Romania has an inflation of renewable projects, says Energy minister

The country has attracted numerous investments in the renewable sector in recent years, due to a generous support scheme, but the lack of new power transportation facilities may hinder the future development of the industry, warned on Tuesday Constantin Nita, delegate-minister for Energy.

He added the Romanian energy system currently accommodates close to 2,000MW in renewables, with envisaged projects for another 21,000MW. Although authorities have granted grid connection permits to an impressive number of projects, specialists say that a large share will remain only on paper, due to lack of financing.

“We are in an inflation of projects, and probably the system, in the current stage, can’t sustain such an infusion of energy, if new transportation capacities are not completed. There are numerous projects, given the fact that Romania is the only country in the EU that offers the most facilities through green certificates,” said the minister quoted by Mediafax newswire.

The renewable industry has fully benefited from the green certificate system in 2012, after the country amended the renewable energy law. Power producers are currently granted between 1 and 6 certificates, depending on the source. On the background on an incentivized production, the wind sector has more than doubled capacity in the last two years close to 2,000 MW.

Wind projects are granted two green certificates through to 2017, when it will be slashed to one. In order to reap the benefits of the current system, foreign utilities have built large projects locally. The Dobrogea region has been favored by investors, due to the strong winds present in this area, close to the Black Sea.

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Although the nature favored the sector, the legal framework has remained a drawback for potential investors. The new energy law contains a provision that blocks the closing of Purchasing Power Agreements (PPAs), which acted as guarantee for developers that needed bank loans to build their projects. Policymakers had though of some alternatives to keep the investment tap on, but the renewable sector is still waiting for a final decision in this area.

Although the support scheme was one of the main investment drivers, the solar sector – though to be next big thing, has lagged behind although it receives six green certificates. Photovoltaic- parks with installed capacities of 30MW were put online in 2012, from a mere 1 MW in the previous year.

Turning Romania into a regional power house

The government aims to turn the country into a reference market in this part of Europe on the sale and acquisition of energy, stating that it’s interested by major investments in the energy sector.

Nita said the Ministry of Economy needs to attract financing for upgrading the power production in order “to have a competitive price and to make Romania the main player in this part of Europe.”

The government wants to build the Tarnita-Lapustesti power plant in a Public Private Partnership as it can’t afford the investment, which hovers around EUR 1.4 billion.

“This hydroelectric plant is necessary for balancing the energy system,” said Nita.

The plant is included in Romania’s energy strategy, along with the building of two nuclear reactors at Cernavoda.

Ovidiu Posirca