Experts argue against Romania’s planned CfD mechanism for green energy investments

Romania recently decided to use EUR 3 billion of the Energy Transition Fund to finance a CfD scheme aimed at spurring investments in green energy generation capacities, but the experts are not unanimous in supporting such a policy. The money could have been used wiser, they argue.

The investors have already developed a system of selling their production in advance (Power Purchase Agreements) that are more common in Europe these days, compared to the CfD arrangements that unnecessarily involve the state, according to Razvan Nicolescu, former vice-president of the Association of Energy Regulatory Agencies in Europe (ACER), minister of energy, partner at Deloitte in the area of ​​energy and resources.

The CfD mechanism, as currently designed, will encourage investors to maximize the output and not to match demand. Furthermore, the EUR 3 billion could not be enough to finance the CfD scheme, Nicolescu argues.

The money could be better used to encourage investments in locations that would increase the stability of the power grid, he suggests.

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