Subsidies for new Romanian nuke reactors frustrate large industrial energy users

The association of Romania’s big industrial electricity consumers (ABIEC) warned that energy-intensive companies could relocate from the country if the rise in electricity prices seen in the past continued. Major production capacities would be shut down, and investments worth hundreds of millions of euros would be abandoned, they said, according to Economica.net.

The message mainly focused on the new subsidy scheme that Romania plans to set up for building two new nuclear reactors, which would further increase the bills paid by energy consumers. The Romanian Government plans to use Contracts for Difference to provide guarantees to the Chinese investor that it will recover the investment in the two new units of the Cernavoda power plant.

ABIEC also argued that the wind and photovoltaic power production no longer needs subsidies, as demonstrated by projects across Europe not supported by such instruments.

On the top of the continuous increase of the electricity price on the Day-Ahead Market, the Contract for Difference (a low carbon energy subsidy scheme), a new support scheme for cogeneration (efficient electricity and heating production) and a programme to guarantee reserve production capacity (dedicated to coal fire plants) are added, ABIEC complains. The total cost of electricity has already reached an unsustainable level the association says. This risks eliminating local industrial producers from the international market, ABIEC concluded.

Nuclearelectrica, the operator of Romania’s Cernavoda nuclear power plant, controlled by the Energy Ministry, and China’s state-owned China General Nuclear Power Corporation (CGN) on May 8 officially signed the preliminary agreement for the construction and operation of two new reactors at the nuclear plant.

“Romania has obtained the European Commission’s agreement to implement contracts for difference (CfD), a new form in which energy consumers will subsidize new investment projects, and the Energy Ministry is preparing amendments to the legislation,” said energy minister Anton Anton at the press conference after the signing of the agreement.

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