1. The European Commission’s decision:
According to a press release published on 06 March 2024, the European Commission has given its prior approval to a Romanian aid scheme aimed at supporting installations that generate electricity from onshore wind and solar photovoltaic power plants.
The official press release contains the following key information:
• The support scheme has a total value of €3 billion (approx. RON 15,22 billion);
• The support scheme was approved under the Temporary Crisis and Transition Framework, which was adopted by the European Commission for the purpose of fostering support measures in sectors that are key for the transition to a net-zero economy, in line with the Green Deal Industrial Plan;
• The support scheme will be open to projects for the construction and operation of new installations for the generation of electricity from solar photovoltaic and onshore wind.
• The state aid will be granted through competitive bidding procedures and will take the form of a two-way contract for difference (hereinafter, “CfD(s)”); The strike price will be determined through the bidding procedures (“pay as bid”); The reference price will be calculated as a monthly output-weighted average of the market price of electricity in the day ahead markets;
• The state aid will be granted before 31 December 2025.
The European Commission’s decision will be published once any confidentiality issues have been reviewed and resolved.
2. The Romanian legal framework:
In the context of the European Commission’s recent decision, it is worth recalling that, on 07 August 2023, the Romanian Ministry of Energy published on its website:
• A draft government decision for the approval of the general legal framework for the implementation and functioning of the support mechanism by means of Contracts for Difference for technologies with low carbon emissions;
• An information note for potential bidders, which describes the general terms of a contemplated first CfD auction.
Once adopted, this government decision will need to be supplemented by a number of secondary legal enactments detailing the implementation of the support scheme.
Although the calendar initially envisioned by the Ministry of Energy (according to which the first CfDs were to be signed before the end of 2023) proved too optimistic, interest in the support scheme remains high. It is likely that its implementation will pick up pace rapidly given the European Commission’s recent decision.
