Romania is an energy efficient country since it has its own oil, gas and coal production. It also has a dynamic renewable energy sector. In fact, it is among the few countries that has already (since 2014) achieved the 2020 targeted quota of 25%.
On January 1, Romania will assume the EU presidency. Even though energy is not on its agenda, the renewable sector will be the focus of EU affairs in the new year. And Romania’s role will be central.
Romania’s government, however, does not appear to be ready to embark on a path towards the so-called Green Era. Instead, the country is continuing to protect and to subsidise the traditional sectors, particularly the coal industry.
European Interest met with Mihai Opriş, the president of the Romanian Renewable Energy Association (ROREA), to discuss this issue. Opriş is an expert of the Romanian energy market and active for more than 10 years on the energy field and the management of renewables projects. ROREA is a professional non-profit, independent and non-governmental association of private and state-owned companies related to renewable electricity.
Opriş outlined the problems the sector faces in Romania. The list includes the unfair business environment that supports the big companies over small producers. Another problem is the negative sentiments that part of the population holds against renewable energy. On the other hand, those active in renewable energy are expecting more from the European Union, especially in terms of legislation.
European Interest: Starting on January 1, Romania will take over the EU Presidency. What does Romania’s renewable electricity sector expect from the Romanian presidency?
Mihai Opriş: Well, the energy sector had high expectations from the Romanian presidency. Unfortunately, a few months ago, the energy minister elaborated an energy strategy upon which the RES target assumed for 2030 is only 27.9%. This is in the context in which Romania already achieved the quota for 2020 (in fact around 25%) since early 2014. Our expectations were that the country would be – during the six months of the EU presidency – a model for all the other countries, but it seems it will not be.
Is the Romanian government prepared for the so-called Green Era? What are the major problems your sector faces today in Romania?
As I have mentioned, the strategy approved is really a joke. The state is prepared, but the decision makers need to be fully aligned with the future.
Since 2013, the sector of renewables has been facing huge problems: unpredictability (more than 15 big changes made to the RES legislation), the strategy with Green Certificates (GC) has proved to be a not-so winning one (just this year, the authorities mentioned about the law that they will try to elaborate a feed-in tariff) – from a total of around 20 million GC issued this year, there are around 10 million unsold – so lack of cash for all RES producers, unfair competition between RES producers – the big one’s are producers, suppliers, distributers of electricity – so they can transfer GCs from one company to another, since the small producers do not have this possibility. Even if it is forbidden to correlate the GCs with electricity, small RES producers (under 3 MW) can conclude bilateral agreements without any control (so there are agreements with very low prices for electricity, only that the supplier will take over some GCs from the producer).
To give you some figures: each year, the average price of electricity here is around €50 per megawatt in case of peak electricity. But producers of RES are basically forced by the suppliers to conclude bilateral agreement with prices even less than €10 per megawatt. Why? Because, this way, they can also sell some GCs that they are holding on their portfolio. So basically, these are all the problems we are facing, and we have been trying since 2014 to solve them.
But didn’t the law July solve some of these problems?
There is unfair competition, as I was saying, between the RES producers. We have the big ones, they are the suppliers, distributers of electricity, and the producers. So basically, what they are doing is to transfer the Green Certificate from the company that is the producer to the supplier. In this way they are fulfilling the quota and they are having the cash available for the company, which is a renewable producer.
To give you another example, under this law, small producers of under 3 megawatts can conclude bilateral agreements without any other control of authorities. So, in this way, let’s say, they are more or less forced by the suppliers to conclude agreements at very low prices.
You can see that there are a lot of problems to be solved. Unfortunately, the law approved in July this year, which amended the initial renewable law, did not solve all these problems. I can say this law is a step forward, but we still have problems.
Romania is an energy efficient country since it has its own oil, gas and coal production. How can the sector of renewables work under the competition of the traditional sources of energy?
This is another big problem because, from this point of view, I believe it was again a not willing solution from the beginning that was adopted by the government. Our opinion is that the publicity made for the renewables was not well done. We are thinking that the consumers should understand better which kinds of results the renewables can offer even to every single consumer.
From this point of view, not only are traditional local companies lobbying the government against the renewables, but also part of the population is against it. This is not normal. Of course, we can understand the fear of the traditional sector because they could lose their job and so on.
But this is a matter for the government. If you are implementing the strategy well over the medium and long-term, you should explain very well to these employers that you have a strategy for them, and that you are trying to relocate workers to try to establish different jobs and that you are factoring for these people.
Because what I can tell you is that most of the people hired by these companies are with university degrees, so they are very well prepared. You can use these people in other sectors. In our opinion, this is a very delicate situation and it was not handled well by the government, by the decision-makers.
The EU is committed to offering its financial support for the development of the renewable sector in Romania. What exactly does this support involve? Do you expect more from the EU on matters of finance, or legislation?
Yes. To be honest, we were expecting a little bit more from the European Commission. They need to be more conscious about the bureaucracy that we are facing, and not only here in Romania. This is a personal point of view, but I faced this also in Brussels. The bureaucracy is quite real. They need to change the strategy.
At the same time the legislation should be more detailed, to have a better look at each different country. In our opinion, the project until now has been a little bit different. We expect from the European Commission to establish a strategy for all countries. Because mainly when you are leaving out the possibilities for each country – in our case, we already face problems in Romania with the Green Certificates, it is a strategy that doesn’t yield any results. Even Germany started with Green Certificates and they changed immediately. So basically, the European Commission should elaborate a medium and long-term strategy also from a legislative point of view. And this must be implemented in more European countries. This is our point of view.
As part of Paris Agreement obligations, the European Commission has presented the carbon neutral vision for 2050. And now a conference will be held in Sibiu on May 9. Do you think this vision is too ambitious? Or is it realistic?
I strongly believe the vision is quite realistic, the only thing is that all European countries should work together to have a brainstorm, to think about and collaborate closely regarding these ambitious objectives.
At the same time, to focus on Romania, while European countries are taking measures to give up coal for good, we are again subsidising coal producers. On the same day that the European Commission presented the Full EU Decarbonisation Strategy, the Romanian Parliament – the deputies chamber – decided to exonerate coal companies from paying for the Green Certificate for the use of electricity, used for extraction, separation and all activities regarding coal sector.
So, from this point of view, this is not fair competition. Of course, they need to obtain the approval from the European Commission and we are really hoping that this will not be obtained. But this law shows the attitude of the government regarding decarbonisation strategy.