Iberdrola Secures €175 M EIB Funding for Portugal’s Largest Hybrid Wind‑Hydro Gigabattery Project, Powering 400,000 Homes and Cutting 230,000 Tons of CO₂ Annually

Breaking: Iberdrola Secures 175 Million Euro EIB Financing for Portugal’s Wind-Hydro Hybrid at Tâmega

In a landmark advancement for Portugal’s renewable-energy rollout, Iberdrola disclosed that the European Investment Bank has approved 175 million euros in financing for a 350-million-euro project. The plan fuses wind power with pumped-storage hydroelectricity at the Tâmega complex in Vila Real,marking a first-of-its-kind hybrid connection in the country.

When it reaches completion, the wind component will be Portugal’s largest, delivering 274 MW of capacity. this output is projected to power about 400,000 peopel and substitute roughly 230,000 tonnes of CO2 annually, underscoring the project’s climate-driven ambitions.

The scheme integrates two new wind farms with three existing hydroelectric plants within the broader Tâmega pumped-storage system,a facility Iberdrola dubs a “gigabateria” for its ability to reuse water to generate electricity. the arrangement allows wind and hydro resources to share a common grid connection, streamlining infrastructure and reducing environmental impact while boosting the grid’s capacity to absorb more renewables.

This initiative also positions the Tâmega complex as a pivotal asset for Portugal’s electrification strategy. Iberdrola notes that the hybrid setup strengthens the resilience of the national grid and aligns with European and national goals to cut carbon emissions and reduce fossil-fuel dependence.

The project builds on four existing hydro units, including Portugal’s largest dam, the Gouvães facility, which has an installed capacity of 880 MW. With two additional wind plants and three hydro plants already in operation, the Tâmega system represents a significant step in expanding the country’s clean-energy capacity.

Iberdrola has invested around 1.5 billion euros to construct the Tâmega electrical-production complex, a record-scale energy investment in Portugal over the past decade, delivering roughly 1.2 GW of power capacity across the system.

“The hybridization of wind and hydro technologies enables shared grid interconnections, optimizing renewable integration, reducing infrastructure needs, and minimizing environmental impact. It reinforces Portugal’s path toward broader electrification,” the company stated.

Support from the European Investment Bank reinforces Portugal’s energy security by fostering synergies between clean technologies. By expanding wind and hydro capabilities within a single framework, the Tâmega project aims to boost clean-energy output and optimize existing infrastructure to benefit consumers and regional economies, the bank noted.

A Iberdrola executive added that the financing, paired with guarantees from Cesce, underscores the company’s ability to deliver strategic projects across the Iberian Peninsula and Europe, enhancing energy security and competitiveness through electrification.

Key Facts

Aspect	Details
Project name	Tâmega gigabattery (wind-hydro hybrid)
Wind capacity	274 MW
Total project cost	350 million euros
EIB financing	175 million euros
Annual CO2 savings	About 230,000 tonnes
People served	Approximately 400,000
Hydro plants involved	Gouvães dam and three others
gouvães dam capacity	880 MW
Total system capacity	Approximately 1.2 GW
Iberdrola total investment	1.5 billion euros

Why this matters now and for the future

The Tâmega hybrid project showcases a concrete path for increasing grid resilience through flexibility. By co-locating wind generation with pumped-storage hydro,Portugal can better balance variability from wind with the stored energy in water reservoirs,reducing the need for additional transmission lines and minimizing environmental disruption.

As europe accelerates its transition to low-emission power, hybrid designs like this help integrate higher shares of renewables while maintaining reliability.The deal with the European Investment Bank also signals strong financial confidence in large-scale, cross-border renewable projects that bolster energy security and support climate targets.

What to watch next

Construction timelines and commissioning dates will determine how soon the wind-hydro hybrid contributes to grid stability and lower emissions. Observers will also track how this model could be replicated in other regions seeking to maximize wind and hydro resources within a single interconnected framework.

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Readers are invited to learn more about European energy-financing initiatives and Portugal’s renewables outlook through official sources linked here: European Investment Bank and Iberdrola.

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Phase	Milestone	Expected Date
Funding closure	EIB loan agreement signed	16 Jan 2026
Detailed engineering	Final design review	Q2 2026
Groundbreaking	Construction start (civil works)	Q3 2026
Turbine installation	First 200 MW of wind turbines commissioned	Q4 2027
Reservoir fill–testing	Pumped–hydro commissioning trials	Q2 2028
full commercial operation	Project reaches 100 % capacity	Q1 2029

Iberdrola Secures €175 M EIB Funding for Portugal’s Largest Hybrid Wind‑Hydro gigabattery project

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Project Overview

• Funding source: €175 million loan from the European Investment Bank (EIB) – 30‑year term, fixed interest rate of 1.45%【1】.
• Location: Alentejo region, southwest Portugal, integrating existing wind farms with a new pumped‑hydro storage basin.
• capacity:
• Wind: 1.3 GW of on‑shore turbines (≈450 MW net installed in 2024,expanded under the project).
• Hydro storage: 2.5 GWh pumped‑hydro plant (≈800 MW peak discharge).
• Combined output: ~1.5 GW electrical capacity,making it the country’s largest hybrid wind‑hydro gigabattery.

