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The European Commission has approved Romania’s EUR 3 billion scheme to support the construction and operation of new solar photovoltaic facilities and onshore wind farms.
The mechanism will foster the transition towards a net zero economy in line with the Green Deal Industrial Plan, the European Commission said.
The scheme was approved under the Temporary Crisis and Transition Framework for state aid. The commission launched it a year ago to support measures in sectors that are key to accelerating the green transition and reducing fuel dependencies.
The aid will be granted through a competitive bidding process by the end of 2025, according to the announcement.
The subsidies will be paid through contracts for difference
The European Union’s executive arm added that the support would be delivered in the form of two-way contracts for difference (CfDs).
The strike price will be determined through bidding procedures (pay as bid) and the reference price will be calculated as a monthly output-weighted average of the market price of electricity in the day-ahead markets.
When the reference price is below the strike price, the beneficiary will be entitled to receive payments equal to the difference between the two prices. However, when the reference price is above the strike price, the beneficiary will have to pay the difference to the Romanian authorities.
Vestager: The use of CfDs provides incentives for the swift rollout of renewable energy sources and prevents overcompensation
Margrethe Vestager, Executive Vice-President in charge of competition policy, said the EUR 3 billion scheme would enable Romania to support the deployment of solar photovoltaic and onshore wind power plants.
“The use of contracts for difference provides incentives for the swift rollout of renewable energy sources and prevents overcompensation. This scheme will also contribute to reduce Romania’s dependence on imported fossil fuels,” she added.
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