Current state of provision

As the above table shows, there is now adequate provision in terms of municipal solid waste collection (100%) and destination (the last waste dumps were closed in 2001). This sector has improved significantly since 1990, when only 41% of the population had access to appropriate waste collection and treatment systems (see Table 5-A).

Table 5-A Population covered by MSW collection and treatment (%)

Mainland Portugal

1990 1995 1999 2003

41 w 35 a 94 x 100 s

FP III (target)

Source: w PNPA, a INE, x SEAMA, s INR

98

Portugal produces an average of 1.2kg of MSW per capita per day 56 , yielding a total amount of

4.5 million tons of waste produced in 2004. Of the total MSW generated in the same year, 66% were disposed of in sanitary landfills, 22.3% incinerated, 6.9% composted and 5% handled in selective collection.

The country has successfully accomplished the collection coverage aim of Framework

Programme III but is still far from achieving differentiated treatment-related aims, particularly in what concerns composting and recycling. The Strategic Plan for MSW (PERSU) had set as targets for the year 2005: 25% composting, 23% in landfills, 22% incineration with energy recovery and 25% in selective collection 57 . For packaging waste, Portugal has achieved the

56

A survey done by CESUR for 2003 came up with 1,4 kg/inh/day, which is closer to EU average.

57

These targets were established based on Directive 94/62/CE.


Strategic Evaluation of Environment and Risk Prevention – Country Report – Portugal overall aims set for recovery (50%) and recycling (25%) in Directive 94/62/CE, even though it still falls short of the goal for recycling of plastic-material waste (Directive 2004/12/EC). Table 5-B shows the evolution of different types of recycled waste.

58

Table 5-B Recycled Waste (ton)

1998

1999

2000

2001

2002

2003

2004

2005

Plastic

280

1.003

4.236

Metal

240

586

11.720

10.836 19.794

15.151 20.344

20.534 14.670

26.018 14.979

32.114 24.926

Source: u

SPV - Sociedade Ponto Verde

Paper

483

4.032

30.332

72.421

79.692

88.680

119.031

164.473

Glass

491

17.814

56.617

Wood

0

42

98

Total

1.494

23.475

103.003

68.275

75.681

91.141

2.445 173.771

2.635 193.502

3.655 218.679

105.911 4.893 270.831

120.917 6.163 348.593


Portugal has 30 MSW management systems. At the end of December 2005 there were 36 landfills (although three of these were at capacity), 8 composting facilities, 2 incinerators and 78 transfer stations, as well as 2 landfills and one composting facility under construction. Two additional landfills and 15 composting facilities are planned. The latter will be an important step towards raising composting towards the desired target. As regards selective collection, there were a total of 26 waste sorting facilities, 171 “Ecocentros” (bring-in sites) and 25 379

“Ecopontos” (curbside collectors). There are plans for 2 more sorting facilities, 14 “Ecocentros” and 190 “Ecopontos”, which will contribute to recycling target attainment.

s

In this section waste fees are analysed and compared to costs. All data are from CESUR (2004) and refer to year 2003.

59 The average weighted operation cost for the MSW system in Portugal was 36,28€ per inhabitant (ie. approximately 378 million euro in total and 70,99 €/ton using the study’s per capita value of 1,4 Kg/day).

60 This number includes all costs indicated by

58

Further information is presented in section 5.2.2.

59

The study was based on a survey of all municipalities and some information problems were reported, especially for cost data. In particular, it is unclear how costs were calculated and which investment cost components are included in the estimate. Unfortunately, this study is currently the only available source of information.

60

The study separates Azores and Madeira from Mainland Portugal, concluding that MSW costs are significantly lower in the islands, at 22,01 €/inh and 25,25€/inh, respectively.


Strategic Evaluation of Environment and Risk Prevention – Country Report – Portugal municipalities, which handle the collection services, pay multi or intermunicipal systems for final disposal, sell selectively collected material to SPV and charge retail prices to households. The average tariff paid in 2003 for final disposal in landfills was 18,21 €/ton. Average composting charges, available in only 7 systems, are somewhat higher (at 24,37 €/ton), and incineration charges are 52,68 €/ton at Lipor and 23,04 €/ton at Valorsul. These tariff differences might partially explain the high percentage of waste that is currently landfilled, but in principle they reflect cost differences as they must be approved by the regulator, IRAR. For selective collection, identified costs are naturally much higher, and never totally compensated by SPV prices except for plastic, as shown in Table 5-C. Nevertheless, one should keep in mind that by sorting and selling waste municipalities also save on transportation and final disposal costs they would otherwise incur.

Table 5-C Costs vs. Revenues for selectively collected waste (2003)

Material Average SPV payment (€/t) of collection (€/t)*

% of cost covered by payment

Paper 135,37 53,74 40%

Glass 74,12 29,87 40%

Plastic 466,36 685,22 147%

Metal Steel 458,44 134,77 29%

Aluminium 1773,33 794,72 45%

* includes sorting costs

Considering these values, it is unclear why plastic still has such low recycling rates. Nonetheless, it should be recalled that plastic waste recycling has been growing at double digit rates for the past few years (as can be seen in Table 5-B).

On the revenue side, as in the water sector, there is a great variety of pricing schemes. A significant number of municipalities (26%) charge nothing at all. Of those that charge households,

66% do so through their water bill (although 22% use only fixed charges) and 8% charge based on other variables. The price incentive possibilities for the households in the MSW sector thus appear to be nil, and other instruments need to be used if the goal is to reduce waste production.

As for total revenues, these yield on average 12,62 €/inh; this amount covers 34,7% of average costs as presented above. Since the true cost value also includes street cleaning services, at

11,39 €/inh, the average deficit amounts to 35,05 €/inh, i.e. 73,5% of costs. Clearly there is scope for price increases, especially considering that an average cost-covering bill for a household of three people would be 145€/year, less than 1% of average household income (as in the case of water).



Within the Ministry of Environment, Spatial Planning and Regional Development , the main authority is the National Waste Institute (INR). It publishes the Municipal Solid Waste National

Plans; maintains a Waste Database; supervises the packaging management circuit; and is responsible for research promotion.

Another important authority for this sector is the Institute for the Regulation of Water and Solid Waste (IRAR), which is in charge of regulation and supervision of concessionary systems (all multimunicipal and intermunicipal, mainly bulk service providers).

In this sector there are also private firms in charge of some of the municipalities’ collection services. Collection is executed in 70% of cases by municipalities, 24% by private companies,

4% by multi or intermunicipal services and 1% mixed (municipalities and multi or intermunicipal providers). EGF, part of the AdP group, is an important public company in the sector, as it controls 13 (out of 15) multimunicipal systems and manages 60% of Portuguese MSW production.

As regards selective collection, the Sociedade Ponto Verde (SPV) is the most significant institution, as a non-profit private company that manages waste recovery and recycling systems on behalf of packaging producers. It is mandatory for all MSW systems to send their recyclable waste to SPV. There are also a number of smaller specialized companies, generally private, that handle various types of hazardous waste (Ecopilhas, Valorpneu, Valorcar).


The following tables summarize data for the previous programming period. It is clear that the

Cohesion Fund in particular gave a significant contribution to the MSW upgrading effort. Still, some problems with execution of remaining projects are currently expected, as unit costs have increased significantly and some approved projects had budgets that are less than half the values presented in various public tender bids in 2006 (see section 5.2.5.). A list of approved projects, which were delayed and are now expected to be built in 2006-2008, is included in

Annex 11.3.

Table 5-D Funding by source – MSW (Million Euro, 2000 – 2006)

Source of funding Funding instrument EUR (million)

Planned

2000-2006

Approved

2000-2004

Executed

2000-2004

Fund 144.1

National funds 143.6 (CF) - 58.1 (CF)


65.2(ERDF)

Total 510.8

Sources: d DGDR (2005) and f MAOTDR (2005)



Table 5-E Proportion of EU funding for CF projects, 2000-2006

Full cost

(€ million)

Cohesion Fund

(€ million)

EU-support(%)

Municipal Solid

Waste

Source: d DGDR (2005)

445.6 302.0 67.8

Table 5-F Proportion of EU funding for ERDF projects, 2000-2006

EU-support


65.2 51.4 78.8 Municipal Solid

Waste

Source: f MAOTDR (2005).


Waste collection is a sector that has come a long way in a short time. No longer are there waste dumps spread throughout the countryside, while in most urban areas “Ecopontos” for selective collection are easy to find. Public investment in waste collection and in adequate deposition facilities was crucial in the process, and most MSW systems remain public. Several specialised private companies have been created by firms whose products are targeted by legislation, to manage specific waste flows.

The current infrastructure is not entirely appropriate, however, to ensure fulfilment of existing deposition, recycling and recovery targets. In particular, landfill deposition is still the method of choice for final disposal, which is incompatible with targets established in the Landfill Directive, as discussed in section 5.2.1. Investment is required to redress this inadequacy, albeit some of it might be expected to come from increased user charges. These are very low in relation to costs, covering only about 25%. Affordability does not appear to create significant problems on average, yet waste charges do not have any incentive properties in terms of waste generation.

5.2 Needs for the Future



5.2.1 Review of policy and targets

Some of the existing targets in the MSW sector are associated with the first Strategic Plan

Strategic Plan for MSW (PERSU), which in 1997 had set as targets for the year 2005: 25% composting, 23% in landfills, 22% incineration with energy recovery and 25% in selective collection 61 . These targets still have not been achieved and so will probably be reinforced in the second PERSU, which will cover the 2007-2013 period and is still in preparation (although it was due in March 2006).

For packaging waste, Directive 94/62/CE, as amended by Directive 2004/12/CE, establishes as targets (to be attained by 2011) an overall recovery rate of 60%, with specific targets for recycling materials by weight as follows: glass 60%, paper 60%, plastics 22,5%, metals 50%, wood (15%).

Portugal has already achieved the overall aims set for recovery (50%) and recycling (25%) in

Directive 94/62/CE.

Another important target regards biodegradable MSW, for which Directive 1999/31/CE establishes ceilings for landfill deposition of 75%, 50% and 35% for 2006, 2009 and 2016, respectively. These have been transposed by DL 152/2002. The reference year is 1995 and the amount of biodegradable MSW for that year was 2 253 000 t, assuming a 58% proportion of total

MSW. In 2003 the National Strategy for the Reduction of Biodegradable Urban Waste

(ENRRUBDA) was approved.

The new National Strategy for Sustainable Development includes these MSW targets and also has SW reduction targets as follows: a decrease of 225 000 t for MSW, a decrease of 12,1% in weight for Industrial Waste and a decrease of 20,7% in weight for Hazardous Industrial Waste.

However, it is unclear how these targets will be translated into action. For instance, the proposed

MSW reduction has not been incorporated into ENRRUBDA, which predicts an increase of MSW to 5,18 million tonnes in 2009 and 5,07 million tonnes in 2016.

There are also specific targets for special types of MSW:

• Waste oil products (DL 153/2003): mandatory certification, 85% collection and 50% recycling expected

• Car Tires (DL 111/2001 and 43/2004): 95% collection, whereby 30% should be retreaded, and the rest recovered (65% recycled)

• Batteries (DL 62/2001): 25% collection with 60% of collected batteries recycled

• Old cars (DL 196/2003): 85% reuse and recovery

• Electric and Electronic Waste (DL 230/2004): 4 kg/inh/year

In these special cases, the strategy has been to mandate producers (or sellers) to handle the waste from their products, through (generally private) companies they create for that effect.

In general, Acquis compliance is a significant part of MSW target definition. Synergies with other targets (such as renewable energy production or technological innovation) are not always clearly identified, although they might be in the new version of PERSU.

61

These targets were established based on Directive 94/62/CE.



5.2.2 State of infrastructure and predicted waste flows

In the absence of PERSU II, not many detailed scenarios exist on waste production. The

ENRRUBDA estimates for total MSW generation in 2009 and 2016, mentioned in the previous section, indicate an increase until 2009 and then a decrease to a final value close to 5 million t in

2016. That still represents an increase of around 11% from 2004 values.

In 2004 approximately 66% of MSW went into landfills, 20% was incinerated, 15,5% was composted and another 15,5% was recycled. Mainland Portugal currently has 36 landfills (of which 3 have reached full capacity and stopped receiving waste), 8 composting facilities, 2 incinerators and 78 transfer stations (INR, 2005). It is clear that without additional investment the targets for biodegradable waste cannot be reached. ENRRUBDA scenarios for biodegradable waste, as corrected by EGF in a presentation in May 2006, are presented in Table 5-G. It should be noted that the capacity for elimination of this type of waste needs to practically double in ten years, which will have a significant impact on waste disposal costs.

Table 5-G Biodegradable Waste Estimates (000 ton)

2006

MSW collection

Global 4984

Biodegradable Waste (BW)

Current proportion (%)

BW Total

BW Targets

BW Required Elimination

BW Elimination methods

Incineration

Composting +Anaerobic Digestion

Selective Collection of Paper

Eliminated BW

Estimated distance to target

59,6

2970

1690

1281

707

286

145

1137

144

Source: EGF (2006)

5181

59,6

3088

1126

1961

707

749

239

1696

266

5072

59,6

3023

788

2235

707

1044

405

2156

79

In spite of the investment in infrastructure dedicated to selective collection, the results in that area are not altogether satisfactory in terms of existing targets. Table 5-H presents the evolution of recovery and recycling rates for the past few years.

Table 5-H Recovery and recycling rates for packaging waste (%)

Recycling Recovery

1998 1999 2000 2001 2002 2003 1998 1999 2000 2001 2002 2003

42 44 41 34 35 38 42 44 41 34 35 39 Glass

Plastics

Paper 48 53 47 57 50 50 48 53 62 74 67 67



Metals

Total

- 1 15 24 53 53 - 1 15 24 53 53

Wood - - - - 30 11 79 - -

35 35 31 38 36 37 35 35 46 52 50 51

Source: INR, 2005

Packaging waste is collected selectively through curbside containers or door-to-door, and can then be sent for recycling through Sociedade Ponto Verde (SPV), which is responsible for the management of recycling schemes. The table shows that neither paper nor glass recycling has been growing, unlike metal recycling which has started recently but already shows high values.

Plastics have good recovery rates but low recycling rates, possibly due to their significant combustion potential. Nonetheless, recycling rates should have increased in 2004-2006, given the growth rates in the amount of recycled plastic noted in section 5.1.2.

According to INR, in 2005 there were 26 sorting facilities, 171 Ecocentros (bring-in sites) and

25379 Ecopontos (curbside collectors), and an additional 2 sorting facilities, 14 Ecocentros and

190 Ecopontos were planned. No detailed scenarios exist for recycling.

5.2.3 Review of future trends

Demographic and economic trends

Portugal is still one of the EU countries with lower per capita waste production, and it already has

100% collection rates. Such characteristics should endure in the following years. MSW

Production was 4,5 million ton in 2004, which is about 1,2 kg/inh/day. Lisbon and Norte are the two regions where MSW production is highest, due to high population densities and increased concentration of economic activity. It should be noted that the relationship between GDP and waste production is not a direct one. Countries like Sweden and Finland are at levels similar to those of Portugal or Greece due to widespread consumer concerns with waste reduction. Per capita values have been stable since 2000 e , although they may yet approach the EU average of

550 kg/inh/year (about 1,5 kg/inh/day) as GDP growth picks up, if consumer awareness is not significantly increased. Economic instruments such as user charges can be applied for cost recovery but in the current context cannot be used as incentives, with a few exceptions mainly associated with very specific types of waste (for example, there is a subsidy for old car destruction).

Waste charges

There is a great variety of pricing schemes for households, as noted in section 5.1.4., none of which show price incentive possibilities. There is a current proposal by EGF to tie waste charges to electricity instead of water bills, which might improve fairness as the correlation with MSW production appears to be higher, but this still will not act provide a price signal for waste reduction. Other instruments need to be used if waste production is to be reduced.

Notwithstanding, it is possible to use the information on current charges to give estimates for future user charges in order to assess affordability. Table 5-I contains such estimates, based on the gap between current costs and revenues. If waste disposal costs increase, as discussed below, the full cost recovery value (high estimate) will become even higher.

Table 5-I Possible waste charges



Possible waste charges

Low estimate

12,62€/inh

(current)

Medium estimate

30,15€/inh

(average)

High estimate

47,67€/inh

(full cost recovery)

Disposal charges, on the other hand, can induce municipalities to choose different destinations.

The evolution of charges in EGF systems is presented in the following table, where it is clear that significant increases are expected to occur by 2010. The average increase is 33%, with systems like Suldouro and Ersuc witnessing charges that are more than double current values, reflecting expected cost increases related to non-landfill disposal. According to EGF, these cost increases can be explained by technological upgrades, rising raw material prices and increasingly demanding legislation. Whether the expected charge increases will indeed be implemented and what their impact will be on municipalities’ efforts to reduce waste generation are open questions.

Finally, there is a great deal of uncertainty in the values for 2010, as several aggravating and mitigating factors might come into play. In particular, charges may be diminished due to the revenues derived from energy generation (Refuse Derived Fuels and Biogas), including CO

2 savings, and by values for composting by-products. On the other hand, additional cost increases are expected, reflecting the latest values presented in public tender bids, putting additional pressure on charges.

62

Table 5-J Predicted Evolution of Disposal Charges

Systems

Approved

(€/ton)

Expected (€/ton)

Valorminho

2006 2007 2010

26,09 27,13 45,12

Resulima 22,61 23,1 27,05

Rebat 37,14 34,27 39,6

Resioeste 37,7 43,05 43,45

22,07 25,73 28,04

Source: EGF (2006)

62

The table reflects values proposed in 2005, and throughout 2006 several public tender bids for new facilities occurred. See also section 5.2.5.



Unit and total municipal waste generation

The values for population evolution, unit and total waste generation are presented in the following table. Population estimates are from INE as in previous chapters, whereas scenarios for total municipal waste generation are based on projected annual growth rates from ENRRUBDA.

63 .

Table 5-K Unit and total municipal waste generation

Current

(2004)

Evolution (% change 2004-2013) scenario

Average scenario

Maximum scenario

Population

(number of people)

Million 10,5 -4,5 0,8 1,8

Unit municipal waste generation kg/year per capita

Total municipal waste generation

Million tonnes/year

Estimates for the evolution of waste composition are generally not available, although

ENRRUBDA assumes a constant proportion of 59,6% for biodegradable waste.

The only available estimates of physical investment needs for MSW are the ones associated with

ENRRUBDA. Additional data was requested from both INR and EGF without success. Table 5-L shows planned capacity expansion for composting, mechanical and biological treatment, and anaerobic digestion, some of which still refers to FP III projects. Yet even though the source is the same, the values that are presented here for composting and anaerobic digestion are slightly different from the ones that can be inferred from Table 5-G (430 000 tons here vs. 444 000 tons for 2009). No new incinerators are planned until 2009, and there is no information on recycling facilities. Nonetheless, EGF investment plans for 2007-2013 currently included a proposal for two new incinerators that would handle a mix of sludge and Residue Derived Fuel.

Table 5-L EGF New Facilities (as of 2006)

Number of facilities

3

3

1

11*

Capacity

50 000

40 000

360 000

380 000

MSW Composting

Green matter Composting

Mechanical and Biological Treatment

Anaerobic Digestion

*One is an enlargement of an existing facility

Source: EGF (2006)

63

All scenarios start with the 2006 estimate, then the 2006-2009 and 2009-2016 annual rates are applied (1,3% and -0,7%, respectively). Using only the latter yields the low scenario, using only the former yields the high scenario, and a combination where the lower rate is applied from

2009 is the medium scenario.



5.2.5 Unit Investment & Operating Costs

Again, not much information is available and none whatsoever on operating costs. The following table presents some data on investment costs from EGF, although the company emphasized that these values are underestimates that result from INR guidelines and not from real construction costs.

