Romania to suspend renewable support scheme through to 2017

The Ponta government plans to lower the current allocation of green certificates granted to renewable producers for three and a half years starting July 1, as it aims to rein in energy prices and will enforce a system that lowers the amount of incentives.

Constantin Nita, delegate-energy minister, said on Tuesday that wind and small-hydro producers will receive one green certificate for every megawatt they produce through to January 2017, while photo-voltaic will be granted two certificates. The difference of certificates that producers are entitled to will be kept in a basket by energy regulator ANRE.

“The scheme will return on its course starting 2017. The investor has some revenues (from green certificates) that will not be generated now, but from 2017,”said Nita, quoted by Hotnews news portal. Nita added the price of green certificates in the electricity bill will drop by 50 percent as a result of this measure.

This will come as a second blow for the renewable sector in less than a week, after the energy regulator proposed massive cuts in the support scheme.

Green certificates have a regulated floor and ceiling price of EUR 28.8 and EUR 58.8 in 2013. One certificate traded in March at around EUR 52.

The minister added that 50 percent of the electricity supplied to large industrial consumers will not bear the cost of green certificates. The government also wants to allow producers with assets below 5MW to close bilateral contracts. At present, the energy law blocks the closing of Purchasing Power Agreements (PPAs) and all deals have to be carried out on the wholesale market OPCOM. This provision was a setback for investors seeking bank financing. The contracts for selling electricity and green certificates would act as a guarantee for companies that took out loans to build green projects.

Nita reckons that investors will not exit or reduce their investments locally as a result of the proposed legal changes.

“Romania’s support scheme is the most generous, but we can’t make everyone happy, we can’t risk an exit of large industrial producers from Romania,” said Nita, quoted by Mediafax newswire.

Ovidiu Posirca