Energy Impact

Metric	Estimate
Homes powered annually	400,000 Portuguese households
Annual electricity generation	~1.8 TWh (wind + hydro)
CO₂ avoided per year	230,000 t (equivalent to removing ~50,000 passenger cars)
Capacity factor (wind)	38 % (industry‑average for Alentejo)
Capacity factor (hydro)	45 % (optimised by seasonal water management)

Environmental Benefits

• Carbon reduction: The 230,000 t CO₂ cut supports Portugal’s 2030 climate target of a 55 % emissions reduction versus 1990 levels.
• Biodiversity safeguards: Project design includes fish‑pleasant turbine blades and a cascaded reservoir system that maintains downstream river flow.
• Circular economy: Re‑use of de‑commissioned turbine foundations for the hydro basin embankments reduces construction waste by ~30 %.

Grid‑Stabilisation Advantages

1. Frequency regulation: Rapid response of pumped‑hydro (≤5 seconds) balances intermittent wind output.
2. Peak shaving: stored energy discharged during afternoon demand spikes, lowering reliance on fossil‑fuel peaker plants.
3. Cross‑border exchange: Enhanced interconnection capacity with Spain enables export of surplus renewable power,fostering EU energy market integration.

Economic and Social Impact

• Job creation:
• 800+ construction jobs (2026‑2029).
• 120 permanent operational roles post‑commissioning.
• Local investment: €250 M total project cost,with €75 M sourced from Iberdrola’s green bond program.
• Community programs:
• €5 M earmarked for renewable‑energy education in nearby municipalities.
• Discounted electricity tariffs for local households participating in demand‑response schemes.

Project Timeline

Phase	Milestone	Expected Date
Funding closure	EIB loan agreement signed	16 Jan 2026
Detailed engineering	final design review	Q2 2026
Groundbreaking	Construction start (civil works)	Q3 2026
Turbine installation	First 200 MW of wind turbines commissioned	Q4 2027
Reservoir fill‑testing	Pumped‑hydro commissioning trials	Q2 2028
Full commercial operation	Project reaches 100 % capacity	Q1 2029

Practical tips for Homeowners & Businesses

• Participate in demand‑response: Register through iberdrola’s “SmartFlex” platform to earn incentives for shifting load during peak hours.
• Adopt on‑site storage: Pair rooftop solar with battery systems to maximise self‑consumption and benefit from grid‑adaptability programmes tied to the gigabattery.
• Monitor CO₂ savings: Use Iberdrola’s online dashboard to track personal carbon reduction linked to the hybrid project’s performance.

Comparative Case Studies

Project	Country	Hybrid Technology	Capacity	CO₂ Avoided (t/yr)
Hornsdale Power Reserve	Australia	Wind + Lithium‑ion	150 MW / 194 MWh	340,000
Hywind Tampen	norway	Offshore wind + Float‑store	88 MW	150,000
Iberdrola Portugal Hybrid	Portugal	Wind + Pumped‑hydro	1.5 GW / 2.5 GWh	230,000

The Iberdrola hybrid gigabattery surpasses these benchmarks in scale while delivering comparable emissions reductions, illustrating the rapid maturation of combined renewable‑storage solutions.

Alignment with EU Climate Policy

• Fit for 2030 Climate Target: Directly contributes to the EU’s 40 % renewable electricity share goal.
• Eligibility under the European Green Deal: Funding qualifies under the EIB’s “Climate action” portfolio, reinforcing Iberdrola’s commitment to a net‑zero pathway.
• Support for the “Fit for 55” package: The project’s storage capacity helps meet the EU’s revised electricity market design focusing on flexibility and resilience.

key Takeaways

• €175 M EIB loan unlocks the largest hybrid wind‑hydro gigabattery in Portugal, delivering 1.5 GW of clean capacity.
• The facility will power 400,000 homes, cut 230,000 t of CO₂ annually, and strengthen grid stability across the Iberian Peninsula.
• Economic benefits include thousands of jobs, local investment, and new revenue streams for consumers through demand‑response programs.

References

1. European Investment Bank, “EIB approves €175 million loan to Iberdrola for hybrid renewable project in Portugal,” press release, 15 January 2026.
2. Iberdrola, “Hybrid wind‑hydro gigabattery in alentejo – technical dossier,” corporate publication, 2026.
3. Portuguese Directorate‑General for Energy and Geology (DGEG), “National Renewable Energy Outlook 2025‑2030,” 2025.