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Nicolescu (Deloitte): Another plan for renewable energy bubble is in the making

20 July 2015
Renewables
energynomics

The support through guaranteed prices for the electricity produced from renewable energy plants, that have an installed capacity of 0.5 MW, represents a new imbalance introduced into the energy market of Romania, said Răzvan Nicolescu, President of the Board of the European Regulatory Energy Agency and consultant at Deloitte.

“Still without an equilibrium solution for those who invested and were basically deceived (with the green certificate scheme for large projects – n.o.), a plan is devised for another bubble for projects below 0, 5MW. Some call them small projects and say they are meant to supply isolated areas. Let’s be engineers for once! An installed capacity of 0.5 MW is almost 20 times more than the actual consumption of an ordinary house. The effect will be an avalanche of new projects and then, perhaps, a new brutal intervention in changing the support scheme, namely a kind of soap opera that will continue for a long time,” says Razvan Nicolescu in an editorial published on capital.ro.

Recently, the Industry Commission of the Chamber of Deputies proposed the legal framework for a support scheme for renewable energy projects of less than 0.5 MW, and Răzvan Nicolescu noted that the proposal was made without any impact assessment and that it “generates suspicion”.

Former deputy minister for energy resumes the analysis of the saga of the green certificate support scheme: while Romanian diplomacy obtained the lowest obligation to increase the share of renewable energy, the domestic law became much too generous with grants for projects, and after about a year and half it became too brutal regarding the removal of subsidies.

Economically underdeveloped compared to the potential that we have, “our strategy in the negotiations in 2007 was to buy time.” […] Thanks to massive investments in research, costs were on a downward trend accelerated, in few years they dropped in the photovoltaic sector by over 50%. But surprise! Before the negotiations on the new European directive were completed, the Chamber of Deputies adopted a law to promote renewable energy which established a very generous support scheme for renewable energy, Romania becoming the country of paradoxes: the lowest growth for renewable energy obligation and the most generous support scheme. ”

The error of the exaggerated generosity is replicated in supporting small projects also, suggests the editorial written by Răzvan Nicolescu.

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