The Madeira region takes a decisive step in the energy transition by launching a competition for 60 MW of solar energy and reintroducing an integrated plan to expand renewables, focusing on grid stability and quality integration in the territory.
This move combines an auction based on LCOE-based tariffs, reinforcement of electrical infrastructure, and incentives for self-consumption + storage, creating a robust ecosystem for investors, families, and public entities.
| Short on time? Here’s the essential: |
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| ✅ 60 MW for injection into the Madeira grid, exclusively solar photovoltaic, with projects up to 5 MW per point 🌞 |
| ✅ Auction with LCOE-based tariff and selection by highest discount; winners have FIT for 20 years 📉📜 |
| ✅ Prepared grid: large-scale batteries and modernized substations to integrate renewables with quality ⚡🔋 |
| ✅ Synergy with +ENERGIA, UPACs, and competitions up to 1 MW in roofs; focus on efficiency and self-consumption 🏠🔆 |
Madeira announces competition for 60 MW of solar energy: impact on the grid and territory
The competition now launched by the Regional Secretariat for Equipment and Infrastructures provides 60 MW of injection capacity into the Madeira Public Service Electric Grid (RESPM), exclusively for photovoltaic production. The capacity will be distributed across various points on the island, avoiding excessive concentrations and promoting a more harmonious implementation across different municipalities. Practically, the estimated reinforcement is around 90 GWh/year, a figure that corresponds to nearly 9.6% of the current annual electric production in the Region, which is around 935 GWh/year.
There are three central ideas in designing the procedure: limit of 5 MW per project, reference tariff calculated via LCOE, and tariff stability for 20 years for the winners. The limit per installation protects the landscape, avoids disproportionate panel extensions, and better distributes risk, reinforcing the resilience of the island grid. In islands, the solidity of the system depends both on the available energy and its geographical dispersion and control quality.
The Madeira Electricity Company has prepared the grid for this leap. The modernization of substations and lines has increased the capacity to integrate renewables, while large-scale batteries help absorb solar peaks, manage surpluses, and stabilize frequencies. This prior investment reduces systemic costs and accelerates the learning curve for future projects. For investors, it means lower technical uncertainty; for the Region, clear gains in supply security.
Access is broad: local companies, national and international operators with a history in renewables, and specialized green economy funds. The terms of reference and the program for the procedure have been published in the Official Journal of the Region and can be consulted from the dates indicated by the Regional Directorate of Energy on its respective portal. The selection is based on the discount compared to the reference tariff (derived from the LCOE), which drives costs down without sacrificing technical quality and environmental criteria.
Imagine a consortium proposing 4.9 MW in Machico, with low-visible-profile architecture, and another installing 3.8 MW in Calheta, using screw piles to reduce soil impact. In both cases, proximity to substations reduces losses and connection costs. By multiplying examples like these across the map, Madeira achieves a distributed production that communicates well with the topography and climate, perfecting the marriage between efficiency and landscape.
The true value of the competition lies in the multiplier effect: it brings clean energy at a competitive price, stimulates the local chain (design, assembly, operation, and maintenance), and aligns with regional decarbonization goals. As we conclude this overview of the competition’s design, it is worth noting the message: new capacity, well-distributed and financially stable, is what drives a mature energy transition. Next, the key question is to understand tariff mechanics and how to calculate viability rigorously.
LCOE-based tariff and 20-year FIT contract: assessing feasibility without illusions
The competition uses as an anchor a base tariff calculated by the LCOE (Levelized Cost of Energy), an international measure that summarizes the cost of generating 1 MWh over the entire project life. The calculation includes CAPEX, OPEX, performance (including degradation of modules), cost of capital, and tax factors. Proposals must offer discounts to the reference tariff, and the final classification favors those who demonstrate better economic efficiency without neglecting the technical aspects.
In islands, the LCOE has nuances: logistical costs, accessibility, and weather contingencies influence CAPEX and OPEX. The project design also weighs in: structures adapted to the orography, management of shadows, and distance to the substation. A common mistake is to underestimate panel degradation over 20 years, which inflates estimated production and “beautifies” the LCOE. Another frequent slip is ignoring insurance costs, replacements, and contingencies for parts, especially inverters.
To arrive at a robust number, a methodical approach is recommended:
- 📌 Size production with reliable solar data (including thermal losses, dirtiness, and seasonal shading).
