The Socialist government will work to ensure that 45 percent of the nation's electricity output in three years comes from renewable sources, he said during a debate in parliament, up from a previous target of 39 percent.

"This new goal will place Portugal in the frontline of renewable energy and make it, along with Austria and Sweden, one of the three nations that most invest in this sector," said Socrates, a former environment minister.

To achieve the goal the government will simplify the licencing rules for new wind parks, encourage greater use of biofuels and expand the capacity of three existing hydroelectric dams as well as construct new ones.

Fifty-four percent of Portugal's total hydroelectric potential has not yet been tapped, the prime minister said

"Portugal is one of the nations in the world with the most hydroelectric potential still left to explore," the prime minister said.

The government wants biofuels to account for 10 percent of all fuel used for transportation by 2010, a decade before European Union member states are supposed to meet this target, he added.

"Biofuels are going to be one of our main energy bets," said Socrates.

Thirty-six percent of Portugal's electricity output was from renewable sources in 2005, the last year for which statistics are available.

Portugal, which is highly dependent on imported oil and gas, has stepped up its efforts to develop reneweable energy since Socrates' government came to power in March 2005.

Portugal built 36 new wind parks in 2006 which boosted its total wind power capacity by 60 percent, giving it the second highest growth rate in the use of the energy source in the EU, the prime minister said.

Last year the world's largest solar power plant began operating in the nation's sunny south while the world' first commercial wave power station is planned for the country's northern Atlantic coast.

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