One of the biggest challenges faced by investors in Romania, as in many other markets, is determining the right direction to take, said Andrew Buglass, Honorary Consul of Romania in Surrey and Kent, on the occasion of the conference “International Approach: Catalyzing Romania’s energy future”, organised by Energynomics in London.
Investors in electric vehicles (EVs) and other renewable technologies face the real risk that policy decisions related to storage, grid balancing, and the broader regulatory environment could significantly impact the financial viability of their projects over time, said Andrew Buglass.
In the past, concerns about policy uncertainty were somewhat alleviated by the stability and predictability of 15- to 20-year Power Purchase Agreements (PPAs). However, that environment has changed, and today, investors are increasingly exposed to greater volatility and price risks, requiring them to adapt to a more uncertain landscape.
“There are three key elements that make a good policy: transparency, predictability, and clarity. As long as you have these three, you provide investors with a clear framework, giving them the tools to analyze and assess opportunities. One of the critical factors that worked particularly well in the UK’s Contracts for Difference (CfD) process was the presence of a healthy dialogue. As regulations were being developed, investors were able to react in real time, providing feedback to the government. They could point out specific and highly detailed aspects of policy that were likely to affect the availability and cost of capital. This kind of interactive process fosters a healthy environment—one in which investors and their advisors can make well-informed decisions,” the consul added.
Buglass noted that the pressure on renewable production is becoming increasingly downward. Reflecting on his first renewable project back in 2005, he pointed out that the situation was very different at that time. The government had committed to supporting renewables, but they were expensive and required subsidies. The key turning point came when sufficient investment was made in renewable technologies, making them competitive without the need for subsidies. That moment, he said, was a game-changer.
He emphasized that today, a combination of both renewable and transitional energy sources is likely to be part of the solution. Investors, according to Buglass, are now focusing on their areas of expertise, whether in onshore or offshore wind. He specifically mentioned that offshore wind is particularly promising due to its scale and the price compression that has occurred, although setbacks in recent years due to material costs have posed challenges.
Buglass emphasized the ongoing need for gas as a transitional energy source in Europe. In the UK, net-zero is defined as achieving carbon neutrality by 2030, with no more than 5% of energy coming from fossil sources. However, Buglass pointed out that this target depends heavily on a significant increase in storage capacity and other enabling technologies to manage the intermittency of renewable energy.
“This is the biggest challenge we face today. As I mentioned earlier, the industry has a responsibility to engage with policymakers and help shape frameworks that are fit for purpose. At the same time, policymakers must listen and acknowledge that no one knows exactly how the energy transition will unfold. It is happening rapidly, with significant technological disruptions that are both exciting and intimidating from an investor’s perspective. The best we can hope for is a clear long-term direction—an aspiration to reach a specific goal. This would allow investors to better manage risks. However, we are undoubtedly entering an exciting yet highly uncertain period,” the consul concluded.
The conference “International Approach: Catalyzing Romania’s energy future” was organised by Energynomics in London with the support of our partners AJ Brand, Elektra Renewable Support, Adrem Asset Management, Enexus, Nofar Energy, Parapet, Wiren.