Portugal's Grid Operator Warns Gas Will Remain Critical for Decades: "We Cannot Live Only on Renewables"

Natural gas will remain essential to Portugal's energy security for many years despite the country's rapid renewable expansion, the president of grid operator REN warned Friday, calling the current Middle East-driven energy crisis more complex than the 2022 Ukraine shock and urging caution against over-reliance on intermittent renewables.

"We cannot live only on renewables — wind, solar, and water," Rodrigo Costa told Observador in an interview published Friday, emphasizing that gas-fired power plants are "critical for the security of our electric system" even as Portugal pursues ambitious renewable energy targets.

Costa's remarks come as European energy markets face renewed volatility following the escalation of the Israel-Iran conflict, which has driven sharp spikes in oil and natural gas prices. The REN chief described the current instability as affecting "the entire world," not just Europe, with price uncertainty presenting the most immediate challenge but supply disruptions a growing risk.

Portugal maintains roughly thirty days of natural gas reserves across storage tanks at the Sines LNG terminal and underground salt caverns at Carriço. Costa acknowledged that "when we are in a situation like this, the normal thought is always that we should have more," and confirmed REN is reviewing those reserve levels. The company had already approved construction of two additional caverns at Carriço in 2022, expected online after 2030, which would add several days to national reserves.

Costa said European-level coordination may lead to revised reserve requirements across the bloc, reflecting the new geopolitical reality. He noted the current crisis differs from 2022's Ukraine war in both scope and complexity, with instability now global rather than regional.

Asked whether Europe can afford to forgo Russian gas entirely, Costa noted Portugal receives virtually no Russian supplies, with Nigeria and the United States serving as primary LNG sources. He declined to speculate on broader European policy, pointing to recent announcements of potential sanctions relief for Russian oil exports and possible Iranian gas sales as signs of how quickly the landscape can shift.

"For now, the concern is clearly more about prices than supply," Costa said, while noting some countries have already begun fuel rationing and others are formally considering consumption restrictions. He described the conflict as having "no winners or losers — we are all losers, we are living through a crisis."

On Portugal's energy transition, Costa pushed back against calls to eliminate natural gas from the energy mix, arguing that thermal generation remains indispensable for grid stability. "We cannot rely on reservoirs always being full of water, we cannot rely on there always being wind, there is only sun during the day, and so this is a reality we have to deal with," he said. Battery storage helps but "does not solve everything."

Costa pointed to last month's ENTSO-E report on April's Iberian blackout, which identified voltage control failures in Spain's solar plants as a key factor. Portugal's regulatory framework already requires renewable plants to include voltage control equipment, a decision Costa said proved prescient. "Portugal did not have a single generator disconnect until the blackout occurred," he noted, adding that the Portuguese system "did its job as it should."

REN decided to remain outside the investment vehicle for the planned European hydrogen corridor connecting Barcelona to Marseille, though Costa said the company supports the initiative and will retain responsibility for any Portuguese infrastructure. The so-called H2Med project, which would create a hydrogen-ready pipeline linking Iberia to France, remains contingent on European Commission funding decisions expected in coming months. Portugal's potential third interconnection to Spain, designed for hydrogen, will only proceed if the broader European project advances, Costa confirmed.

On hydrogen's future, Costa expressed measured skepticism. "Green hydrogen produced by electrolysis, using green electricity, is still expensive," he said, noting Spain remains far more enthusiastic about hydrogen than Portugal. Biomethane, he argued, offers a more realistic near-term alternative but with limited production potential in Portugal, suitable for residential distribution networks but not large industrial or power generation needs.

Costa also addressed the January 28 windstorm that destroyed roughly one hundred transmission towers and took down 650 kilometers of high-voltage lines. Repairs will take "several months," he said, with costs covered by insurance. The storm has prompted REN to revise forty-year-old construction codes to account for higher wind speeds, after gusts exceeding 230 km/h toppled towers designed for 150-160 km/h winds. The company also ordered additional Starlink satellite phones after crews were left without communication during the storm.

When asked whether the Chinese ownership of REN — with State Grid holding a major stake — poses risks amid U.S.-China trade tensions, Costa said the company has faced no difficulties and emphasized that shareholders play no role in executive or technical management. "We are essentially a buyer of European technology, and some national, like Efacec," he said, noting REN operates under public procurement rules and buys from qualified suppliers offering the best price.

For expats: The continued reliance on natural gas means Portugal's electricity prices will remain exposed to global energy shocks, even as renewable capacity expands. Understanding this exposure is critical for household budgeting and for anyone considering solar or battery storage investments. Gas-price volatility will continue to ripple through electricity bills whenever wind and solar output is low.