Romania Cuts Subsidies For Green Energy


By Marian Chiriac/Bucharest

June 12, 2013

Starting from next month, Romania will cut subsidies for renewable energy projects in a move aimed at curbing electricity price increases.

The move becomes official on Tuesday following the publication in the Official Gazette of a government decision, amending and supplementing Romania’s renewable law.

The order stipulates that wind, solar and small hydro-power producers will only get around half of the “green certificates” they have till now been entitled to receive as a stimulus to develop clean energy.

The government is reducing subsidies because it says they are overcompensating investors in green power.

“We had to find a compromise allowing investors in renewable energy to continue to make profits but not to the detriment of other industries or of households,” Prime Minister Victor Ponta said recently.

The move comes after some important companies in Romania, such as the steel maker Arcelor Mittal and the aluminium producer Alro, said they might quit the country as the prices for energy were too high.

Under the current incentive scheme, conventional energy producers and distributors have to purchase “green certificates” from renewable energy producers, passing on the costs to household and industrial consumers.

Investors in green energy have criticised the government’s decision as premature and as damaging to the economy as a whole.

“The investments in Romania’s renewable energy sector are in their early stages, and this sudden and unjustified changes in the law will only damage the investment climate and have a negative effect on any intention to invest in Romania,” Ionel David, president of the Romanian Wind Energy Association, RWEA, said.

The Romanian green energy sector has seen marked growth in recent years. Installed wind energy alone increased by around 112 per cent in just a year.

Romania is committed to increasing its share of renewable energy to around 24 per cent of total output of power by 2020.

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