European Energy is pursuing its expansion of activities in Romania, having under development a pipeline of 984MW renewable energy with 859MW in solar and 125MW wind. The first solar park project of 20MW is ready to build and the construction is scheduled to start within 2023. We have also received grid connection approval for another 125MW PV project which is well under project development progress and several more projects are following within the next years, says Ioannis Kalapodas, Head of the Bucharest office, European Energy Romania, in an exclusive interview for Energynomics. At the same time, in Denmark, the company has a Power-to-X project worth millions of euros – a segment that can develop here as well.
What are European Energy plans regarding Romania? How much will you invest, and what projects are under development now? How about in the medium term? Why did you choose Romania?
European Energy is deploying its renewable energy projects in more than 20 countries, including Romania, and the purpose of this is clean and affordable electricity for all. And that is the same as the point of Ursula von der Leyen, president of the European Commission, she said at COP27, that the global fossil fuel crisis must be a game changer and we must massively accelerate the roll-out of renewables. Now renewable energy deployment is not only aims to decrease of CO2 emissions but also leads to energy security and independence.
Regarding our plans and projects in Romania, for us it is very important to see the political will of the Government and the relevant Ministries, a reliable investment climate and a clear regulatory framework. And the latest speech of Klaus Iohannis, President of Romania also at COP27, showed prioritizing of the focus, where he mentioned, that a lack of action against climate change generates losses and economic and non-economic damages across the world. So for us, it is very important that the Romanian government keeps the topic of climate change in a high level of policy making.
Unfortunately, scientific researches state that the climate is changing faster than the global capacity to adapt. So, companies around the world must deliver better and faster projects, to reduce CO2 emissions and governments to take fast, and brave fundamental decisions and immediate actions. The good news is that European Union was able to cut dependency on Russian fossil fuels, but clearly, that is not enough and the climate change struggle has to continue. According to open resources, the European Union’s additional renewable capacity is set to more than double in 2022, to up to 50 gigawatts. And I think, definitely, Romania is the country with great renewable energy potential. So the simplification of the permitting processes, investments in grids stability will make even more realistic all the ambitious plans of Europe’s climate neutrality by 2050.
European Energy is pursuing its expansion of activities in Romania, having under development a pipeline of 984MW renewable energy with 859MW in solar and 125MW wind. The first solar park project of 20MW is ready to build and the construction is scheduled to start within 2023. We have also received grid connection approval for another 125MW PV project which is well under project development progress and several more projects are following within the next years.
What is the main change incurred in the market after the Ukraine’s conflict? How did that affect costs, operations and projects’ speed?
The COVID 19 Pandemic, the energy and transportation crises and of course the war in Ukraine created many changes with a deep impact on the project’s cost and implementation process. The increase of the components and services prices due to the increased cost of energy, inflation, the increased financing cost, the longer delivery period increased the capital expenditure and the project development risk. Over and above we have to add the internal turbulences that occurred from the local stakeholders’ policies and decisions which in connection with the lack of the required electrical grid infrastructure are resulting quite long and expensive project development cost. The recent GEO 119 which set a limit of the energy price, only on the producer’s side is another measure, with quite a deep impact and bringing instability of Romania’s RES market and not only, since this measure has had a deep impact on banking sector as recently is expressed by the BNR. But we consider ourselves as “Creative Enablers”. When others say it is impossible, we give it a go. We are optimistic and believe that we can make a real change through the Green Transition.
What are the latest developments in Power –to-X? When do you think we could see such projects coming to Romania and the region?
The potential of Power-to-X technology (ex. green hydrogen, e-methanol) is truly enormous when green electricity plays an especially significant role in solving the problems caused by CO2 emissions in the transportation of heavy goods, in the chemical industry and in the heat supply sector. Power-to-X has been created as a solution to turn to green energy to those industries where emissions are difficult to reduce, and which are dependent on fossil fuels.
