Romania caps green energy quota to help large industrial firms

March 29, 2014 by  
Filed under Green Energy News

* Govt caps industry’s green energy quota at 2013 levels

* Industrial consumers complained of higher energy prices

* But new measure creates uncertainty for investors

BUCHAREST, March 26 (Reuters) – Romania’s government capped
the amount of renewable energy that large industrial consumers
must buy this year in a move to help offset their high energy
costs and stave off the threat of job cuts ahead of elections
later this year.

The cap is part of a wider set of measures the leftist
government plans to enforce this year to help industrial
consumers, who have repeatedly warned that high power and gas
prices could lead to production cuts, layoffs and even plant

However, the measure also boosts uncertainty for private
investors in the electricity and gas sectors, which could scare
off badly needed investment. The government has already lowered
its support scheme for renewable energy projects.

The support scheme gives developers green certificates for
each megawatt generated and forces power suppliers and large
industrial users to buy them based on a gradually increasing
annual quota set by the country’s energy regulator.

Green energy investors gain once by selling certificates and
again when they sell their electricity.

On Wednesday, the government said it capped the annual quota
at the 2013 level of 11.1 percent of gross power consumption.

The incentives, which have been in place since 2012, were
once deemed too generous by the European Commission. But they
have also brought droves of foreign investors to Romania,
particularly to wind energy, including Czech energy company CEZ
, Italy’s Enel or Energias de Portugal

The renewable support scheme is not the only factor pushing
energy prices higher. The government is also in the process of
deregulating its gas and power markets in stages, as agreed
under an aid deal from the International Monetary Fund and the
European Commission.

Romania has put off deregulation for years to protect voters
in a country where the average individual income is roughly $500
a month. For millions of Romanians and some industrial consumers
tariffs are capped below market prices.

(Reporting by Luiza Ilie; Editing by Susan Fenton)

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