Romania has emerged as a leader in renewable energy, driven by strong government commitment, a transparent legal framework, and innovative financing. The country’s success story, particularly in implementing Contracts for Difference (CfD) auctions, has drawn the attention of other nations seeking to replicate its achievements, according to Maria De Melo, Principal in Energy Policy at the European Bank for Reconstruction and Development (EBRD).
On the occasion of the conference “International Approach: Catalyzing Romania’s energy future”, organised by Energynomics in London, De Melo emphasized that Romania’s journey to becoming a renewable energy leader was a multi-year process. The EBRD began working on the CfD framework with the Romanian government as early as 2020, even before the COVID-19 pandemic. The collaboration required extensive policy development, engagement with multiple institutions, and careful structuring of auctions to attract private investment.
“What Romania achieved and the path it took to become a leader in renewable energy is truly inspiring,” De Melo said. “It has already spilled over to other countries we work with, who also wanted to know, ‘How did the Romanians do it? Why was it so successful? Can we get the same prices?’”
One of the key factors behind this success was Romania’s ability to communicate clear, long-term plans for renewable energy development. The government set a target of 10 GW of capacity and 1.5 GW of CfDs by 2024, providing developers with certainty about investment opportunities. Furthermore, Romania committed to additional CfD auctions beyond 2024, ensuring stability in the market and allowing investors to plan their projects strategically.
Policy and regulatory strengths
A crucial component of Romania’s success was its ability to implement a robust and transparent legal framework. This framework was designed through clear government decisions, secondary legislation, and cooperation among key institutions such as Transelectrica and OPCOM. The well-defined rules gave investors confidence that their projects would not be affected by sudden regulatory changes—an issue that has deterred investment in other markets.
Romania’s CfD scheme was designed with flexibility in mind, allowing developers to bid for portions of their projects while securing bilateral contracts for the rest. Additionally, there were no restrictions on integrating battery storage into CfD-backed projects, which improved financial viability.
“The developers were free to bid for part of their power plant and enter into bilateral contracts for the rest. This changed the project economics and allowed CfD prices to be more competitive from a consumer perspective,” De Melo explained.
Innovative financing through carbon credit sales
Unlike many EU countries that fund renewable energy subsidies through levies on consumers, Romania leveraged its allocation of carbon credits under the EU’s Modernization Fund. By selling these carbon credits, the country was able to finance its renewable energy programs without placing additional costs on electricity consumers. This financing model has attracted attention from other EU member states looking for more efficient ways to support renewable energy development.
“This has been transformative in the European Union,” De Melo noted. “Many other countries have now come in and asked the Modernization Fund how they can implement similar approaches.”
Another major lesson from Romania’s approach was the importance of market dialogue. The government actively engaged with investors and developers to refine the auction design and address concerns. This iterative process helped remove unnecessary restrictions and improved the overall efficiency of the CfD mechanism.
As Romania prepares for its next round of CfD auctions, attention is turning to new opportunities such as offshore wind development. The Romanian model has already influenced energy policies across Europe, and its future progress will likely continue to set benchmarks for the region.
“The Romanian government has supported 1.5 GW directly through the CfDs, but the total capacity of these projects is much higher,” De Melo concluded. “This demonstrates how public resources can be used to leverage significantly greater private-sector investment. The results speak for themselves.”
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.