Romania remains one of the European energy markets with significant growth potential, particularly in the solar sector, although the transition will come with a number of structural risks that investors and policymakers must manage carefully, says Loukas Botsis, senior manager at Baringa.
“Romania is a market with huge potential. It’s starting from a low point and there is clear political intention to support the sector,” he said, at Energynomics Day, on the premises of the Green Energy Expo & Romenvirotec.
He added that the country starts from a relatively low installed capacity compared with Western European markets, but benefits from strong political support for renewable energy investments. At the same time, developers and investors must account for risks that are already emerging across European electricity markets. One of the most visible trends is the growing frequency of negative power prices during periods of high renewable production, especially during sunny or windy hours when supply temporarily exceeds demand.
These dynamics can significantly affect the profitability of solar projects. Lower capture prices are already becoming a key concern for investors across Europe, he stated.
Rising pressure on carbon prices, changes in energy market regulation and volatility in natural gas markets can also influence electricity prices and project economics. Although geopolitical tensions may temporarily push gas prices higher, analysts do not expect a permanent supply shock comparable to the one triggered by Russia’s invasion of Ukraine. In this context, the business model for solar investments is evolving. Developers increasingly look at combining solar generation with battery storage or other assets located at the same site, a strategy known as co-location. Storage systems allow operators to shift electricity to periods when prices are higher, reducing exposure to negative price events.
According to Botsis, another structural risk relates to the geographic concentration of renewable energy projects. Experience in other European markets shows that large volumes of generation located in a limited area can create grid balancing problems and increase costs for the electricity system. For example, the concentration of wind generation in northern parts of the United Kingdom required expensive balancing operations to move electricity to other regions, ultimately raising consumer bills. Similar risks could appear in emerging renewable markets if infrastructure planning does not keep pace with new generation capacity.
Botsis argued that this is why policymakers should adopt a more holistic approach to planning energy infrastructure, taking into account where electricity demand, grid capacity and generation projects are located. Centralized planning could help determine where new solar plants, batteries or grid upgrades are most needed, rather than leaving all decisions entirely to market forces. In large energy transitions, governments often need to coordinate infrastructure development to avoid inefficiencies or excessive network costs.
Despite these challenges, Romania is broadly on track to meet its renewable energy targets for 2030 under the National Energy and Climate Plan, particularly in the solar sector. However, analysts believe that current plans underestimate the need for energy storage. As the share of intermittent renewable energy grows, additional battery projects will likely become essential for balancing the system and managing periods of surplus production.
Another area where the regulatory framework remains unclear is compensation for grid curtailment (situations where renewable plants are forced to reduce output because the network cannot absorb all the electricity produced). As the renewable fleet expands, combining solar plants with storage systems could help mitigate this risk as well.
Across Europe, the renewable energy sector is also seeing a shift in investment strategies. Instead of the traditional “develop and flip” model, where developers sell projects once they reach the ready-to-build stage, more investors are moving toward long-term ownership and more sophisticated merchant market strategies. These changes reflect the increasing maturity of renewable energy markets, where project profitability depends not only on building capacity but also on managing market risks over the long term, Botsis added.
The conference Energynomics Day was organized by Energynomics, on the premises of the Green Energy Expo & Romenvirotec, with the support of our partners: Elektra Renewable Support, Baringa, Big Store, Think Blu Solution.