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Romania to Scale Back Renewable Energy Aid to Curb Power Price Gains

Romania to Scale Back Renewable Energy Aid to Curb Power Price Gains

Romania will scale back renewable power subsidies to limit electricity-price increases for consumers, according to the minister-delegate for energy.

The eastern European country plans to make changes to its incentive program in July or at the beginning of next year, Constantin Nita said today in an interview in Bucharest. It intends to cut the maximum value of so-called green certificates granted for clean-energy generation, he said.

The plan to rein in support for renewables follows similar moves in Spain, France, Italy and the U.K., where debt-strapped governments have reduced aid to avoid overcompensating companies and to curb power-price increases for households and businesses.

Romania, which offers two green certificates for each megawatt-hour generated from wind, may cut the number to one or 1.5, and for solar to 3.5 from six, Ziarul Financiar reported, citing an unpublished draft law. Their maximum value may drop to 30 euros ($39) from 55 euros, the newspaper said.

“We haven’t made a decision yet but we will make one, and we will change the law because we can’t destroy our local industry, which generates thousands of jobs,” Nita said at a seminar. The certificates’ minimum value will remain unchanged at 27 euros, he said.

Romania has raised electricity prices 10 percent this year, with clean-energy subsidies accounting for about 4 percent of the increase, according to Nita. The total cost of renewables to consumers this year — about 500 million euros — is a “price too big for Romanians,” he said.

Current Capacity

Romania has about 1,600 megawatts of installed wind capacity and about 70 megawatts of solar, according to data from the regulator. It has attracted investments from CEZ AS, EON SE, Energias de Portugal SA and Enel SpA, especially in the southeastern region of Dobrogea on the Black Sea.

The country has a target to get 24 percent of its energy from renewable sources by 2020 as part of a European Union-wide program to lower carbon emissions.

“Romania won’t have any problems in reaching its target for green energy by 2020 as we already have 1,700 megawatts under development this year, which will bring us very close to the maximum capacity that our power grid can support,” Nita said. The nation won’t need EU approval to make subsidy changes, he said, citing earlier moves by other member states to cut aid.

Copyright 2013 Bloomberg

Lead image: Romanian currency via Shutterstock

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