The SIIF Energies windmill farm in Cabril, Portugal. Portugal was once a rising renewable energy star in the European Union, but the sector slowed significantly after the country rolled back subsidies in 2012 | Miguel Riopa/AFP via Getty Images Portugal’s clean-power problem Lisbon was once a renewable energy champion, but now it has fallen off the map.

Energy generated by Portugal’s abundant wind, water and sunshine could fuel the country’s much-needed economic recovery — if the government becomes more enthused about tying its energy market to the rest of the world.

Portugal’s Socialist government isn’t doing much to foster investment, critics say, as it scales back subsidies, and plans to build a power link from the Iberian Peninsula to France sputter. The French connection in particular was a priority for the previous Social Democratic administration, which was replaced last November.

The European Commission could help. Later this fall it is expected to propose two key pieces of its project to build an open-border, interconnected energy union. Those are the new rules for meeting the EU’s renewable energy target of 27 percent by 2030, and an overhaul of the bloc’s electricity market.

But Portugal has to indicate it wants the help.

"There’s a whole renewable discussion to be done and Portugal is nowhere to be seen" — EU source

So far Socialist Prime Minister António Costa has done little to lobby on his country’s behalf, according to an EU source familiar with Portugal’s energy sector and policies.

“Portugal went from being a small country that was really ambitious and fantastic in renewables — with policy proposals that the Germans were calling ‘the Portuguese option’ — to being a desert,” said the source, who asked not to be named. “There’s a whole renewable discussion to be done and Portugal is nowhere to be seen.”

Lisbon agreed in 2012 to roll back generous investment perks to the renewables industry as part of a broad bailout plan to cut spending and keep the country out of bankruptcy. Portugal's then-burgeoning renewable sector took a hit. Now it risks facing penalties as other EU countries race to meet their binding targets for adding renewable energy by 2020.

Portugal is now a dead market for an industry eager to piggyback on the EU’s targets to boost renewable energy generation.

“They are killing the business,” António Sá da Costa, managing director of the Portuguese renewable energy association APREN, said of the austerity measures. “Portugal, sooner or later, will come to a stall.”

Hydro, wind, solar and other renewables produced an average 52 percent of Portugal’s electricity as of 2015, which is just 8 percentage points shy of the country’s target of 60 percent by 2020. Renewables also accounted for 25 percent of Portugal’s total energy use (including transport, heating and cooling) — the goal is 31 percent.

Despite its strong start, the changed incentives mean Portugal may fall short of its 2020 targets, warned Sá da Costa. “Maybe, on this track, we can reach a 54-55 percent share of renewable electricity by 2020,” he said.

The government says it continues to support investment in renewable energy by focusing on emerging technologies, such as concentrated solar and photovoltaic or wave energy.

Even after the end of some subsidies, "there is interest on investments in solar projects in Portugal," the economy ministry said.

Not everyone is as critical of the government’s decision to gradually end renewable energy subsidies and expose the projects to the free market. Mature technologies such as onshore wind need to be able to stand on their own. Onshore wind received €628 million out of the €978 million in incentives in 2013, according to the International Energy Agency.

The broader Portugal 2020 plan Lisbon and Brussels agreed on to stimulate jobs and economic development, in exchange for €25 billion from the EU, includes €130 million in funding for new types of renewable energy. Under the program, the government announced a competition in late July for €25 million in funding for emerging technologies.

“We have to separate the mature renewable technologies such as wind energy, which is no longer in need of public support because it is already financed by the market,” Secretary of State for Energy Jorge Seguro Sanches said in June. “We must have support for the test phase of pilot projects.”

In another show of support, the government is looking into an underwater power line to Morocco and the two governments agreed in June to spend €400 million on a feasibility study. The Commission is happy for EU states to link up with countries outside the bloc, but says connections between members remains the priority.

Stranded Portuguese

Without interconnectors, Portugal remains an energy island tied only to Spain.

“Imagine a BMW factory in Germany that produces a lot of very nice, very good cars, but then doesn’t have the roads it needs to sell the cars to other countries,” Sá da Costa said. “It’s a bottleneck.”

Portugal, Spain, and the European Commission have long pushed the French link as an integral part of the EU’s energy union.

That means the generation of renewable energy is restricted by what Portugal and the small interconnectors to Spain can handle. Too much rain, wind or sun causes a surge in power output that drags down prices and overloads the grid; not enough causes price spikes and supply shortages.

The favorite option has been in talks for years: a line across the Pyrenees into France, which is already connected to the U.K., Belgium, Germany, Switzerland, Italy and Spain. Another plan, calling for a cable from Portugal under the Bay of Biscay to Britain, would be too expensive.

Portugal, Spain, and the European Commission have long pushed the French link as an integral part of the EU’s energy union.

France is more cautious, pointing to the high cost and construction challenges — an argument that echoes its position on a proposed gas pipeline from Spain to France. Portugal and Spain say France’s resistance is more about protecting its fleet of 58 nuclear power stations from renewable energy competition.

"The lack of interconnection capacity is just between France and Spain, which is clearly insufficient given the capacity of the Iberian Peninsula to provide renewable electricity to Europe," the Portuguese ministry said, noting delays and "small steps," despite commitments from Portugal, Spain and the Commission.

Lisbon strong-armed Paris into agreeing on the need for more cross-border interconnectors in 2014, in the run up to last year’s COP21 Paris climate summit. Portugal threatened to veto the EU’s climate and energy targets for 2030 unless countries agreed to also set a goal for connecting national electricity grids.

"Energy is not the Portuguese government’s main concern nowadays" — António Sá da Costa, renewable energy association

“Portugal said ‘We are not Poland, because we actually want the 2030 goals to be achieved,’” the EU source said. “Because without the 2030 goals, France could not have a successful COP21.”

The blackmail worked — for a time. The EU set a goal of linking 10 percent of its electricity production capacity across national borders by 2020, and France, Portugal and Spain agreed to look into the power line project, as well as the gas pipeline.

But momentum has since stalled, and time is running out to build the line by 2020.

“Energy is not the Portuguese government’s main concern nowadays,” Sá da Costa said. “I hope the European Commission will help. But are my hopes nowadays very high? No they are not.”

This article has been corrected to note that the comment about renewable technologies was made by Secretary of State for Energy Jorge Seguro Sanches, not Secretary of State for Environment and Energy Jorge Moreira da Silva.