Portugal must maintain its efforts to deliver a financially sustainable energy system.

That’s according to the International Energy Agency (IEA) which recommends the Portuguese Government to resolve the so-called tariff deficit caused by past imbalances between the electricity system’s regulated costs and revenues from regulated tariffs.

Its report highlights the progress the government has made to increase renewable energy deployment such as wind power which alone provided almost 25% of the electricity generated in 2015.

The IEA also welcomes Portugal’s updated energy strategy, which focuses on energy efficiency and lower investment costs and strengthens national competitiveness.

However it highlights that task-sharing and co-ordination between government bodies must be clear to ensure full and effective monitoring of energy efficiency results.

It is also urging Portugal, with its regional partners Spain and France and alongside the European Commission, to reinforce interconnections with transnational European electricity and natural gas networks.

Despite the country continuing to liberalise its energy markets “there have been some setbacks such as the decision to delay the elimination of regulated tariffs until 2017”, it added.

The IEA suggests the country should consider fuel poverty as a priority and the government must allocate assistance directly to ensure that it is effectively targeted at those who need it most.

Fatih Birol, CEO at the IEA said: “Portugal has made some difficult choices but to maintain investor confidence, Portugal must also closely follow the principles of transparency, predictability and certainty if the country wishes to continue to remain attractive to further investment in the energy sector.”