BUSINESS

Why should we subsidize new production capacities

Romania has attained target in renewable energy sector

Although Romania has long ago attained the target set by the EU in what concerns the renewable energy’s share in total energy consumption, the authorities are continuing to offer accreditation to new production capacities and investments in the domain. The Regulatory Committee of the Regulatory Authority for Energy (ANRE) has accredited four solar farms and one hydropower micro-plant as beneficiaries of the green certificates support scheme, an ANRE document shows.
With these new production units, Romania’s renewable energy production capacity has reached a total installed power of 4,704 MW at the end of August this year, Transelectrica data shows. A month before, at the end of July, that capacity stood at 4,664 MW, while at the end of last year renewable energy totaled 4,349 MW. The energy system included wind power projects totaling 2,800 MW, solar farms totaling 1,234 MW, hydropower micro-plants totaling 570 MW and biomass projects totaling 100 MW.
Renewable energy producers receive subsidies in the form of green certificates, certificates which are paid by consumers, including household consumers, and which are listed separately in every electricity bill.
Romania took the commitment to cover 24 per cent of its gross final consumption of energy from renewable sources by 2020, however ANRE announced that this target was already attained on January 1, 2014. Thus, for 2014 the mandatory level of green energy acquisition has remained at 11.1 per cent, the 2013 level, compared to the 15 per cent level that should have been registered this year.
If Romania is at the top of the ladder when it comes to renewable energies, why does it continue to encourage investments in the domain? Especially since investments in this sector are hiking the bills of both household and industrial consumers.
It is true that in order to mitigate rising bills the government decided on 1 July 2013 to postpone for 2017-2020 the offering of a number of green certificates.
According to Emergency Government Ordinance 57/2013, solar farms receive only four green certificates per MWh, compared to the six they used to receive before the ordinance. Wind farms receive only one certificate, compared to two before, and hydropower micro-plants receive two certificates compared to three before.  At the same time, the new projects that will come online after 1 January 2014 will receive fewer subsidies from the start. According to Government Decision 994/2013 from December 2013, solar farms receive only half of the subsidies they used to receive, namely only three certificates.
In the case of wind farms, the number of certificates will be lowered by 0.5 by 2017 and by 0.25 starting in 2018. Consequently, new investors will receive only 1.5 green certificates until 2017 and 1.75 certificates from 2018.
Likewise, the number of green certificates received by hydropower micro-plants will also drop by 0.7 per cent per MWh, namely only 2.3 certificates for new micro-plants.

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