Being Portuguese, I applaud this, but as the article said, lets not forget about the environmental (and local social) damage it creates. A lot of small shops that based their business alongside the rivers are now closed. Many fisherman that fished at those rivers can't anymore. Job creating has been close to none, and in a country where many people live near poverty (minimum wage is 500 euros a month, in Porto (second largest city), the average wage is about 700), high energy (home and car gas) costs are a big deal to many.
But hey, still happy we are doing it, just hoped it would create more wealth to the 'little' people as well.
In Galicia (just north of Portugal) we produce a great deal of Spanish electricity, from both renewable and carbon fossil resources. We bear landscape degradation, health issues, and unreasonable risks (we have a gas unloading plant too close to a city). Yet most energy companies pay their taxes in Madrid.
To add insult to injury, electricity service here has bad coverage and is unreliable in small towns (of which there are many over here; Galicia has about 8% of Spanish population, but over 50% of municipalities). I see wind turbines everywhere I look in the mountains around, but I'll have blackouts in winter if there is --ironically enough-- too much wind. I can see how those folks at Alto Minho and Alentejo feel about their environment being raped to provide electricity to Lisbon without getting any much compensation. We could use a lot more consideration for externalities.
There is a mountain range at the north of Madrid, but you won't see wind turbines there because they'd spoil their landscape. It's better to spoil much more valuable landscapes and ecosystems a few hundred miles northwest, then dissipate a significant share of that energy in transport.
I can't quantify but in my home town, Moura, it had a good impact in local economy. They built there one solar plant with 46 MW capacity which was at the time the biggest in the world. (http://translate.google.pt/translate?u=http://economia.publi...) They also built a fotovoltaic pannels factory for constructing the solar plant and which now exports pannels.
Considering how bad every economic aspect goes there it was really a blessing. The jobs it created, qualified or non-qualified; the population it brought (desertification is one of the worst problems there). And they really deserve it, right now it might be 45ºC there. I work in Lisbon and when I occasionally go there in the weekend I can barely do anything(hint: fresh beer tastes like gold there!).
Regarding the cons, the fotovoltaic power doesn't have an environmental impact as bad as the dams. I guess the only one could be the visual impact. It even creates the possibiility to cultivate new cultures behind the solar pannels.
But, and there is always a but, there is much controversy about the solar power. The thing is that you can't store electricity, and as the production hours depend on the sunlight you will have a period of abundance and a period of scarcity that will not adjust very well. This will lead to an unbalanced match of supply and offer and so the efficiency of solar power is lower than other energies (a similar thing applies to wind power) like the hydropower where you can control when you want to generate it.
It makes me really proud to see so many good references to Portugal here in HN, for a country that is in such a bad shape it's good to see some things might change in the future.
The problem of storing energy is true for many renewable energies but there is work being done to solve it too.
An example for solar power is the use of special salty compounds that maintain the temperature for much longer (though I'd imagine at the cost of taking longer to reach high temperatures, i.e. they have a very high heat capacity) and hence provide a more constant output.
Another one is to connect one of these to an hydroelectric plant: any spare electricity is used to pump water up the dam.
Finally solar power has the advantage that it's plentiful during the day and especially in the summer which is when the electric demand is highest.
In the end solar power alone won't solve anything, but bundled with other renewable and with gas/nuclear to provide a steady baseline it should be fine.
In this case they do it, like 10 kilometers from the solar plant is the dam that created the biggest artificial lake in Europe. The dam is prepared to do that as it has a smaller dam after it.
The biggest controversy here in Portugal is if we have reached the limit of util unstable renewable energy, and how much/longer it should subsidized. And also the need of nucler energy.
But hey, still happy we are doing it, just hoped it would create more wealth to the 'little' people as well.