Table 5-M Reference Investment Cost Values

1. New Facilities

Capacity <40.000 ton/yr

Capacity >40.000 ton/yr e <70.000 ton/yr

Capacity >70.000 ton/yr

Green Matter Composting

2. Modification of existing facilities

3. Enlargement of existing facilities

400

375

300

200

75

80% of the amount presented in 1.

Source: EGF (2006)

Clearly, this information is inadequate considering the values that appeared in recent public tender bids during 2006. Bids for a facility with a 100 000 ton/year capacity varied between 320 and 499 €/ton, whereas bids for smaller facilities (20 000 – 30 000 ton/year) had unit costs between 516 and 1405 €/ton, with an average value around 1000 €/ton, which is more than 100% higher than the reference INR value. This discrepancy presents significant problems not only for the estimation of 2007-2013 investment needs but also for the execution of remaining 2000-2006 projects, which were approved at much lower budgets than now appear necessary.

5.2.6 Indicative Investment Requirement – Municipal Solid Waste

As discussed in the previous sections, the available information on investment plans is very incomplete and does not allow a proper evaluation. The following table presents data prepared by EGF for the national strategic reference program (2007-2013). Nobody has estimates for the whole MSW system, even if EGF occasionally presents data for systems that it does not control.

After a request was made to INR, where PERSU II is being prepared, we were told that total planned investment for 2007-2013 in the sector was 1000 million euros, but nothing else.

Table 5-N EGF Planned Investments for 2007-2013 (in mill €, 2005 prices)

Type/System Investment

Selective collection

Sensitisation

Deposition

16

25

Collection

Sorting

Other

Refuse Derived Fuel (RDF production)

34

20

9

3

Sludge and RDF incineration 260

Ersuc* 130,1

Valorsul (incineration) 60

TOTAL 557,1

* includes sorting, MBT, transfer stations, landfill and biogas production



Source: EGF

5.3

5.2.7 Summary

The work presented here shows that a significant problem with estimating MSW investment for the next programming period is a severe lack of information. Although good data exists for past quantitative values, not much is available in terms of future predictions, especially of costs.

Several stakeholders verbally mentioned a great deal of uncertainty in the sector, as there are current discussions on system restructuring, different technological options, and cost increases. It is possible that INR will be extinguished. No one is willing to give out complete data, at least until

PERSU II is published. That should have happened earlier this year but so far it has not. EGF, which handles 60% of MSW, appears to be the only direct source of cost information and investment plans, even for systems it does not control.

The most serious problems with MSW have been solved in the country in the past decade, for which EU legislation and financial support have been crucial. Nonetheless, analysis of the current situation and of legal targets indicates that the main areas for investment will be associated both with the reduction of landfill deposition, through alternative methods of biodegradable waste treatment, and with the increase of selective collection and handling. A list of general priorities prepared by INR also includes energy recovery (namely Refuse Derived Fuel) and publicity campaigns for waste reduction and selective deposition.

Field Priorities

Given the lack of data expressed in the needs section, it is difficult to propose quantitative field priorities and credible disaggregated investment levels. Table 5-O presents a ranking of priorities within the field.

Table 5-O Ranking Types of Investment within Field (Rank most important as 1)


Recovery

Disposal

Publicity Campaigns

Ranking

4

3

1

2

5




Alternative Funding Sources

This is another area where investment is mostly public, except in particular types of special waste. The sources of funding for investment projects in MSW for the period 2000-2006 have been the EU (CF: 59%; ERDF: 10%), the National Government Budget (28%) and the municipalities (3%). Alternative funding sources include revenue-raising from MSW by-products, where energy sales are particularly significant (incineration is currently a profitable endeavour), although revenues from recycling do not cover costs. The next period’s investment in RDF is also expected to contribute to financial equilibrium, especially if CO

2

prices are high, as companies using RDF can save on emissions. It is also likely that waste fees will be increased both for the final consumer and for municipalities that must pay disposal fees, as discussed in the following section.

Use of Flanking Measures

As noted in section 5.1.4, cost recovery levels for Portugal are very low (26,5% on average in

2003). There appears to be some room for funding a part of the investment from user charges, although these will probably be billed through other variables (water, property, electricity).

Affordability issues might be important for lower income households but not for the majority of the population, since the average increase of 145€/year per household, even considered along with water bills, still leaves a total payment comfortably below the 5% of household income threshold.

Disposal fees for municipalities are also expected to increase, as these are regulated to reflect cost increases and these appear to have been significant. This might present a problem since even now there are municipalities that do not pay their dues (personal communication from EGF).

Public investment support will continue to be necessary for the investments planned for the period 2007-2013, as legislation proposes more stringent targets and technological upgrades have occurred.

Assessing the capacity to deliver investment programmes

The second version of PERSU, the strategic plan that guided the investments in MSW during

2000-2006, and which ought to prepare the negotiations with the European Commission for the period 2007-2013, has not been published. The information we have from EGF, which is the only reliable source at this point, is that values for the next period are very uncertain, especially due to increasing costs. For non-EGF systems, which are mainly intermunicipal, information is not available at all. Delays in implementation for some 2000-2006 projects show that there are some problems in the capacity to deliver, even if the investments that did occur were paramount in the improvement this sector witnessed in the period. Additional constraints are specific to this sector, where it is always difficult to locate facilities due to popular resistance. For example, a plan to build a third incinerator in the ERSUC system was abandoned after strong environmental and population objections, having been replaced by a proposed MBT facility.

Table 5-P Estimate of the Financial Requirement for MSW, 2007-2013


Based on Review



Needs (Meuro) – from Table 3

Global value given by INR, of which 557,1 Meuro is accounted for by EGF

1000

B: Investments likely to be Approximate share of A:

100


Strategic Evaluation of Environment and Risk Prevention – Country Report – Portugal covered by market schemes

(sales of by-products)*

10% (very rough estimate)

C: Amount recovered from Approximate share of A existing user charges not included in investment need

5%

D: Further amount that could be recovered from higher rates for existing or new

5% charges to fund investment

Approximate share of A



B-C-D) (Meuro)

50

50

800





(Meuro)

90%

(E multiplied by F) 720

*EGF data for 2004 implies that non-tariff revenues were on average around 40% of costs, although it is unclear how much of these are investment costs, and estimates vary significantly between technologies (incineration was actually profitable).



RENEWABLE ENERGY SOURCES 6

7000

6000

5000

4000

3000

2000

1000

0

1995

(see Annex 11.4)

6.1.2 Current state of provision and state of infrastructure

Portugal is one of the EU countries with a higher proportion of renewable energy sources (RES) in electricity production, yet the country has a strong dependency on foreign energy resources. In

2005, it imported 85% of the total primary energy consumption. Behind this is strong growth of primary energy consumption, with annual average growth rates between 5% and 6% from 1994 to 2000 and about 4% since 2001.

64

As regards RES in electricity production, between 1996 and 2004 the annual average growth rate of installed capacity was 2,22%. An impressive increase of 11,13% occurred in 2004, and 2005 saw a still remarkable annual growth rate of 10,5%. However, overall capacity increases vary significantly between different RES. Between 1997 and 2005, while hydro capacity was practically unchanged, the annual average growth rate of wind electricity capacity was 60,7%, which was the strongest increase of all renewable energies, followed by biogas (with 27,8%) and photovoltaic (with 21%). Nevertheless, the growth rate of RES installed capacity has not been sufficient, in most years, to match the strong growth of final electricity consumption. The following figures show the evolution of installed capacity (in MW) for the period 1995-2005, providing a comparison among different RES and also contrasting the latter with total electricity installed capacity.

Figure 6-A RES Capacity - Hydro and Other

1800

1996 1997 1998

Hydro (> 10 MW)

1999

Hydro (<= 10 MW)

Other

2000 2001 2002 2003 2004 2005*

400

200

0

1995

1000

800

600

1600

1400

1200

1996 1997 1998 1999

Urban Solid Waste

Biomass

Wind

2000 2001 2002

64

Data tables are in Annex 11.4.

2003 2004 2005*


10000

8000

6000

4000

2000


Source: DGGE (2006)

Figure 6-B: Evolution of RES and Total Electricity Installed Capacity

14000

12000

0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Source: DGGE (2006).

It should be emphasized that the contribution of RES to electricity generation in the country depends substantially on the annual fluctuations of the hydrological regime, since hydro represents such a large proportion of installed capacity (77% in 2005). For example, due to extremely dry conditions in 2005, hydroelectricity production decreased 52% relatively to 2004, which represented a decrease from 12,6 TWh to 8,5 TWh in total electricity production from renewable energies (DGGE, 2006). The share of RES electricity in 2005 was only around 16,5% compared with 25% in 2004 and 37% in 2003.

65

Figure 6-C RES Electricity Generation

65


50000

40000

30000

20000

10000


20000

18000

16000

14000

12000

10000

8000

6000

4000

2000

0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005*

Other

Urban Solid Waste

Biomass

Wind

Hydro (<= 10 MW)

Hydro (> 10 MW)

Figure 6-D RES and Total Electricity Production

60000

0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005*


Figure 6-E shows the share of RES sources in Total Gross Electricity Consumption and Total

Primary Energy Consumption, as well as the EU Directive targets. The formula that is used to calculate the attainment of the Directive goal smoothes the strong share variations that are evident and, as discussed previously, these can be attributed to hydrological factors.

66

Figure 6-E: Evolution of RES shares on TGEC, TPEC and the EU Directive

66

The Directive 2001/77/CE indicative target for 2010 (see section 6.2.1) is calculated assuming the hydrologic index of 1997 (base year concerning the target definition).



Shares of RES on TGEC, TPEC and the EU Directive

45

40

35

30

25

20

15

10

5

0

1997 1998 1999

RES as a share of TGEC


2000 2001 2002

RES as a share of TPEC

2003 2004 2005

% of renewables (Directive)

Finally, another of the infrastructure issues to consider in the framework of electricity production from RES is the connection to the grid. In Portugal, the operator of the electric grid is obliged to accept renewable electricity and the distribution company is obliged to purchase surplus electricity produced from RES, regardless of the specific source from which it is obtained. There is a 12-year contract between the producer and the electricity distributing company, which is meant to provide reasonable foreseeability. However, regional weaknesses in the grid are hampering the stronger penetration of RES electricity, especially in more remote areas. This issue will be further discussed in section 6.2.

6.1.3 Renewable energy pricing and support issues

Other than the obligation of the electricity distributor to buy all the RES offered to the grid, the

Portuguese Government has launched several other energy plans and financing measures in order to promote RES development. Incentives for renewable electricity comprise mainly investment subsidies, tax deductions and RES production incentives (through the establishment of a feed-in-tariff scheme consisting of a fixed tariff per kWh for each RES technology).

Investment subsidies have been considered the main instruments to promote electricity generation from RES, especially for the technologies considered to be less cost effective. In the last decade, two important programmes have supported investment projects in this area: the

“Energia Programme” (ended in 2002) and the “MAPE Programme” (2000-2006 – ended in

March, 2006), supporting 40% of investment for amounts above 25 000 euros

67

. MAPE -

Measure for Supporting the Use of Energy Potential and Rational Use of Energy – was within the framework of POE - Economics Operating Programme, later substituted by PRIME - National

Programme for supporting the Modernisation of the Portuguese Economy. The MAPE

Programme is described in section 6.1.5.

67

For rational energy use projects the minimum is 10 000 euros.



As for tax deductions, DL 442-A/88 establishes fiscal incentives for individual buyers of new equipment using renewable energy sources within the Personal Income Tax. Since 2002, tax deductions are allowed up to 40% of investment cost, with a maximum annual ceiling of 700

Euros. Reg.Decree 22/99 introduces the Accelerated Depreciation on Solar Thermal Equipment

Investment Scheme within the Corporation Tax. This fiscal incentive complements the investment subsidy programmes. Companies can benefit because they can write off the investment on solar equipment in only 4 years. Also, for indirect taxation, DL 109–B/2001 establishes an intermediate rate of V.A.T. for renewable energy facilities of 12%, in comparison with the normal rate of 21%.

It is not clear how much these fiscal incentives have achieved, and it would be important to study their effects. The Corporation Tax incentive lacks publicity, and the Personal Income Tax incentive is fairly limited and it cannot be accumulated with other tax deductions related to housing expenses.

Finally, DL 33-A/2005 establishes rules for differentiated generation tariffs, which favour electricity production from renewable energies. Table 6-A presents the average tariff values.

Table 6-A: Feed-in Tariffs in 2001 and 2005

Renewable Energies

Hydro (< 10 MW)

Average Tariff

D.L. 339-C/2001 (€/MWh)

72*

Average Tariff

D.L. 33-A/2005 (€/MWh)

75

Biomass (wood)

68

Urban Solid Waste

Biogas (landfills)**

Biogas (animal biomass)**

Biogas (others)**

Photovoltaic Solar (> 5 kW)

74,5* 109

74,7** 75

75 105

103

76

320**

103

54,8

310

Photovoltaic Solar (< 5 kW) 550** 450

68

Biomass with co-generation is not included in the RES laws, as it is regulated separately, along with other methods of co-generation, in Portaria 60/2002.



* CEC (2004).

**Martins (2005).

Source: Roberto (2006).

69

Despite such favourable tariffs, investors have complained that they lack long-term stability, since some values experienced significant changes in this relatively short period. Still, tariff values are generally higher than generation costs and often above market prices for electricity 70 , which means that accepting a large number of RES connections would imply a rise in prices for electricity consumers. This can create significant difficulties. For example, for solar photovoltaic energy there was a huge increase in Preliminary Information Requests (PIP), which paralysed the administrative licensing system after DL 132/2001.

6.1.4 Institutional and public support issues

The main government authority responsible for renewable energy policies is the General

Directorate of Geology and Energy (DGGE), of the Ministry of the Economy and Innovation.

DGGE is also responsible for the licensing processes. Other than the obligation of the electricity distributor to buy all RE offered to the grid, there are 5 other supporting mechanisms, some of which were presented in the previous section: national targets, promotional campaigns, investment incentives, production incentives and fiscal incentives.

National targets for electricity production from renewable energy sources are established in RCM

63/2003 (see also section 6.2.1). There is also a national compromise to fulfil the indicative target of Directive 2001/77/CE, in 2010 (39% of gross national consumption of electricity production from renewable sources). This target, and its relation with Kyoto commitments, has been widely publicized due to two controversial proposals, one of a new hydropower dam (in the currently pristine Sabor river) and one relating to a nuclear plant. The first is currently being reconsidered by the government after it failed to gain EU financial support for environmental reasons, and the second is not an official project.

There are currently two national promotional campaigns in progress: “Solar Hot Water

Programme” and “National Programme for Energy Efficiency in Buildings”. The former has financial support from the MAPE Programme, with EU support through ERDF and ESF.

Licensing processes currently last many years and speeding them up is considered a sine qua non condition for the rapid development and full performance of investment projects. The licensing procedures normally take 2 years. However, in some sites, for example in environmentally protected areas, they may take from 4 to 8 years (for wind) or from 10 to 16 years (for hydro) from the time the first permit is granted to the beginning of construction. As far as hydro and wind power are concerned, there is, at present, a strong restriction to their development: DL 93/90, which aims to protect areas designated as ecological reserves (REN).

This introduces strong restrictions as an important number of favourable hydro and wind projects

69

Other sources indicate higher average tariffs. For instance, according to APREN – Portuguese

Association of Renewable Energy Producers, the actual average tariffs for Hydro and Wind in

2005 were 83€/Mwh and 87€/Mwh, respectively.

70

Current average prices for the Iberian Market are 77€/Mwh, reaching 141€/Mwh for domestic consumption (GEOTA, 2006).


Strategic Evaluation of Environment and Risk Prevention – Country Report – Portugal sites are located, totally or partially, in REN areas. Further legislation may be approved to increase the flexibility of licensing procedures in REN land.

6.1.5 Experience of Previous and Other Ongoing Investment Programmes

Portugal has received financial support for promotion of RES since the First Community Support

Framework.

Since 2000, the POE / PRIME Programme contributed to support electricity production projects and rational energy use projects, through the MAPE Programme (which is

Action 3.5 within Measure 3 of PRIME). The objective of this programme is to promote support schemes on:

- Electricity generation from renewable energy sources (MAPE A),

- Rational use of energy (MAPE B), and

- Consumption conversions to natural gas (MAPE C)

The PRIME Execution Evaluation Report was published in 2005. The following two tables present the Funding types and rates for Measure 3 as a whole, as no disaggregated data are available for MAPE A and B, which are the relevant items for this report

71

.

Table 6-B: PRIME Programme, Measure 3 Funding by source

Source of funding Funding instrument EUR (million)

Planned Approved Executed

2000-2006 2000-2004 2000-2004

National Public Funds 301 761 129

Others (Private)


278

909

121

1140

67

293

Source: PRIME Report 2005.

Table 6-C: PRIME Programme, Measure 3 co-funding rates (million Euros)

Funding Total

Structural

EU –

71

Martins and Santos (2005) show preliminary data for MAPE 2000-2006 which indicates that

MAPE A accounts for a significant part of this amount. MAPE C only covered about 10% of approved investment. MAPE closed in March 2006.



Funding

(ERDF) support

Planned Funding

(2000-2006)

Approved Funding

(2000-2004)

1 140 258 43,1%

Executed Funding

(2000-2004)

Source: PRIME Report 2005.

It can be seen that approved projects until 2004 already exceeded programmed funding, which gives an indication of the strong investment in the sector by national actors (public and private) in the past years. Recalling that investment would be even higher if not for licensing delays and considering the levels of feed-in tariffs, it is clear that investment and production support have helped turn at least some RES into highly attractive endeavours.

A more detailed analysis of data for MAPE A and B projects (see Annex 11.4) indicates that most of the approved investment was in wind (96% of investment and 88% of support), although the proportion of investment costs that was funded was only 12% for this RES. Other RES have smaller absolute values but a higher proportion of funded costs (85% for biomass and close to

40% for biogas, solar thermal, geothermal and hydro).


With the exception of hydroelectricity, RES do not yet have a strong expression in national electricity generation, despite their increase in the last few years. The past growth rate of RES installed capacity has not been sufficient to match the strong growth of final electricity consumption. This is reflected in energy trade numbers, which show net imports of 6 481 GWh in

2004 (more than 10% of total gross electricity consumption). Although some RES have substantially increased production, there is still ample potential for increase. Such potential will be further discussed in the Needs section (6.2.1).

It can be concluded that Structural Funding support in the current programming period, as well as tax relief and feed-in-tariffs established by the Portuguese government, have been extremely important for the development and generation of private investment in RES in Portugal, especially for photovoltaic, wind and biomass. Investment incentives facilitate the beginning of the project and production incentives ensure operational sustainability. However, such strong support has created bottlenecks in grid connection as well as licensing problems, which are not easy to solve without accepting increases in electricity prices and also denote nature conservation constraints.

More attention should currently be devoted to wind, solar thermal, biomass, tides and wave energies, since these are the areas where Portugal has most growth potential. A clear long-term institutional setting should be provided to avoid investment uncertainty. A legal framework


Strategic Evaluation of Environment and Risk Prevention – Country Report – Portugal regarding the implementation of green certificates, or a mixed system of green certificates and feed-in-tariffs, should also be taken in consideration to allow price differentiation. Finally, licensing processes should be streamlined to speed up capacity installation. Projects that simultaneously contribute to other goals (such as MSW recovery or natural risk reduction) should be especially supported.

6.2 Needs For the future


Portuguese energy policy includes a number of main concerns. It aims to ensure the operation of the national electrical supply system, without discontinuity and at affordable prices; to reduce the external dependence on oil, and to diversify primary energy sources and supply origins, namely by promoting the use of other fuels, such as natural gas; to foster the development of local energy resources, by using new and renewable energy sources; to foster energy conservation and rational use, as well as to reduce energy intensity in all activity sectors; to reduce the environmental impact of energy production and use, especially decreasing GHG emissions; to promote national competitiveness through increasing effectiveness and efficiency of national energy products and services, to liberalize the energy sector and to improve its quality (RCM nº

169/2005 - National Energy Strategy). The National Strategy for Sustainable Development also includes six different targets related to energy, including legal targets described below as well as targets for energy intensity and the use of economic instruments.

