Romania is preparing to tender 1 GW of wind power and 1 GW of PV capacity as part of its 10 GW auction plan by 2030. The country's first auction will be launched by the end of this month, with successful bidders to be announced in November.
The Romanian Ministry of Energy started seeking expressions of interest for its first renewables auction in December. At the time, it said that eligible facilities should have a minimum capacity of 5 MW.
“The scheme, inspired by the UK model, will support onshore wind and photovoltaic projects with a total capacity of 5,000 MW split in two auctions, with the first auction in 2023 for 2,000 MW and the second auction in 2025 for 3,000 MW,” Mihaela Nyerges, managing partner at law firm Nyerges & Partners, told pv magazine. “In both auctions, capacity will be equally split between the two technologies.”
She said that the timeline for the 2023 tender is quite ambitious, with final objective to sign the CfD contracts by the end of this year. The bidders must include in their bids the target commissioning date, project capacity, and strike price expressed in euros per megawatt-hour.
With regard to eligibility requirements, Nyerges notes that projects with storage capacities behind the meter will not be considered as well as those benefiting from other support schemes (for example National Recovery and Resilience Plan or Modernization Fund).
Furthermore, a technical connection permit must be already obtained, with a connection date no later than December 2026. Should the delays exceed 24 months, the CfD contract will be terminated.
Finally, projects for which the engineering, procurement and construction contracts or equipment supply contracts were concluded are still eligible to the extent such contracts were concluded after July 20, 2022.
“Importantly, the scheme beneficiaries will not receive the CfD payment for the intervals where the market reference price is negative,” Nzerges says. “This severely affects the stability given by the CfD contract and its bankability, especially considering that we have already seen negative prices earlier this year and such cases are expected to become more frequent once new capacities are commissioned.”
The Ministry of Energy and other local authorities are now working with the European Bank for Reconstruction and Development (EBRD) to create the necessary legal and regulatory framework for the CfD support scheme. The final information note to bidders is to be published ahead of the official launch of the auction and will be made available on the Romanian Ministry of Energy’s website.
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Two-way CfD schemes like the one which will be implemented in Romania are designed to incentivize investments in renewable energy by providing revenue stability to developers and strengthening the market integration of renewables.
“This new CfD scheme awarded through auctions is critical to unlocking private-sector investment and to ensuring the transition to a resilient and green energy sector,” said Mark Davis, EBRD Regional Head of Romania and Bulgaria.
The forthcoming auction represents the first round of a multi-year plan, which envisages the award of CfDs for a total of 10 GW of onshore wind power and PV capacity by 2030.
The procurement exercise is designed in line with the country’s Recovery and Resilience Plan milestones to have the first capacities supported by this mechanism up and running by 2026 and its renewable energy targets.
Last year, Romanian Energy Minister Virgil Popescu told Reuters that the scheme will translate into “an explosion of renewable energy development.” However, he noted that CfDs would also be used “to finance conventional energy such as nuclear.”
The country has committed to phasing out coal by 2032 and replacing it with nuclear, gas and renewable energy. It has also vowed to restructure lignite-fired holding CE Oltenia by 2026 and replace its old capacity with 725 MW of solar power and some gas.
According to the Romanian Photovoltaic Industry Association (RPIA), at least 3 GW of renewables are to be added by 2026, with solar accounting for around 2 GW of the total. The latest statistics from the International Renewable Energy Agency (IRENA), Romania had 1,414 MW of solar installed at the end of 2022.
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“Importantly, the scheme beneficiaries will not receive the CfD payment for the intervals where the market reference price is negative,” Nzerges says. “This severely affects the stability given by the CfD contract and its bankability, especially considering that we have already seen negative prices earlier this year and such cases are expected to become more frequent once new capacities are commissioned.”
And the only reason for that? Because the imbeciles in the European Commission and member states, point blank refuse to reform wholesale price formation – they have a quasi-religious belief in marginal pricing. Pathetic.