Energy producers based on low-carbon technologies will receive state money if the price of electricity on the market falls below a certain threshold, but they will have to return the difference if the price goes above that level, said Doru Vișan, secretary of State in the Ministry of Energy.

“The Ministry of Energy is considering promoting a mechanism like contracts for difference. This mechanism will apply to all investment projects to produce electricity in low-carbon capacities. The implementation of such a mechanism allows for a transparent framework to address the risk to long-term investment and provides an attractive, stable and predictable environment for investors”, Vișan said.

Such a mechanism aims at stabilizing revenue for producers at a fixed price level, known as the strike price, the minister said, according to Agerpres.

“Thus, producers will obtain revenues from selling electricity on the competitive market, and if their market price is below the exercise price, they will receive a payment representing the difference between the reference price and the strike price. Instead, if their price of selling electricity on the competitive market is higher than the strike price, generators have to reimburse the difference up to the strike price”, the state secretary said.

According to him, the reference price will be different for each type of technology.
“Such a mechanism will be adopted in the specific conditions in Romania and in line with the European legislation in the field of energy, competition and state aid. The mechanism will aim to maintain a balanced mix based on low-carbon technologies and efficient use of resources to ensure Romania’s independence in electricity generation. We will consider those technologies that can help achieving the energy and environmental targets that will be set for Romania at the level of 2030 “, Vişan also said.

The European Commission has already approved state aid such as difference contracts for a new nuclear power plant to be built in the UK.

Nuclearelectrica officials have stated on several occasions that such a mechanism could help complete the Cernavoda reactor 3 and 4 project. This is because the investment in the two new reactors, estimated at over € 6 billion, is not feasible given current market prices.