EFT ENERGONEWS

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1 EFT ENERGONEWS INTERNAL NEWS MEDIA Disaster on green certificates market Only 5,490 out of the 1.7 million GCs offered by OPCOM were sold during the March 16 trading session Transelectrica has issued 15.1 million green certificates (GCs) in 2015 and up until March 10 this year, however 480,820 of them expired and can no longer be traded, according to the data published on the OPCOM website. OPCOM is the operator of the centralized energy market. Thus, the total number of GCs issued for the renewable energy produced by green certificate market participants in 2015, and transmitted to OPCOM, stood at 14,156,259 GCs, while the number of green certificates issued for the energy produced up until March 10 this year stood at 1,016,335. At the same time, 355,892 GCs were cancelled in 2015 and 124,928 were cancelled in the first two and a half months of The value of the certificates that expired and were cancelled stood at RON 63.3 M, representing money lost for good by renewable energy investors, according to Martin Moise, First Vice President of the Employers Organization of Romanian Renewable Energy Producers (PATRES). At the same time, the up-to-date stock of available certificates not covered by the quota is 4,303,236 green certificates, representing a value of RON 569,767,811, a stock that will grow significantly by the end of the year, based on the very small quota approved by Government and ANRE for The renewable energy disaster is also confirmed by the March 16 trading session on the Green Certificates Market, in which only 5,490 GCs were sold from over 1.7 million offered. While the authorities are doing absolutely nothing in order to improve this disastrous situation, we are wondering, with utmost concern, how long can this sector resist, a sector that is rapidly heading toward bankruptcy, Moise pointed out. Renewable energy capabilities reached an installed power of 5,153 MW at the end of January this year, according to Transelectrica data. Thus, the system had wind farms with a power of 3,129 MW, solar farms with a total capacity of 1,336 MW, hydropower micro-plants of 585 MW and biomass projects with a total power of 103 MW. At the end of last year, the system had renewable energy production capabilities of 5,142 MW according to Transelectrica. Romania s renewable investors struggling with financial pressures For the past two years, the local renewable sector has been grappling with reduced incentives and unclear legislation, say investors, who warn that, on this backdrop, it will be difficult for the country

2 to attract new projects. This stark outlook comes after years of booming growth, which has translated in around EUR 6 billion worth of investments. Most of the investments were made in the wind sector, which had reached MW of installed capacities at the end of 2015, down from the previous year when the wind parks that received incentives stood at MW. Solar was second, with MW of installed capacities at the end of 2015 Players reeling from booming years The depressed state of the renewable market has been described by both investors and companies that helped with the construction of projects. Titus Loew, CFO at Siemens Romania, said during the seventh German & Austrian Investors Forum organized by Business Review in February, that the company had worked in the past on big energy projects, in the renewable sector, but because the incentives were cut, now the operations in these areas have slowed down substantially. For instance, Monsson Group, the biggest developer of renewable projects in Romania, decided last summer to close down a wind farm, citing the changes in the green certificate support scheme. The farm had an installed capacity of 27 MW and was never put into operation although it had been finished in The company has developed 11 wind projects in the country, the biggest one being a 600 MW farm that was sold to Czech utility CEZ. We are talking about a collapse state for the renewable energy industry, a state in which the investments that have already been made run a real risk of bankruptcy, while the potential ones have been halted indefinitely, representatives of the Romanian Wind Energy Association (RWEA) have told BR. The association cited a recently published report which stated that the operation period for a wind park is of 20 years, while in Romania investors will need 33 years to recover their investments. This is a paradox which, together with the unpredictable legislation, practically blocks any new initiative in the sector. Last year, two companies controlling wind farms filed for insolvency. The message for any investor is negative and discouraging, stated the RWEA representatives, adding that Romania will become interesting once again for investors only if we will have a predictable energy strategy. Romania renewable output at 27 percent out of total energy consumption Cristian Busu, state secretary at the Ministry of Energy, stated that Romania has been able to meet its target regarding the renewable output in gross electricity consumption three years earlier than it was initially planned. Romania has met its objective as share of total renewable energy of 24 percent for Today, Romania has already reached 27 percent, said Busu, according to an official statement. The government official has met on Wednesday with Li Yong, the general manager of the United Nations Industrial Development Organization (UNIDO). 2

