The approach to risks associated with investments in renewable energy projects should be different in Romania than in other countries, and one of the solutions to mitigate them could be PPAs, said Oana Mogoi, Sector Head Utilities & Natural Resources at ING Bank.
“For the Romanian market which is characterised by legislative volatility and unpredictability, the financing structures for renewable energy projects should reflect this and not be as relaxed as in countries like the Netherlands or Germany, where even if you want to, you cannot change the legislation. From our point of view, things have to be approached on a country-specific basis”, at the conference “2024: A defining year for the renewable energy sector in Romania”.
Looking at the two main risks facing the renewable market, we can say that while regulatory risk is out of the control of investors in renewable energy projects, market risk is something that the investor can control and is frequently a requirement of financing. Experienced investors with a long track record in developing renewable energy projects that we are talking to are considering PPAs as an internal condition for investing in such projects.
CHECK The numbers in the “Monitor of the Romanian Photovoltaic Projects”
For the time being, Romanian legislation is not favourable to PPAs due to the unpredictability of regulated prices and subsidies granted for the payment of energy bills for non-household consumers. It is therefore difficult to predict how the market will evolve as long as there is this state control over electricity prices, which is even intended to be prolonged, which takes us away from the idea of a free market.
“Regarding market risk, the investor can and even should do something, because we all know that both consumption and especially the price of energy are volatile, but bank rates are fixed. At ING, we want to support the renewable energy sector, but we will do this by providing financing with sustainable structures, suitable for the Romanian market context,” Mogoi added.
The conference “2024: A defining year for the renewable energy sector in Romania” was organized by Energynomics with the support of our partners: ADC, Alive Capital, CRC Energy, Elektra Renewable Support, EnergoPower, Ensys, Extro, Horváth, ING Bank, LONGi Solar, Monsson Operation, Nofar Energy, OX2 România, Photomate, PNE Romania, Polytrade Global, REI Grup, Renomia, Sph3ra Management Solutions, Transelectrica, WALDEVAR Energy, Wiren Romania. On this occasion, Energynomics launched its first report under the initiative “Monitor of the Romanian Photovoltaic Projects”.