Electricity

Romania grants EUR 418 million for power distribution grid upgrades

Romania grants EUR 418 million power distribution grid upgrades

Photo: Sebastian Burduja / Facebook

Published

February 19, 2024

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Published:

February 19, 2024

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The Ministry of Energy of Romania approved EUR 418.2 million in grants to the country’s regional power distribution system operators for grid expansion and modernization projects worth EUR 645.7 million in total.

The development of electricity networks is crucial for the energy transition and decarbonization, but it is among the segments lagging the most in the process. The lack of grid capacity and digitalized, smart features hinders the deployment of renewables and storage solutions. In turn it also limits the amount of electricity supply from intermittent and scattered sources that the system can handle.

Romania, which is experiencing a photovoltaics boom, led by prosumers, allocated a sizeable chunk of its European funding for the expansion and modernization of the power distribution network. The Ministry of Energy said it signed 21 contracts supporting investments worth an overall EUR 646 million.

Ministry approves funds for all six DSOs

There are six regional distribution system operators (DSOs) in the country: Delgaz Grid, Distribuţie Energie Oltenia, Distribuție Energie Electrică Romania (DEER), Rețele Electrice Muntenia, Rețele Electrice Dobrogea and Rețele Electrice Banat. Greece-based Public Power Corp. (PPC) took over the last three in 2023 from Enel as part of its acquisition of the Italian company’s entire business in Romania. Until then they were called E-Distribuţie Muntenia, E-Distribuţie Dobrogea and E- Distribuţie Banat, respectively.

The six firms got EUR 418.4 million in total in grants from the European Union’s Modernisation Fund. The proposed investments include safety, monitoring and measuring systems, transformers, voltage stabilization and energy efficiency.

Burduja: Accelerate, accelerate, accelerate

“We have a motto in the Ministry of Energy team: accelerate, accelerate, accelerate… What do these investments from non-refundable financing mean? Modernizing electricity distribution networks and increasing their degree of resilience in the context of climate change, by moving overhead power lines underground; increasing the ability to absorb new prosumer and renewable energy production capacities, a phenomenon we fully support; digitalization of networks through the introduction of smart meters, with a focus on large urban communities,” said Minister of Energy Sebastian Burduja, pictured here fourth from right.

Electrica, in which the government holds a 49% stake, is implementing one third of the cofinanced projects and it received the highest sum

Investments at the distribution level are particularly important for small power plants, facilities for self-supply as well as for the development of local energy cooperatives and communities.

PPC’s subsidiaries got EUR 87.1 million through six contracts, for projects valued at EUR 112.2 million. The ministry awarded EUR 121.6 million to E.ON’s Delgaz Grid for four investments, worth EUR 187 million altogether. Electrica, in which the government controls 49%, received EUR 170.7 million in cofinancing. It estimated its seven projects at EUR 265.7 million, the announcement reads.

Distribuţie Energie Oltenia plans to spend EUR 59.8 million on expansion and modernization, of which the state will cover EUR 38.8 million, according to the ministry. The firm, owned by Macquarie Infrastructure and Real Assets (MIRA), signed four deals.

Even more funds for district heating from Modernisation Fund than for power distribution

The ministry said that it facilitated 38 investments so far for electricity distribution systems via the Modernisation Fund, securing a total of EUR 593.1 million in state aid. As for other recent news, it signed the first contract for funding high-efficiency cogeneration projects and the modernization of the district heating network.

The Municipality of Suceava received EUR 49.5 million for a EUR 72.7 million project. The ministry issued two calls at the beginning of February for an overall EUR 590 million, also from the Modernisation Fund. Local authorities and district heating transmission and distribution operators can apply on a first come, first serve basis.

There is EUR 590 million available for high-efficiency cogeneration projects and the modernization of the district heating network

Burduja called on the Municipality of Bucharest to apply. In his view, the heating issues in Romania’s capital city are the biggest in the country. The minister added that tens or hundreds of thousands of people in Bucharest lack heating and hot water every day.

Moreover, Burduja launched an initiative for five measures that he claims can cut bills in the sector in the city by up to 60%. They can also secure the supply of district heating and hot sanitary water, he added. He proposed to merge the operators and obtain gas for heating plants. The minister added that the government has allocated EUR 670 million for three projects to modernize the facilities. It also plans to introduce renewable sources, particularly geothermal energy, and repair the district heating network.

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