Romania’s government plans changes in renewable sector: The green certificates’ market is not working, says minister

Newsroom 18/07/2016 | 12:26

The minister of energy, Victor Grigorescu, says the government is currently working with the European Bank for Reconstruction and Development (EBRD) on several scenarios considering the difficult market conditions for the renewable industry.

“Considering that the we don’t have a consensus, we have commissioned a study together with our colleagues from the EBRD to work on several scenarios and to come up in the autumn to have a draft bill that can provide a position of balance for the renewable industry. It is clear that there are certain things that are dysfunctional,” said Grigorescu in an interview for HotNews.ro.

Although the minister did not go into details about the draft bill, the problems faced by renewable investors are linked to the capacity of the projects to make money. After the government deferred the issuance of some green certificates and largely exempted the big consumers from acquiring them. However, the problem is that the market for green certificates is frozen at the moment as few deals are taking place.

Eric Stab, the president of the Foreign Investors’ Council, recently told BR that the investors have put EUR 7 billion in the renewable sector and some EUR 2 billion were written off. Stab, who is also chairman and CEO, country president Romania and Poland at Engie, the French utility. He added that the market for green certificates will come under serious pressure next year, when the first deferred certificates will be issued.

Minister Grigorescu said the market for green certificates has proven to be “rather complicated”.

“There is a discussion regarding the price of the certificate. There are companies that were able to sell them, while other companies are not able to do this. There is was also a discussion about the viability of this system from the perspective of the competition. There were talks with the Competition Council. There are certain aspects that have to be taken into account. Moreover, the focus has been on the quota. (…) The quota is not the only important thing that has to be taken into account. There are also the exemptions from this system, exemptions for big consumers and this is an important element. That are elements of fiscal nature, when the taxes for the green certificates are paid when the money is collected.  I think we should look at this situation of green certificates from a global perspective because probably the intervention in several spots can bring us in this area of balance. I think that a few years ago we were very enthusiastic and now we are paying for this enthusiasm,” said the minister.

The energy regulator ANRE has proposed a quota of 8.3 percent of incentives for renewable energy out of the total gross energy consumption from 2017.  This figure stood at 12.15 percent this year. According to the renewable law, the quota should have reached 18 percent in 2018.

Ovidiu Posirca

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