2023-09-20 14:24:00
The energy sector in Romania has greater financing possibilities than ever, of many billions of lei, through state aid schemes and financing of larger or smaller projects, the money being provided by the Modernization Fund and the National Recovery and Resilience Plan ( PNRR).
Energy sectorPhoto: HotNews / Claudia Pirvoiu
Projects are being prepared, contracts have already been signed for some, but it is not enough, the hardest part being the deadlines for spending the money, i.e. for their completion. Any project not completed on time means lost money. So far, very few contracts have been signed on the PNRR, the vast majority being in the evaluation stage.
How much money is available and when we will see the first projects completed
More than 16 billion euros might be made available from the Modernization Fund, until 2030, and 1.62 billion euros, excluding VAT, from the PNRR, an amount that must be used by June 30, 2026. The money is used in particular for ensuring the green transition, by promoting the production of electricity from renewable sources, energy efficiency and new technologies.
HotNews.ro asked the Ministry of Energy for an up-to-date situation of financing from PNRR and the Modernization Fund.
On the PNRR, the first projects that might be completed are those under measure I.1 of the PNRR. They have a completion date of June 30, 2024. The projects under measures I.2, I.4 and I.5 have a completion date of December 31, 2025 and the projects related to measure I.3 have a completion date of June 30, 2026.
From the Modernization Fund, considering that the individual projects approved for financing from the Modernization Fund are large-scale (construction of electric lines by Transelectrica SA, construction of new gas pipelines by SNTGN Transgaz SA, construction of combined cycle power plants and photovoltaic parks by CE Oltenia), these require longer implementation periods (2-5 years or more), the Ministry of Energy says.
The first completed investments will be the investments for the installation of electricity production capacities from renewable sources (solar and wind), which will be carried out within the calls that will be launched soon by the Ministry of Energy.
PNRR – for how many projects and for what amounts contracts were concluded
Until 18.09.2023, within the PNRR, 34 contracts worth 1,555,494,220 lei were signed, of which 183,118,866 lei represent PNRR funds. For other 184 projects related to measure I.1. the evaluation has been completed and is in the pre-contracting stage. The rest of the projects are in the evaluation stage.
Financing contracts will be signed with the beneficiaries whose projects were approved in the order of the score obtained in the call PNRR/2022/C6/M ENERGIE/I1.
Launch of a bidding procedure for energy production projects from renewable sources (wind and solar energy), competitive call and within the budget approved for this call. These lists are periodically updated on the website of the Ministry of Energy.
PNRR – How many funding applications were submitted and how many of them were analyzed?
Regarding I.1 – State aid scheme with the objective of supporting investments for the installation of new electricity production capacities from renewable wind and solar energy sources, with or without integrated storage facilities, currently submitted bids are either in the evaluation stage, or in the pre-contracting or implementation stage. 744 offers were submitted, of which 21 were rejected because the projects did not comply with the submission method mentioned in the Specific Guide.
Lists of projects and the stage they are in can be found on the website of the ministry:
- the list of projects under evaluation – Installed capacity 0.2 – 1 MW can be consulted at the following link: https://energie.gov.ro/wp-content/uploads/2023/08/02-1MW-site-ME_-final.pdf
- the list of projects under evaluation – Installed capacity of over 1 MW can be consulted at the following link: https://energie.gov.ro/wp-content/uploads/2023/08/1MW-site-ME_final.pdf
Regarding I.2 – Renewable gas distribution infrastructure (use of natural gas in combination with green hydrogen as a transitional measure)as well as green hydrogen production capacities and/or its use for electricity storage – sub-measure 2.2 – Supporting investments in building capacities for green hydrogen production in electrolysis plants)”.
On 04.09.2023 (when the call for projects closed), 19 funding applications were submitted. They are being evaluated, and the financing contracts will be signed in October.
Regarding I.3. The state aid scheme with the objective of supporting the development of gas production capacitiesflexible, for the production of electricity and heat in high-efficiency cogeneration (CHP) in the district heating sector, 9 financing applications were submitted.
Following the completion of the evaluation procedure, 4 financing contracts were signed.
- The list of submitted projects, as well as the list of signed contracts, can be consulted here: https://energie.gov.ro/wp-content/uploads/2023/01/Stadiul-evaluarii-Masura-I3-25.07.2023.pdf
Regarding I.4. State aid scheme with the objective of supporting investments in the entire value chain of batteries (production and/or assembly and recycling) and Supporting investments in the entire value chain of photovoltaic cells and panels (production and/or assembly and recycling) 4.1, 3 offers were submitted.
