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Romania to Cut Clean-Energy Subsidies Paid by Consumers

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April 2 (Bloomberg) -- Romania plans to temporarily cut in half subsidies energy consumers pay for clean power by holding back one in every two green certificates it currently awards to utilities for generating electricity from wind turbines.

The frozen certificates, which electricity distributors are obliged to buy before passing on the cost to consumers, will be paid out from 2017, Energy Minister Constantin Nita said today. The suspension of certificates is due to start in July, he said.

“We considered several variants for the scheme but in the end we decided to grant this timeout to see how the economy is doing and how investors recover their investment in a certain period of time,” Nita said. “The program is still generous so we don’t think investors will reduce investments or pull out.”

Utilities now get two certificates per megawatt-hour of wind power, three for hydro and six for solar. Under today’s plan, Romania will cut the number it immediately grants to one for wind and hydropower, and two for solar until 2017, with the rest of the entitlements delayed until the same date, Nita said.

On Feb. 28, the minister had said Romania was considering cutting the number and value of certificates that it paid out.

A draft government decree published on the Economy Ministry’s website after Nita’s comments said only two solar certificates would be delayed until 2017, and that wind certificates would be delayed until Jan. 1, 2018. Calls to the Economy Ministry press office and Nita’s spokeswoman seeking clarification weren’t immediately returned.

Romania had installed wind power capacity of 2,117.5 megawatts and solar capacity of 85 megawatts as of March 13, according to the draft decree.

Spain, France, Italy and the U.K. are among countries in Europe that have reduced some support for clean energy to curb rising electricity costs for consumers. The regulator in Romania, which gets most of its green energy from wind, will assess the market before the certificate freeze ends.

The country may approve the draft law, applying to new and current projects, in May after a public consultation.

To contact the reporter on this story: Irina Savu in Bucharest at isavu@bloomberg.net

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net