Within the context of the fulfilment of the Kyoto Protocol, Directive 2003/87/EC, which created the

European Trading of GHG Emissions Licences (CELE) for the experimental period 2005 – 2007, was transposed by DL nº 243-A/2004. In this framework the National Plan for Attribution of

Emissions Licences (PNALE) imposes, in a first period, a national CO

2

emissions ceiling. In a second period, it establishes a CO

2

emissions ceiling on every Portuguese installation considered (248 installations for the period 2005-2007). The total amount of emission licences was based on PNAC projections (Martins et al., 2005). The Kyoto target for Portugal is an increase of 27% in GHG emissions relative to the 1990 value.

Directive 2001/77/EC proposes national indicative targets for each member state for the electricity produced from RES to gross electricity consumption by 2010. This Directive resulted in: a number of National Government resolutions establishing specific targets for 2010.

The next table compares the 2005 RES capacity values with their 2010 targets.

Table 6-D: National targets for each specific RES and corresponding gaps - MW

Renewable Energy

Installed Capacity (MW)

2005 (1) 2010

Targets* (2)

DTT in %

(2-1)/(1)

Hydro (> 10 MW)

Hydro (<= 10 MW)

4 476

267

5 000

450

11,7%

68,5%



Biomass (with co-generation)

Biomass (without co-generation)

Urban Solid Waste

357

12 n.d.

250

-

198%

88 130 32,3%

Photovoltaic Solar

Solar Thermal

2

0

150 n.d.

112%

-

Waves / Tides 0 50 -

Solar Thermal – panels (m

2

) 250 000** 1 000 000 300%

* 2010 targets imposed by RCM (Council of Ministers Resolution) nº 63/2003, RCM nº 119/2004 (PNAC),

RCM nº 171/2004, and RCM nº 169/2005, as well as the National Energy Strategy (2006).

** Up until September, 2005. n.d. – not defined

Source: Roberto (2006).

It should be noted in relation to wind power, which is farthest from the target, that there are, at present, 800 MW of installed capacity in construction and an additional 1 300 MW to be licensed.

For biomass, there are 140 MW pending approval. Also, the extent of solar thermal installations should witness an increase due to the recent approval of a number of legal instruments on energy efficiency of buildings, one of which requires the installation of solar thermal panels or equivalent RES in all new buildings (DL 78/2006).

6.2.2 Supply and Demand Forecasts

The following table presents forecasts for the installed capacity of electricity generation from

RES. It also illustrates which RES show most growth potential for the next few years, thus indicating possible capacity investment choices. It should be stressed, however, that some of the capacity extensions will be more expensive than others, as discussed in section 6.2.3.

Table 6-E: Forecasts for Installed Capacity of Electricity Generation from RES -

Portugal - MW - Sustainability Scenario *

Renewable Energies 2015

Promising Potential

(2015-2020)

Wind 5 100 5 200

Hydro (> 10 MW) 5 696 6 150



Mini-hydro (<= 10 MW)

Solar Thermal

500

25

600

50

Biomass (without cogeneration)**

250 350

Waves / Tides 100 5 000

TOTAL 5 975 5 975

* This Scenario takes into consideration the implementation of present measures.

Source: REN (2005), except ** which reflects a new target.

Note that Portugal presents very good natural conditions to promote wave energy, with a potential of 5 GW. Two of the very few European prototypes of large dimension are in Portugal: the OWC – Oscillate Water Column (400 kW) in Pico Island of Azores and the AWS –

Archimedes Wave Swing (2 MW) in Póvoa de Varzim. In 2005, another OWC power plant started to be constructed in Foz do Douro - Matosinhos. Portugal is the world leader in technical and scientific knowledge in this area (more than 25 years of R&D), so wave energy should be of primordial Portuguese concern in its energy policy (WEC, 2004).

Table 6-G shows forecasts for electricity generation from RES for 2010 and 2015, taking into consideration 3 possible scenarios.

Table 6-F: Forecasts for Electricity Generation from RES - Portugal - GWh



Renewable Energy Low scenario (1) Sustainable case scenario (2)

High scenario (3)

2010 2015 2010 2015 2010 2015

8 521 9 659 10 025 11 364 11 529 13 069 Wind

Hydro (<10MW) 733 825 1 222 1 375 1 711 1 925

Solar 0 91 0 107 0 123

Photovoltaic

Biogas

180 202 212 237 244 273

192 248 226 292 260 336

Biomass (without 734 co-generation)

1 028 863 1 209 993 1 390

USW 526 716 619 842 712 968

Waves 65 190 76 223 87 257

Total 10 951 12 959 13 243 15 649 15 536 18 341

(1) Low scenario based on the sustainable scenario – 40% for hydroelectricity due to variations in

Hydroelectric Productivity Index (HPI) and – 15% for the remaining ones due to uncertainties.

(2) Sustainable case scenario based on information given by REN.

(3) High scenario based on the sustainable scenario + 40% for hydroelectricity and + 15% for the remaining ones.

Source: REN (2005).

Table 6-F does not include biomass with co-generation (which currently yields 1343 Gwh) or large hydropower. It is important to re-emphasize that hydroelectricity generation depends highly on the hydrologic index, which is extremely uncertain. Consequently, it is very difficult to predict and construct scenarios for this type of renewable energy generation. Nonetheless, according to

REN, the reference scenario for hydroelectric power plants of more than 10 MW includes Baixo

Sabor, in 2012 (still subject to certain degree of uncertainty owing to the eventuality of environmental constraints), Picote II, in 2012, Linhares, in 2013, Bemposta II, in 2014 and Foz

Tua, in 2015, as the main candidates for the expansion of the hydroelectricity sub-system. These power plants would allow a 1220 MW increase in capacity, taking production capacity of major hydroelectricity power plants to around 5 700 MW ( REN, 2005). Thus, according to our scenarios, large hydro is forecasted to reach 12 705 GWh and 14 474 GWh for 2010 and 2015, respectively.

This result in a total RES generation (including large hydro and considering biomass with cogeneration at 2004 levels) of 27751 GWh and 31926 GWh for 2010 and 2015, respectively, taking into consideration the sustainable scenario.

GHG emissions

The following Figures present relevant information on GHG Emissions in Portugal. Figure 6-F compares GHG emissions as compared with the Kyoto target, and clearly shows the existing


Strategic Evaluation of Environment and Risk Prevention – Country Report – Portugal difference and the absence of a positive approximation trend. Figure 6-G presents past and current emissions divided into sectors, highlighting the strong impact of the energy sector.

Figure 6-F: Portuguese GHG Emissions

GHG Emissions

100.000

80.000

60.000

40.000

20.000

0

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2010

CO2 CH4 N2O GHG Emissions (3 gases) Kyoto Target 2008-2012

Source: IA, 2005.

Figure 6-G: GHG Emissions by Sectors

GHG Emissions by Sectors

70.000

60.000

50.000

40.000

30.000

20.000

10.000

0

Industry Solvents Agriculture

1990 2002 2003

Waste Energy

Source: IA (2006).

According to PNAC (2004), in a business as usual scenario (BAU), which does not take into consideration the implementation effects of the present measures, there is a prediction of an increase of GHG emissions around 54% and 63% by 2010 compared with the reference year.

This scenario largely exceeds the value of + 27% established in Kyoto Protocol. To accomplish that target, Portugal must decrease its GHG emissions from 16 to 21 Mega tones of CO

2 equivalent. This effort can only be achieved if the European Trading of GHG Emissions Licences

(CELE), reference scenario measures and additional measures are implemented. For the CELE there is no quantitative information about the expected reduction on GHG emissions yet. For the reference scenario a decrease of around 7,6 to 8,8 MT CO

2 e is expected between 2008 and

2012. Considering that a reduction of 6,7 to 7 MT CO

2 e is expected from additional measures, it is clear that all these efforts are not sufficient to accomplish the Kyoto Protocol. Portugal needs a


Strategic Evaluation of Environment and Risk Prevention – Country Report – Portugal supplementary reduction of 1,7 to 5,6 Mt CO

2 e. PNAC suggests the development of national mechanisms to participate in the flexibility mechanisms predicted in Kyoto Protocol, like

International Emissions Trade, Conjoint Implementation and the Clean Development Mechanism.

Table 6-G: Official Forecasts of core indicators - Portugal

Core Indicators Low demand scenario Intermediate scenario High demand scenario

2007 2010 2013 2007 2010 2013 2007 2010 2013

GDP (million Euro)

(1)

152 144 163 998 174 036 152 144 165 043 178 515 152 144 165 606 180 962

Electricity Demand

(GWh) (2)

58 363 66 030 74 704 59 207 67 954 77 993 60 059 69 924 81 409

Primary Energy

Demand (3)

330 111 354 454 380 592 334 970 364 966 397 648 339 877 375 737 415 380

(1) Source: DPP (2005)

(2) Intermediate scenario based on the annual average growth rate between 1995 and 2004 (4,7%). Low scenario based on intermediate scenario + 0,5% and high scenario based on intermediate scenario

-0,5%. Source: DGGE (2006).

(3) Intermediate scenario based on the annual average growth rate between 1995 and 2004 (2,9%). Low scenario based on intermediate scenario + 0,5% and high scenario based on intermediate scenario

-0,5%. Source: DGGE (2006).

Electricity demand is forecasted to grow about twice as fast as average energy demand.

Moreover, it should be emphasized that these forecasts imply that both energy and electricity demand will be growing faster than GDP, in the latter case significantly so. Considering that

Portugal already has one of the worst GDP energy intensity values of the EU, such high growth of energy and electricity demand might be too pessimistic. Alternative forecasts for these variables could be produced using GDP forecasts and applying current energy/GDP and electricity/GDP values. Still, even using the official forecasts, it is clear that RES generation

(using data from Table 6-F) is expected to be close to 40% of electricity demand in all scenarios as long as large hydro is included.


6.2.3


Unit investment & operating costs

Table 6-H: Installation, Operation and Maintenance Costs in 2005 - (constant

2004 prices)

Costs

(€ / kW)

1 100

Maintenance Costs

(€ / kW / year)

26,4

Average

Generation

Costs (€/MWh)

52

Hours / year

2 200

Payback

Time

20 Wind

Hydro (<= 10 MW)

(1)

1 750 5 41 3 200 30

Biomass 1 510 332,3 (2)

Biogas*

Urban Solid Waste*

3 100.

4 500.

3850

(4)

4,5 192

4 816

34

10

132,5 (3) n.a. n.a.

4 000

4 000

-

-

Solar Photovoltaic

Solar Thermal

Waves / Tides 3 000 - - -

(1)

Due to the huge diversity of large hydroelectricity power plants, it is extremely difficult to identify a standard value for their expected investments, where each power plant is a specific case. For instance, the investment costs for a new hydroelectricity power plant with a big storage capacity, like Baixo Sabor, exceeds 1 800 € / kW, whereas, the installed capacity reinforcement of existing hydroelectricity power plants, through the construction of new power plants, can be around 600 to 700 € / kW.

(2)

(3)

Includes fuel used in biomass combustion.

(4)

The high O&M cost of Solar Thermal is associated with the storage of electricity equipment.

This value, proposed by REN, is lower than DGGE values presented in the Summary data table.

Source: REN (2006), except *DGGE(2006).

-

The expected future evolution of costs varies according to the specific source. For wind and hydro power plants there are no predicted diminishing costs, as their technologies have already reached their maturation level. Thus, the same cost levels are expected. For the other technologies, there are learning curves which show a downward trend due to technological development and power plant dimension. Moreover, in spite of the remaining gap between costs of RES and other energv sources, it should be remembered that the inclusion of CO

2

emission values into non-RES energy costs can make a significant difference, depending on CO

2

permit prices. The following table shows cost forecasts for those RES technologies where change is expected and predictions exist.



Table 6-I: Installation, Operation and Maintenance Costs - Forecasts for 2010 and

2015 - (constant 2004 prices)

Biomass

Solar Photovoltaic

Costs

(€ / kW)

Maintenance

Costs

Average

Generation

Costs (€/MWh)

Hours / year Payback Time

(€ / kW / year)

2010 2015 2010 2015 2010 2015 2010 2015 2010 2015

1 346 1 231

2 320 1 850

332

3

302

2

63

116

57

92

7 010

1 450

7 010

1 450

20

25

20

25

Solar Thermal 3 562 3 391 88 78 65 60 4 906 4 949 30 30

Source: REN and University of Coimbra (2005), “CISEPI – Caracterização de Soluções de Integração Sustentada de

Elevados Níveis de Produção Intermitente”, Abril.

6.2.4 Enabling and hampering factors to meet needs

The existing support and incentive schemes were described in section 6.1.2. Comparing average tariffs with generation costs, it is clear that investment in RES production is already attractive.

Nonetheless, support schemes are not exclusive of RES. Thermoelectric power plants and

Combined Cycle Gas Turbines also have support schemes that are not specified in this study.

Furthermore, the support schemes currently in place are insufficient to make targets seem reasonably achievable for all RES, not least because significant interest in RES generation has not been matched by appropriate licensing and grid connections. It is unclear whether the existing permit bottleneck is easily solvable, as with current support levels the sale of RES energy to the grid is so attractive that accepting all of it could significantly raise electricity prices.

As noted in section 6.1.3, the development of a system of green certificates to allow price differentiation could be a way to by-pass this problem.

Other important constraints remain the excessively bureaucratic and time-consuming authorisation system necessary to obtain all the permits required to install and operate any kind of RES, as noted in section 6.1.6. Furthermore, Municipal Director Programs, which are spatial planning instruments that delimit infrastructure location, do not take into consideration the location of RES power plants. Another significant constraint is the existence of regional weaknesses in the grid connection. The transmission and distribution network needs some especial attention. Further investments are required to strengthen the network for the grid integration of RES production, especially in more remote areas of the country. Inappropriate grid connections increase costs, and the substantial distance from the production to the grid connection results in higher energy losses. However, the grid operator is also subject to licensing problems, especially in environmentally sensitive areas. There may be a conflict between increasing RES production and other environmental goals (namely nature conservation).

Finally, the new legal framework for energy efficiency in buildings should also contribute to RES growth in the coming years, especially through the installation of solar panels.



6.2.5 Investment Calculation and Comparison

The following Table presents official planned investment costs for the period 2007-2013, for main energy sources (thermal energy data is included for comparison). The expected investment effort in RES is clearly significant.

Table 6-J: Official Planned Investment Costs for 2007 - 2013

Unit: million Euro (constant 2004 prices)

2007 2008 2009 2010 2011 2012 2013

Thermal 46 25 129 321 506 390 244

Hydro 54 91 180 260 215 155 123

Other RES

(1)

983 908 713 128 128 127

Total 1 201 1 100 1 217 1 295 849 672 495

(1) Cogeneration and USW not included.

Note: These values do not include amounts concerning investments needed to connect the electricity to the national grid.

Source: REN (2006).

To validate the above values, we have calculated the investment costs that would be required to reach the 2010 targets, multiplying the necessary MW (Table 6-D) for each RES by the estimated investment costs, presented in Table 6-H and Table 6-I. Our calculations yielded the results in

Table 6-K. The total investment required to 2010 is 5490 million euro, which is higher than the

4289 million euro implied for 2007-2010 by official estimates (Hydro + other RES).

Table 6-K Required Investment Costs for 2010

Unit: million Euro

Wind

Hydro (<= 10 MW)

Biomass*

Solar photovoltaic

2010

4463

320

186

343

Solar Thermal

Total

178

5 490

* Using the old target of 150 MW.



As for network reinforcement to connect RES electricity, it is already under way. The total investment predicted for 2006-2011 is around 159,1 million euros.

72 For the same period, the investment for large hydro network connections is forecasted to be around 28,6 million euros.

Portugal should expect requests for EU funding in wave energy, biomass, biogas, geothermal and photovoltaic energy, as these energies imply the use of technologies that are not sufficiently mature. Some requests for EU funding in wind energy concerning the industrial production units of wind turbines in Portugal are also expected. To comply with the national strategy and the intended development of the Portuguese wind energy industrial market, two assembling factories in the north and center of the country and a new production factory of blades in the northern coast were already announced.

6.2.6 Summary

The Portuguese energy sector is characterised by a high external dependence from primary energy due both to the absence of fossil fuel resources and to the insufficient level of renewable energy sources exploitation. Although electricity demand has grown faster than RES production in recent years, the trend is expected to reverse until 2010, so the target of 39% of electricity production from RES might not be compromised. In fact, current estimates indicate that the target will be achieved if all planned investments are done, as long as large hydro maintains values close to average. On the other hand, the GHG target of 27% has already been largely exceeded, according to the estimates of PNAC (PNAC, 2004).

Several measures and mechanisms have been taken to promote the development and implementation of RES: promotional campaigns, investment incentives, fiscal incentives and production incentives through the establishment of a feed-in-tariff scheme. Albeit important, these incentives have not been sufficient. Thus, progress to date, though relevant, does not guarantee fulfilment of 2010 RES targets without significant additional investment. Portugal should diversify sources, as it is endowed with good potential for a large number of these. Further R&D should be supported in technologies with strong national potential, such as wind power (especially offshore), solar (thermal and photovoltaic), biomass, biogas, tidal and wave energies.

Technologies where energy production also contributes to other desirable goals, such as biomass (forest fire prevention) and urban solid waste (reduced landfill deposition), should be especially supported.

A summary of possible specific measures include: a long-term feed-in-tariff or stable tariff criteria to avoid investment uncertainty; deeper coordination between the different public administrations, particularly concerning the authorization procedures and the building and operating licenses; a simpler and transparent administrative system to diminish the time-lag for actual project realisations; a strengthening of the grid to overcome physical constraints and to avoid project implementation delays; clear delimitation of distribution companies’ actions, especially in relation to the purchase requirements, but also for situations of denied grid access.

The major constraint remains the bureaucratic and time-consuming authorisation system necessary to obtain all the permits required to install and operate any kind of RES. Another

72

Figure from REN, in “PIR - Plano de Investimentos da Rede Nacional de Transporte 2006-

2011”


Strategic Evaluation of Environment and Risk Prevention – Country Report – Portugal related restraining factor is the existence of regional weaknesses in the grid connection. Wind energy, for instance, which has shown significant growth, has its biggest potential in inner mountain regions in the north of Portugal, where electricity consumption is small. Nonetheless, the electricity cost implications of increasing RES production need to be addressed.

Since EU structural funds have been the most important source of RES development funding in

Portugal, along with national funds, it seems clear that financial instruments and/or investment incentives should continue in order to meet national and EU indicative targets. However, there will be a delicate balance between competing environmental considerations, especially for hydropower and wind. Therefore, more must be done to invert or at least slow energy consumption trends, through effective promotion of energy efficiency throughout the economy.

Considering the needs identified in the previous section, our ranking of the different types of investment is presented in Table 6-L.. Investment in energy generation from MSW, of any type, is not included here as it is already taken into consideration in its own chapter.

Table 6-L Ranking Types of Investment within Fields (Rank most important as 1)


Renewables Wind

Geothermal

Solar electric (PV)

Waves / Tides

1

5

2

3

4

9

6

8

7

* Liquid biofuels were not analysed in this report, although they are also an energy priority, reflecting Directive

2003/30/EC. There is a 5% target for biofuels (in road transport) in 2010.


Alternative funding sources

The Portuguese Government has several energy plans and financing measures in order to promote RES development. Incentives for renewable electricity comprise mainly investment subsidies, tax deductions and RES production incentives (through the establishment of a feed-intariff scheme consisting of a fixed tariff per kWh for each RES technology, complemented by mandatory purchase by the grid operator), as described in section 6.1.3. These schemes are expected to continue into the next programming period, maintaining the attractiveness of private investment in RES.