- The list of beneficiaries can be accessed at the following link: https://energie.gov.ro/wp-content/uploads/2023/07/Lista_proiectelor_depuse_I4.1.pdf
Regarding the State Aid Scheme with the objective of Supporting investments in the entire value chain of batteries (production and/or assembly and recycling) and Supporting investments in the entire value chain of photovoltaic cells and panels (production and/or assembly and recycling) 4.2 , 6 offers were submitted.
- The list of beneficiaries can be accessed at the following link: https://energie.gov.ro/wp-content/uploads/2023/07/Lista_proiectelor_depuse_I4.2.pdf
Regarding the State Aid Scheme with the objective of supporting investments in the development of electricity storage capacities (batteries), 26 offers were submitted
- The list of beneficiaries can be accessed at the following link: https://energie.gov.ro/wp-content/uploads/2023/07/Lista_proiectelor_depuse_I4.3.pdf
Currently, all offers related to I.4 are in the evaluation stage.
Finally, regarding I. 5 – Ensuring energy efficiency in the industrial sector – State aid scheme to support investments in modernization, monitoring and efficiency of energy consumption at the level of economic operators in order to ensure energy efficiency in the industrial sector – In the first call, 14 projects were submitted and entered the evaluation stage. In the second funding call, 16 projects were submitted. A new call will be launched following the updated scheme is approved.
The Modernization Fund – What is the amount that Romania can benefit from and until it actually has to be spent?
The modernization fund is a European financing instrument established, for the period 2021-2030, for the modernization of energy systems and the transition in regions dependent on coal in Member States with GDP per capita at the market price lower than 60% of the EU average in 2013 .
The fund for modernization is made up of the revenues obtained by auctioning on the market 2% of greenhouse gas emission certificates (GHG) at the EU level, for the period 2021-2030 and Romania has allocated a percentage of 11.98% of the total of 2%.
The total number of certificates available to Romania from the Modernization Fund is 200,766,069, of which:
- 33,018,490 – part of the Fund for modernization (11.98% according to Annex IIb to the EU-ETS Directive)
- 81,673,875 – transfer from art. 10(2)(b) EU-ETS Directive (Solidarity Fund)
- 86,073,704 – transfer in art. 10c EU-ETS Directive
The auction of the certificates that provide the Fund’s resources for modernization is done by the European Investment Bank (EIB) and the accumulated amounts depend on the price of the greenhouse gas emission certificates. Considering the current price of GHG certificates, it is estimated that the amount Romania will have available from the Modernization Fund until 2030 is over 16 billion euros.
How many projects and how much have been contracted to date?
The amount drawn from the modernization Fund is more than 4.9 billion euros, which represents the entire amount available to Romania until March 2023, when the first session of the Investment Committee took place.
Priority and non-priority investment proposals submitted to the EIB/COM for approval can be individual projects or multi-year schemes. So far, out of the amount of 4.9 billion attracted from the Modernization Fund, more than 1.4 billion euros belong to individual projects, namely 21 individual projects, and the amount of 3.5 million euros is allocated to multi-annual schemes.
As for the number of projects that will be financed from the Modernization Fund, it is difficult to estimate. We mention that, for example, the number of projects that might be financed within a single scheme, namely Supporting investments in new production capacities of electricity produced from renewable sources for self-consumption for entities that do not fall under the scope of state aid to which 500 million euros, might be over 1000 projects. The number of financed projects depends on the amount of money requested for financing by potential beneficiaries.
What are the most important projects for which contracts have already been concluded through the Modernization Fund?
So far, 26 financing contracts have been concluded:
– 18 financing contracts for individual projects
- nine financing contracts concern the construction of power lines by Transelectrica SA;
- eight financing contracts aim at the construction of eight photovoltaic parks by CE Oltenia:
- a financing contract concerns the construction of a natural gas plant of approximately 475 MW within SE Turceni by CE Oltenia.
– 8 financing contracts under the multiannual scheme Realization and modernization of the electricity distribution network
To what extent is there a risk that the amounts from the PNRR and the Modernization Fund will not be spent
On PNRR, the Ministry of Energy claims that there are no risks regarding the absorption of funds. “Considering the very large volume of submitted offers, the complexity of their analysis as well as the dynamics of communications between the financier and the beneficiary, we assure you that the Ministry of Energy undertakes all the necessary steps in order to complete the evaluation and contracting of the above-mentioned projects in the shortest possible time, accelerating the flow of approving projects by increasing the number of teams involved and establishing clear deadlines for analysis and response”, says the Ministry of Energy.
A similar response was made regarding the Modernization Fund. “At the level of the Ministry of Energy, efforts are being made to strengthen the administrative capacity in order to carry out in optimal conditions the absorption of financing resources available to Romania from the Modernization Fund, but the spending of the money also depends on the beneficiaries of the financing in order to implement the projects within the established terms, without delays and postponements”, claims the Ministry of Energy.
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