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The Executive approved in Thursday's meeting the Government Decision establishing a predictable investment framework for the 15-year Contracts for Difference, in which the price for electricity is set following an auction, Energy Minister Sebastian Burduja announced on Thursday.
"This instrument is used in all advanced economies to support investments in the energy sector. What does it provide? Basically, it provides for a predictable 15-year investment framework in which the selling price for electricity is set following a competitive bidding procedure. When the prices in the market, we are talking about the monthly average, are above this competitively set price at auction and the investor earns more, he returns the difference to the state, to the counterparty, as it is called, in the case of this scheme we are talking about OPCOM. When the prices in the market are below the price set by auction, the strike price, the difference is given by the state to the private investor. This ensures a horizon of 15 years in which the operation of these renewable energy production capacities mainly, but not only, stimulates investments, accelerates Romania's green transition, allows the fulfilment of the promises Romania has made," explained Burduja at the briefing at the end of the Government meeting.
He pointed out that this normative act involved an effort that lasted more than two years and involved many leading institutions, such as the European Bank for Reconstruction and Development, which, together with independent consultants and external experts, drew up all the procedures underlying this state aid scheme, including the maximum exercise price set for this year's first auction, namely 91 euros/MWh for wind and 93 euros/MWh for solar energy.
At the same time, the minister added, this Government Decision has created the framework to replicate this scheme, contracts for the difference, and for other technologies in the coming years.
"We are talking about offshore wind, where we are on the last lap in the Chamber of Deputies with the Offshore Wind Law, which will allow us to have in the Black Sea, in the horizon 2031-2032, the first wind power plants. We are talking about hydropower, we are talking about nuclear resources and, most probably, Romania's civil nuclear programme will also benefit from a scheme for contracts for the difference in the future. We are talking about hydrogen and, very importantly, we are also talking about energy storage (...) So, a modern instrument, a predictable investment framework, over a 15-year horizon, stimulating the achievement of Romania's goals in terms of green transition and, last but not least, positioning Romania as a regional leader in the energy sector. You have seen and heard a lot about the Spanish model, the Portuguese model, lower prices, clean energy. This is exactly what we need to move towards and this kind of instruments, contracts for difference, are an effort by Romania to reach a model based on energy at a fair price, as low as possible for all Romanians, cleaner air, therefore a greener energy and, of course, a secure national energy system," said Sebastian Burduja.
