Green Forum • 11 September, 2024 at 8:08 PM
With support from the EBRD, Romania has introduced a Contract for Difference (CfD) mechanism this week aimed at developing renewable energy infrastructure.
The country has also initiated its first auction for 1.5 GW renewable energy capacity, comprising 500 MW of solar PV and 1 GW of onshore wind. This marks a significant step in Romania's plan to increase the share of renewables in its energy mix.
The EBRD's assistance in designing and implementing the CfD scheme is funded by Spain and the European Union's Technical Support Instrument, managed by DG REFORM.
"Romania's goal to expand its renewable energy sector aligns perfectly with the EBRD's strategy in the country. We are eager to continue supporting the Ministry of Energy and helping to boost private sector investment in this area," said Victoria Zinchuk, EBRD Head of Romania.
The two-way CfD scheme encourages investment in renewables by offering revenue stability to developers while promoting the integration of renewable energy into the market.
Funding for the CfD mechanism comes from the European Union Modernisation Fund, supporting an initial wave of projects totaling 5 GW. This includes this year's 1.5 GW auction and a second round for 3.5 GW scheduled for 2025.
The CfD mechanism helps Romania move closer to its long-term decarbonization goals. Investing in renewable energy is essential for meeting the climate targets outlined in Romania's National Energy and Climate Plan, which aims for 34% of renewable energy in gross final energy consumption by 2030. The country's draft energy strategy sets a goal of 44% of gross final energy consumption from low-carbon sources by 2035.
As a leader in climate finance, the EBRD has supported the rollout of renewable energy auctions in many of its operational countries. Its strategic priority in the energy sector is to help nations scale up renewables by offering financial tools and technical assistance to create policy frameworks that encourage private sector investment through well-designed competitive auctions.
In Romania, the EBRD is fully backing the transition to cleaner energy. Since the start of the year, the Bank has financed nearly 1 GW of renewable capacity across six projects, investing over €180 million, which in turn has mobilized almost €1 billion in private and public funds.
To date, the EBRD has invested over €11.3 billion in 549 projects in Romania.