Auction for CfD green energy contracts in Romania to start from high prices

The negotiations for the contract for difference (CfD) arrangements, by which Romania wants to extend EUR 3bn grants to investors in solar and wind facilities, will start from EUR 91 per MWh for solar energy and EUR 93 per MWh for wind energy, in the context in which the price of spot energy is on a downward slope, Ziarul Financiar announced.

Energy minister Sebastian Burduja assured that his ministry and the Competition Council would make sure that there was enough competition (to bring the prices down).

The "execution prices" set under the competitive procedure are de facto guaranteed to investors, who, in exchange for this guarantee, give up the potential profits generated by market prices above the execution price.

Romania will finance the CfD scheme from the Modernization Fund. The past schemes for green energy were financed directly by the end-consumers, which resulted in their eventual diminishing.

"Romania is the first country at the European level that will use the money from the Modernization Fund to finance the CfD scheme", Burduja announced.

According to him, there will be two auction rounds, the first this year for 2,000 MW, equally divided between solar and wind, and the second next year, for 3,000 MW, the capacity being this time equally divided between the two technologies.

"We and the Competition Council will be very careful to make this auction competitive. A low price signals that Romania is attractive for investments. We want the adoption in a few weeks of the government decision that will establish the functioning mechanism of the scheme."

(Photo: Konstantinos A/ Dreamstime)