Abrantes Coal Plant Transformation Pushed to 2027: What Delays Mean for Jobs and Portugal's Energy Future

The Spanish energy giant Endesa has pushed back the timeline for its €600M renewable energy transformation of the decommissioned Pego coal plant in Abrantes, now confirming that construction will commence in 2027—a delay attributed to environmental permitting complexity and ongoing adjustments demanded by Portugal's impact assessment authorities. For residents and businesses eyeing the region's transition away from fossil fuels, the postponement extends the wait for what promises to be one of Europe's most ambitious hybrid renewable installations, designed to power data centers and heavy industry with 600 MW of combined wind, solar, and battery storage.

Why This Matters

• Jobs and training timeline extended: The project's commitment to 75 direct jobs and over 12,000 hours of technical training for 2,000+ people remains intact, but local employment opportunities now start a year later than originally planned.

• Former coal workers still waiting: Portugal's government has extended wage support three times via the Environmental Fund to cover ex-Pego plant employees as transition delays continue.

• Data center energy supply delayed: The hybrid baseload profile—rare among renewable projects—targets large-scale consumers, but operational status is now firmly set for 2027, not 2025 or 2026.

• Regional economy in limbo: Demolition of the old coal infrastructure begins in March 2026, creating 80 temporary jobs, but the main economic injection waits until construction starts next year.

What the Project Will Deliver

Endesa's reconversion plan transforms the Pego site into a hybrid renewable hub combining two wind farms, five solar photovoltaic plants, and what the company describes as Europe's largest battery storage system. The configuration is engineered to mimic baseload power generation—steady, predictable output—making it particularly attractive to data centers and industrial clients who cannot tolerate intermittent supply.

The project also includes a 500 kW electrolyzer to produce green hydrogen, initially targeting industrial customers in the region. This positions the site as a potential anchor for Portugal's nascent hydrogen economy, though the electrolyzer represents a small fraction of the overall capacity.

With a total investment hovering around €600M, the Pego reconversion is embedded within Endesa's broader 2026-2028 strategic plan, which allocates €10.6 billion globally and €3 billion specifically to renewables. The company, Spain's largest electricity provider and Portugal's newest major renewable developer, recorded €2.198 billion in profit for 2025, up 16.4% year-on-year, giving it ample financial backing for the Pego commitment.

Why the Delays Keep Piling Up

The project is divided into four licensing groups, each navigating Portugal's environmental approval maze at different speeds:

Group 1 (Aranhas wind farm and grid connections) has secured a conditional favorable environmental title, clearing the first major hurdle.

Group 2 (Cruzeiro wind farm, substation, and transmission line) holds a conditional favorable Environmental Impact Statement (DIA), meaning it can proceed but must meet specific mitigation requirements.

Group 3 (Atalaia and Concavada solar plants and associated infrastructure) received an unfavorable execution opinion and is awaiting final approval after submitting a revised proposal—this remains the most problematic segment.

Group 4 (Helíade and Torre das Vargens photovoltaic plants plus high-voltage line) obtained a conditional favorable environmental opinion. Recent adjustments include burying medium-voltage lines and removing a 60-hectare development area to reduce ecological impact.

Endesa's CEO José Bogas acknowledged the delays publicly in February 2025, stating that while "some lag" had occurred, the company was meeting all social commitments, including worker training and community engagement. CFO Marco Palermo emphasized that the firm expected to secure all necessary authorizations throughout 2025 to enable investment flows by year-end, though that timeline has evidently slipped further.

What Happens to the Old Coal Infrastructure

While Endesa navigates the permitting labyrinth for the new renewable complex, Tejo Energia—the consortium that operated the coal-fired Pego plant—begins demolition of the old cooling towers and associated structures in March 2026. This teardown, expected to last roughly three years, will restore the land to baseline conditions and create approximately 80 temporary jobs.

The dismantling work runs parallel to the renewable project's authorization phase, meaning the site will be in a state of simultaneous deconstruction and preparation through 2027. For local workers and contractors, this offers a short-term employment bridge, though it falls well short of the permanent positions the renewable hub promises.

Impact on Expats, Investors & Data Center Operators

The Pego delay has tangible consequences beyond the immediate region. Portugal has positioned itself as a prime European data center destination, leveraging stable governance, competitive electricity pricing, and a growing renewable grid. The hybrid baseload design of the Pego project was explicitly crafted to serve this sector, offering power profiles that reduce reliance on fossil backup during cloudy or windless periods.

