Romania to extend EUR 3 bln subsidies to green energy producers under CfD contracts

Romania will extend RON 15.2 billion (over EUR 3 billion) in subsidies to new solar and onshore wind production capacities under a contract for difference (CfD) mechanism to encourage new investments.

The European Commission endorsed Romania’s state aid scheme.

The CfDs will be awarded through a competitive bidding procedure.

Under a CfD scheme, investors are paid the positive difference between the exercise price (set as a parameter of the contract) and the reference price (the actual market price in a specific month) but will return the difference if the actual reference (market) price is higher than the exercise price, in a specific month, Economica.net reported.

The exercise price will be established through bidding procedures, and the reference price will be calculated as a production-weighted monthly average of the market price of electricity on the markets for the next day.

The scheme was approved under the Temporary Crisis and Transitional Framework for State aid measures, adopted by the Commission on March 9, 2023, and amended on November 20, 2023, which was established to encourage support measures in the sectors essential for accelerating the green transition and reducing fuel dependence.

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