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Romania is set to have 1,4 GW of new wind capacity in the next 5 years

Wind energy is set to boom again in Romania with 1,4 gigawatts (GW) of new installations forecasted for in the next 5 years, the most recent study published by WindEurope shows. Almost half of this capacity is already in some stage of permitting, according to official data from the National Transmission System Operator (TSO), Transelectrica.

Currently, Romania has 3 GW of wind power, exclusively onshore, covering 12 per cent of the country’s energy needs in 2020.

“WindEurope’s Realistic Expectations Scenario provides the best estimate of the installed capacity in Europe over the next five years. This scenario considers the pipeline of wind energy projects, auctions and tenders results, and ongoing legislative changes in European countries that could enable the deployment of additional capacity”, the study launched last month reveals. Set in Brussels, WindEurope is actively promoting wind power in Europe and worldwide, having over 400 industry members, in over 35 countries.

The new permitting wave

Investors are already lining up at Transelectrica, the Romanian TSO, in order to secure access to the national grid for their future projects.

Grid connection is often mentioned as one of the biggest obstacles for the second wave of investments in Romanian renewables. The lack of system flexibly and small interconnection capacity are some of the problems the new green projects will have to tackle. Storage units and Demand-Response technology are often mentioned, but few projects like these are up and running in Romania due to lack of legislative clarity.

But according to the official data coming from Transelectrica, 307 megawatts (MW) of wind capacity were already awarded grid connection contracts, thus having secured the access of the future production to the national grid. The first new MW will be connected to the grid in 2024 and the last ones in 2027.

Other 460 MW have obtained connection permits during last year and the beginning of this year. Official Transelectrica data shows that these investments if completed, might connect to the grid starting this year until 2026.

Among the companies that have already expressed their intention to invest significantly in Romania are Enel (Italia), ENGIE (France) or EDPR (Portugal). All of the mentioned energy groups already have a major wind footprint in the Romanian green market.

The first green boom

This would be the second wave of wind projects development for Romania. The first one, between 2009 and 2014, lead to 4,5 billion euros of investments in over 3 GW of wind power capacity, transforming Romania into the European wind energy El Dorado.

The key to this success was one of the most enticing support schemes for the wind investors, based on green certificates and mandatory quotas for energy suppliers concerning the renewable energy sold to their end-users. The sudden change in legislation led to the instant market freeze.

“Romania has reached a high share of zero-carbon generation thanks to a short-lived renewables boom over 2011-2014, but decarbonisation has stagnated since the government introduced retroactive tariff cuts in 2014”, according to the Investing in the Recovery and Transition of Europe’s Coal Regions White Paper published last year by BloombergNEF.

Currently, Romania isn’t even in the top 40 most attractive countries worldwide for wind investments, according to the latest RECAI (Renewable Energy Country Attractiveness Index) published by the EY consultants, many investors being very cautious about placing new money of the market.

In 2012, Romania was the 10th most attractive country in the world for wind projects, according to the RECAI published by EY.

New demands, new energy

The forecasted boom for wind projects in Romania is based on several market conditions. First of all, as part of the UE, Romania has new targets to achieve concerning the green energy percentage in its total consumption.

So, by 2030, the country has to reach 30,7 per cent of green energy in its final consumption, compared to the 24,4 per cent obtained last year. Also, when it comes to its entire energy production, 49,4 per cent of the total must come from renewable sources by 2030, compared to the 41 per cent registered last year.

The energy transition will be among the most difficult tasks for the Romanian authorities since the country is the second-biggest gas producer in the UE, after the Brexit and almost 20 per cent of its energy is now generated in coal power plants.

Basically, Romania is forced to another green energy boom as the only way in meeting its Green Deal goals. In fact, according to the National Energy and Climate Plan (NECP), the official roadmap of Romania in this green race, by 2030 the country should reach 5,2 GW in wind, an increase of 75 per cent compared to the actual capacity. For solar, the envisaged increase is from 1,4 GW to 5 GW in the next 10 years. Some say that these official plans are too cautious.

“In the least-cost scenario, the share of coal in the capacity mix falls from 26 per cent in 2018 to just 3 per cent after 2027, whilst wind and solar account for 40 per cent of the capacity mix. Romania adds 10 GW of new solar and wind capacity, for 8.5 billion euros in new investment. Romania’s NECP envisages just 6 GW of new renewables coming online over the next decade, in addition to a new nuclear unit. This scenario, which requires more investment, sees emissions fall by 65 per cent from 2018 to 2030, compared to 71 per cent in the least-cost scenario”, according to the Investing in the BloombergNEF’s Recovery and Transition of Europe’s Coal Regions White Paper.

Also, BloombergNEF believes that the total size of the Romanian power system will grow from 22 GW to 28 GW over the next decade in the least-cost scenario. By the end of the decade, wind and solar account for 50 per cent of capacity, as onshore wind capacity doubles and solar grows fivefold from 2018 to 2030. Solar investments dominate at the beginning of the decade, but wind build increases after 2026 due to lower costs.

Onshore wind in focus

Although the future seems bright, last year was a very challenging time for the industry.

Europe installed 14,7 GW of new wind capacity in 2020. This was 6 per cent less than in 2019 and 19 per cent less than what we expected pre-COVID. EU27 installed 10,5 GW. Europe’s wind farms generated 458 terawatts-hour (TWh) of electricity in 2020. They covered 16 per cent of the electricity demand in Europe (EU27+UK), according to WindEurope.

“We expect Europe to install 105 GW of new wind farms over 2021-25 provided Governments deliver on the promises they’ve made. Over 70 per cent of this will be onshore wind. But if Governments don’t address permitting issues, fail to put in place effective strategies for repowering and implement new restrictions on the free movement of goods and people due to the pandemic, then Europe will install less than 80 GW over 2021-25.”

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