Capstone believes there is a 70% probability the Romanian government will approve a Contract-for-Difference (CfD) scheme by June 2023, which, if enacted, would benefit solar photovoltaic (PV) and nuclear energy operators. The scheme would provide €340 million annually for low-carbon technologies, supporting traditional renewables such as wind and solar, as well as batteries, nuclear, and carbon capture technologies. We believe solar PV and nuclear are best placed to benefit from the mechanism in the near to medium term given the country’s ambitious targets for both energy sources. Romania’s renewables deployment has stagnated since 2016 when it phased-out its previous support mechanism. However, as coal capacity is decommissioned and decarbonization targets increase, the country is increasingly committed to supporting renewables and nuclear to replace coal power generation capacity. Against this backdrop, we see upside for companies with renewable operations in Romania, which would benefit from guaranteed revenue streams from the upcoming CfD mechanism.
Solar and Wind Power to Nearly Triple in Romania’s Energy Mix
