Romania must obtain European Commission authorization this year for the re-engineering plan for Unit 1 at Cernavoda and request approval for the construction of Units 3 and 4, as these investments will require state aid, the president of the Competition Council, Bogdan Chirițoiu, said on Monday.

“This year, we need to obtain the European Commission’s approval for the Cernavodă 1 refurbishment plan and we will start the discussions – I don’t think we can finish them – but we will start the procedures, or rather, for the construction of Units 3 and 4. So, this year we want to obtain the European Commission’s authorization for the Cernavodă 1 refurbishment plan and notify, so ask for the European Commission’s approval, for the construction of 3 and 4. Why do we need the European Commission’s approval? At least in our area, we need it for state aid measures, because these investments will not be made only under market conditions. These are too large amounts,” said Chirițoiu, quoted by Agerpres.

He explained that the formula for granting this state aid must be identified, either in the form of guarantees for loans or by guaranteeing the price.

“We will have to see how the state aid results from the discussions with the Commission and see what formula Nuclearelectrica wants to follow, but essentially state aid measures can mean state guarantees for the loans they will take, because, I repeat, no one lends them those amounts and those durations – large amounts and long durations – without a state guarantee and it is also possible to guarantee them a price. The mechanism is called a contract for difference. Essentially, a contract for difference means that the state guarantees you a certain price. If you receive less money in the market, the state gives you the difference. It is smarter than the old mechanisms – called feed-in tariff (FiT) – in which you were guaranteed a certain price. Now it pays you the difference between the market price and a certain price that you need to make the investment profitable. So, these would be the state aid mechanisms and you find these everywhere – everyone wants to do nuclear now, no more we are the only ones who have nuclear. There is already a recent decision of the European Commission regarding the Czech Republic and a decision regarding Poland. So, we already have decisions from recent years taken by the European Commission, state aid decisions that include such measures”, explained the president of the competition authority.