One of the panelists at the Environmental & Sustainability Summit 2021, Catalin Velescu, General Manager and Founder of Volta Grup, spoke to Business Review about Romania’s transition to 100% green energy, and all the challenges and opportunities behind this ambitious goal.
- Which are the main challenges to be addressed by the Romanian energy sector in order to make the transition to 100% renewable energy possible?
The energy transition will be a long process. It will not be easy and if things aren’t done in the proper way, it can also be very painful. I see three challenges to be addressed: funding, social issues, and technological barriers.
When it comes to funding, the energy transition (like any other transition) has a cost. For the Romanian economy, which is dealing with big budget imbalances, getting the money will be a real challenge. But in the same time, we have a big opportunity: about EUR 80 billion are waiting for us in Brussels and the only job for us to do is to take this money and use them correctly.
Regarding social issues, the transformation in the Romanian energy sector may cause some social problems: some people could lose their jobs or have to change jobs. But in this situation, the European mechanisms could help us make a ‘Just Transition’
From the technological point of view, many innovative solutions and breakthrough technologies should be implemented to achieve 100 percent green energy.
- How can European mechanisms such as Green Deal, PNRR, React-EU, or Just Transition Fund help Romania in its green transition?
By the end of this decade, Romania could get around EUR 80 billion from the European Union through different mechanisms. It is about 10 billion/year or 5% of our G.D.P. It is a once-in-a-lifetime opportunity for us, but also a very big challenge. We haven’t been champions in this “sport” until now. What we have to do is to move fast, to develop good projects, and, most importantly, to develop projects that are in line with the EU objectives: Green Deal and Fit for 55. The better we do this, the easier and less painful will the transition be.
- From the technological point of view, are there any solutions to ensure 100% green electricity? If so, what are they?
The best news is that yes, we have the technologies to ensure 100% green electricity. And even more than that, they are becoming cheaper and cheaper. We have always believed that clean energy is more expensive than “dirty” energy. We have wind, solar power, geothermal, biofuels, hydropower, storage, and, of course, we have hydrogen. The more we use these technologies, the cheaper will it become.
The prices of wind and solar power have plunged exponentially, to levels that nobody had anticipated. Since 2010, these prices have fell by 90%. This is a ten times fold and the process will continue. Today, solar and wind are the cheapest ways to produce energy in new capacities almost everywhere around the world. From Mexico to Chile, from the UK to Spain, we saw bids of 2 cents/kwh for solar and wind energy generation.
The problem is that the sun does not always shine and the wind does not always blow. For this reason, other technologies should be introduced.
“The issue of renewables is no longer about the price. We have an issue with grid integration because the big problem with green energy is instability.” Catalin Velescu said during #ESS2021.
Digitalization is the first of them all. The problem with the energy is that it cannot be stored in big quantities yet. So the production has to meet demand in every moment. For wind and solar power, this is close to impossible and a lot of data and lots of technologies have to be used to make the transition possible. Different kinds of green energy (wind, solar, hydropower, biogas, etc.) with different types of storage solutions (lithium-ion batteries, redflow batteries, pumping water, thermal storage) could work linked by digitalization. For every kWh of energy that is produced or consumed, a byte is in the backstage.
“Like any new technology, hydrogen needs years of research to reach the market.” Catalin Velescu, GM & Founder at Volta Grup.
- How should the European Institutions, the national government, the financial system and the companies work together to provide funds in order to accelerate the transition?
All kinds of financial instruments must be used. Both public and private funds should be put together to support the transition. European financial instruments could be used to mobilize private investments
Besides, our country’s objectives must match the European Commission’s goals. The EU has the most ambition planning to fight climate changes: The Green Deal. The European Commission stated very clearly that only the projects that are in line with its goal will be financed. So all Romanian Institutions that are involved in this sector have to understand the message and bring only projects that are in accordance with EU targets.
- What are the main legislative obstacles to overcome in order to achieve net-zero energy? For example, what should be done to increase exponentially the number of prosumers.
For me, this is the most difficult question to answer to. Volta Grup is one of the companies that are allowed to install photovoltaic systems using different types of schemes: “Casa Verde Fotovoltaice” or “Electric Up”.
We used to make more than 200 prosumers and, believe me, it was quite a challenge. Sometimes it takes more than six months from the moment of installation to the moment when the customer has a prosumer contract with his energy provider.
There were lots of legislative changes in a short time. And, of course, it is unlikely to find two people that understand a law in the same way in two different institutions.
But I have to admit that a lot of progress has been made. I heard about big changes in prosumer law and we all hope these will allow us to help more and more customers and companies to produce their energy.
- What is the role of electromobility in the process of transition to 100% green energy?
The transportation sector is, in my opinion, one of the most disrupted industries in the last years. There are three different things that are happening in the same time.
Firstly, we have electrification. We can see today’s growth rates of more than 100% of electric vehicles sales. For example, in August, the new passenger plug-in electric car registrations doubled in Norway to an incredibly 88% market share. Of course, the situation is very different in EU countries from the ones around the world, but the trend is the same.
Secondly, we have an exponential increase in ride-sharing and ride-hailing industries. Mobility, as a service, is a solution that more and more people (especially the younger ones) prefer.
Lastly, we have self-driving. This technology (which is a reality today) will halve the cost of ride-sharing services and this will be the biggest disruption for the automotive industry.
For the energy sector, the electrification of transportation is a challenge as well. The demand of electricity, especially in big cities, will increase fast and a lot of investments need to be done to support this. Moreover, a charging infrastructure should be deployed and it is not so simple.
It is known that 70% of the charges take place at home or at work. Think about Bucharest. Most of the people live in apartments. When 20% of them will have an EV, what will happen?
The energy sector has to find solutions to all of these problems. And it must happen fast, otherwise, the price of this transition will increase and fewer people will accept it.
“The development of the electric car charging network must go hand in hand with the adoption of electric cars. This is the role of subsidies, to help technologies that are not yet economically viable. The EV charging station network infrastructure is a big problem in Romania. Energy demand is very high and it is growing. There are huge amounts to be invested in the grid.” Velescu says about the EV charging infrastructure in Romania.