Romanian government lowers support for new renewable energy producers

By bne IntelliNews December 17, 2013

Romania’s government has enacted the cut in the support for renewable energy projects, which will be commissioned after January 2014, news service HotNews reported, quoting the market regulator’s vice-president Emil Calota as saying.

The government’s decision is based on the proposal issued in March by market regulator ANRE and is aimed at bringing the expected internal rate of return [IRR] for future projects in line with the 10-12% target IRRs set under the 220/2008 law. Projects commissioned before January 2014 are subject to a separate ordinance, OUG 57/2013*.

Romania operates a standard tradable green certificates [TGC] system to support renewable energy production. Projects are eligible to receive TGCs for a period of 15 years after commissioning. The government’s decision announced by ANRE's vice-president stipulates lower number of TGCs given per MWh delivered to the market.

Wind farms commissioned starting January 2014 will this receive 1.5 TGCs per MWh by 2017 and 1.3 after 2017, compared to 2 TGCs currently. Photovoltaic plants will receive 3 TGCs per MWh instead of 6 currently. Micro hydropower plants will receive 2.3 TGCs instead of 3 currently.

The announced modification of the support system has spurred investments in renewable energy projects in H2 this year. The installed capacity of solar power plants thus increased significantly to 656MW – up from only 49MW at the end of last year and high above the 78MW target set by the market regulator for the end of 2013.

The installed capacity of wind farms also increased robustly to 2,459MW from 1,900MW at the end of last year and the 2,450MW end-2013 target. The National Renewable Energy Action Plan NREAP targets total solar power capacity of 260MW and wind power capacity of 4,000MW for the end of 2020.

* Under ordinance 57/2013, which amends law 220/2008 for renewable energy support, part of the tradable green certificates given to investors in green energy projects is withheld until 2017/2018 [depending on the technology used]. Technically, the move is aimed at bringing the profitability of projects commissioned in the past in line with the target IRRs.  

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