Romania needs a target of at least 34% for renewable energy, by 2030, said Adrian Borotea, executive vice president of the Romanian Wind Energy Association (RWEA). The EU has prepared funds of up to 32 billion euros to new projects, and Romania can benefit from the latest technologies to invest more efficiently in green energy.
Given the new Green Deal policy, what is, according to RWEA, the most appropriate energy mix for Romania, for the period 2020-2030 and 2030-2050?
The Green Deal is an opportunity for Romania and not a threat. In 2021-2030, the EU will finance new green investment projects with 1,000 billion euro, in non-reimbursable funds. The latest information show that about 32 billion euros will be allocated to Romania.
RWEA supports the significant increase in the level of ambition for 2030 regarding the share of energy from renewable sources to at least 34%, an objective achievable under conditions of technical and economic efficiency, as demonstrated by the study “Renewable Energy in Romania: Development potential by 2030”, made by Deloitte Romania. There are three scenarios, for a share between 32.4% and 35.5%, with additional wind capacities between 3,000 and 4,000 MW, achievable with investments significantly lower than those taken into account by the National Integrated Energy and Climate Change Plan (NECP) and with a lower price of electricity to the consumer, before taxes. We remind that the form of NECP now in public debate provides for a share of 30.7% renewable energy in 2030.
We need a renewable energy target of at least 34%, a target that is not a burden for Romania, but a sign that Romania has understood its potential and wants to be an important player in the new European Ecological Pact. Renewable technologies are the most important pillar of Europe’s new economic policy and any country that will demonstrate ambitions in this field will have the chance to attract the necessary investments not only in the field of power generation, but also in the strategic value chains to be created at European Union level.
The EU target for 2050 aims at climate neutrality, with a share of renewable energy close to 100%. We consider that Romania has enough wind and solar potential to reach over 80% in 2050.
Are the targets now in the NECP enough for such a vision to be fulfilled?
The share of renewable energy for 2030 must be at least 34% (compared to 30.7% in the provisional NECP), renewable energy being the cheapest form of energy generation and thus offering benefits to the industrial consumer and households.
There are already experts saying that we can reach grid parity easier, through new investments, as prices rise and the value of the initial investment decreases (CAPEX). What measures to support new investments do you see necessary for Romania in the coming years?
Indeed, with the increase in power prices on centralized markets and the reduction of CAPEX for wind and solar energy, we near the grid parity.
Given that the recovery of a new investment is made over a period of at least 15 years, the question is whether electricity prices will remain at least at the current level throughout the period. Electricity consumption is expected to increase slowly and steadily, nuclear units will extend their service life, coal-fired electricity production will be around 2,000 MW by 2030 and there are new investment planned for gas plants. In addition, the entire region will need additional production capacity in the coming years. All these premises confirm that in the next period, Romania will remain a net importing country of electricity, while the price of electricity is to stay at least at the current level.
The good news for consumers is that RWEA proposes that much of the additional capacity needed for Romania to come from wind energy, the cheapest energy.
In order to be able to reach renewable energy targets, it is necessary to completely liberalize the market, implement European regulations and allow bilateral power purchase agreements (PPAs). It is also necessary to reduce and / or eliminate the tariffs for strengthening the networks.
For implementation, RWEA proposes that NECP provide that the contracts for difference (CfD) to provide visibility for a minimum of five years regarding the date of organization of the auctions, the budget allocated to and the capacities auctioned. NECP should include a plan of concrete measures and actions for increasing the flexibility of the national energy system (NES), with targets for increasing the interconnection degree, implementing Demand Side Management (DSM), developing flexibility in R&D. It is necessary to develop a market and technologies for energy storage, those based on hydrogen, digitization is a must and also increasing the degree of flexibility in the transmission sector. The development of networks must take into account and anticipate the development of renewable capacities, taking into account the availability of the resource.
What wind capacities do you think Romania could develop in the next 10 years and what financing can the wind industry attract? How can we use them?
From the available data, until 2030, Romania can mobilize at least 5.5 billion euros through the EU Cohesion Policy, of which 3.1 billion euros are allocated to the energy sector. 10.11 billion euros could be made available through the Mechanism for a Fair Transition, of which 757 million euros through the Fund for a Fair Transition (JTF). Another financing line within the mechanism will be InvestEU, which will mobilize public and private investments supported with Union budget guarantees. If Romania starts the tenders and directs them to the energy transition, about 18 billion euros will be accessible through the Modernization Fund powered by the EU-ETS mechanism, and other instruments, such as the Connecting Europe Facility or the LIFE + program, will also be used to support Romania’s transition to clean energy.
The question is how much of the mentioned funds will be allocated by the authorities for wind energy. For example, according to the statements of the European Parliament’s chief negotiator for financing the Green Deal, Siegfried Mureșan, the first pillar of the JTF, worth 757 million euros, is allocated to give perspective to the affected (mining) areas in Romania. The other two pillars of the JTF are money for refurbishment and energy sources – refurbishment of coal-fired power plants and their transformation into gas-fired power stations, and nuclear units.
Given the above mentioned benefits of wind energy, RWEA believes that a large part of these funds should be allocated to financing new wind energy projects. We can assure you that RWEA members have submitted their proposals for new wind energy investments to the Ministry of Economy, Energy and Business Environment, in order to access European funds.
What are the current achievements in the program for job conversion of miners in the Jiu Valley and how will it develop in the future?
The Academy of Professional Training and Reconversion for Renewable Sources and Electricity Distribution is a project RWEA loves a lot, a project proposed by CEZ and Monsson. The project aims, through specialized courses and practice in installations, to train miners in the Jiu Valley and in the Oltenia area into specialists in wind energy and electricity distribution. The idea was very well received by the Ministry of Energy, in fact we already signed a collaboration protocol.
On the occasion of Wind Open Day 3, RWEA’s flagship event, last summer, we invited 100 miners to the CEZ park in Fântânele-Cogealac. At the end of the visit, we received as 100 offers from the miners to attend the courses and to be employed in wind energy.
In the fall of last year we started a pilot, with the help of Monsson’s RESS school. The first miners have already been hired.
Currently, we are exploring possibilities for extending the program to its final parameters using European funding.
What is your opinion on Romania’s storage needs and on how can it be transposed into concrete projects, in future years (2020-2030)?
To the extent that additional capacities in wind and solar energy will be put into operation, it will be necessary to balance the energy system by increasing the storage capacity, especially in hydroelectric plants with accumulation by pumping, in batteries, but also in new technologies, with hydrogen production, Power-To-Gas, thermal energy produced from electricity and stored in Molten salt tanks and others. In addition, there is a growing need throughout the SEE region and, consequently, an opportunity to export system services.
Financing new storage capacities from European funds is another solution, promoted through projects submitted by RWEA members and well received by the ministry.
This interview firstly appeared in the printed edition of Energynomics Magazine, issued in March 2020.
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