For ten years, EDP Renewables has been strongly committed to contributing to the gradual growth of renewable energy in Romania. These efforts are not simply a matter of being green or not, but rather an endeavor to ensure that regulatory conditions are met. Furthermore, they also offer an economic solution for the economy as a whole, as well as for the sustainable development of local communities. We conducted a short interview with Mr. João Manso Neto, CEO of EDP Renewables, to get a better understanding of the company’s situation and future plans for Romania and its regional green-generation potential.

Mr. João Manso Neto, what are the results of the first storage project implemented in Romania?

We are extremely satisfied with the result of the project so far. The battery at the Cobaldin wind farm is testament to our commitment to investing in the R&D of new technology. A commitment that represents one of the cornerstones of our growth, encouraging us to push the envelope and seek new alternatives that enhance those currently offered in the market and at all stages of energy generation, in turn boosting the positive impact we have on society.

In this context, we installed a pilot storage system with a capacity of 1.3 MW. This storage system is AC coupled at the MV substation level (33 kV). Additionally, a second pilot system, called Băilești Storage, was installed at the Băilești solar PV plant. This storage system, with a capacity of 630 kW, is DC coupled at the inverter level.

Both of these storage systems are pilots which have no commercial purposes or objectives, but which facilitate our research and data collection. This project enables us, amongst many other things, to utilize an automatic operating mode, which reduces any potential forecast errors.

Another milestone can be found in the readings it provides, which provide a better understanding of the battery’s responsiveness to the charging and discharging cycles; the number of optimal cycles needed per day / week / month / year; its optimal charging and discharging capacities; optimum maintenance; useful troubleshooting processes; and the overall operating costs. All of these can be harnessed to forecast commercial functionality, depending on the installed capacity of the renewable-energy production unit.

Also, with the introduction of the ancillary services system, the storage system will be able to create the stability which the TSO and DSO are aiming for.

What is the business model of the storage project at PV power plants in Romania? Is it different from other projects in Europe and elsewhere?

The Băilești Storage system is a pilot with an On-Demand (energy time-shifting) mode of operation. This project studies how to store solar energy when the demand is low and provide power when demand is high. It also studies the advantages of DC-coupled solutions in comparison to the AC-coupled solution used for PV applications.

ALSO READ EDP Renewables installs a new energy storage system connected to a photovoltaic power plant

This project is in line with the European-wide focus on demand response and demand side management.

EDPR spoke about the strong opportunities for renewables in Romania, even those without subsidies. What are these opportunities that you have in mind? Do you consider large power farms or only small units linked to industrial plants?

Romania is a country that needs to continue increasing its energy production capacity, for a number of reasons, the first being that its current production fails to meet demand. On this basis, you can find numerous neighbouring countries across Europe or in the US in which examples of economically feasible developments without subsidies are underway.

A contract for differences, based on competitive auctions, is a system with proven success across the globe. Producers of renewable energy do not need to rely on subsidies to ensure viability. A competitive auction would allow for RES installations to operate at a low cost for the system. In addition to this, we must also note that wind and solar are now the cheapest energy technologies available. Moreover, medium and large power plants are always more competitive than smaller ones, due to the scale of the projects.

It seems that all investors are asking for new financial instruments whenever they expect another wave of investments in Romania’s power generation sector. Could you please mention a few of these instruments?

Romania is expected to implement regulatory changes that will clarify doubts surrounding the capacity for long-term project financing. As such, if projects have greater access to reliable and stable bank financing, we don’t think it will be necessary to go down the route of further alternative financing.

Is the market model in Romania well suited for the further integration of renewables?

The fact that Romania has one of the fastest-growing economies in the European Union also gives us confidence in this market. This is further consolidated by the entry into the labor market of a new highly-skilled generation, which is highly competitive as regards its employment outlook.

It will help boost investor confidence in the country with a view to increasing investment in its electric grid. Similarly, a new regulatory scheme could be implemented. From experience, a combination of CfD and PPA would boost Romania’s appeal for foreign investment and increase electricity production.

This change would help shift Romania’s role from a net energy importer to a self-sustainable producer. Public legislation in this regard is expected to be implemented in the near future.

What is the strategy for EDPR’s development in SE Europe in the next decade, and what is Romania’s role within this strategy?

EDPR continuously keeps track of global growth opportunities. This has led us to be present in 14 markets and be one of the key global players. Our strategy does not rule out any market and Southeast Europe is no exception. We study each case based on the predictability of cash flows, security in the regulatory sphere, transparency in public tenders and security to make long-term investments.

We are firmly committed to the Romanian market. Our uninterrupted presence in the country since 2008 is testament to our commitment. We aim to continue developing our projects in Romania at facilities such as Cernavodă, Peștera, Vutcani and Sarichioi, which boast a combined installed capacity of 521 MW, largely made up of wind power, as well as solar energy.

EDPR is ready to invest further in the development of Romania as soon as the necessary conditions are met. Predictability of cash flows, security in the regulatory sphere, and fair and equal conditions for everyone involved will attract healthy investments and facilitate access to bank financing, helping to balance the system with the use of the cheapest (wind and solar) technologies.