2013 in review: Renewable Energy

This year has seen a dramatic expansion of solar installations, while wind capacities have increased at a moderate pace. The government has deferred the issuance of some green certificates through to early 2014, and incentives for new projects coming online in 2014 will be reduced as authorities want to limit the impact of subsidies on the bills of households and industry.

The installed capacities in photovoltaic projects have soared from 49MW at the end of 2012 to 543MW by September 2013, according to grid operator Transelectrica. Investors have flocked into solar this year to benefit from the six green certificates granted for each megawatt that these projects feed into the grid.

Wind capacities have continued to grow from 1,822MW at the end of 2012 to 2,283MW by September 2013, according to Transelectrica.

In the face of rising electricity bills due to renewable incentives, the government enforced this July a government ordinance deferring the issue of some green certificates for wind, solar and small-hydro through to April 2017. The additional certificates should be recovered by 2020.

Solar has been the star of the renewable market on deal making. Foreign companies of the likes of Samsung or Enel have been active buyers of Romanian photovoltaic projects.

The energy regulator ANRE is currently working on a feed-in tariff for renewable sources, as an alternative to the green certificates support system. Specific legislation should be rolled out in the first half of 2014.

Grid investments have remained limited this year and Transelectrica says it needs around EUR 500 million to strengthen the grid and build new power lines. New transport lines are of utmost necessity in the Dobrogea region, where the biggest share of wind projects are operational, according to experts. The grid operator has taken the first step in finding new financing sources, which will also be funneled towards new investments, by raising EUR 45 million in a bond sale in December. The company aims to raise around EUR 200 million through bond sales in the coming period.

As the government plans to cut renewable incentives for new solar, wind and small hydro projects becoming operational from 2014, experts predicts we could see more investments in the biomass sector, which has remained largely underdeveloped. According to Transelectrica data, biomass capacities have slightly increased from around 40MW at the end of 2012 to little over 50MW by September 2013. Players say this technology should expand in the years to come, primarily due to Romania’s impressive agricultural potential.

The weighted average price of a traded green certificates has fallen from RON 246 (December 2012 – February 2013) to RON 187 (September – November 2013), according to data from energy stock exchange OPCOM.

The EU and China reached a deal this summer over the trade of solar panels. This involved the set up of a threshold of 7GW worth of solar imports from China yearly, with anything above this level facing an anti-dumping tax averaging at 47.6 percent.

Ovidiu Posirca

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