Data Centres in Portugal Face a Renewable Power Requirement in a Decree Due by Year End, While Factories Keep First Call on the Grid

Data centres that want to set up in Portugal will have to run on renewable electricity, help pay for their grid connection and obtain a favourable environmental impact statement, under a decree-law the government expects to approve, or at least submit, by the end of the year. Environment and Energy Minister Maria da Graça Carvalho set out the rules at a meeting with reporters on Monday, Público reported. The text is "in its final phase", she said.

What the minister said the decree will require

• Renewable power, not their own plant. "We do not require their own production, we require renewable energy," the minister said. The power can come from a plant next door or anywhere else, as long as renewable output is available.
• A share of the connection cost. Operators will contribute to the cost of connecting to the electricity grid.
• Water. There must be water available for what each project needs.
• Environmental clearance. Projects need a favourable Declaração de Impacte Ambiental (environmental impact statement).

Industry keeps priority over data centres for grid capacity. Electricity-intensive factories will have their connection requests approved without going to auction, while other applicants, data centres included, will compete for capacity, Público reported. "Industry is the priority," the minister said, adding that the priority also follows from EU rules.

Where it fits

In March the Council of Ministers approved a National Data Centre Plan with 15 initiatives for 2026 and 2027. The plan makes the investment agency AICEP the single point of contact for investors and promises maximum licensing deadlines and pre-planned zones with early access to the grid, the government's digital agency says. The plan also counts more than 2.6 gigawatts of planned IT capacity in Portugal, with the Lisbon region holding a large share. The Council of Ministers communiqué of 19 March presents it as a way to turn the country's potential into investment and digital sovereignty.

The economic case for each project, covering jobs, contribution to GDP and the digital transition, is being worked on by the Ministry of State Reform. The energy, water and environmental requirements sit with the minister's own department, Público reported. The national electricity security-of-supply monitoring report published in June points to 6 gigawatts of demand from data centres by 2040, according to Público.

What is still unknown

The details have not been published. Público notes it is not yet known what share of renewable electricity will be required, how operators will have to prove it, or whether water use will be capped. The minister said the Portuguese decree will not copy Spain's draft, which Público says would require at least 80 percent renewable electricity matched hour by hour and new renewable capacity for every new megawatt of demand. The environmental group Zero had criticised the absence of such an "additionality" rule, Público reported.

Why it matters to residents

Data centres compete with homes and businesses for grid capacity and, in a drought-prone country, for water. A rule that relies on existing renewable output rather than new plants leaves open how much new demand the grid can absorb, and whether that weighs on what other consumers pay. Councils that host these projects will also want to know how the plan's promised local benefits will work. The decree is the first place where those answers should be written down, and it is due within about two months.