The EU taxonomy is rather an alarm signal, as it announces the last days of unsustainable investments, says Sorin Elisei, director within Deloitte Romania.
“One way or another, I don’t see taxonomy as good news, but as an alarm signal. I would see it as an alarm clock with a shrill sound, in the sense that we need to get to work. With coal-based electricity production, we can use the gas or nuclear vector in decarbonization. The first step is to officially declare the phaseout on coal, we do not have an official paper in this regard and the money on Just transition does not come until we sign this declaration. Along with what will happen with the restructuring plan of the Oltenia Energy Complex and its entry in a straight line and the assurances that the Romanian authorities wanted regarding this plan, I assume that this declaration will be assumed and signed,” said Sorin Elisei, according to zf.ro.
“In fact, the taxonomy is not necessarily an obligation, but the classification system related to the regulation, at least led me to the idea that public and investor money will be channeled only to those economic activities declared and qualified as sustainable following the technical criteria, written in black and white in the regulations.
“On gas, we have new combined cycle projects and projects or rehabilitation of high-efficiency cogeneration plants. For both we see some emission thresholds. For example, 270 grams of CO2, equivalent per kilowatt/hour, which today, with the available technology, are not available on the market. It is true that the taxonomy tells us that by 2035, the conditions I am talking about being cumulative, we must reach a renewable gas or low carbon gas situation with that plant. In other words, I start with natural gas in 2025, and from 2035 my emission is zero or net zero, based on green hydrogen,” he added.
“Then, the business case at the moment sounds like this: I start a combined cycle or cogeneration plant and I already have to figure out how much money I have to spend in such a way that in 2035 to be zero and at the same time to be profitable. Given that we wanted the taxonomy to have an additional decarbonization vector, we put some additional costs on the installed megawatt, which – in the case of this country – we can not afford.
In terms of current natural gas performance, we are probably around 400 grams, and the new plants have 350-340 in relatively ideal operating conditions.
After the phaseout and we have a plant that we assume will be green hydrogen in 2035, I can install new gas once the taxonomy comes into force within 15% of the gas capacity it replaces. If we make a calculation against the coal capacity that we proposed in PNRR, which is around 4,000 megawatts, I think it is a logical conclusion that we can install with the entry into force of the taxonomy, because this is the more importantly, about 600 megawatts.
We can carry out such plants if we produce a comparative analysis together with the investment proposals, which would show if, in terms of cost efficiency and benefits, we could not have put renewable sources in place of the gas plant. I don’t know who can afford to do such a study.”