Use of flanking measures

Electricity prices are regulated, and it is not easy for distributing companies to pass on cost increases to consumers. Moreover, there are no separate consumer prices for RES and non-



RES. Such price differentiation might be achieved through the implementation of a system of green certificates. There have also been proposals to lower the VAT of renewable energy from its current rate of 12% to the lowest possible level, 5%, although this has not been currently approved. Finally, energy efficiency should be promoted as much as possible as conservation is currently much cheaper than any type of production. New legislation already provides mandatory standards for energy efficiency in buildings, including provisions for RES use.

Assessing the capacity to deliver investment programs

The previous investment programs were quite successful in the promotion of RES, especially wind, so much so that the MAPE program closed early as all possible funding had been approved. It is clear that there is private interest in these investments and public capability of managing funds. What is not so clear, however, is how to solve the existing licensing problems and grid bottlenecks. A part of the problem is regional grid weakness, which might be dealt with through additional investment. Nonetheless, conflicts between RES development and nature conservation goals, especially for hydropower and wind, will not go away and need to be honestly debated. Furthermore, existing spatial planning instruments need to be reconciled with RES location. Together with improved licensing procedures, these measures should reduce waiting times (which can reach 8 years for non-hydro and 16 years for hydro). Another interesting debate is whether existing production support measures are part of the problem by creating a strong interest in RES production, at a high cost to the electric grid operator, which cannot then be passed on to consumers. This factor may be contributing to purposeful licensing delays. As investors require stable long term perspectives, such considerations must be well thought out and cleared up once and for all.

Table 6-M Estimate of the Financial Requirement for RES, 2007-2013


Based on Review



Needs (Meuro)

5 165 M€


(eg purchasing of renewables)

Approximate share of A: 40%

(rough estimate)

2 066 M€

C: Amount recovered from existing user charges not included in investment need

D: Further amount that could be recovered from higher rates for existing or new charges to fund investment



B-C-D) (Meuro)





90%

E x F

3 099 M€

2 789,1 M€


(Meuro)




NATURAL RISKS 7

There hasn’t been an integrated quantitative national risk assessment of natural hazards in the country nor do data generally exist on risk management costs. The only case where numerical scenarios are available is climate change (project SIAM - Santos and Moita (2002)). In fact, risk prevention and minimization constitutes one of the primary objectives for the period 2007-2013 in the most recent integrated national strategic documents: the National Strategy for Sustainable

Development (ENDS) and the National Programme of Spatial Planning Policies (PNPOT). Even for specific risks such as forest fires or floods, the existing data generally does not include cost or cost-effectiveness considerations, as described in the following section.

7.1.1 Existing assessments

The main natural risks that can be identified in Portugal for the purpose of this report are forest fires, drought and erosion (continental and coastal), although other hazards exist. Shows the risks considered in PNPOT for Mainland Portugal. In Madeira Island some areas have an important risk of land slide. In the Açores Islands severe risk of earthquakes and volcanic phenomena exists. A more complete list of risks can be found in Annex 11.5.

Figure 7-A Most important risks in Mainland Portugal

Major cities

Industrial facilities with Security report in 2003

Seismic risk area

Tsunami risk area

Mass movement risk

Flooding zones

Critical point on flooding

Flooding plans

Dam failure influence zone

Critical area on coastal erosion

Operation gas pipe

Project gas pipe

Oil pipe

Source: PNPOT (2006) – draft version for public consultation



Forest fires

The past few years have been disastrous for Portuguese forests. Figure 7-B presents data from

1980 to 2005 for forest fires in Mainland Portugal and data from 1985 to 1998 on forestation, for comparison.

Figure 7-B Forest fires (left) and forestation (right)

450 000

400 000

350 000

40 000

35 000

30 000

300 000

25 000

250 000

200 000

150 000

20 000

15 000

10 000

100 000

50 000

5 000

0

80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05

Burnt area Number of forest fires

0

Area (ha)

(2004)

Out of a total forest and natural vegetation area of 4,2 million ha p

, this implies that an average of

5,3% of the relevant area has burnt down each year in the last five years. Economic costs are clearly significant, considering that forest areas generate an average return of 344€/ha in the country q

. Gross Added Value for forestry and related sectors was 3,3 million euros in 2003, and the associated employment was 113 000 q

. Moreover, forest fires have also caused losses of human lives, of 20 people in 2003 and 19 people in 2005, along with houses and other buildings

(1425 buildings in 2005). Such terrible outcomes were, of course, related to extreme meteorological circumstances, but in other southern European countries the same circumstances did not originate comparable increases, in spite of the fact that the Portuguese public protection expense per ha is the highest (27 €/ha versus an average of 16 €/ha).

q

Figure 7-C shows the area at risk based on 2004 data. The apparent absence of risk in the

Alentejo region is mainly due to the fact that there were not as many forested areas (as thus not as many forest fires) as in other regions. There is a distinct possibility that this situation may worsen due to the reforestation effort that has been undertaken with EU support for previously agricultural soil. As the National Strategy for Forests recognizes, “reforestation subsidies can create perverse incentives for forest fires”, not to mention directly increasing risk. This points towards a strategy for the next programming period of forest cover improvement (“consolidation”) and not of continuing expansion q

.

As for prevention costs, reliable data are not available. Fire-fighting corporations represented total expenses of 293 million euros (of which 47 million in capital expenses) in 2003 a

, but a significant part of this amount can be attributed to functions other than fire-fighting. As for information on EU support, project-by-project analysis of the Environment Sectoral Programme

(POA) reveals only one 1,93 million euros programme for fire prevention (of which 1,45 million from ERDF) f , which is dwarfed by the 792 million euros approved for forest support from various

EU sources (the analysis of which would be outside the scope of this report) q .



Figure 7-C Risk Map for Forest Fires

Source: DGRF, 2006

Municipalities’ borders

Very high

High

Average

Low

Very low

Drought

Portugal’s climate is associated with extremely variable precipitation levels, both seasonally (over

70% of rainfall comes in October-March) and over different years (for an average of 960 mm of yearly precipitation, approximately 25% of the years have values below 800 mm or above 1100 mm) k

. Furthermore, the spatial distribution of precipitation is very asymmetric, from 2200 mm/yr in the northwest river basins to 570 mm/yr in Guadiana river basin. Thus, the basins that are most at risk are those in the South.

Hydrological year 2004/2005 was particularly dramatic, with approximately 400 mm of precipitation. In the summer months of 2005, 100% of Mainland Portugal was under extreme or moderate metereological drought.

j

In late August 100 000 people were affected in terms of water supply. The total cost of the drought is estimated at 286 million euros, excluding the costs


Strategic Evaluation of Environment and Risk Prevention – Country Report – Portugal associated to increased CO million euros).

j

2

emissions for energy production (which could reach an additional 38

The 2005 Drought report concludes with a number of recommendations based on the difficulties felt during the year, but none of which include estimated costs or even effectiveness. In fact, one of the problems during the drought was that there was no quantified information on achieved water savings to assess the impacts of implemented measures. The most affected River Basin District was Algarve, where many reserves approached zero at the end of the summer, with the Funcho and Arade dams below usable capacity levels and significant saline intrusion in the Querença-Silves aquifer. Interestingly, the National Water Plan (PNA) in

2001 indicated a higher vulnerability of the Alentejo and Centro regions, and stated that “since the dams were built Algarve has not had significant drought problems”.

Erosion

Mainland Portugal suffers from two types of erosion: continental erosion and coastal erosion.

Continental erosion is a man made process related with incorrect agricultural practices and deforestation, often caused by forest fires. Coastal erosion, which will be the focus of this section, derives mainly from the increase in the average sea level coupled with the reduction of sediments that is associated with the existence of dams.

The coastline of mainland Portugal has an extension of 950 km, presenting significant morphologic diversity. It can be classified into four main types: beaches, wetlands, hardened and cliffed coasts. Of these four types, beaches and cliffed coasts represent 590 km. The percentage of Portuguese coast that is undergoing erosion is one of the highest in Europe, at 29%. In some coastal areas, the average shoreline retreat has reached 9 meters. The human pressure on these areas is important because 75% of population inhabit the coastal zone, where most of the large cities are located (Porto, Aveiro, Coimbra, Lisboa, Setúbal, Faro), and tourism represents an additional strain, particularly in Algarve, in the South. The associated risk potential is significant, even if no major disaster of this type has yet occurred. The areas at risk are marked in

Figure 7-A.

The nine Zoning Plans for Coastal Areas (POOC) have all been approved and their application should enable the improved protection of the areas at risk. No information exists, however, on the associated implementation costs. Analysis of POA projects shows that a total of 60,3 million euros relates to interventions in coastal areas (23 projects), of which 45,2 million euros are from

European Funds (ERDF). Notwithstanding the technical merits of infrastructural projects, their ability to prevent coastal erosion in the medium to long term is questionable as they tend to disrupt natural sediment flows and often create significant imbalances.

Floods

The variable hydrological regime highlighted in previous sections also brings about occasional episodes of flooding. In exceptional years, there have been instances of very intense precipitation

(50% of yearly values occurring in a single month). Historically, the most affected river basin has been the Tejo (500 people died there in 1967). More recently, the 2001 floods in the Tejo and

Douro rivers caused 10 deaths, isolated some towns, interrupted road and rail transport, flooded agricultural areas and affected various buildings. The Mondego river also experienced a flood that year, which brought about the rupture of flood barriers. Local episodes of “flash floods” have occurred in 1997, of which those in the lower Alentejo region caused 11 deaths. For at risk areas


Strategic Evaluation of Environment and Risk Prevention – Country Report – Portugal see Figure 7-A, which also shows areas at risk from dam ruptures. It should be emphasised that the main risks are concentrated in coastal areas, with very few exceptions.

Paradoxically, the improvement in flood prevention, by decreasing the frequency of small floods, has increased human occupation of flood plains, thus increasing the probability of significant damage in future severe flood occurrences. Thus additional investments should only be considered in a context of proper spatial planning. For the programming period of 2000-2006,

13,95 million euros of investment were planned for river management projects (5) within POA, of which 10,46 million from ERDF.

The National Service of Fire-fighters and Civil Protection, SNBPC (of the Interior Administration

Ministry) is the main operational actor in all natural risk situations. In special cases, the Armed

Forces (Defence Ministry) are also expected to cooperate. Recently (in 2006) combat and coordination changes have been approved, motivated by the serious forest fire episodes: a group of immediate combat was created within the Portuguese National Republican Guard (GNR), which has incorporated all the Forest Guards Corp. Moreover, to support more efficient air combat new aircraft is being purchased by the state (they were fully rented until 2005).

In the case of fires , planning and prevention duties were with the General Directorate of Forestry

Resources - DGRF (Ministry of Agriculture and Rural Development), both at a national level and regionally (with its regional delegations). After 2005 the National Authority for the Forest Fires concentrates many of these competences, as well as coordinating combat operations.

Regional and local authorities are the five Regional Commissions of Coordination and Rural

Development (CCDR) and the Municipalities, whose role has become more significant through the definition of Municipal Risk Maps for the Defence of Forests Against Fire, among other duties

(p.e. cleaning and deforesting protection strips along roads). The coordination of local Fire

Departments is done by municipality presidents.

The Meteorological Institute (IM) provides daily severity ratings during the fire season and emits a public national alert for particularly risky situations/areas. At those occasions all combat means already in the field are reinforced and remain in standby or patrol.

It should be emphasized that since 85% of Portuguese forests are private, there is also a significant role for Associations of Private Producers and Owners q

. For example, industrial cellulose producers control their forest areas, managing and combating fires using their own means. It has been difficult to achieve proper coordination of all the relevant authorities, and the sector has gone through some institutional re-organizations in the past ten years. In the “disaster” years, the different responsible authorities have typically blamed one another as well as the reorganizations, for the inadequacy of results. Forestation after occurrences is an additional problem because of the need to achieve agreement between the state and landowners.

A large number of institutions were associated to the process of drought management in 2005.

The Drought Management Committee (DMC) and its technical secretariat, coordinated by the

Institute of Water (INAG), included: the SNBPC; the water services regulator (IRAR); CCDR;

General Directorates of Geology and Energy (DGGE) and of Firms (DGE), both from the

Economy Ministry; the DGRF and the Institute of Rural Development and Hydraulics (IDRHa) from the Ministry of Agriculture and Rural Development; Health Authorities; the IM; and private


Strategic Evaluation of Environment and Risk Prevention – Country Report – Portugal and public representatives from the main users (water suppliers, municipalities, tourism, industry, agriculture, and environmental NGO’s).

DMC published a biweekly report on from March to December 2005. It was widely considered that the work of the Commission was essential in the collection, integration and dissemination of drought information, as well as in the co-ordination of drought mitigation measures.

The main authority on coastal areas is also INAG (since 2005). INAG delegates authority to the

Institute for the Conservation of Nature (ICN) for protected areas and to the Maritime and Port

Institute (IPTM) for some port areas (and their neighbourhoods). The most important five port areas are under delegated jurisdiction of specific port authorities. Other institutions involved in coastal area management are under the Maritime Authority System (navy and maritime police included), which controls all activities at sea.

In the case of floods INAG is the main authority for planning, monitoring and prevention, and the

SNBPC is the operational entity (municipalities play a determinant role in civil protection as local managers of the risk). INAG runs the System for Surveillance and Alert of Water Resources

(SVARH), which provides real-time information on river flows to the Reservoirs Management

Commission. This Commission coordinates discharges with dam operators and, in the case of international river basins, with Spanish authorities. By satellite information analysis and additional

RADAR information all civil protection means in the problem area are activated and INAG starts river flow emergency monitoring and simulation. Contacts between INAG and its counterpart in

Spain are done whenever necessary.


This has been answered in the text where applicable.

Table 6.4: Overview of ERDF projects, 2000-2006 (approved)

EU-support

Fire Prevention

Coastal Erosion

Floods

Total


1,93 1,45 75

60,26 45,2 75

13,95 10,46 75

76,14 57,11 75

Most of the well identified funding for natural risk prevention is concentrated in floods and coastal erosion, possibly because those are the ones where infrastructural solutions (requiring easily quantifiable investment) are more easily applied. Given current information (or lack of it) it is not at all clear whether and which infrastructural investments are appropriate. Integrated risk assessments with appropriate linkage to spatial planning policies, as good cost of measure quantifications, are essential steps towards damage prevention.




Currently the natural risks that carry a highest priority in Portugal are forest fires and drought, due to the recent events of this type that the country has experienced (and because they have strong consequences more frequently and are short term events). Recent plans for both fields identify a number of measures that should be implemented in the next years, although there often isn’t a proper account of investment needs and measure effectiveness is seldom discussed. In the case of forest fires, there appears to be an additional problem of institutional coordination, as the various models that have been tried were unable to address the recurrent problem of increasing forest destruction. In all the risks that were discussed, a significant issue is the effect of population concentration in coastal areas by increasing damage potential. Spatial planning is of the utmost importance. Moreover, the country is in dire need of adequate integrated risk management instruments and of consequential and cost-effective measure implementation.

7.2

7.2.1

Needs for the future

Review of policy objectives and targets – and supporting instruments

In Portugal policy objectives exist, they generally have legal support documents but often these are programmatic documents of good intentions. They don’t establish formal compromises among all agents that should be involved in public administration. There are typically significant changes with government changes: some are forgotten or revoked, others are overvalued. Many documents containing national policy objectives:

- do not have quantified targets or budgets;

- do not reveal what concrete actions should be undertaken;

- are not adequately transposed into regional, related or inferior instruments (plans, laws, programs, actions, projects);

- are disrespected without consequences (for example, building permits are issued on flood plains because related tax revenues are important to municipalities).

All this contributes to important inefficiencies, and even to the ineffectiveness of legislation.

Forest fires

The major goals on forests are stated in the National Strategy for Forests (currently under public discussion). In parallel there was a public presentation in early 2006 of the National Plan to

Defend Forests from Fire. Along with the obvious target (to diminish the number of forest fires and burnt areas), these documents also include some other ones: to promote forest planning; to ensure sustainable forest management; to reduce ignition and fire propagation; to recover burnt areas; to guarantee citizens’ involvement in the defence of forests. Quantified targets for 2015 are: maximum burnt area of 50 000 ha/yr, 60% of forested area under management plans, and

500 000 ha with forest management certification (ENDS, 2006).

Recently, forest fire combat was almost exclusively based on volunteers. This situation is changing to allow better combat capacity, tactical coordination and communication. In prevention, specific goals are to implement Regional Forestry Plans (PROF) and forest management plans;


Strategic Evaluation of Environment and Risk Prevention – Country Report – Portugal to break continuity of some forest species; to create forest clearings to stop propagation, which can be used as road access; to clean sensitive areas; and to implement improved surveillance systems.

Droughts

Legal, institutional and programmatic frameworks are similar to those described for floods. The main concerns are on the effect of droughts on the economy and on people’s lives. Major actions are directed towards demand management and adequate guarantee levels of water supply and its quality. This means mainly urban public water systems, as 80% of the irrigated areas are private and use their own systems; most of the large industrial facilities are also in self-service.

The 2005 Drought Report refers the improvement of information on groundwater, the decrease of water losses through measures like those in the National Plan for the Efficient Use of Water

(PNUEA), and the construction of some new public supply systems, among others, as priority measures for drought prevention. Developing adequate management skills in water services is another important question at the moment, as referred in previous sections

The Albufeira convention, mentioned above, is an essential instrument in drought situations. For each river it establishes minimal flows in the rivers to guarantee subsistence uses and ecosystem integrity.

Erosion

For coastal erosion the main objectives are: to promote a sustainable development of natural resources of costal zones; protect sensitive coastal areas; ensure spatial planning of activities and occupations in the entire coastal strip. For continental erosion main objectives are related with: correct soil use; adequate terrain coverage to conserve soil and water; adequate location of human activities; recovery of damaged zones; population attraction to interior areas and sensitization. It is clear that in this area practically all goals are related with spatial planning policies.

Portugal has many instruments of spatial planning. PNPOT establishes strategic options on how different regions develop and connect based on regional potential; each natural protected area should have a plan establishing what actions can or can’t be undertaken; POOC are specific plans for the mainland coast; at regional level there are regional plans and, subordinated to these, municipal plans which include PDM - Municipal Director Plan, PGU - General Urbanization

Plan and PP – Detailed Plans.

Floods

Objectives concerning floods are originally from PNA, finished in 2001 by INAG. All its dispositions are included in 15 first generation river basin plans (PBH) for the Mainland (currently under revision) and two regional water plans for insular regions - PRA (Madeira e Açores).

However, the framework has changed as the new water law, referred in previous chapters, has been in force since December 2005. This law reinforces PNA dispositions about flood objectives.

It creates new planning instruments, puts under its regulation other territorial management instruments, and creates a new competence framework with five river basin authorities. The main


Strategic Evaluation of Environment and Risk Prevention – Country Report – Portugal objectives on floods are to increase knowledge and implement measures to provide adequate protection for human activities, recognizing that floods are natural phenomena, and as such are environmentally useful and can’t be eliminated.

Portugal shares five major river basins of the Iberian Peninsula with Spain, so there are some bilateral protocols to regulate common river use. The last and most integrated one, known as the

Albufeira Convention, is from 1998 and it is about the sustainable use and common management of the international rivers. It regulates extreme situations (drought and floods), and it is a very important instrument in this respect. Nevertheless, in crisis situations there needs to be a level of common understanding, coordination and action based on real knowledge of the problems and this requires permanent joint work. There are very important dams close to the border and uncoordinated discharges per se could provoke artificial floods.

Risk definition integrates threats (defined in a probabilistic way), vulnerability and the magnitude of consequences. Risk means uncertainty, particularly in natural systems. These are complex and they involve variables that are difficult to understand and connect. Only some of the climate phenomena, such as hydrologic occurrences, are in some way predictable. As mentioned in section 7.1.1, the only source containing quantified forecasts is SIAM (2002).

