Market Status: Romania - Legislative uncertainty sidelines wind projects

After almost nothing was added in 2009, Romania's installed wind capacity should rise by roughly 500MW this year, says Romanian wind energy association (RWEA) executive director Dana Duica. The lion's share of Romania's 2010 capacity increase is set to come from the 348MW Fantanele wind farm, the first phase of a 600MW project that Czech utility CEZ is building.

In 2009, Romania added just over 3MW in new wind capacity, bringing its cumulative total to 14MW, figures from RWEA show. The financial crisis, Romania's presidential elections and the government's failure to approve renewable energy legislation proposed back in 2008 all contributed to a wait-and-see attitude to investments in the country's wind energy sector last year, explains Bryan Jardine, a partner in the Bucharest office of law firm Wolf Theiss. "Investors have lost a degree of enthusiasm, but it could be reinvigorated," he says. "Everyone knows there's a lot of potential for renewable energy and Romania has 2020 goals to meet."

Legal complications

Approval of renewable energy legislation has been held up as the European Commission evaluates whether or not some elements of Romania's support scheme for wind and other renewable energy sources contained in Law 220 of October 2008 are exempt from European state aid rules.

As 2010 got under way, there was general optimism that it would receive the green light, although some investors have held back until there is greater transparency on the support scheme.

Romania's incentive scheme is currently based on the issue of green certificates. Wind producers can sell the certificates to power suppliers required to meet a renewable energy requirement, representing 8.3% of their total portfolio each year in the 2010-2012 period. The 2008 law, should it go into effect in its current form, would set a price range for each green certificate of EUR0.027-0.055/kWh and see wind producers receiving two green certificates per MWh of electricity production until 2015; thereafter they would receive one green certificate per MWh.

Some progress

Despite the legislative uncertainty, a number of projects have been moving forward. CEZ says it is progressing with construction of its Fantanele project, which is slated for commissioning in the first half of 2010. The company expects to commission a 253MW second phase of the project at an adjacent site in Cogealac in 2011. Clean Energy Development, owned by Swiss investment firm Stream Invest Holding, recently brought 3MW online on a site in Mihau Viteazu in Constanta county, the first portion of a 28MW wind farm due to be completed later this year. EDP Renovaveis, the renewables arm of Portuguese utility EDP, has revealed it is constructing a 159MW project in Costanta county that it expects to complete this year.

Alongside the international players, local developers such as Monsson Alma, which developed the 600MW CEZ project, along with American firm Continental Wind Partners, have also been active with both small and large projects. In 2009, Monsson Alma inaugurated a 2MW wind farm and, by the end of this month, was expected to have commissioned two wind farms in Silistea and Galbiori, each with a capacity of 5MW.

RWEA's Duica notes that transmission system operator Transelectrica has already approved nearly 4GW of wind projects. RWEA forecasts that Romania will have installed wind capacity of roughly 1.3GW by 2012 and 5GW by 2020. According to Romania's renewable energy commitment as a European Union member state, the country must meet 24% of its total energy demand - including heating, cooling and transport as well as electricity - from renewable energy sources in 2020, compared to a current level estimated at around 18%.

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