Lukoil to steer new renewable investments away from Romania, Bulgaria

Russia’s Lukoil, the oil major, said it may turn to Russia for future renewable energy projects, as its operations in Bulgaria and Romania were hit by cuts in incentives, reports Bloomberg newswire.

Maxim Karnaukhov, first deputy general director of Lukoil-Ecoenergo, the power generation arm, said the company may start a pilot project of 10MW of wind generation in Kaliningrad as early as next year, if Russia eases restrictions requiring equipment to be bought locally.

“The company has decided to halt long-term investments in renewables projects in Eastern Europe,” said the director. “Unfortunately, at the moment, the support mechanism for renewable energy in some countries is being reconsidered, which is ruining the investment climate.”

Romania is among the EU members that have changed the incentives system in an effort to limit the impact of growing eco-taxes for households and big industrial consumers.

The government has postponed last year the issuance of one green certificate in wind projects, which should be recovered starting 2018. Furthermore, new wind projects coming online will lose 0.5 certificates through to 2017 and 0.25 certificates in 2018, with authorities citing falling prices in this technology. Wind projects are granted two green certificates under Romania’s renewable law.

Enterprise Investors (EI), the Poland-based private equity fund, has put any potential acquisitions of wind projects in Romania “on hold” following changes in the renewable legislation, Cristian Nacu, EI partner, told BR earlier this March. The fund had launched investment vehicle Wento, part of EI’s Polish Enterprise Fund VI, in early 2012 and was interested in Romania, although Poland remained its core market.

Lukoil is one of the big players in the local renewable sector, recently completing the 82MW Topologu-Dorobantu wind farm. The investment was made through LUKERG Renewable, the joint venture between Italy’s ERG Renew, the energy company, and LUKOIL – Ecoenergo. Last year, the joint venture took over the 70MW Gebeleisis wind farm in Romania from Vestas, in a deal worth EUR 137.5 million.

According to Mediafax newswire, Lukoil plans to build a 9MW solar farm near its Petrotel refinery in Ploiesti. Aside from renewable assets, the company owns in Romania a network of over 300 retail fueling stations

Romania reached 2,704MW of incentivized wind capacities by January 2014, according to grid operator Transelectrica.

Ovidiu Posirca

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