Funding 3 Billion Euros! EU Helps Romania's Green Transition

According to foreign media reports, the European Commission recently approved a 3 billion euro aid program that will finance the installation of photovoltaic systems and onshore wind power facilities in Romania.

The European Commission will provide the funding in the form of a two-way Contract for Difference (CfD) through a competitive bidding process. Photovoltaic systems and onshore wind facilities to be constructed and operated in Romania in the future will be eligible for funding.

Under the terms of the CfD, the implementation price will be determined through a competitive bidding procedure, while the reference price will be calculated based on the weighted average of the monthly output of the previous day's market price of electricity.

The European Commission has stipulated that when the reference price is lower than the strike price, the beneficiary will be entitled to receive funding for the difference between the two prices. When the reference price is higher than the implementation price, the beneficiary must pay the difference to the Romanian regulator.

In a statement, the European Commission explained, "The scheme thus guarantees a minimum level of return to beneficiaries, while ensuring that beneficiaries are not overcompensated during periods when the reference price is higher than the implementation price."

This aid program was approved under the European Commission's Interim Crisis and Transition Framework for State Aid (ICFTF), which aims to support the acceleration of the country's green transition and the reduction of dependence on fossil fuels in key sectors. The European Commission claims that the program will facilitate Portugal's transition to a net-zero emissions economy.

Margrethe Vestager, executive vice-president of the European Commission responsible for competition policy, said: 'The use of CFDs provides incentives for the rapid diffusion of renewable energy and prevents overcompensation. The scheme will also help reduce Romania's dependence on imported fossil fuels without unduly distorting competition in the single market."

Romania hosted its first Contract for Difference (CfD) auction for renewable energy last year. The Romanian government raised its target for installing renewable energy generation facilities at the end of 2023. It aims to generate 36% of its energy from renewable sources by 2030, with an installed capacity of 8.3GW of photovoltaic (PV) systems and 7.6GW of wind power facilities installed. The country plans to phase out coal-fired power plants by 2032.

By the end of 2023, the cumulative installed capacity of photovoltaic systems installed in Romania reached 2.9GW.