Forest fires

Many reasons justify fire occurrences but the majority is a result of crime and neglect. Recently the government implemented a series of measures that should finally have positive consequences. It should be remembered that forest fires are natural in Mediterranean climates.

What is completely abnormal is the intensity and frequency of such episodes nowadays. The resilience of forest ecosystems is generally low, something that has severe consequences in biodiversity, increases the torrential character of run off, implicates lower infiltration capacity, losses of fertile soil, erosion, creation of ashes that will be dragged to superficial water bodies, degrading their quality (particularly in drought periods), among others. Climate change seems to contribute to more forest fires by creating optimal conditions to them: warmer temperatures, severe drought during summer and longer summers. SIAM results suggest an intensification of extreme temperatures that will multiply 3 - 5 times the days with high meteorological risk (in the fire weather index), having as consequence the lengthening of the forest fire period.

Droughts

There are no doubts about the theoretical concept of drought. In concrete, adopting quantified criteria, different authors, institutions and other agents have different visions of what droughts are. At any rate droughts, like floods, are relatively frequent and natural in countries like Portugal.

Nevertheless, the magnitude, frequency and duration of droughts are becoming unusual, apparently as one of many consequences of global warming and climate change (SIAM, 2002).

Usually climate droughts are distinguished from hydrological ones, because in the second case there are direct consequences to human beings. So, if droughts are intensifying it is expected that water resources decrease in the near future, with a lower guarantee for water supply systems, increasing demand, higher potential of water status degradation in drought periods (by eutrophication and diseases). Further, in Portugal this implies lower hydropower potential, with important economic consequences as hydropower represents a relevant part of national energy


Strategic Evaluation of Environment and Risk Prevention – Country Report – Portugal production (as discussed in section 6.1) SIAM forecasts for 2080 indicate gross losses in run off up to 60% in the south of Mainland Portugal and up to 30% in the center.

It was relatively usual to consider that a drought would occur every five years, and a severe drought every ten years (although hydrological phenomena are significantly heterogeneous in

Portuguese regions). Currently it seems that droughts are becoming more frequent and long.

Figure 7-D shows the most important years of drought.

Figure 7-D Historical registry of hydrological occurrences in Mainland Portugal

Total annual

Source: MAOTDR, 2005c

Average of 1961-1990

Shunting to the average (1961-1990)

Erosion

As referred earlier, Mainland Portugal suffers from continental and coastal erosion. Continental erosion is strongly related with incorrect agricultural practices and deforestation, caused in many cases by forest fires. Trends in agriculture do not suggest an increase of cultivated area.

Moreover, European agricultural funds will be more closely associated with good practices and competitive agriculture rationally implies soil conservation, so forest fires are the great threat to continental erosion. For these reasons the forest policy and the results of forest recovery will be decisive.

Coastal erosion combines three processes: (i) sedimentary balance modification (sediments are retained by dams), (ii) changes in coastal flows (of water and sediments) and (iii) global warming.

Reasons (ii) and (iii) are related and are the great threat that can not be reverted in the next decades, so delocalisation and mitigation measures will be necessary. Many natural regressive and transgressive processes have geologically affected the Portuguese coast. Currently another transgressive one is occurring, but it has an artificial character. As the coastal area is under intense urban pressure, this will involve important costs. It will be necessary to either build more coastal infrastructures to protect human activities or, which will certainly be less expensive in some cases, to move those activities elsewhere.



Another consequence of coastal erosion is that beaches will disappear or retract themselves: this is economically significant because beach tourism represents the main part of Portuguese tourism (which in turn represents 8% of Portuguese GDP and 10% of employment aa ). According to SIAM, in the 20 th century the sea level went up between 10 cm and 20 cm in the coast of

Mainland Portugal (these are measured data). Because of climate change, a sea level rise between 25 cm and 110 cm is expected until 2080.

Floods

The most relevant floods occur in Mainland Portugal, as described in section 7.1.1. Activities like urban pressure, soil coverage modification (agriculture, deforestation), construction of artificial barriers to the natural flow (roads, railways) and flood plain occupation continue to increase, despite the large number of spatial planning instruments that have been created. These are difficult problems to solve and immediate results are not easy to come by.

Project SIAM predicted an increasing risk of floods, especially in the north. The concentration of precipitation in winter and the estimated increase in the frequency of heavy precipitation events is likely to worsen flood magnitude and frequency. Considering that 64% of national territory represents shared river basins, floods originating in Spain also need to be considered, as general climate influences are similar for both countries. The tendency for increasing flood episodes may call for important investments in the security components of hydraulic infrastructures (dams in particular).

7.2.3 Costs of Infrastructure / Technologies (Unit Investment & Operating Costs)

Main objectives what concerns floods, drought, erosion and forest fires involve structural and non structural interventions as shown in Table 7-A toTable 7-D. The measures listed there are not purely theoretical. For instance, in the case of floods, many are proposed with specific budgets mainly in PNA, PBH and PRA, for the planning period ending in 2015. Other measures, such as forestation, soil use modifications, and spatial planning instruments need more time to yield results. Existing monetary values for broad measures are presented in section 7.2.5.

A rational, massive and coordinated investment involving many resources (institutional, human and financial) will be required to tackle these problems. Portugal has budgetary problems and some institutional problems, so means are scarce and problems are dynamic (the work is never done, it has a continuous character). The environment, agriculture and public works ministries must lead in terms of physical impact of investments. Operative measures, training and equipments should be provided by interior, defence and health ministries.

Table 7-A Forest fires: main measures on risk prevention

Structural interventions Non structural interventions

♦ forestation (new forests and recovery of burnt areas)

♦ new access/ physical barriers creation

♦ water spots creation

♦ surveillance towers

♦ non-conventional surveillance measures

♦ training of combat and surveillance personal

♦ combat/ communication/ surveillance/vehicle equipment

♦ public involvement

♦ biomass center creation to use forests’ energy potential

♦ monitoring and quick attack of fires



♦ genetic improvement of forest species

♦ use of controlled fires

♦ forests as greenhouse gas sinks

♦ promotion of owner associations for forestry exploitation

Table 7-B Droughts: main measures on risk prevention


♦ monitoring (rivers and aquifers)

♦ real time monitoring of supply systems

♦ soil coverage planning (increasing aquifer recharge)

♦ new waste water treatment plants

♦ substitution/partial revision of supply systems with important losses, demand peaks and quality problems

♦ integrated management of sewage and water supply systems

(water re-use when applicable)

♦ integrated management of superficial and groundwater sources

♦ new water sources

♦ forecast and support system: precipitation, run off and aquifer recharge forecast; reservoir management; use restriction; support measures

♦ river basin managing plans (and specific plans, spatial planning plans and artificial water bodies plans on activity conditioning - POAC)

♦ artificial lakes management, connection with managing commission and drought management committee (activated in crisis situation)

♦ alerting people and firms to rational and sustainable use of water

♦ better understanding of climate change effects, especially at regional and local level

♦ contingent and emergency plans

♦ better connection among all support agents and alert teams

♦ flow discharges to guarantee aquatic life

♦ new tariff regulations including scarcity costs and a water resource charge

Table 7-C Erosion: main measures on risk prevention


Continental

♦ more adequate agriculture and forestry practices

♦ rural development at regional and local level

♦ recovery of damaged areas

♦ water management

♦ plan compliance

♦ public involvement

♦ training of agricultural agents

♦ research support

♦ plan compliance Coastal

♦ maritime protection infrastructure

♦ beach recharge

♦ dune recovery

♦ infrastructure delocalization

Table 7-D Floods: main measures on risk prevention


♦ real-time monitoring (remote control) - surveillance/ alert system ♦ river basin managing plans (and specific plans – water law)



♦ forestation campaigns/ soil coverage planning (torrential flow mitigation)

♦ sediments and other obstacles cleaning

♦ retention basin creation

♦ new infrastructure construction, protection or substitution

♦ implementation of new infrastructures’ security systems

♦ dams and channels building

♦ activities, buildings and infrastructure delocalization

♦ artificial lakes management regulation/ connection with managing commission

♦ land planning (respect and compatibility between all existing plans – particularly at municipal level)

♦ flow plain occupation and permeability control measures

♦ risk area inventory and designation

♦ infrastructure stability monitoring and dam security compliance

♦ infrastructure inventory

♦ dam security plans, studies and stability models

♦ better understanding of climate change effects, especially at regional and local level

♦ contingent and emergency plans

♦ better connection among all support agents and alert teams

♦ training of civil protection agents and population sensitization

7.2.4 Instruments and Support Schemes – Enabling/hampering factors to meet needs

Enabling measures / Support schemes

In the last support framework (CSF III), POA financed many different projects, plans and programmes for the environment, including natural risk management. It is not known if this will remain, but QREN is expected to have a main investment axis related with natural risk management, grouping investments for many areas. Considering budgetary constraints it is possible to suppose that the prevailing opinion will not emphasize physical/ structural investment

(more expensive) but rather privilege dynamic investment (surveillance alert and support equipments). Main programs or plans involving major actions on risk managing are summarized in Annex 11.5.

7.2.5 Investment Calculation and Comparison – Natural Risk Management

Existing official monetary values for natural hazard prevention are presented in the following tables.

Table 7-E Risk management budget for water-related hazards - forecast (2007-

2013)

Intervention Budget (million €)

Water source protection and improvement 31,8

Droughts 12,4

Spatial planning interventions

Flood prevention and minimization

5 381

42,0

Riverbed conservation

Public Information and communication

159,8

8,4

Research 29,2

Monitoring and information systems

Total

35,9

5 700,5

Source: INAG, based on PNA proposed expenditure

Table 7-F Risk management budget for forest fires– forecast (2006-2010)



Intervention

Legislation and policy reviewing and integration

Promotion of forestry management and actions on strategic areas

Public and stakeholders involvement and responsabilization

Knowledge improvement on forest fire causes

Public education and sensitization

Reinforcement of surveillance and dissuasive capacity

Guarantee of permanent availability of adequate means

Improvement of detection process, surveillance and primary action

Accurate and efficient fire combat and extinguishing

Guarantee of logistic and humanitarian support in combat areas

Evaluation and mitigation of the forest fires impacts and long term strategy implementation

Defining and implementing organizational structure

Base knowledge promotion on forest fire defence

Total

Source: PNDFCI (2006) - 2005 prices

Budget (million €)

1,2

410,96

0,57

0,10

28,56

1,84

29,61

83,75

6,71

0,23

4,04

94,55

15,46

677,58

Table 7-E is based on PNA and it appears to have some reliability problems. It compiles data from all 15 PBH and each one was done by a different consulting team, so that methodology is not always comparable. Furthermore, measures were defined in 1999-2001 and cost variations might have occurred. Finally, the main expense is associated with spatial planning, which is inexplicably high considering that original PNA values for this area, included in Program 5

(Planning and Management of the Water Domain) were 85 million contos (approximately 425 million euro). Even considering the addition of new investment associated with the Finisterra coastal intervention program (219 million euro), this is still far below the 5 381 million euro presented above. Notwithstanding, we were told that values proposed by INAG for risk management and water management in QREN are significantly lower. It is also important to refer that although PNA was prepared by INAG, it involves cooperation and responsibilities of other ministries. As for Table 7-F, it comes from the 2006 Plan to Defend Forests from Fire and it is unclear how much of the expenditure, if any, will be eligible for structural fund support.


This section summarizes the specific problems and constraints associated with each type of risk as well as the main needs that were identified.

The strong tradition of individual ownership is an important constraint to the suppression of scale problems in agriculture and forestry exploitations. The associated fragmentation creates difficulties for proper forest management and raises the forest fire risks. It can also be pointed out that the Portuguese people show some persistent inadequate behaviours, such as picnics

(with grills) in forest areas, careless cigarette disposal, and starting small fires that get out of control. Existing financial yields stimulate monocultures and short to medium term planning. The role played by European agricultural funds will probably continue to be more significant than that of available environmental funds in the next programming period. Forestation and adequate forest management are determinant, even if fire combat capacity and popular involvement are the most pertinent in the immediate future.



Climate change is expected to have a significant impact on droughts , with warmer temperatures overall and lower run-off. The quantitative and qualitative effects of Spanish water uses must be taken into account. Water use efficiency is very low and supply systems are small, not resilient and difficult to manage. Sewage treatment in general is behind and there is some reluctance towards reuse. It is absolutely necessary to improve robustness of water supply systems and with it their reliability and resilience. Non-conventional solutions can play an important role.

For continental erosion , agriculture and forest developments will have a decisive contribution.

On the other hand, coastal erosion risk has been amplified by the urbanization of coastal areas.

This will imply relocating costs in the future, and the state will probably have to take on some or even most of those as continued building in such areas has been legally permitted. Climate change is expected to worsen these problems as the sea level will rise. Another difficulty is associated with insufficient knowledge of the sedimentary cycle, and monitoring failures in sediment extraction control. Nonetheless, major measures should be directed at removing activities and infrastructure from risk areas. Protection investment should be considered only if its cost-effectiveness is established.

There has been a historical tendency towards flood plain occupation, both because of inadequate spatial planning and because the perception of flood risk has decreased. Furthermore, there has been intense urban growth instead of urban renovation. The impacts of climate change appear significant due to rainfall concentration and increased occurrence of heavy precipitation. Another relevant factor is the influence of Spanish dams on water flows. For these reasons torrential control is paramount (for which forestry and land planning policies are determinant), as is coordination in international rivers.

Considering the needs identified in the previous section, our ranking of the different types of investment is presented in Table 6-L. Investment in drought prevention has been given a relatively low priority because main investments are included in water supply.

Table 7-G Ranking Types of Investment within Fields (Rank most important as 1)

Natural hazards Drought

Fire

Flood

Erosion

3

1

4

2

Feasibility of managing and delivering ERDF/CF Programmes to meet needs 7.3.2

In these areas it is more difficult to justify structural fund support as the main responsibilities rest with national governments. However, it should be noted that the most significant expense by far is related to spatial planning, which has wide implications in all natural risks.


8


CROSS FIELD PRIORITY ASSESSMENT

In this chapter the importance of each field in Structural Fund application is assessed. Initial point scoring is presented in Table 8-A.

Table 8-A Indicative Point Scoring Allocation Across Fields Based on Regional Development and

Resource Management Arguments

Field of Investment Main Arguments Indicative

Allocation

Points

Water Supply Response to increasing water demands, regional development, benefits to health, need for increased efficiency

25-45 35

Waste Water

Treatment

MSW

RES

Natural Hazards environmental quality improvements, increasing sewage and treatment coverage as fundamental goal

Response to improve management of material 10-20 20 resources as a result of increased use and to avoid health and environmental effects

Response to wider climate change effects and to the need for improved energy efficiency and national energy independence

10-25 10

Response to EU wide threats, regional development and resource management issues

5-15 5

Other: Strategic

Planning

All Fields

Response to ensure adequate strategic management and planning

<5 3

100 100

Table 8-B provides a Multi-Criteria Assessment for Portugal, based on criteria defined in Box A.

The values are based on default values provided by GHK, except for highlighted values which are different for reasons explained below. While the contribution of priority investment to acquis compliance is self-explanatory, for the other criteria some examples can be given. In the case of damage avoidance, water-related investments as well as waste service improvements are of direct relevance to the quality of life. Investments in RES contribute in a more indirect fashion by improving energy reliability and diminishing greenhouse gas emission, whereas natural hazard prevention in general is specifically associated with damage avoidance. Another criterion is technology and market development. Here the main contributions will be associated with investments in RES, especially for those technologies which are not considered mature and where research and development is essential for efficiency gains. Some other investments, namely in waste disposal, also have potential here, through the stimulation of recycled-product markets and new technologies.



Employment goals are an important part of European strategies, and environmental investment can help develop new industries and services that will generate opportunities for workers with different qualifications, from highly qualified (as in advanced RES technologies) to lower skilled

(as in MSW collection and sorting). Finally, the promotion of cross border cooperation is most evident in natural hazard prevention, such as flood control or fire fighting, where Portuguese and

Spanish authorities often work together. Water supply issues also contribute to cooperation between the two countries, as the main Iberian rivers are shared.

Box A: Criteria for Scoring the Potential Impact of Different Types of Investment

Contribution of investment to:

1. securing compliance with the acquis

2. avoiding economic and social damages

3. encouraging new technology and market development

4. generating employment opportunities in line with national and regional employment goals

5. providing employment and training opportunities for low skilled workers or

‘hard to reach’ groups

6. promoting cross-border co-operation

7. delivering national and regional environmental strategies and plans which are well integrated with wider development strategies and plans

8. promoting more cost-effective programme design and delivery



Table 8-B Multi-Criteria Assessment for Portugal

Assess the contribution of each type of investment to each criteria

Water

Supply

Reservoirs

1 2 3 4 5 6 7 8

3 7 3 3 3 7 7 0

Transport (inc leakage) - long

Transport (inc leakage) - local

10

10

7

7

3

7

3

3

3

3

7

0

7

7

0

0

7

Waste Water

Treatment

New STPs

Renovation / upgrade STPs

New Sewerage

Renovation / upgrade sewerage

MSW

3 7 3 3 3 3 7 3

7 7 3 3 0 0 7 3

3 7 3 3 0 0 7 3

7 7 7 3 0 0 7 3

Waste collection

Waste sorting

Recovery

Disposal – new disposal facilities

Disposal – remediation of existing

7

7 7 0 3 0 0 7 3

3 3 7 7 7 0 7 7

7 3 7 7 7 0 3 7

7 3 7 3 3 0 3 7

10 7 7 3 0 0 7 7

7 3 3 3 0 3 3


RES facilities

Wind

Solid biomass

Geothermal

Natural

Hazards

Waves/Tides

Drought

Fire

Flood

Erosion

Key: Very Strong Contribution: Score 10

Strong Contribution: Score 7

Limited Contribution: Score 3

Negligible Contribution: Score 0

GHK, ECOLAS, IEEP, CE


Assess the contribution of each type of investment to each criteria

1 2 3 4 5 6 7 8

7 7 7 3 3 0 7 7

3 3 3 3 3 7 3 7

3 7 7 7 3 3 7 7

7 7 3 7 3 3 7 7

3 7 7 3 3 3 7 3

3 7 7 3 3 0 7 3

3 7 7 0 3 0 7 7

3 7 3 3 3 7 7 10

0 7 3 3 3 7 7 10

3 7 3 3 3 10 7 10

0 7 3 3 3 7 7 10

107


For water supply, metering was considered to have generally lower contributions as it is already fairly complete in the Portuguese water supply network. For waste water, STP and sewerage were given maximum priority in aquis compliance because this is where the most serious problems are. For MSW, waste collection was given a lower priority in acquis compliance as only selective collection might be relevant (current collection coverage is 100%), while waste sorting was given a higher priority as part of differentiated disposal plans. Remediation was given a lower score in avoiding damages since current facilities provide adequate disposal. For RES, wind and biomass were given higher scores as these are the two areas where the country has a stronger potential to contribute to compliance (hydro is currently a larger contributor but its growth potential is lower). Solar thermal was given a higher score for cost effectiveness not because of its role in electricity production but because of its potential, given climatic conditions, of improving energy efficiency in buildings.

The MCA tested two sets of weightings applied to the different criteria: one which emphasised the contribution of investment to securing compliance with the acquis; and one which emphasised the contribution of investment to regional development. These results were then compared with the allocation implied by the estimated financial requirement. For illustrative purposes an allocation of 3 billion Euro was assumed (this compares with the plan for the current period of 3.8 billion euro).

