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Renewables: a new appeal for the subsidy increase

12 July 2016
Renewables
energynomics

Three leading green energy industry associations appeal again the authorities to up the green certificates rate for next year and measures enabling their absorbtion into the market.

“The renewable industry has learned with dismay and concern over the future of renewable energy in Romania about the proposal of the National Energy Regulatory Authority – ANRE establishing a compulsory quota of electricity produced from renewable energy sources (RES-E) which benefit from the promotion system through green certificates for 2017 at 8.3% of the gross final consumption of energy. We have repeatedly reported to the authorities that the calculation of the annual mandatory quota of renewable energy is neither functional nor coherent”, states a press release jointly issued by the three associations – RWEA, Patres and RPIA. The document is signed by Ionel David, executive director of Romanian Wind Energy Association (RWEA), Razvan Lupulescu, chairman of the Romanian Photovoltaic Association (RPIA) and Viorel Lefter, president of the Patres – Owner’s Organization of the Renewable Energy Producers.

Associations ask the government to “urgently adopt the necessary amendments to Law 220/2008 by issuing an emergency ordinance that provides that starting with 2017, all green certificates, including those postponed, to be sold, as it is the only measure that could save the industry from bankruptcy.”

At the same time, they require the “fixing of the price of the green certificate to the minimum legal level and reintroducing the delayed certificates – deferred over a longer period of time than three years (the current version of the law), to protect final customers from a too steep impact of green certificates the electricity bill.”

The decision of the Regulatory Authority (ANRE) to reduce the share of subsidies to 8.3% of the energy produced for the renewable industry could send into bankruptcy smaller players, already struggling with negative yields for quite a while.

Players in the market told energynomics.ro that there are wind projects already closing, without mentioning, though, which.

Investors in renewables, who injected about 7-8 billion euros in Romania, found themselves suddenly with an inflation of green certificates (GC) on their hands- as the subsidy system collapsed, the market value and the related demand of the certificates fell alltogether, and only larger players coped with difficult new market conditions.

A new proposal of ANRE for the 2017 quota of of GCs may mean the end for many small investors.

“For us this news came as a shock – practically ANRE decided that Romania does not need more renewable energy and we put all producers into bankruptcy next year,” previously said Moise Martin, vice president of the local capital investors’ association Patres.

“When we made the investments, the Law 220 provided for a quota increase year by year up to 20%. In 2014 we were supposed to have 15%, and we had 11.1%, in 2015 was supposed to be of 16%, and we had 11.9%, in 2016 was set at 17% initially, and we have just 12.15%. After three years the state has not respected its promise, producers’ income has dropped and has already reached below the limit of affordability, and for next year a new quota of 8.3% is provided, compared to the initial 18%, which was the base for over 8 billion of euro worth of investments in Romania,” said Moise.

Since the market is already having a surplus of over 6 million green certificates and more than half a million have expired – it was a legitimate expectation of investors for the state to remedy the situation.

“On the contrary, the situation goes from terrible to catastrophic, and we foresee that next year the coverage of the GC share will be only 45%, without taking into account the above mentioned surplus. (If we count the excess coverage decreases to 30%) … Thus Romania reached the ridiculous situation in which it says that it support renewable energy, when in reality only a third of production is sustained.”

ANRE has proposed increasing the share of certificates to 12.3%, but with continued delay of a part of GCs untill 2018, a proposal that investors considered “ridiculous”, despite the fact that would increase market coverage to 68%, if we do not count in the surplus of unsold GCs.

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