March 30, 2013

Romania plans to cut support for renewable energy

By Luiza Ilie | Reuters | March 29, 2013 |

Romania’s government will cut its support scheme for wind, solar and small hydro renewable energy projects to avoid overcompensating investors, energy regulator ANRE said on Friday.

Elsewhere in the European Union, countries such as Germany, Britain and Spain have either cut or plan to reduce incentives for renewable energy after years of strong government support.

Romania’s support scheme gives renewable power producers green certificates for each megawatt generated. Suppliers must get an increasing percentage of the power they sell from renewable energy and buy certificates to meet these targets.

Investors in renewables make gains when they sell the certificates and again when they sell their power output.

But the support scheme also allows ANRE to ask the government to cut certificates if investors’ rates of return become too high.

ANRE proposes to cut the number of certificates to 1.5 from two per megawatt for wind energy, to three from six for solar projects and to 2.3 from three for small hydro power plants, it said in a statement. The changes will apply to new projects.

Romania’s subsidies, which analysts and the European Commision have said are too generous, have attracted billions of euros in investment, particularly to wind power.

The scheme, which has been in place for only one year, has also driven the inflation rate higher. Green certificates accounted for nearly half of a 10 percent hike in households’ power bills in January.

Energy Minister Constantin Nita was quoted as saying earlier this month the government also planned to cut the upper range of the price that renewables producers get for certificates, catching many investors off guard. (Editing by Jane Baird)

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