Romania has taken a significant step toward its energy transition goals with the recent auction of 1.5 GW in renewable energy projects, focusing on solar and wind technologies, under a Contracts for Difference (CfD) scheme.

This process, covering 500 MW in solar energy and 1,000 MW in wind, is part of an ambitious national plan aiming for renewable energy to account for 38.3% of total energy consumption by 2030.

“The announced 1.5 GW CfD scheme will contribute to the development of the national electricity sector. Through the CfD mechanism, these investments will be in place within 36 months of the contract signing. The implementation of this mechanism, which guarantees predictable income for producers, will gradually lower energy prices for final consumers,” says Diana-Alexandra CODĂU, Director of European Affairs and International Relations at Romania’s Ministry of Energy, in an interview with Energía Estratégica España.

Investors participating in the auction will benefit from a CfD contract that guarantees a fixed electricity sale price for 15 years. The price will have a maximum threshold of 78 EUR/MWh for photovoltaic projects and 82 EUR/MWh for wind energy.

The deadline for submitting funding applications is November 18. It is expected that selected applicants will receive CfD contracts by December 20, and the signing will take place on January 20, 2025.

With the auction, Romania aims to attract significant investments and accelerate the construction of clean energy infrastructure. “The CfD mechanism is considered essential in the current crisis context and the REPowerEU Plan to accelerate and expand the availability of investments in renewable energy in a cost-effective and predictable way for investors,” Codau points out.

“By providing a stable and predictable operational financial support mechanism, an attractive environment for energy investors is created, thus stimulating investment in green energy projects and energy-efficient technologies,” she adds.

The call for projects is part of the approval of the CfD scheme, which aims to finalize CfD contracts by December 31, 2025, for projects with a total capacity of 5,000 MW using solar photovoltaic and onshore wind energy technologies.

“In the next period, the procedural rules for the 1,500 MW will be approved by the Minister of Energy’s order. Thus, after the competitive procedures/rounds organized until the fourth quarter of 2024, CfD contracts for 1,500 MW are expected to be signed, and by the fourth quarter of 2025, CfD contracts for at least 3,500 MW of installed capacity are expected,” says the Ministry of Energy representative.

She emphasizes that this mechanism represents the main tool for stimulating investments in renewable energy technologies, with a capacity target of 5 GW by 2028.

2030 Targets

On October 16, Romania presented the updated National Energy and Climate Plan (NECP) to the European Commission, which forecasts that installed capacity for solar photovoltaic and wind will increase significantly, from the current 4.8 GW to 15.5 GW.

The Ministry assures that in the upcoming period, 3.9 GW of large-scale solar capacity and 4.3 GW of wind capacity should be operational.

Additionally, the country has set a key target of achieving 57.8% renewable energy production by 2030, with wind and solar development being the primary method to achieve this, according to Codau.

To support its energy transition, the Romanian government has implemented several financial support mechanisms and key regulations. Through the PNRR (National Recovery and Resilience Plan), Romania has secured 460 million euros for new wind and solar generation installations, with a goal of adding 950 MW to installed capacity by 2026.

Furthermore, the EU Modernization Fund, regulated by the Emissions Trading Scheme (EU ETS), helps finance low-emission technologies, thus improving the security of the National Energy System (SEN). The Ministry representative emphasizes: “This support not only increases renewable generation capacity but also strengthens the transport and distribution infrastructure needed for the efficient integration of renewables.”

Barriers and Challenges for the Energy Transition

Despite progress toward its 2030 goals, Romania faces significant challenges, primarily related to bureaucracy, project installation timelines, and a lack of skilled labor.

Codau emphasizes that “long permitting processes and administrative complexity slow down developers’ ability to respond quickly to market demands and address capacity shortfalls.”

Additionally, to reach its targets, the country needs to strengthen its supply chain and overcome difficulties in infrastructure installation, particularly for wind and solar projects.

Energy Storage and Grid Stability

Energy storage is considered a strategic component to achieving the 2030 goals, enabling the efficient integration of renewable energy into the electrical system and improving its flexibility.

Romania has planned a storage capacity of 1,200 MW by 2030 and 2,000 MW by 2035 through batteries and pumped hydroelectric plants. Codau details that “energy storage supports grid stability and facilitates the incorporation of greater renewable capacity, especially with projects in the Black Sea and in hydrogen use.”

Funds allocated by the PNRR and the Modernization Fund support the development of these storage capacities, strengthening the resilience of the national electrical system.