Romanian market regulator suggests thorough reconsideration of renewable energy strategy

By bne IntelliNews November 28, 2013

Romanian energy market regulator ANRE has proposed to lawmakers a thorough reconsideration of the renewable energy support schemes, advocating that the share of renewable energy in total energy consumption already met the 24% target set for 2020, Adevarul daily reported, quoting ongoing discussions within parliament committees.

Heating, which accounts for roughly half of the country’s gross final energy consumption, is 43%-generated by burning wood in households [mainly in rural areas where 45% of the population lives].

ANRE proposes specifically cutting down the targets for the annual share of electricity generated from renewable resources [RES-E] – for instance to 13% next year, down from 15% under the current planning.

Furthermore, ANRE proposes capping the licensing of RES-E projects at the moment when the share of RES-E meets the target – and not when the planned investments are achieved. ANRE is supposed under the current regulations to freeze licensing of new projects each year when the targeted end-year installed capacity [for each technology] is met.

Finally, ANRE also considers switching the evaluation of investments in RES-E projects from international benchmarks [IEA] to case-by-case evaluations. Evaluation of investments is a key element of the overcompensation process that is carried out on a yearly basis [twice a year starting 2014] by ANRE for avoiding excessive internal rate of returns gained by investors.

Romania endorsed in 2010 and submitted to the EC its National Renewable Energy Action Plan – which covers the sector of heating, electricity and energy used for transportation. Nonetheless, the forecast for energy consumption was drafted in advance and based on bullish economic growth forecasts made before the recession period. In order to meet the targets, the government enforced various support schemes – the most important being those for renewable electricity [tradable green certificates] and high-efficiency co-generation. 

IntelliNews Comment: Romania’s share of RES in total gross energy consumption was 23.4% in 2010 amid record hydropower generation. In 2012, the hydropower generation was very weak on the back of adverse weather conditions – only 20.5% of total electricity generation, down from 33.5% in 2010. The hydropower generation returned to average levels [25-30%] this year and supplementary more wind farms came online. The share of wind electricity in total generation exceeded 8%. ANRE's estimate of 24% renewable energy in total seems thus to be based on this year’s data.

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