Renewables

Romania’s Burduja reveals ceiling prices for wind, solar auctions

Romania Burduja reveals ceiling prices wind solar auctions Modernisation Fund

Photo: Sebastian Burduja / Facebook

Published

March 12, 2024

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Published:

March 12, 2024

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Romania will publish a call for its first solar and wind power auctions within weeks, pending the green light from the government and the Modernisation Fund, Minister of Energy Sebastian Burduja estimated. He announced the ceiling prices in the bids for CfD market premiums would be EUR 91 per MWh and EUR 93 per MWh, respectively.

Romania will be the first country to use the European Union’s Modernisation Fund to cover two-way contracts for difference (CfDs) with renewable electricity producers. The government received a green light last week from the European Commission for a EUR 3 billion state aid scheme for solar and wind power projects.

Auction winners will be entitled to a guaranteed price for the electricity they sell for 15 years, Minister of Energy Sebastian Burduja noted. Under a CfD, the government pays the private operator the difference if the market price is lower than the price in its contract. When it’s the other way around, the utility returns the difference.

It means predictability for encouraging strategic investments in Romania’s green transition, Burduja stressed. He vowed to make the competitive bidding process as competitive as possible.

“Because a lower reference price will give a signal to the entire European market, and even beyond the European Union, that Romania is really attractive for investments in the energy sector, on the one hand, and on the other hand, it no longer exposes the state to a risk of paying more than would be the case in a comfortable time horizon for investors of 15 years,” Burduja stated.

Hefty green energy subsidies crippled government finances a decade ago, so the renewables market collapsed and remained dormant for several years.

Romania expects approval from Modernisation Fund by end of March

Burduja estimated that the government would issue the necessary approval within a few weeks and that the Modernisation Fund would sign off on the auctions by the end of the month. Officials were earlier targeting March 1 for the launch of the public call. The budget for the first round was seen at EUR 815 million.

The upcoming auctions are envisaged to be held for projects with an overall 1 GW in solar power and 1 GW in wind power capacity. Another 1.5 GW for each technology is planned for next year, bringing the combined quota to 5 GW.

Burduja: Auctions to bring significantly lower prices

Burduja revealed that the ceiling, the maximum bidding prices, would be EUR 91 per MWh for photovoltaics and EUR 93 per MWh for wind farm projects. The levels were determined with consultants and the European Bank for Reconstruction and Development.

The minister said he expects final auction prices to be significantly lower. Last year Romania was a net electricity exporter, he underscored. It was the first time since 2018.

The adoption of the legal framework for CfD auctions is several years late, though the government provided other kinds of subsidies. The country is about to pass an offshore wind power law.

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