Table 8-B Indicative Investment Allocations

Scenario 1: Estimated Financial Requirement

Total financial requirement (2007-2013) in %

Allocation of available funding (2007-2013) in Meuro

Scenario 2: Emphais on Compliance with the Aquis



Scenario 3: Emphasis on Supporting Regional Development



Indicative Investment Allocations minimum allocation (%) allocation range (%)

Field 1 Field 2 Field 3 Field 4 Field 5

9%

466

11%

568

9%

438

17%

861

22%

1,112

17%

827

14%

703

18%

883

15%

735

55%

2,725

46%

2,319

55%

2,768

5%

244

2%

117

5%

231

3,000

3,000

3,000

DWS WW MSW RES RISK

9% 17% 14% 46% 2%

11% 22% 18% 55% 5%

9-11 17-22 14-18 46-55 2-5

In summary thee analysis indicates that investment in RES and risk management will tend to have a more significant benefit, per unit investment, for regional development, and that the investment in the other fields by has a relatively smaller effect. The analysis also indicates that

GHK, ECOLAS, IEEP,CE

108

Strategic Evaluation of Environment and Risk Prevention – Country Report – Portugal even a small allocation for water supply will, unless the overall allocation is very small, provide the investment required.

In the light of this the evaluator has revised the initial Round 1 scoring to give greater weight to

RES and less to water supply (Table 8-C).

Table 8-C Revised Indicative Point Scoring Allocation Across Fields Based on Regional

Development and Resource Management Arguments

Field of Investment

Water Supply

Main Arguments Indicative

Allocation

Points

Response to increasing water demands, regional development, benefits to health, need for increased efficiency

25-45 28

Waste Water

Treatment

MSW

RES

Natural Hazards environmental quality improvements, increasing sewage and treatment coverage as fundamental goal

Response to improve management of material 10-20 17 resources as a result of increased use and to avoid health and environmental effects

Response to wider climate change effects and to the need for improved energy efficiency and national energy independence

10-25 22

Response to EU wide threats, regional development and resource management issues

5-15 5

Other: Strategic

Planning

All Fields

Response to ensure adequate strategic management and planning

<5 3

100 100

Table 8-C provides a rough estimate of the regional share of investment for each field. As the data provided was not regionally disaggregated, the numbers presented here should be taken as indicative.

Table 8-C Share (%) of investment by regions in Portugal

REGION WS WWT MSW RES NRM


109


As noted in section 2.5, some of the impacts of environmental investment in regional development can be found in basic services (WS, WWT and MSW), as the lack of such services is often a hindering factor for growth. These three fields of investment are expected to significantly improve services mainly in the Norte and Centro regions, as well as in the Alentejo, where there is lower population density. In the case of RES, given Portuguese geographical specificities many developments should take place in poorer regions (wind and hydro inland in

Norte, Centro and Alentejo; biomass in Centro and possibly also Norte, where large forested areas are located; photovoltaic in sun-drenched Alentejo; waves in the Northern coast). Such investment can provide a contribution to the development of technological clusters in rural areas, creating employment and attracting industry, especially if the current scenario of high energy prices holds.


110


9 CONCLUSIONS

9.1 Key points from current situation

This report’s overall aim is to provide the strategic evaluation of the needs and priorities for environmental investment under the structural and cohesion funds for Portugal for the period

2007-2013. It covers 5 fields of environmental investment: water supply, waste water treatment, municipal solid waste, renewable energy sources and natural risk management. Although these do not cover all the environmental problems identified in the country, they do include the most significant ones. In all fields, with the possible exception of natural risk management, the country has witnessed significant improvements as previous structural and cohesion funds were applied and acquis compliance was improved. This section recalls the main conclusions of the report for the characterization of each field.

Water Supply

Major infrastructure investments have been made in water supply during the previous programming period, with very positive results. Some investment will still be required in the future, as coverage needs to be improved in specific regions. The highest needs will likely be concentrated in retail water supply. Improved quality monitoring is also required to comply with

EU legislation. Reducing water losses should also be a major concern. A key issue during the next programming period will be the role of price incentives in water supply management. Public awareness of water as a scarce good is high due to the recent two-year drought, and prices are expected to rise in line with WFD requirements of cost recovery. Ideally, efforts should be focused on efficient tariff structures to reduce the complex variety of schemes that currently persist. The new charge on water resources is also expected to play a role.

Waste Water

This sector shows one of the weakest results for programming period 2000-2006, with current service levels still far from established targets. Full compliance with the UWWTD has not been achieved and Portugal has received several warnings on this issue. Increased coordination between bulk and retail system construction is important to ensure that collection, treatment, and discharges are properly integrated. Furthermore, it is clear that significant investment will be required in the next few years if there is to be any chance of achieving existing targets. Some surface water quality problems persist, although it is unclear how many can be attributed to WW discharges. Pricing issues have potential mostly in cases of discharge-metered industry, working only through reduced water supply for residential users.

Municipal Solid Waste

Waste collection is a sector that has come a long way in a short time. The entire population is covered by collection services, there no waste dumps and selective collection has become a part of daily life. The current infrastructure is not entirely appropriate, however, to ensure fulfilment of existing deposition, recycling and recovery targets. In particular, landfill deposition is still the method of choice for final disposal, which is incompatible with targets established in the Landfill

Directive. Investment is required to redress this inadequacy, albeit some of it might be expected to come from increased user charges, even if for waste these do not have any incentive properties. Charges are currently very low in relation to costs, covering only about 25%.


111


Renewable Energy Sources

Although some RES have substantially increased production in Portugal, which has one of the highest proportions of RES electricity generation in the UE, the country still has ample untapped potential. Structural Funding support in the current programming period, as well as tax relief and feed-in-tariffs established by the Portuguese government, have been extremely important for the development and generation of private investment in RES in Portugal, especially for photovoltaic, wind and biomass. Investment incentives facilitate the beginning of the project and production incentives ensure operational sustainability. However, such strong support has created bottlenecks in grid connection as well as licensing problems, which are not easy to solve without accepting increases in electricity prices and also denote nature conservation constraints.

Natural Risk Management

Currently the natural risks that carry a highest priority in Portugal are forest fires and drought, due to the recent events of this type that the country has experienced. Recent plans for both fields identify a number of measures that should be implemented in the next years, although there often isn’t a proper account of investment needs and measure effectiveness is seldom discussed. In the case of forest fires, there appears to be an additional problem of institutional coordination, as the various models that have been tried were unable to address the recurrent problem of increasing forest destruction. In all the risks that were discussed, a significant issue is the effect of population concentration in coastal areas by increasing damage potential. Spatial planning is of the utmost importance. Moreover, the country is in dire need of adequate integrated risk management instruments and of consequential and cost-effective measure implementation.

9.2 Summary of environmental investment needs

This section is designed to summarise the needs assessment. It partly helps to address the difficulties of estimating the total investment needs in all cases by making using of qualitative analysis and physical indicators as well as available financial assessments. The summary consists of three tables: Table 9-A Needs Summary: Qualitative Analysis , Table 9-B Needs

Summary: Key Indicators , and Table 9-C Needs Summary: Indicative Investment Needed .


112


Table 9-A Needs Summary: Qualitative Analysis

Summary qualitative needs assessment – providing context and background to the priority assessment.

PORTUGAL

WATER

Future needs being addressed by current initiatives – such as existing plans or investment

New reservoirs

New production plants

(drinking water withdrawals)

New production plants

(drinking water treatment plants)

Future needs requiring further planning and/or investment in

2007 – 2013.

New network (drinking water pumping stations)

New network (drinking water distribution: pipes)

New drinking water treatment plants

WASTE WATER

New STPs

Rehabilitation of existing water treatment plants

New water distribution networks

(bulk and retail)

Renovation / upgrading of STP

New wastewater collection networks

(bulk and retail)

NEEDS ASSESSMENT TABLE – SUMMARY 1

WASTE RES

NATURAL

HAZARDS

New STPs Composting plants Waves / tides Floods: Land planning, infrastructure security and emergency actions

New sewerage


Additional sorting facilities

Additional solar thermal and PV

Erosion: some infrastructure and activity relocation

Existing plant upgrade Additional biomass Droughts: Increase water supply robustness (quantity

Additional wind and quality)

Forest fires: combat performance and public sensitization

Across fields: connections Forestation plans

Incineration (esp. RDF and sludge)

MBT development

Additional composting

Waves / tides

Wind: equipment

Additional wind

Floods and erosion:

Relocation of activities

General: Strict implementation of spatial plans

Droughts: increased water supply robustness (quantity and quality)

OTHER AREAS (if of critical importance)


113


PORTUGAL

WATER

Rehabilitation of water distribution networks (bulk and retail) – leakage control

Water pricing (demand control)

WASTE WATER


WASTE RES

NATURAL

HAZARDS


Water saving technologies

Rehabilitation of waste water collection networks

(bulk and retail water)

Water pricing

(financial sustainability of utilities)

Sludge treatment

Selective collection improvements

Additional solar thermal and PV

Financial sustainability Additional geothermal

Forest management

(and economic valuation)

Coastal erosion:

Protective structures construction

Sludge disposal or re-use

Additional efforts on biogas

Additional hydro

Limited needs

(less important issues or issues already addressed)

Key:

Metering CSO upgrading General Collection Flood infrastructure construction

Bold: high relevance to meeting the policy objectives of each field – these need not be the most costly items but the most critical

Italics: expected relatively high investment required (>100M€)


114


Table 9-B Needs Summary: Key Indicators

.

PORTUGAL

Future needs requiring planning and/or investment in

2007 – 2013 – indicating the type and physical requirement

WATER

National connection rate to drinking water supply (2003): 92%

Target PEAASAR II

2007-2013: 95%

Worst (NUTS II):

82.9% (Norte)

WASTE WATER


WASTE

National connection rate to the sewerage system (2003):

73.5% Target

PEAASAR II 2007-

2013: 90%


36.3% (Açores)

59.6% (Norte)

National % of population served by STP (2003): 60.4%

Target PEAASAR II

2007-2013: 90%


19.5% (Açores)

49.3% (Norte)

Landfill deposition target for

Biodegradable MSW:

1126 000 ton (2009)

788 000 ton (2016);

1019 000 ton new capacity (or recycling) required

New MBT facility:

360 000 ton

RES

Wind: capacity to be installed by

2010 = 4 057 MW

Large hydro: 3 plants to be built =

831 MW (693 MW without Baixo

Sabor)

NATURAL

HAZARDS n.a.



115


PORTUGAL


WATER WASTE WATER WASTE RES

NATURAL

HAZARDS

Water pricing: Cost recovery level in water supply (2002) 99%, but including only financial costs and with wide variations.

New water resource charge should reflect scarcity and environmental costs

Water saving technologies, loss reductions from current (2003): 36% to

PNUEA target 20%

Water pricing: Cost recovery level WW

(2002) only 54% of financial costs and with wide variations.

16 agglomerations without STP (2005)

Waste charges: cost recovery 25% (2003).

30 STP noncompliant with the UWWTD, 23 of which discharging in sensitive areas agriculture (98%).

Sludge disposed in landfill (2%).

Key:

Bold: high relevance

Italics: expected relatively high investment required (>100 M€)

Mini-hydro = 183

MW

Solar Photovoltaic =

148 MW

Solar Thermal =

750 000 m

2

Biomass: waves / tides = 50

MW



116


Table 9-C Needs Summary: Indicative Investment Needed

Summary of investment needed over the 7 Year Programme Period, providing examples and illustrations when a complete picture is not possible. Key gaps highlighted so account can be taken of missing data.

PORTUGAL

Needs requiring investment in

2007 - 2013

Indicative level of investment for the Field

(Meuro):

Indicative examples of the types of investment needed:


The aim is to note the key needs for the country and approximate investment amounts

WATER

1 061 M€

New drinking water plants (bulk water):

52.4 M€

Rehabilitation of existing drinking water plants (bulk water): 34.8 M€

WASTE WATER

1 958 M€

New STP (bulk water): 190.5 M€

Renovation / upgrading of existing STP (bulk water): 40.5 M€

WASTE

1 000 M€

Selective collection:

104 M€

New MBT facility:

80.5 M€

RES

5 165 M€

1 078 M€ (hydro)

4 087 M€ (other

RES)

(Note: biomass capacity also contributes to forest fire prevention)

NATURAL HAZARDS

6 378 M€

Forest Fires: 677 M€

Spatial Planning (water domain): 5 381 M€

(might provide sinergies across all fields)


New water distribution networks (retail water): 420.2 M€

New sewage networks

(interception - bulk water): 949.6 M€

Sludge and RdF incineration: 260 M€

(might not be highly relevant for waste targets but contributes to waste water and

RES targets)


PORTUGAL

Needs requiring investment in

2007 - 2013


The aim is to note the key needs for the country and approximate investment amounts

WATER

Rehabilitation of existing water distribution networks (retail water): 322.7 M€

WASTE WATER

Renovation / upgrading of existing sewage networks

(interception - bulk water): 374.3 M€

WASTE

Other incineration:

60 M€

RES NATURAL HAZARDS


Other measures:

42.6 M€

Key data gaps: Values from AdP.

Physical values behind investment needs not provided.

Other measures:

273.7 M€

Values from AdP.

Physical values behind investment needs not provided.

No information on systems outside EGF-

AdP group. Severe uncertainty expressed.

Strategic sectoral plan delayed.

Uncertainty on actual production support received, incomplete physical values behind investment needs.

Data not entirely reliable, unexplained high value for Spatial Planning

Evaluation of economic impacts of all natural risks, cost effectiveness of different measures

Knowledge about sedimentary cycle, esp. effect on the coast of dam retention

Key:

Bold: high relevance

Italics: expected relatively high investment required (>100 M€)


9.3


Overall National priorities

This section points out identified priorities, comparing, whenever possible, those that are officially incorporated in existing national plans and those that can be identified from this report. The tables were also used to add some information on other areas that were not covered in the work but which appeared as significant in related areas or in stakeholder contacts. In particular, national priorities were discussed with Luis

Morbey of the Environment Ministry, who has been collecting environment-related information for QREN.


120


Table 9: Qualitative Summary of the Priority Assessment

This table describes briefly the main types of investment which should be the main priorities and indicates where these may differ from previous or emerging MS priorities

PORTUGAL

Priority areas as could be expected in MS submissions to the

Commission - in other words priorities from

National strategies, plans, policies etc

WATER

Retail water networks Major national priority: improving coverage for WW connection and treatment

Some new water production (drinking water quality)

Increasing recovery rates (MBT, RDF production) deposition, esp biodegradable waste

Water efficiency improvements

WASTE WATER

PRIORITY ASSESSMENT TABLE – SUMMARY

WASTE RES

NATURAL

HAZARDS

Increasing recycling through improved sorting and selective collection

Increasing RES production to attain existing targets, esp. for wind, biomass

Developing new technologies, esp. waves, solar

Improving energy efficiency

Floods, droughts, coastal erosion

General spatial planning, esp. iinvestments in the water domain


Industrial waste water

Industrial waste

Abandoned mine decontamination

Decision support systems (monitoring, information)

Priority areas that the country analysis would suggest as important

Mainly the same, although with a higher emphasis on cost effective implementation which is hardly a concern.

Management capacity development, esp. retail


121


National stated priorities that do not seem so important to the evaluators given developments

Priorities not stated as national priorities but which could usefully be priorities

Important flanking measure to encourage

None found. The opposite problem occurs. There are national plans and programs for almost everything, as if everything could be a national priority.

Cross field analysis could be useful to identify sinergies and conflicts. Administrative capacity needs improvements (including system coordination, effective regulation and proper use of markets and market based instruments)

Efficient Pricing for incentive and cost recovery

Water efficiency support

Pricing for cost recovery to ensure financial sustainability

Pricing for cost recovery to ensure financial sustainability

Green certificates

Energy efficiency support

Proper application of spatial plans


122


Table 10: Summary of the Priority Assessment = Key Indicators

This table summarises the main priorities with reference to key indicators describing the required infrastructure.

Only fill in the expected MS priorities if set out in official plans

PORTUGAL


WATER


The aim is to indicate the priorities for the country using key indicators of the physical infrastructure required

WASTE WATER WASTE RES

NATURAL

HAZARDS


Lack of physical indicators to describe required infrastructure

Wind: 4057 MW

Biomass:238 MW

Hydro: 1094 MW n.a.


123


Table 11: Financial Summary of the Priority Assessment

This table summarises the main priorities and indicates the financial requirements. Only fill in the expected MS financial priorities if set out in official plans

PORTUGAL



The aim is to summarise the financial priorities for the country (Meuro).

WATER WASTE WATER WASTE RES

NATURAL

HAZARDS

Retail networks

742.9 M€

Drinking water plants 87.2 M€

STP 231 M€

Sewage Networks

1323.9 M€

Incineration:

320 M€*

MBT and associated facilities: 130,1 M€

Selective collection:

104 M€

To be defined considering existing support measures. RES that are already highly profitable should not be investment priorities

Spatial planning but realistic amount cannot be indicated with available information


* Although two new incinerators included here weren’t in previous plans, and the one that was there was subsequently dropped for environmental reasons and under popular pressure, it is clear that companies are keen on this method for its profitability. Financial sustainability of systems should be a concern of decision makers, of course. Furthermore, it should be recalled that energy production from MSW also contributes to RES targets, namely CO

2

emission reduction where the country is having serious difficulties.


124


10 CONSULTEE AND REFERENCE LIST

List of consultees

Alexandra Serra and Rosário Cancelino at Águas de Portugal (AdP) : WS, WWT

Vitória Mira da Silva, at Instituto da Água (INAG) : WWT

Rui Ferreira dos Santos, at Instituto.Regulador de Águas e Resíduos (IRAR) :

WS,WWT,MSW

Paulo Pinho, Francisco Saraiva and Helena Azevedo, at Rede Eléctrica Nacional

(REN) : RES

António Branco and Nuno Pinto, at Empresa Geral de Fomento (EGF) : MSW

Félix Ribeiro and Ascenção Gonçalves, at Departamento de Prospectiva e

Planeamento (DPP) : General

Luís Morbey, Environment Ministry : General

Data sources a INE, http://www.ine.pt

b Eurostat, http://epp.eurostat.cec.eu.int

c DG Regio, http://europa.eu.int/comm/regional_policy/index_en.htm

d DGDR, Cohesion Fund Report 2004, http://www.qca.pt/coesao/publicacoes.asp

e IRAR, RASARP 2004 f MAOTDR, POA Report 2004, http://www.qca.pt/pos/poa.asp

g

PEAASAR II h

INSAAR, http://insaar.inag.pt/ i

SNIRH, http://snirh.inag.pt/ j

INAG, Drought Commission Report, Seca 2005, http://www.inag.pt/inag2004/port/divulga/actualidades/seca/relatorioBalanco.pdf

k

INAG, PNA, http://www.inag.pt/inag2004/port/a_intervencao/planeamento/pna/pna.html

l

IA-MAOTDR, REA 2004, http://www.iambiente.pt/ m

INAG, Art. 5 Report,


125

Strategic Evaluation of Environment and Risk Prevention – Country Report – Portugal http://dqa.inag.pt/dqa2002/port/relatorios/Relatorio_Artigo5_PT-SETEMBRO.html

n DGGE, http://www.dge.pt/ o DGRF, http://www.dgrf.min-agricultura.pt/ p CLC2000 q ENF, http://www.dgrf.min-agricultura.pt/v4/dgf/pub.php?ndx=2315 r IA-MAOTDR, REA 2003, http://www.iambiente.pt/ s INR, www.inresiduos.pt

t Ecopilhas, www.ecopilhas.pt

u

SPV, www.pontoverde.pt

v

PIRSU w

PNPA x

SEAMA y

MEI, PRIME Report 2004 z

INTERREG III-A, Programming complement aa

ICEP, http://www.icep.pt/portugal/turismo.asp

POLIS, http://www.polis.maotdr.gov.pt/

Finisterra, http://www.mcota.gov.pt/finisterra/index.html

PANCD, http://panda.igeo.pt/pancd/

References

Amorim e tal (2004), “Regional Convergence in Portugal – The Role of National (and EU)

Policies”, Cadernos INA

Bernardo, João (2006), “O aproveitamento das fontes renováveis de energia em Portugal”, in VI

Jornadas do Ambiente – Energias Renováveis .