3 Yong came to Romania to talk about the use of renewable energy, supply security and storage solutions for energy. Busu has pointed out that the renewable energy has to be stored in a sustainable manner, because of the difficulties generated by the lack of infrastructure and bad weather during winter. Although the country is getting a growing amount of electricity from renewable sources, the producers are currently dealing with a series of financial issues. Initially, the country had put in place a support scheme which generated around EUR 8 billion worth of investments in the renewable sector. In the meantime, the incentives were reduced so investors are struggling to generate revenues. Projects are allotted a number of green certificates depending on the technology. EnergyMin Grigorescu: Romania learnt lesson on renewable energy the hard way The investors in renewable energy have received substantial subsidies in past years, with Romania having had at one time the most generous scheme in the EU Romania has learnt a difficult lesson from the way it has developed the wind and photovoltaic energy industry; in the future, new legislation must be preceded by accurate assessments and thorough studies, Energy Minister Victor Grigorescu told the Berlin Energy Forum, according to a posting on his personal Facebook page. Grigorescu participated on March 17 to 18 in the second Berlin Energy Transition Dialogue. In Berlin, within the conference on the transition to a green economy, I have reaffirmed that everyone must choose their own energy mix. We cannot ignore the energy security and the continuity of supply when we talk about how we reach the decarbonisation targets. Policies must be technologically neutral to allow all technologies to have a real contribution, including that of nuclear sector. I have reminded that Romania has already exceeded the target for renewable energy stipulated for 2020, the minister wrote on Friday on Facebook. Grigorescu refers to the fact that investors in renewable energy have received substantial subsidies in past years, with Romania having had at one time the most generous scheme in the EU. However, with the increasingly higher impact in electricity bills, subsidies were reduced. On Thursday, State Secretary Cristian Busu announced that Romania had reached a renewable energy share of 27pct, having exceeded since last year the assumed target of 24pct for The capacities of electricity production from renewable sources reached a total installed capacity of MW at end-january 2016, according to the data centralized by Transelectrica, the stateowned operator of the national energy transmission grid. Renewable energy producers receive free green certificates that they sell on a specialized market for an additional gain. These green certificates are paid by all consumers in Romania, including the population, in their electricity bills. For 2016, the mandatory quota of electricity produced from renewable energy is 12.15pct of the gross end consumption of electricity, according to decision taken by the Government on 30 December

4 Renewable energy producers argue that the authorities decisions make it impossible for them to sell green certificates and thus many relevant companies will go bankrupt. 2. ANRE, Transelectrica, OPCOM Useful Information OPCOM Prices recorded for the DAM (Day Ahead market) Prices and volumes ,52 126,64 126,52 121,19 98,72 64,73 117,46 126,06 564,52 576,64 576,52 571,19 548,72 514,73 567,46 576,06 Total daily DAM volume traded Prices and volumes ,18 118,56 119,02 114,86 85,56 84,44 160,65 158,13 569,18 568,56 569,02 564,86 535,56 534,44 610,65 608,13 Total daily DAM volume traded Prices and volumes ,87 124,48 111,03 88,19 135,28 150,71 129,72 127,40 607,87 574,48 561,03 538,19 585,28 600,71 579,72 577,4 Total daily DAM volume traded Prices and volumes ,32 103,15 47,96 73,75 125,69 566,32 553,15 497,96 523,75 575, Legend: Piete la termen Futures markets 4

5 TRANSELECTRICA Charts, Map Legend: Carbune Coal Hidro Hydro Hidrocarburi Hydrocarbons Nuclear Nuclear Foto Photovoltaic Biomasa Biomass Eolian-Wind 5

6 Leganda: Reteaua Electrica de Transport din Romania Romanian Energy Transport Network Starea Sistemului System Status Cosumul si productia in Romania Consumption and production in Romania Ultima actualizare Latest update Consum Consumption Productie Production 6

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