- 🧮 Project CAPEX with price scenarios for modules, structure, inverters, cables, and interconnections.
- 🔧 Map OPEX realistically: O&M, cleaning, monitoring, insurance, and replacements.
- 📉 Model annual degradation and technical availability of the facility.
- 🏦 Calculate WACC sensitive to island risk and the FIT contractual profile.
Consider an illustrative case: a 5 MW facility with an expected net production of 1,850 kWh/kWp/year, an average degradation of 0.4%, and an OPEX of 17 €/kW/year. If the total CAPEX stays within the range indicated for island projects with anti-corrosion solutions and mountainous logistics, the LCOE tends to be competitive when close to the grid and with good capacity factor. Still, what decides is the quality of the project (minimal shading, controlled DC/AC losses, impeccable grounding) and efficiency in operation.
The strength of the model proposed by the Region is the FIT for 20 years for winners, which guarantees revenue predictability and facilitates banks to arrange financing with compatible terms. Financial stability reduces the cost of capital and, in turn, the LCOE. On the other hand, the limit of 5 MW per project deters speculative large-scale movements, preserving coherence with the territory and the grid.
A practical recommendation for proponents: present sensitivity scenarios (CAPEX ±10%, production ±5%, WACC ±1 p.p.) to demonstrate the solidity of the offered discount. In competitive auctions, it signals maturity and reduces the risk of unsustainable under-offering. And remember: technical transparency is a competitive advantage.
With the economic bases in place, the strategy gains even more strength when it engages with self-consumption and demand-side efficiency. This is where the programs for UPACs and the reinforcement of distributed storage come in.
Self-consumption, +ENERGY, and small competitions: how individuals and entities can benefit
While the 60 MW competition boosts distributed utility-scale generation, Madeira maintains an active front in self-consumption and storage. The +ENERGY program has supported the installation of electricity production systems for personal use, coupled batteries, and equipment for hot water and heating, benefiting families, businesses, and institutions. Dozens of UPACs have been registered in the Region, totaling around 22 MW of capacity and 3 MW of associated storage, a clear sign of traction. In 2025, announcements were made with application windows throughout the year, accelerating projects on existing roofs and infrastructures.
In addition, new competitions are planned focusing on parks up to 1 MW in already built areas: industrial rooftops, parking lots with photovoltaic shading, technical infrastructures. This approach reduces land occupation, values built heritage, and brings production closer to consumption, reducing losses in cables. For condominiums, schools, and IPSS, the equation is even more interesting when combined with batteries, electric vehicle charging, and energy management measures.
Practical example: the “Condomínio Atlântico Verde,” in Funchal, decides to install 200 kW on its roof with a battery bank of 200 kWh. With simple hourly management (prioritizing daytime consumption, storing excess, and discharging during late afternoon peaks), the collective bill consistently decreases, while the grid benefits from reduced pressure during peak hours. If, later on, the condominium integrates high-efficiency heat pumps for AQS, the synergy with solar strengthens.
In the public sector, the “Madeira 2030” framework has opened announcements for energy efficiency in municipal infrastructures, focusing on reducing consumption, smart control, and thermal rehabilitation. When a school replaces lighting with LEDs, improves the opaque envelope, and installs a UPAC with storage, a virtuous cycle is created: lower demand, greater local renewable fraction, and superior thermal comfort for students and teachers.
For those considering joining, three decisive steps are: consumption diagnosis (hourly curves), coverage study (shading, structural condition, waterproofing), and operational plan (rules for batteries, smart meters, potential energy sharing between units). In tourist developments, there are additional gains in communication: guests value certifications and reduced carbon footprint, which translates into reputation and occupancy rates.
The point to retain is simple: the success of the transition arises from the encounter between distributed generation, efficiency, and storage. And Madeira is connecting these pieces methodically.
2030-2050 goals and island resilience: batteries, substations, and climate design
The Region has set ambitious goals: to reach around 55% renewables by 2030 and approach 95% by 2050. For an island system, these goals require fine orchestration between solar generation, demand management, and storage. Investment in large-scale batteries is central, acting as a buffer to smooth the midday curve and reinforce the grid in the late afternoon. Additionally, modernizing substations improves voltage quality and operation safety, a crucial condition when multiplying renewable production.