Borrego et al (2005), “Ambiente e Prevenção de Riscos” (in Estudos Temáticos para Preparação do Próximo Ciclo de Intervenções Estruturais QREN 2007-2013)

Caetano, Carrão e Painho (2006), Alterações da Ocupação do Solo em Portugal Continental

1985|2000, IA-MAOTDR


126


CEC (2004), “The share of renewable energy in the EU – Country Profiles”, in Overview of

Renewable Energy Sources in the Enlarged European Union , Brussels.

CESUR (2004) Os Sistemas Tarifários de Resíduos Sólidos Urbanos em Portugal, CESUR-IST

CM (2005) “Portugal, Grandes Opções do Plano 2005-2009”, Conselho de Ministros.

DGDR (2005) Fundo de Coesão, Relatório de Execução 2004

DGDR (2005b) Estudo de Actualização da Avaliação Intercalar do Quadro Comunitário de Apoio

2000-2006 - Relatório Final, Dezembro

DGGE (2005), “Estatísticas Rápidas – Dezembro 2005”, in Renováveis , nº 10, Fevereiro.

DPP (2005) “Grandes Opções do Plano 2005-2009”, Department of Prospective and Planning,

Ministry of Finance [Main Planning Choices] for 2007-2009.

EGF (2006) “Resíduos Urbanos Biodegradáveis: Estratégias e Investimentos”, presentation at 7ª

Conferência Anual do Jornal Água & Ambiente, Lisboa, 17 de Maio

ENDS (2006) Estratégia Nacional de Desenvolvimento Sustentável, preliminary version, http://www.desenvolvimentosustentavel.pt/

European Commission - DG Environment (2002), Report “Disposal and recycling routes for sewage sludge”.

GEE (2006), Síntese Estatística Mensal – Energia , Gabinete de Estratégia e Estudos, Ministério da Economia e da Inovação, Fevereiro

GEOTA (2006) “Coerência no financiamento das Energias Renováveis: Precisa-se!”, http://www.geota.pt

GEPE (2002), “Cenários para a Economia Portuguesa 2000-2025”, Department of Studies and

Economic Prospective (currently renamed Department of Studies and Strategy), Ministry of

Economy.

Gonçalves, Hélder; António Joyce and Luís Silva (2002), “Fórum Energias Renováveis em

Portugal – uma contribuição para os objectivos de política energética e ambiental”,

ADENE/INETI, Dezembro, Lisboa

INE(2004) As Cidades em Números: Informação Estatística 2000-2002, CD-Rom

INE(2005) Estatísticas do Ambiente 2004

INTERREG III-A (2005) Complemento de Programação, 2ª versão

IRAR (2005), Relatório Anual do Sector de Águas e Resíduos em Portugal (RASARP) 2004

MADRP (2006), DGRF, Estratégia Nacional para as Florestas (proposta)

MADRP (2006b), DGRF, Plano Nacional de Defesa da Floresta Contra Incêndios (proposta)


127


MAOTDR (2006), IA, Relatório do Estado do Ambiente – REA 2004

MAOTDR (2006b) Relatório de balanço Seca 2005

MAOTDR (2006c) Programa Nacional de Política de Ordenamento do Território (proposta)

MAOTDR (2006d) Plano Estratégico de Abastecimento de Água e Saneamento de Águas

Residuais (PEAASAR 2007-2013)

MAOTDR (2005a), INAG, Relatório síntese sobre a caracterização das regiões hidrográficas

(Artigo 5º DQA)

MAOTDR (2005b) INAG, Programa Nacional para o Uso Eficiente da Água (PNUEA)

MAOTDR (2005c), IA, Relatório do Estado do Ambiente – REA 2003

MAOTDR (2005d), “QCA III, Portugal 2000-2006, Programa Operacional Ambiente, Revisão In tercalar 2004”

MAOTDR (2005e), “QCA III, 2000-2006, Complemento de Programação do Programa

Operacional do Ambiente”

MAOTDR (2004) Programa Nacional para as Alterações Climáticas – PNAC 2004

MAOTDR (2003), INR, Movimento Transfronteiriço de Resíduos, Ponto de Situação 2003

MAOTDR (2001), INAG, Plano Nacional da Água – PNA

Martins, Álvaro and Vítor Santos (2005), Formulação de Políticas Públicas no Horizonte 2013 relativas ao tema Energia , (in Estudos Temáticos para Preparação do Próximo Ciclo de

Intervenções Estruturais QREN 2007-2013).

Martins, R. and A. Fortunato (2005), “Residential Water Demand Under Block Rates – a

Portuguese Case Study”, Estudos do GEMF , n. 5.

Mateus et al (2005) “Competitividade Territorial e Coesão Económica e Social” (in Estudos de

Enquadramento Prospectivo do QCA III)

MEI (2005), “PRIME – Relatório de Execução 2004”

Orçamento de Estado 2006, http://www.dgo.pt/oe/2006/Aprovado/index.htm

Renzetti, S. (2002), “The Economics of Water Demands”, Kluwer Academic Publishers.

Roberto, Piedade (2006), “A biomassa florestal como fonte de energia renovável”, in Seminário:

Novas Energias , DGGE, Abril.

Rodrigues (2002), Social Security in Portugal: An Update of Long-Term Projections, DGEP


Santos, F. Duarte & R. Moita (2002), “Climate Change in Portugal: Scenarios, Impacts and

Adaptation Measures (SIAM)”, June.


128


WEC (2004), Potencial e Estratégia de Desenvolvimento da Energia das Ondas em Portugal,

Wave Energy Centre.


129


11 ANNEXES

Table 11-A Population forecast 2007-2013

Regions 2007 2013 Growth rate 2007-2013

Low growth scenario

Base growth scenario

High growth scenario

Low growth scenario



Low growth scenario



Portugal 10,209,554 10,615,892 10,655,627 10,056,127 10,610,502 10,714,419 -1.50% -0.05% 0.55%

Centro 2,287,308 2,343,892 2,376,574 2,224,935 2,300,369 2,353,285 -2.73% -1.86% -0.98%

Lisboa 2,648,381 2,852,756 2,830,729 2,612,938 2,892,827 2,878,407 -1.34% 1.40% 1.68%

R. A.

Açores

240,871 245,063 246,270 244,184 250,403 253,773 1.38% 2.18% 3.05%

R. A.

Madeira

239,203 248,901 249,833 237,814 251,064 253,651 -0.58% 0.87% 1.53%

Source: INE – National Institute for Statistics, Resident Population Forecasts, Portugal and NUTS II 2000-2050.

The number of households has been increasing in the last century in Portugal at a rate higher than the growth rate of population. Therefore, in a base scenario of population stabilization, we may still expect an increase in the number of households, due to the structural trend for the reduction in household size. Even if the number of households remains constant, an increase in the number of connections to the public supply network is expected because the 95% target set in 2000 is still yet to be reached (92% in 2003). The change, however, will not be very significant if we compare it to the situation in wastewater connections where the gap between the current connection rate and the target set is much higher.


130


Table 11-B Number and average dimension of households 1911-2001

1911 1920 1930 1940 1950 1960 1970 1981 1991 2001

Population 5.999.146 6.080.135 6.802.429 7.755.423 8.510.240 8.889.392 8.663.252 9.833.014 9.867.147 10.356.117

Number of households

1.411.327 1.426.242 1.663.776 1.811.645 2.047.439 2.356.982 2.345.225 2.924.443 3.147.403 3.650.757

Average household dimension

4,25 4,26 4,09 4,28 4,16 3,77 3,69 3,36 3,14 2,84

Household growth rate

-

Population growth rate

Household dimension growth rate

- 0,29% -4,09% 4,70% -2,90% -9,26% -2,06% -8,98% -6,76% -9,52%

Source: INE – National Institute for Statistics

Table 11-C GVA Growth Projections 2000-2015

Industry-Business Branches

Manufacture of Food Products

Manufacture of Beverages

Manufacture of Tobacco Products

Manufacture of Textiles,

Dressing, Fur, Leather and

Footwear

Manufacture of Wood and Cork

Products and Furniture

Manufacture of Pulp, Paper,

Paper Products and Publishing

Manufacture of Chemical, Rubber and Plastic Products

Low-growth scenario

2%

1.5%

1.5%

High-growth scenario

2.5%

3%

2%

0.3% 2.2%

1.7%

3%

2.2%

4%

2% 3.5%

Manufacture of Ceramic and

Other Non-metalic Mineral

Products 2.5% 3.7%

Manufacture of Glass and Glass

Products 2% 3.5%

Manufacture of Cement and

Other Construction Products 2% 3.5%


131


Industry-Business Branches

Manufacture of Basic Metals

Manufacture of Fabricated Metal products and Other Manufacture

(Machinery and Equipment)

Total Industry

Low-growth scenario

0%

High-growth scenario

1.5%

3.4% 4.5%

2.1% 3.7%

Source: GEPE (2002), “Cenários para a Economia Portuguesa 2000-2025”, Department of Studies and Economic

Prospective (currently renamed Department of Studies and Strategy)

A s for industry, according to the National Water Plan (PNA), the unit industrial water demand per worker (using drinking water) will grow in a range from 0.16% to 5.16% in employment terms in the period 2006-2012. The Department of Studies and Strategy (GEPE) of the Ministry of

Economy and Innovation has forecasts for the growth of GVA for each industry branch (see

Annex 11.1) The National Water Plan indicates the branches which consume more water; they are, in decreasing order, Manufacture of Pulp, Paper and Paper Products, Manufacture of Food

Products and Beverages, Manufacture of Basic Metals, Manufacture of Chemical Products,

Manufacture of Textiles, Manufacture of Wood and Cork Products. It should be noted that

Manufacture of Pulp, Paper and Paper Products is the branch which consumes more water by far

(it consumes more than the double of any of the others). It is also one of the branches with high average annual forecasted GVA growth (3%-4%). GEPE also provides forecasts for economic sectors, concluding that the fastest growing will be Services and Energy. Cambridge

Econometrics forecasts the greatest changes in GVA by sector to come from Manufacturing

(21.52%), Services (21.15%) Energy (18.44%) and Agriculture (14.55%). However, of those sectors, only Services would have a rise in employment (5.80%, second after Land Transport with 6.5%), while Manufacturing (-3.07%), Energy (-14.29%) and Agriculture (-17%) would face reductions in employment levels.

Table 11-D GVA Growth Projections 2000-2015

Industry-Business Branches Low-growth scenario High-growth scenario

Agriculture 2% 3%

Energy 2% 4%

Industry 2% 3.2%

Construction 2.1% 3.7%

Services 3.2% 4.6%

Total 2.8% 4.2%

Source: GEPE (2002), “Cenários para a Economia Portuguesa 2000-2025”, Department of Studies and

Economic Prospective (currently renamed Department of Studies and Strategy), Ministry of Economy.

Cambridge Econometrics’ forecast is more pessimistic than the National Water Plan, pointing to a reduction in industrial employment of -3.07% in the period 2007-2013 (table 2L). At the national level employment would rise 3.33% in the same period. This would correspond to a growth from

2007 to 2013 in GVA of 19.12% (table 2K). In manufacturing the growth rate for GVA in the


132

Strategic Evaluation of Environment and Risk Prevention – Country Report – Portugal program period would be 21.52% while in the energy sector (another major water user), GVA would rise 18.44%, despite a 14% drop in employment. Agriculture’s GVA would rise 14.6%, while losing 17% in employment.

Table 11-E Cambridge Econometric projections for Gross Value Added

Total GVA

(millions 2000 Growth rate 2007-

Euro) 2007 2013 2013

Average annual growth rate 2007-

2013

Portugal 124,662.1 148,495.8 19.12% 2.96%

Agriculture 4,241.5 4,858.8 14.55% 2.29%

Energy 2,445.2 2,896.1 18.44% 2.86%

Water Supply 933.9 990.9 6.10% 0.99%

Manufacturing 20,354.4 24,734.8 21.52% 3.30%

Land Transport

Water Transport

Air transport

Services

(excluding transports)

4,233.5

92.2

266.2

4,568.6 7.92% 1.28%

92.4

267.5

0.22%

0.49%

0.04%

0.08%

51,697.3 62,630.1 21.15% 3.25%

Table 11-F Cambridge Econometric projections for Employment

Total Employment

(000s)

Growth rate 2007-

2007 2013 2013

Average annual growth rate 2007-

2013

Portugal 5063.8 5232.6 3.33% 0.55%

Agriculture 453 376 -17.00% -3.06%

Water Supply 1

Manufacturing 879

Land Transport

Water Transport

123

2

1

131

2

0.00%

852 -3.07% -0.52%

6.50%

0.00%

0.00%

1.06%

0.00%

Air transport 6 6 0.00% 0.00%

Services

(excluding transports) 1622 1716 5.80% 0.94%

According to INE, the regions which are expected to have the greatest population growth rates in the program period are the Azores (1.38% to 3.05%) and Algarve (0.34% to 3.99%). Regions like

Alentejo and Centro will face reductions in their population. (-0.98% to -2.73%).


133


The forecasts from Cambridge Econometrics for regional population variation are more conservative (regional values are closer around the national average), pointing to a reduction of

1.14% in Centro, Lisboa and Alentejo, and a growth in the regions Norte (1.21%) and Algarve

(1.37%). No data is given for the archipelago regions.

Cambridge Econometrics’ forecasts for the regional variation in GVA are also conservative.

Algarve has the lowest growth rate forecast for the period 2007-2013 (18.36%) and Alentejo has the highest (19.32%). For employment, Lisboa has the lowest forecasted growth rate (1.68%) and Alentejo has the highest (6.20%).

Table 11-G Transport and connection costs according to pipe diameter

Diameter

100

150

200

250

Lower limit (Euro/km)

20 000

29 750

42 500

46 963

Average value (Euro/km)

29 750

34 000

46 750

55 250

Upper limit (Euro/km)

45 000

50 000

55 250

68 000

300

350

400

450

500

600

800

1000

59 500

72 250

85 000

93 500

110 500

136 000

221 000

331 500

68 000

85 000

97 750

110 500

127 500

161 500

263 500

391 000

85 000

102 000

119 000

136 000

153 000

195 500

318 750

467 500

Source: Águas de Portugal.

Acronyms

CSO :

DS :

DWF :

PE : combined sewer overflow dry solids

Dry Weather Flow, the amount of waste water to be treated during dry weather conditions. Can be expressed in m³/d or in l/PE/d (= unit dry weather flow) population equivalent = the amount of waste water produced by 1 person = 1 PE = 60 gBOD/day

STP : sewage treatment plant = municipal wastewater treatment plant

UWWTD : Urban Waste Water Treatment Directive 91/271/EC

WWT : wastewater treatment


134


Table 11-H Classification of surface water courses according to their quality characteristics for multiple purposes

Class

Parameter

A B C D E

Excellent Good Reasonable Bad

Very bad

6.5 - 8.5* 5.5 - 9.0 5.0 - 10.00 4.5 – 11.0 pH

Conductivity

(uS/cm,

20ºC)

Total

Suspended

Solids

Saturation of dissolved oxygen

(mg/l)

(%)

BOD

COD

Ammonium

Nitrates

Kjeidahl

Nitrogen

(mg

O2/l)

(mg

O2/l)

(mg

NH4/l)

(mg

NO3/l)

(mg

N/l)

Phosphates

Total

Phosphorous

Total

Coliforms

Faecal

Coliforms

Faecal

Streptococci

Iron

Manganese

Zinc

Copper

Chromium (mg/l)

Selenium (mg/l)

Cadmium

Lead

Mercury

Arsenic

(mg/l)

(mg/l)

(mg/l)

(mg/l)

(mg

P2O5/l)

(mg

P/l)

(/100 ml)

(/100 ml)

(/100 ml)

(mg/l)

(mg/l)

(mg/l)

(mg/l)

<=750

<=25.0

>=90

<=3.0

<=10.0

<=0.50

<=5.0

<=0.5

<=0.40

<=0.2

<=50

<=20

<=20

<=0.50

<=0.10

<=0.30

<=0.050

<=0.050

<=0.01

<=0.0010

<=0.050

<=0.00050

<=0.010

751 - 1 000

25.1 - 30.0

89 - 70

3.1 - 5.0

10.1 - 20.0

0.51 - 1.50

5.0 - 25.0

0.51 - 1.00

0.41 - 0.54

0.21 - 0.25

51 - 5 000

21 - 2 000

21 - 2 000

0.51 - 1.00

0.11 - 0.25

0.31 - 1.00

0.051 - 0.2

-

-

0.0011 - 0.0050

-

-

0.011 - 0.050

1 001 - 1 500

30.1 - 40.0

69 - 50

5.1 - 8.0

20.1 - 40.0

1.51 - 2.50

25.1 - 50.0

1.01 - 2.00

0.55 - 0.94

0.26 - 0.40

5 001 - 50 000

2 001 - 20 000

2 001 - 20 000

1.10 - 1.50

0.26 - 0.50

1.01 - 3.00

0.201 - 0.5

0.011 - 0.050

0.051 - 0.100

0.00051 - 0.001

-

1 501 - 3 000

40.1 – 80.0

49 – 30

8.1 – 20.0

40.1 – 80.0

2.51 - 4.00

50.1 – 80.0

2.01 - 3.00

0.95 - 1.00

0.41 - 0.50

>50 000

>20 000

>20 000

1.50 - 2.00

0.51 - 1.00

3.01 - 5.00

0.501 - 1.000

-

-

>0.0050

-

-

0.051 - 0.100

>3 000

>80.0

<30

>20.0

>80.0

>4.00

>80.0

>3.00

>1.00

>0.50

-

-

-

>2.00

>1.00

>5.00

>1.00

>0.080

>0.050

>0.100

>0.001

>0.100


135


Cyanide

Fenóis

Agentes

Tensioactivos

(mg/l)

(mg/l)

(Lasmg/l)

Region Municipality

Alentejo

Algarve

Centro

Évora

Portalegre

Odemira

Elvas

Grândola

Tavira

Castelo

Branco

Figueira da

Foz

<=0.050

<=0.0010

<=0.2

-

0.0011 - 0.0050

-

Agglomeration Agglomeration size (PE)

Évora

Portalegre

Vila Nova de Milfontes

Elvas

Torralta

Tavira

Castelo Branco

Figueira da Foz

47 500

31 700

30 000

16 000

15 000

48 000

63 500

52 800

0.051 - 0.080

0.0051 - 0.010

0.21 - 0.50

Évora

Portalegre

Vila Nova de

Milfontes

Elvas

Torralta

Tavira

Castelo Branco-

Norte

Castelo Branco-Sul

S. Pedro

Zona urbana ou de

Vila Verde treatment

SEC

SEC

SEC+NP

SEC

SEC+M

SEC

SEC

-

0.011 - 0.100

-

Source: SNIRH – National Information System on Water Resources

Table 11-I Sewage Treatment Plants (STP) in situations of non-compliance with the UWWTD

91/271/EEC

>0.080

>0.100

>0.50 load in the project horizon

Type of intervention

60 000

44 000

To install phosphorous removal

To install disinfection


000

STP (SEC)

18 000


15 000

30 000


Deactivate when the connection to the new STP is completed

(SEC+M)

To install

35 000

6 800 removal



No need for intervention

Classification of the environment

(discharge point)

Sensitive

Sensitive

Sensitive

Normal

Sensitive

Sensitive

Sensitive

Sensitive

Sensitive

Sensitive

Sensitive


136


Region Municipality Agglomeration Agglomeration size (PE) treatment

Type of intervention load in the project horizon

Viseu

Guarda

Viseu

Guarda

47 000

33 000

S. Salvador

S. Miguel

SEC

SEC

60 000

40 000

To install denitrification and

Phosphorous removal.