For data center operators and cloud infrastructure investors scouting Portugal, the 2027 timeline means waiting longer for a dedicated, large-scale renewable offtake option. Competitors in Spain, Germany, and the Nordic countries are advancing similar projects faster, potentially eroding Portugal's first-mover advantage in renewable-powered computing.

Expats and remote workers concentrated in Lisbon, Porto, and the Silver Coast may notice indirect effects: slower rollout of green energy infrastructure can constrain Portugal's ability to meet EU decarbonization targets, potentially triggering higher carbon taxes or energy price adjustments down the line.

Investors in Portuguese renewables should note that the Pego saga reflects broader permitting friction across the Iberian Peninsula. While Endesa's financial strength insulates this project from cancellation risk, the delays underscore the importance of factoring 18-24 month regulatory buffers into any Portuguese energy development model.

Social Commitments and Community Response

Endesa has repeatedly emphasized its social and economic development plan for the Abrantes area, including priority hiring for former Pego coal plant workers. The company launched the Escola Rural de Energia Sustentável (Rural School of Sustainable Energy) in Abrantes, announcing its 2026 training calendar in January. The curriculum focuses on skills directly applicable to renewable plant construction, operation, and maintenance—crucial for a workforce transitioning from fossil fuels.

Despite the delays, available reporting indicates minimal organized resistance or public protest from the local community. The Portuguese government's repeated extensions of wage support via the Environmental Fund—financed through EU Just Transition compensation—have cushioned former workers from immediate economic shock, though the uncertainty surrounding job creation timelines creates a precarious holding pattern.

Local municipalities and regional development agencies view the project as essential to preventing economic decline in Abrantes and surrounding towns, which depended heavily on the coal plant's direct and indirect employment. The 75 permanent jobs promised by the renewable hub represent only a fraction of the coal plant's former workforce, making the training and upskilling initiatives critical to preventing long-term displacement.

How Portugal Fits Into Europe's Coal Exit

The Pego reconversion sits within a continental wave of thermoelectric plant transformations. Across Europe, nations are racing to shutter coal infrastructure and repurpose industrial sites for renewable generation:

Sweden, Austria, and Belgium have completely decommissioned their coal fleets—Belgium in 2016, Austria by 2020, Sweden in 2020. France closed its last coal plant in 2022, Portugal followed with the Pego closure in 2023, and the United Kingdom shuttered its final coal facility at Ratcliffe-on-Soar in 2024.

Germany, despite its larger coal dependency, met its 2028 reduction target three years early, beating the goal by 10%, and aims for full coal phase-out by 2038. Poland, home to Europe's largest coal plant at Bełchatów, is studying a transition plan that would replace most lignite generation with 11 GW of wind and solar backed by batteries, with lignite reserves expected to deplete by 2036.

Portugal's EDP is transforming its former thermal plants at Sines, Carregado, and several Spanish sites into "green hubs" integrating green hydrogen, solar, mini-hydro, and battery storage, targeting 100% green production by 2030.

In 2024, solar energy surpassed coal generation across the European Union for the first time, accounting for 11% of electricity output versus coal's 10%. Renewables collectively represented 47% of EU electricity in 2024, with wind and hydro contributing 38% and 26.4% of the renewable total, respectively.

Portugal's Pego project mirrors these continental trends but highlights the friction inherent in repurposing legacy industrial sites: while the vision is clear and the financing secure, navigating environmental law, grid integration, and social transition remains a multi-year undertaking even in favorable regulatory climates.

What Comes Next

Endesa's revised timeline places construction kickoff firmly in 2027, with the expectation that all four licensing groups will have secured final environmental approvals by late 2026. The company's financial disclosures and strategic planning documents continue to classify Pego as a "star project" within its renewable portfolio, signaling no retreat despite the delays.

For Portugal residents, the practical takeaway is straightforward: the Pego renewable hub remains on track, but its economic and environmental benefits—job creation, regional investment, decarbonized baseload power—arrive later than promised. Those in the Abrantes area should monitor the Escola Rural training programs as the most immediate opportunity for skill acquisition and future employment.

Data center operators and industrial energy consumers should plan alternative renewable procurement strategies for 2026-2027, treating the Pego project as a 2028+ operational asset rather than a near-term offtake option.

The Pego reconversion ultimately tests whether Portugal can execute the energy transition at the pace its climate commitments demand—or whether regulatory and administrative friction will continue to stretch timelines well beyond industry norms.