The number of green certificates granted to renewable energy producers is likely to remain unchanged through to 2014, according to a bill to be voted in Parliament, although the energy regulator (ANRE) will ask the government to cut certificates in overcompensated technologies, said specialists last week at the launch event of the Romanian Photovoltaic Industry Association.
Emergency ordinance 88, which amended renewable energy law 220, has already been approved by the Senate and includes a provision that protects technologies that may be receiving too many certificates, mainly solar. It should receive a final vote from the Chamber of Deputies in the coming weeks.
Romania currently has 2 MW of installed solar capacities but over 800 MW has the technical connection permit (ATR), although little will materialize due to lack of financing, according to Zoltan Nagy, general manager at the energy regulator ANRE.
Photovoltaic is currently granted six green certificates (GCs) but the decreasing price of this technology has increased the investments return rate (IRR), leading to overcompensation that cuts the number of certificates.
The investment price for 1 MW in solar ranges between EUR 2 million and EUR 2.5 million.
ANRE has been analyzing renewable projects over the past few months and will issue a report this June stating if a certain technology yields 10 percent over the approved IRR. In that case, the technology would be overcompensated and ANRE will ask the government to cut the number of green certificates for that source. The IRR of 11.6 percent in solar has already been exceeded and producers can now recover their investment in four years instead of seven.
“If we cut the GC on a certain source we will not go below the IRR, to fit in with rates approved by the European Commission. If for photovoltaic, with an investment of EUR 2 million, it results that the 11.7 percent IRR can be obtained with 4.25 GC, this is what will be proposed to the government,” explained Nagy.
He added that the annual maintenance costs for 1 MW of solar are around EUR 30,000 to EUR 38, 000, while variable balancing costs stand at around EUR 10 per MWh.
The price of green certificates is likely to go down in the coming years, as the mandatory quotas of renewable energy in total consumption will be met. Last year, Romania had a quota of 10 percent and achieved only 3.7 percent of it. This year, the quota increased to 12 percent, while consumption will be close to 7 percent, according to ANRE estimates. It should be 20 percent by 2020.
Specialists say the country will have an oversupply of GC once the quota is met. This will drag prices towards the lower limit of EUR 28 for one certificate, which is valid for 16 months. Closing deals for the acquisition of green certificates and power purchasing agreements can be a solution according to Nagy.
“Already, there are many energy suppliers who are obliged to buy these certificates that want to close such contracts for six to seven years,” said Nagy. The GC support scheme runs for 15 years.
Romania had 1,681 MW of renewable energy capacities in April, according to Transelectrica, the grid operator. More than 1,200 MW was in wind.