At a critical moment for Romania’s energy transition, discussions on the abolition of the minimum trading threshold for green certificates (GCs) – currently set at 29.4 euros per unit – are causing deep concern among investors in the renewables sector. The associations RWEA, RPIA and PATRES, representing a quarter of the country’s generation capacity and investments of more than 5 billion euros, warn that such a measure could undermine the financial stability of existing projects and discourage new investments in the sector.
Beyond the legislative and procedural arguments that unequivocally indicate that it is a change that could bring new litigation for the Romanian state and the payment of additional sums, changing the rules in the middle of the game risks being the defining element of the local environment, which will lead to the loss of strategic and serious investors, warn the associations. “The context is an extremely unfavourable one, risking mature projects and failure to meet internationally agreed goals. Not to mention the fact that renewable energy is the cheapest source of energy and, as a consequence, it will have the opposite effect on the market: an increase in energy prices”
The green certificate system, introduced in 2008, was designed to incentivise the production of renewable energy by giving producers an extra income for every MWh they deliver to the grid. However, repeated adjustments to the scheme – including a reduction in the number of certificates awarded and the exclusion of new plants after 2017 – have resulted in a surplus of around 20 million unsold CVs, severely affecting market liquidity.
The removal of the minimum threshold could allow CVs to be sold at prices well below the current level, which would significantly reduce producers’ revenues and jeopardise the economic viability of existing projects.
Moreover, such a decision could have adverse effects on energy prices for consumers. While in theory lower CV prices could marginally reduce costs in energy bills, in reality, discouraging investment in renewables – the cheapest source of energy – could lead to higher prices in the long run amid insufficient supply.
In a context in which Romania has set ambitious targets under the European Green Pact and the National Integrated Energy and Climate Change Plan, maintaining a stable and predictable legislative framework is essential. Changing the rules in the middle of the game not only undermines investor confidence, but also threatens the achievement of the country’s decarbonisation and energy security targets.
“Critical is to have investment. Or with such measures, we risk those investments! Lack of predictability and consistency will cost us all!” warns renewable energy industry associations. “There are dozens of changes to an already rickety scheme. Such measures could be the coup de grace leading to major financial problems. Not to mention the exposure to financiers and the risk of default!”