UK and Romania have had a strategic partnership in energy for three years, especially focusing on energy security and diversifying resources, says Giles Portman, the British Ambassador to Romania. Resilience is really important, and so are storage capacity and grid flexibility. “And I think that the UK can help in all of those areas. I would say that wind power and particularly offshore wind power is probably the big kind of opportunity, looking into the near future,” Giles Portman tells Energynomics.
While emphasizing the importance of diversifying supply, especially in the renewables segment, Giles Portman also specifies the importance of partnerships in the nuclear segment. ”There’s a real opportunity for Romania in the Black Sea, to look at offshore wind, and latest technology, like floating offshore wind platforms. And I think a great opportunity for UK companies to share their expertise on offshore wind,” adds Giles Portman during an exclusive, face to face interview with Energynomics. Meanwhile, the trade between the two countries went over 10 billion GBP for the first time last year, growing 5%, with Romanian exports to UK accounting for 70%. At the same time, UK investments in Romania went up to about 3 billion GBP annually.
What are the main cooperation lines in the energy and environment sectors between the UK and Romania?
Enegynomics has been a very useful platform to bring together the UK and Romania, at business and government levels. We’ve been pleased to support it through the British Embassy and it’s great we can continue to do the same this year.
In terms of our bilateral cooperation, there’s a lot of similarity and overlap as Romania and the UK are countries with quite a good energy mix, but also looking in particular at the potential for a renewables and low carbon energy future.
The areas of cooperation are, firstly, in decarbonization, where there are a lot of partnerships that can be developed in terms of renewable energy. Secondly, in terms of energy security: that means both diversification of sources but also making sure that we have the networks and the grid and the storage capacity to be resident and resilient. And, thirdly, in the areas of innovation, and the kind of offers that the city of London can make, both in terms of green finance, advisory support, legal support etc.
Therefore, low carbon, energy security and energy innovation are the three areas we can cooperate in. I see a lot of British energy companies showing an interest in Romania – especially in the wind energy sector. There are lots of projects that we can do together, but it can be more than that: it can be a strategic choice that the UK and Romania join up as partners for a secure energy future. We have a strategic partnership. We’ve had it for three years. Energy security is part of it, but it should become an even more important part of it and really be recognized as a pillar of our bilateral strategic relationship.
Can you mention some of the companies that have recently showed interest in Romania?
Late last year I visited Vifor wind farm, near Buzău – there’s a massive new wind farm being built just outside the city by Rezolv Energy, a British company, and it’s being backed by Actis, a financial management company which has UK links and lots of UK partners. That’s a great example of one of the biggest onshore farms and a kind of next generation onshore wind farms. I also visited the wind farms near Constanța, also a major investment. These are the latest generation, much taller, much bigger, and so much more powerful in terms of the amount of energy that they can produce.
Which is the best way for a country like Romania to ensure its energy independence and secure its energy supply?
There are two issues: one is energy resilience, which means a good mix. And second comes smart partnerships. In terms of the energy mix, as I said, you can see quite a lot of similarities between the UK and Romania – we’ve both had fossil fuels capacity in the past, we’ve all both had nuclear and we’re both investing a lot in wind. Resilience is important – make sure that you have the mix. Storage capacity is key because the more you invest in renewables, the more you also must recognize that renewables are, by definition, intermittent, depending on whether the sun shines or the wind blows. So that storage capacity and grid flexibility are very important.
The UK can help in all those areas. I would say that wind power and offshore wind power in particular is probably the big kind of opportunity looking into the near future. We had tightened up our laws on onshore wind, now we’ve relaxed them a bit to allow greater onshore wind capacity, but I think the real opportunity in the UK in the North Sea is offshore wind. Just last week we released the latest licensing decisions in the UK. We had what I believe was the biggest auction ever in Europe for offshore wind licenses. We just granted those last week and you’re going to see the equivalent of power for 12 million homes produced by those latest licenses.
There’s a real opportunity for Romania in the Black Sea, to look at offshore wind, and at latest technology, like floating offshore wind platforms. And a great opportunity for UK companies to share their expertise in this area.
Nuclear is another area where we’re doing similar things. We’ve both got nuclear power stations and we’re both upgrading and renewing those big nuclear power stations. Cernavodă for you, massive project like Sizewell C in the UK for us – but also looking for the future for small modular reactors. And we’re both recognizing that is the future of nuclear. We now have Rolls-Royce winning the competition to be the provider in the UK and winning tenders elsewhere in Europe.