Resilience, in this context, means withstanding rapid cloud variations, dealing with climatic events, and maintaining service in remote areas. It is also about urban integration: discreetly oriented solar systems, with low-impact architecture and attention to glare. In schools and hospitals, where service continuity is critical, support batteries and internal microgrids allow operation with autonomy during incidents and quick recovery after disturbances.
From the building perspective, renewable energy shines when the envelope is efficient. Cool rooftops, cross ventilation, shading by photovoltaic pergolas, and facades with high thermal mass materials reduce the load on the system. In hotels and multifamily housing, the combination of heat pumps for AQS with solar self-consumption is, today, one of the best return solutions, especially when synchronized with batteries and IoT control.
The local culture and tourism demand respect for the landscape. The limit of 5 MW per project and the preference for built areas in competitions up to 1 MW show a clear intention: to grow elegantly, without visual “blots” that harm valleys or viewpoints. This concern is not only aesthetic; it supports social acceptance, which is political capital to maintain the pace of the transition.
Another front is training. The more technicians master commissioning, predictive maintenance, cybersecurity, and operational data analysis, the stronger the foundation will be to meet the goals for 2030 and 2050. In this sense, each well-operated facility is a living school. The message that remains: resilience is not a product that is bought, it’s a skill that is built, every day, in the way we design, operate, and care.
With the strategic gears aligned, the next step is to detail the “how to do” of a project between 1 and 5 MW that respects territory, people, and numbers.
1–5 MW projects in Madeira: practical guide for applications and sustainable design
To turn a good idea into an asset that produces for decades, the process starts with choosing the site and ends with impeccable operation. The competition for 60 MW rewards those who demonstrate competence throughout the entire value chain, so a clear guide helps avoid leaving any loose ends. Below is a pragmatic path to prepare the application and the executive project with technical solidity and landscape sensitivity.
Site selection and grid connection
Map solar coverage, access routes, and distance to substations with available capacity. Terraced slopes may offer favorable installation angles as long as the structures respect stability and erosion. Proximity to the grid reduces losses and interconnection CAPEX; studying routing alternatives avoids surprises in expropriations or servitudes. A noise analysis for inverters and natural ventilation ensures comfort in nearby residential areas.
Environment, landscape, and community
Identify environmental and cultural constraints early. Avoid sensitive ecological corridors and areas with dominant visibility from viewpoints. Low-profile solutions, discreet color palettes, and native hedges can break sight lines. Communication plans with the community—open sessions, site visits, and disclosure of local benefits—strengthen social acceptance and reduce the risk of opposition.
Engineering and operation
Choose robust modules and inverters for marine environments, with protection against saline atmosphere. Structures with appropriate fixation to local soils, stormwater management, and well-defined maintenance paths. In electrical design, pay attention to short-circuit currents, protection against electric arcs, and grounding quality. In operation, continuous monitoring, predictive maintenance, and cybersecurity plans for SCADA systems are now indispensable.
- 🧭 Step 1: site diagnosis (topography, soils, access, grid).
- 📐 Step 2: pre-sizing (kWp, orientation, losses, cabling).
- 📑 Step 3: environmental and landscape report with mitigating measures.
- 💶 Step 4: financial model with sensitivity scenarios to the LCOE.
- 🛠️ Step 5: executive project and O&M plan with clear KPIs.
- 🗂️ Step 6: complete application and realistic construction schedule.
For those who prefer to start on a smaller scale, competitions up to 1 MW in roofs and existing infrastructures are an ideal springboard. Parking lots with solar shading serve two functions: thermal comfort and electricity generation. In warehouses, reinforcing waterproofing and loads before installation avoids future corrective works. And don’t forget compatibility with electric vehicle charging, a trend that is rapidly growing in the Region.
A useful tool: combining energy sensors, weather forecasts, and simple optimization algorithms can elevate useful production by 3–6% without any additional panels. In competitive auction scenarios, this margin counts. The final piece is the documentation diligence: meet deadlines, respond to clarifications, and register the project on the platforms indicated by the Regional Directorate of Energy. The tip that is worth gold? Start today by surveying your site and tracking your consumption curve—even on an industrial scale, this is the first treasure map.
If there is one immediate gesture that makes a difference, it is this: identify the cover or land with the best radiation and short distances to the grid, and request an independent technical pre-study. This initiative accelerates everything else. 🌞
Source: www.dnoticias.pt