European Energy’s production of green fuels has taken a big step forward. European Energy’s upcoming Power-to-X-facility (PtX-facility) in Kassø, Denmark, will be the largest e-methanol facility in the world to date. The Danish Green Investment Fund (DGIF) has agreed in October to come with financing of EUR 53m to the total investment of the facility. We are happy that DGIF sees the same potential in green fuels, including e-methanol, as we do and this is part of the total investment in the facility, which the Danish bank Jyske Bank is also co-financing. The future PtX facility is supplied with renewable energy from the nearby Kassø Solar Park. A solar park that European Energy has developed and built. The solar park is to date the largest solar park in Northern Europe with a capacity of 300 MW. This corresponds to the solar park being able to supply 75,000 Danish households with green electricity. We are now entering an era in which green electricity is key to unlocking CO2 emission challenges in the heavy transportation, chemical industry, and heating sectors. In this new era, European Energy has green solutions that ensure we truly can reach the global goal of a carbon-free world, as we have already taken pivotal steps into the world of Power-to-X and green heating. All this experience we would like to share and implement all here in Romania, so now it is an important role for the clear regulatory framework development, that will allow us to work on similar projects as in Denmark, here in Romania.
There are some fundamental steps Romania has to take towards to PtX direction like: the legislative framework that will regulate the development and operation of such projects; the infrastructure; the market conditions that will make such investment feasible. Green electricity is not enough for Romania to reach its targets, to secure for Romanians, cheap and sustainable energy able to power the local economy and upgrade Romania’s position within the EU and not only.
What should Romania do in order to allow an acceleration of investments and to ensure our energy independence from supplies from Russia? How can we speed up the adoption of European Funds? How can we make the grid more suitable for renewables? How about demand-response?
Today, the installed energy capacity of solar and wind in Romania is at the lowest levels, comparing to other European countries and we plan to support Romania to change that by developing constructing and operating more renewable energy production (PV, on/offshore wind, PtX, etc.) facilities in Romania within the next years. The offshore wind, Agri-photovoltaics and Power-to-X areas are still lacking legislative framework, a clear and friendly environment to proceed.
Romanian economical and geopolitical role in the EU, the Black Sea Countries and not only, is already upgraded and it will be upgraded more in the near future resulting Romania’s significant role and “voice” in the Region.
Romania needs to make big and brave steps toward the green transition, and energy production is a must. Romania has all the potential and has already attracted the interest of international RES investors who are willing to invest within the country and support the Romanian economy.
Romania is seen as a fast-growing market in the Southeast European region, and maybe more ambitious goals will be established in the new Energy Strategy of Romania, which is currently under development.
So to answer your question, first of all a reliable investment climate and stable regulatory framework are needed, the development of clear market rules for these types of projects, and a clear message of the government and direct dialog with stakeholders. We are sure, that as soon as we have all three components in place, as investment climate, regulatory framework and policy will, then financial institutions will be more open to financing those types of projects, and that will make the green light both to investors in renewable energy, green fuel producers and consumers. A lot of work ahead, but a joint goal makes us motivated.
Another important point: we need investments in energy infrastructure, which is a fundamental need for development and growth. Such investments had to be done a long time ago, these are big and long-term investments, but necessary to be done. Their existence is a significant boost for economic and social growth and their lack results in economical and social recession.
It is proven that renewable energy is the cheapest, environment friendly and safe, that is why, we do not see any reasons, why not to grow new renewable energy capacities in Romania. And such energy efficiency mechanisms as the demand response are similarly important for the country, as the energy efficiency measures for households, for the industry and the public sector has to be implemented in parallel and in smart correlation with renewable energy and green fuel development.
About European Energy
European Energy, a renewable energy company headquartered in Denmark, since 2004, has had the ambition of supporting the development of an independent and green European energy system. European Energy covers the full life cycle of renewable electricity production: development, construction, PPA, asset management of onshore and offshore wind, solar energy or green heating solutions. European Energy also takes the leading position in Power-toX (covering e-methanol, green hydrogen).
_____________________________________________
This interview first appeared in the printed edition of Energynomics Magazine, issued in December 2022.
In order to receive the printed or electronic issue of Energynomics Magazine, we encourage you to write us at office [at] energynomics.ro to include you in our distribution list. All previous editions are available HERE.