(discharge point)

Sensitive

Sensitive

Normal

Lisboa e

Vale do

Tejo

Norte

Lisboa

Amadora,

Cascais,

Oeiras,

Sintra

Almada e

Seixal

Nazaré

Montijo,

Alcochete

Tomar

Almeirim,

Alpiarça

Alcochete

Seixal

Matosinhos

Lisboa

Costa do Estoril

Corroios/Quinta da

Bomba

Nazaré/Famalicão

Montijo/Seixalinho

Tomar

Almeirim/Alpiarça

Alcochete

Cucena

Matosinhos

1 063 000

720 000

142 900

53 000

43 400

28 500

27 000

18 000

8 300

287 000

202

No need for intervention

To install

Alcantara PRIM secondary treatment and disinfection

Guia PREL 900 000

To install advanced physical and chemical treatment and disinfection

Quinta da Bomba

Nazaré / Famalicão

SEC

PRIM

216 000

55 000


To install secondary treatment

Seixalinho

Tomar

Almeirim/Alpiarça

Alcochete

Cucena

Matosinhos

SEC

SEC

SEC

SEC

SEC

PRIM

65 000

30 000

29 700

28 000

24 000

325 300


Deactivate when the new

STP Sta Cita

(SEC+M) is operational


Deactivate when the new

STP (SEC+M) is operational


To install secondary treatment

Normal

Normal

Less

Sensitive

Sensitive

Normal

Sensitive

Sensitive

Sensitive

Sensitive

Sensitive

Normal


137


Region Municipality Agglomeration Agglomeration size (PE) treatment load in the project horizon

Type of intervention


(discharge point)

Braga

Vila Real

Chaves

Amarante

Paços de

Ferreira

Braga

Vila Real

Chaves

Amarante

Paços de

Ferreira/Freamunde

110 000

58 000

38 500

16 500

14 500

Cidade de Braga

Vila Real

Chaves

Amarante

Arreigada

SEC

SEC

SEC

SEC+NP

SEC

170 000

60 000

50 000

19 000

16 000

To install denitrification and disinfection

To install denitrification, phosphorous removal and disinfection

To install denitrification, phosphorous removal and disinfection



Sensitive

Sensitive

Sensitive

Sensitive

Sensitive

Source: INAG, National Water Institute.

Note 1: STP were considered non-compliant if they required any kind of intervention (construction of a new STP, expansion, improvement or installation of the adequate treatment level to comply with the UWWTD).

Note 2: data for the agglomerations ranging from 2000 PE to 15000 PE is being updated.

Note 3: STP serving agglomerations with less than 2000 PE were not considered.

Table 11-J Physical investment needs – Sewers

Type of sewer system

73

Fully combined or partially separate

Sewage connection rate (% of population or households connected)

(2003) l

Length of trunk sewers/collectors current situation (2002) h 74

[%] 65-75

[%] 73.5

[km] 3626

Length in need of rehabilitation [km] n.a.

Pumping stations

Planned new sewers/collectors present number

75

[km]

[ ] n.a.

1127

7373

Source INAG – National Water Institute.

74

Situation in the year 2008 (date of conclusion of the investments of PEAASAR), only for bulk waste water. Source: PEAASAR II.

75

According to PEAASAR II the number will be 4067 in the year 2008 (date of conclusion of the investments of PEAASAR), only for bulk waste water.


138


Table 11-K - Design criteria for Combined Sewer Overflows

Carry on flow of the Combined Sewer Overflows (CSOs), compared to the mean or peak Dry Weather Flow (DWF)

76

Design spill frequency of CSOs

[ ] 6 x DWF

(new

CSO’s)

3-6 x

DWF

(existing

CSO’s)

[1/year] n.a.

Other (please specify)

Source: INAG – National Water institute

Side weirs (70%); Stilling pond structures (15 to

25%); Surcharge relief overflows (remainder)

Table 11-L Physical investment needs – Combined Sewer Overflows

Number of existing

Combined Sewer

Overflows

Compliant to design criteria

Non-compliant to design criteria

Number

Number n.a. n.a.

1700 n.a. Planned Combined Sewer Overflows

Source: INAG – National Water institute

Number

Table 11-M- Physical investment needs – Sewage sludge treatment

77

Present situation (2005)

Quantity of sludge produced h

Type of sludge treatment used other (specify)

Disposal or reuse route used

Capacity [tonnes DS/year] n.a. other (specify) n.a.

Source: ADP – Águas de Portugal.

76

This criterion refers to the dilution theory, e.g. carry on flow = 5 * DWF

77

STP sludge produced by companies held by AdP – Águas de Portugal, in the year 2005. This is only a small fraction of the total. For 2002, INSAAR indicates a total amount of sludge production of 298 828 tonnes/year.


139

350

400

500

600

450

500

600

800

1000


Table 11-N Transport and connection costs according to pipe diameter

Diameter

200

250

300

Lower limit (Euro/km)

25 500

30 000

45 500

Average value (Euro/km)

45 000

59 200

70 000

Upper limit (Euro/km)

57 600

71 040

77 000

58 500

73 500

94 500

115 500

93 500

110 500

136 000

221 000

331 500

90 000

105 000

135 000

165 000

110 500

127 500

161 500

263 500

391 000

99 000

110 250

141 750

173 250

136 000

153 000

195 500

318 750

467 500

Source: Águas de Portugal.

11.3 Municipal Solid Waste

Table 11-O Approved FP III projects to be built in 2006-2008 (000 €)

11.4

Planalto Beirão

Tratolixo/Amtres

Resat/Rebat/Residouro/AMVDNorte

Suldouro

Amarsul

Amalga/Amagra/Amcal/AMDE

Algar

Valnor/AdZC/Raia Pinhal

Braval/Valorminho/Resulima

Resitejo

Vale Sousa

Valorlis/Resioeste

29 212

43 880

10 263

9 048

39 560

15 129

10 208

8 785

8 248

18 900

8 512

9 827

21 909

25 450

5 953

6 000

23 736

9 229

7 452

6 501

5 760

5 859

5 959

7 075

Renewable Energy Sources

Table 11-P Summary Data Table

Renewable Energy 2005

Average

Investment

Costs (€ / kW)

75%

58%

58%

66%

60%

61%

73%

74%

70%

31%

70%

72%

Wind

Installed capacity (MW)

Electricity Production (GWh)

% of installed capacity over total installed capacity *

1 043

1729

4,2%

Operation &

Maintenance

Cost (€ / kW)


140


% of electricity production over total electricity production*

% of electricity production over RES production*

Number of wind turbines

Number of installed wind farms

1,8%

6,3%

650

101

Hydro (> 30 MW)



% of installed capacity over total installed capacity**

% of electricity production over total energy production**

% of electricity production over RES production**

Hydro (> 10 MW and <= 30 MW)






Hydro (<= 10 MW)



% of installed capacity over total installed capacity*

% of electricity production over total energy production*


Biomass

Installed capacity with co-generation (MW)

Installed capacity without co-generation (MW)

Electricity Production with co-generation (GWh)

Electricity Production without co-generation (GWh)




Biogas






Urban Solid Waste






Photovoltaic Solar






Solar Thermal

M

2

installed

4225

4376

68,3%

9,8%

51,2%

251

261

4,1%

0,6%

3,1%

267

281

2,3%

1,3%

4,5%

357

12

1343

52

3,6%

3,9%

14%

7,1

27

0,1%

0,06%

0,3%

88

472

1,4%

1,1%

5,5%

2,3

3

0,02%

0,006%

0,02%

250 000*** n.a. n.a. n.a. n.a.

1 750

1 510

3 100

4 500

> 5 kW = 4 500

< 5 kW = > 5 000

4 816

5

332,3

34

10

4,5

132,5


141


Geothermal*



% of installed capacity over total installed capacity

% of electricity production over total energy production

% of electricity production over RES production

Number of Sites

Data at constant 2004 prices.

18

84

0,1%

0,19%

0,7%

2 n.a. n.a.

*2004 for Portugal (Mainland Portugal + Azores and Madeira).

** 2005 for Mainland Portugal.

*** September, 2005. These m 2 do not represent installed collectors to be used for electricity generation and injected in the connection grids, but only to be used for heating purposes.

Sources: n DGGE (2006a and 2006b) and REN (2005).

The following table shows some available physical and financial indicators for the MAPE A

Programme.

Approved Projects: MAPE A - Action 3.5 A (million Euros) *

Construction / Modernisation of wind powers of Power

Stations

865

- Construction / Modernisation of small hydro up to 10MVA

Total MAPE A 865 of Power

Stations

127

- of mini hydro

Nº

Projects

Investment Subsidies

-

37

88

13

1 174

54

199

18

127 37 101 1 229 218

Total MAPE - - - 371 1 426

* Data until July, 2005.

Source: Martins et al. (2005).

The following table expresses the investment and incentives for each renewable energy within

MAPE Programme (A and B) – Portaria 394/2004, of April 19 (suspended since March 6, 2006) between 2001 and 2005. The results concern national and European support for electricity generation as well as for RUE – Rational Use of Energy – (thermal energy).

Table 11-Q Past Investment Costs and Support in RES-E 2001-2005

Units: million Euro

274


142


Hydro

Wind

Biomass

Biogas

(heating)

Geothermal

(low enthalpy)

Total Cost Support Total Cost (%) Support (%) Support on Total Cost (%)

55,715 19,32 3,74 9,32 34,68

1 426,401 183,071 95,79 88,28

4,61 3,951 0,31 1,91

1,521 0,685 0,10 0,33

12,83

85,70

45,04

0,215 0,086 0,01 0,04 40,00

Solar Thermal

Total

0,695 0,267 0,05 0,13

1 489,157 207,38 100 100

38,42

13,93

Source: DGGE (2006).

Table 11-R Installed Capacity of Electricity Generation from RES (MW)

Hydro (> 10 MW)

Hydro (<= 10 MW)

Biomass

Geothermic

4 032

246,38

4 036

248

4 130

245

4 051

247

57 125 268 980

4 035

257

4 036

267

4 049

281

4 061

293

4 062

297

4 321

306

4 476

267

359 345 351 351 441 441 441 478 458 473 369

8,8 8,8 8,8 18 18 18 18 18 18 18 n.a.

Urban Solid Waste - - -. - 88 88 88 88 88 88 88

Total RES installed capacity

4 655 4 657 4 766 4 722 4 898 4 935 5 004

* Mainland Portugal only.

Source: DGGE (2006b)

Table 11-S Electricity Generation from Renewable Energies (GWh)

5 131 5 194 5 768


143

6 189


Wind

Hydro (> 10 MW)

Hydro (<= 10 MW)

Biomass

Geothermal

16 21 38 89 122 168 256 362 496 816 725

7 962

492

988

14 207

658

959

12 537

638

1 036

12 488

566

1 022

7 042

589

1 237

11 040

675

1 551

13 605

770

1 600

7 551

706

1 732

15 163

891

1 666

9 570

577

1 803

4 637

280

1 358

Urban Solid Waste

Biogas

Total RES

Total Gross Electricity

Consumption (TGEC)

- - - - 157 514 511 518 523 475 472

9 501 15 895 14 301

34 178 35 631 37 106

14 223

39 258

9 071 13 515 16 338 10 449 18 309 12 853 8 501

42 427 44 695 46 748 48 006 49 646 51 586 51 747

Total Primary Energy

Consumption (TPEC)

238 069

* Mainland Portugal only.

Source: DGGE (2006b).

236 779 255 163 270 740 291 710 297 100 296 330 309 580 297 850 307 440 323 470

Table 11-T presents a subjective but systematic presentation of qualitative natural risk.

Technological risks such as dam failure or pollution accidents are not considered.

Table 11-T - Natural risks classification at national level*

Phenomena

Earthquakes

Floods

Droughts

Forest Fires

(1)

H

VH

VH

Risk Frequency

(3)

Level Notes

M/H Tagus valley and Algarve are “H” NF

Tagus valley; Mondego and Douro final sections

All of southern Mainland Portugal (MP) – below Tagus river

All of central and northern MP and highest land on south

Intense rains M/H

Thunderstorms M/H

F

F

F

F

Heat wave

Cold vacant

Snow storms

H/VH

H/VH

H

Over all MP; more intense in the south

In the high lands (mainly Estrela mountain complex)

F

F

F

Relevancy

VL

VL

VL

L

VH

VH

VH

VH

(2)

State

≡

↑

↑

↑

↑

↑

↑

↑

Fogs and frosts M/H Particularly in lower lands

Cyclone L

F VL ↑


144


Tornados L

Geomorphologic M

Erosion (continental and costal) H/VH

Particularly in Madeira island; some areas covered by artificial lakes (of dams); mines

NF M ↑

F VH ↑

(1)

Natural phenomena to take into account in Portugal – as listed by the National Service of Fire-fighting and Civil Protection (SNBPC)

(2)

Relevancy to this project (in terms of regional funding investment with influence over the vulnerability)

(3)

What concerns important events (in Earthquakes are over level 5 of Mercalli Scale events): frequent (F); not frequent (NF)

Levels: very low (VL); low (L); medium (M); high (H); very high (VH)

State: ↑ - increasing; ↓ - decreasing; ≡ - stable

The next table lists existing programs or plans, which are briefly described below. Many have direct measures and budgets; others are financing instruments and others are strategic documents with relevant impact on risk management.

Table 11-U Main operational instruments involving risk management

Operational Instruments

A - POA

B - Finisterra

C – POOC

D – POLIS

E - PEAASAR

F - Monitoring

G - SNITURH

H - Large dams program

I - Sediment extraction plans

J – Dam emergency plans

K - National Programme for Climate Change

L – PNPOT

M - National strategy for forestry

N - National plan on forest fires defence

O - Combat system against forest fires

P - Water resource plans

Q - Regulation of reservoir managing plans

R - Spatial planning instruments

S – Forest Law

X X

X X X

X X

X

X

X X

X X X

X

X

X

X X

X X X

X X X

X X X

X

X X

X X

X X X

X X X

List of main programmatic instruments on natural risk management

Main programs or plans involving major actions on risk managing are below presenting a flash description of them purposes and main European funds. Many of them have direct measures and budgets; others are financing instruments and other oriented strategies with important influence on risk management.

A - POA - operational environment programme, described in earlier sections.

B - FINISTERRA - national programme created in 2003 related with coastal zones (expected to continue beyond 2006): involves actions on risk zones tending to requalify maritime and urban places, natural environment, estuarine and port zones recovery and public participation (and formative actions). Financing participation of POA; LIFE and INTERREG.

C - POOC - land planning of costal strip is according with the law a special plan of land planning covering 500 m from the ocean: totalizing nine plans, the last one was finished in 2005; mainly a planning instrument it's expected to order uses and activities and valorise natural mean and environment conservation and protection, coordinating all human activities.


145


D - POLIS - urban qualification programme: created in 2000 but expected to remain in force after 2006 and keep urban and environmental qualification of cities, having in mind competitiveness and attractiveness reinforcement. Financing participation of URBAN, INTERREG, ERDF and ESF.

E - PEAASAR - strategic program on water supply and sewage, described in earlier sections.

F - Monitoring: since 1995, in a pioneer way, a national information system on water resources (SNIRH) was created, responding to needs of public involvement. This system’s development integrated many other components such as historical series on climatic and hydrological variables. Recently SNIRH Coast is being developed, which will have available information on beaches and coastal zones (many in real time); SNIRH integrates data of almost all monitoring networks, some of them on real-time. Because of this telemetric character it integrates SVARH, a sub-system used for emergency monitoring.

G - SNITURH: a great system to manage water uses in Portugal (SNITURH) is under development. It should integrate all information related and simulation capacity to decide new water use licences, so it will play an important role on which uses will exist, where, and in which conditions (involving what pressures and impacts).

H - INAG launched in 2003 a control and monitoring program to guarantee security of large dams in the country. This will involve large amounts because it's associated with physical intervention (as well as projects and simulation).

I - Sediment extraction plans: they're an obligation of the new Water Law but had already started before. When finished they will define the places/areas were sediment extraction is possible or needed by management reasons (before this there existed a trade and neighbouring extraction logic).

J - Dam emergency plans: they are a recent obligation that intends to establish for each important dam what must to be done in emergency situations about people, security devices and reservoir management.

K - PNAC: national plan containing strategies involving targets on consumption of energy, energetic efficiency and emissions that contribute for the greenhouse effect, described in previous chapters.

L - PNPOT: under public discussion, a proposed program to establish coherent options for Portugal's development. It valuates forces, strengths, opportunities and threats of each part of the territory which includes major pressures to mitigate or eliminate and positive tendencies that need to be created or instigated. It's expected that PNPOT will be an important support of the national budget.

M - National Strategy on Forests: under public discussion, contains the strategic framework that must be transposed to the regional level of planning (PROF); this strategy begins with a diagnosis of the main actors, constraints, dynamics and previous political options without a national coherence taking into account the importance of forestry in the Portuguese economy and the destructive potential that forest fires represent.

N - National Plan on Forest Fire Defence: technical proposal, very exhaustive, programmatic and strategic about the causes, objectives, means, targets and actions.

O - Combat system against Forest Fires: a complex system involving many agents, coordinated by SNBPC and the

National Authority for the Forest Fires (NAFF). SNBPC pertains to the ministry of interior and NAFF to the agriculture ministry. Environment, defence, health and social affairs are others ministries that can be involved in some of their institutions.

P - Water resource plans: at national level, National Water Plan (PNA), 15 river basin plans to mainland Portugal and two

Regional Water Plans (PRO) to the insular territories. Each one, at its scale establishes all actions and strategies to water management. These plans entered into force in 2001 and 2002 and their revision process is beginning as consequence of the Water Framework Directive.

Q - Regulation of the reservoirs management plans: under preparation despite being a legal obligation since 1998. This regulation will determinate the rules, contents and other disposition of each individual plan must respect. After this, each reservoir manager must develop its respective plan under that rules. These plans are operational plans intended to establish concrete actions under specific conditions, diminishing arbitrary decisions.

R - Spatial planning plans: Portugal has many instruments of land planning at different scale of action. Some of the most important are PROT, at regional scale and PMOT and municipality level. PROT intends to get a correct articulation of physical realities and activities and PMOT includes other sub plans, treating particular details of planning (architecture details, infrastructures arrangement, soil use conditioning - PDM, PGU, PP).They have been created to justify the first specific investments financed by the EU and now, if well used, are seen has development instruments. At local level and in some places they are disrespected or reviewed with non legal procedures.

S – Forest Law: this law is from 1999 and is one consequence of the Plan to the Sustainable Development of the

Portuguese Forests (that is a resolution of the Council of Ministers of March 1999). This law includes a financial fund for forestry and considers forest management at regional scale (done by plans called PROF) and at the subregional scale by

PGF.


146

STRATEGIC EVALUATION ON ENVIRONMENT AND RISK

STRATEGIC EVALUATION ON ENVIRONMENT AND RISK

PREVENTION UNDER STRUCTURAL AND COHESION FUNDS

FOR THE PERIOD 2007-2013

National Evaluation Report for Portugal

Main Report

Directorate General Regional Policy

A report submitted by in association with

Date: November 10th, 2006

TABLE OF CONTENTS

EXECUTIVE SUMMARY

1 INTRODUCTION AND METHODOLOGY

2 OVERVIEW AND HORIZONTAL ISSUES

3 WATER SUPPLY

4 WASTEWATER TREATMENT (WWT)

5 MUNICIPAL SOLID WASTE

RENEWABLE ENERGY SOURCES 6

NATURAL RISKS 7

8

CROSS FIELD PRIORITY ASSESSMENT

9 CONCLUSIONS

Table 9-A Needs Summary: Qualitative Analysis

Table 9-B Needs Summary: Key Indicators

Table 9-C Needs Summary: Indicative Investment Needed

Table 9: Qualitative Summary of the Priority Assessment

This table describes briefly the main types of investment which should be the main priorities and indicates where these may differ from previous or emerging MS priorities

Table 10: Summary of the Priority Assessment = Key Indicators

This table summarises the main priorities with reference to key indicators describing the required infrastructure.

Only fill in the expected MS priorities if set out in official plans

Table 11: Financial Summary of the Priority Assessment

This table summarises the main priorities and indicates the financial requirements. Only fill in the expected MS financial priorities if set out in official plans

10 CONSULTEE AND REFERENCE LIST

11 ANNEXES

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