I would also just reiterate UK expertise in energy and battery storage, and also its financial and legal expertise, recognizing that the UK is intending to position itself as a as a global center for green finance. I think that’s the first thing that Romania has to do, have that resilience of supply. The second thing is to look for smart partnerships, because one can already see that Romania is at least self-sufficient, if not potentially a net exporter of energy in some areas. For example, through Neptune Deep.
The question for Romania is whether it can actually become a regional energy hub. If it upgrades its cross-frontier connections, it can actually play that bigger role, not just a supplier of energy, but a genuine regional hub – obviously, for countries like Moldova, where Romania has been vital already for electricity supply, for Ukraine, but also more general in the region, given it’s being a Black Sea state. It’s huge potential. And the UK has expertise in all those area so we can work together in this direction.
Which are the companies that can get involved in the small modular nuclear reactors (SMR) segment?
Rolls-Royce is the one, basically, for the UK. It took quite a long time for the government to choose which its preferred supplier would be for SMRs in the UK, and it chose around third quarter last year – confirmed it would be Rolls Royce.
Rolls-Royce will build the first SMRs in the UK. Rolls-Royce won a big tender for building SMRs in the Czech Republic. I know that there are other European countries that are very interested in queuing up, really, for Rolls-Royce.
There’s real potential there. But there’s always a time lag, right? And the longer you wait, the longer you’ll have to wait. I think it’s something that Romania should be thinking about.
What are the main energy lines that the UK Government follows in terms of energy transition after Brexit?
In terms of the main energy lines we pursue, the most important thing is Net Zero by 2050. There’s huge ambition in the British Government for the UK to be a global leader in terms of net zero and green energy. We’re clearly ahead of virtually the whole pack in terms of doing that. Coupled with that green energy vision is, as I said, the need for secure energy. That means making sure that you have flexibility & resilience and storage capacity in the network. It also means making sure that we’re aware of the hybrid risks of countries like Russia wanting to undermine our security energy infrastructure. The third area is innovation and making sure that we can become the most competitive energy producers and providers by being innovative, which is great for businesses, but should also lead to lower prices for consumers. And then, in terms of our own energy mix, as I said, a real focus on wind energy, but also on next generation nuclear.
The two other things I would add to that are, firstly, decarbonization of industry and transport. That means both carbon capture but also investing in hydrogen as a source for public transport, for example, which I know has been looked at in cities like Cluj and Bucharest already.
The final bit is electrification: that goes also for transport, including private transport. The latest figures I saw said that over 30% of cars on British roads are currently electric. We’re getting to that point where it will be a kind of critical mass of electric vehicles in the UK. And in homes too. There’s a real drive to try to phase out gas heating in British homes, move from gas boilers to heat pumps as the best way to heat our homes in the future.
What are the main figures and growth ratios of trade and investments between Romania and the UK?
Our bilateral trade went over 10 billion GBP for the first time last year – it grew 5%. Roughly speaking, 3 billion GBP are the British exports to Romania. And about 7 billion GBP are the Romanian exports to the UK. There’s quite a heavy balance in favor of Romania in terms of trade.
Areas like the automotive industry, defense infrastructure and energy are right up there.
The UK’s total investment in Romania is of about 3 billion GBP a year. We became a top 10 investor in Romania for the first time last year, and that’s going to improve further this year. We now have over 3,000 British companies in Romania, big ones, such as Vodafone, Unilever, London Stock Exchange, Endava. Vodafone acquired Telekom Romania late last year, and that cemented its position as the biggest British investor.
I think there’s real potential for more Romanian investment in the UK, as the UK is recognized as globally the second most attractive destination for FDI (Foreign Direct Investment). We’re beginning to see Romanian companies, whether it’s Therme, or whether it’s tech companies, like RebelDot or InnovX recognizing that the UK is a great headquarters for them, both to expand to a big market, and also as a launching pad to international markets, including the US.
I would also stress the work we’re doing just to reduce market access barriers, to make that easier. Since I’ve been ambassador, we had a new agreement passed on VAT reciprocity. On 1 January, we implemented a new double taxation agreement. We’re looking at a new agreement to make it easier for companies to participate securely in public tenders in both countries.
The role of the embassy is mainly to support those main companies that want to do business in each other’s countries. And to talk to government about how we can make it as easy and as frictionless as possible for companies to set up in both our countries. And I hope we are making a really good job in this regard!
