The Ministry of Energy launched the Contracts for Difference (CfD) scheme, a financial instrument designed to stimulate the production of green energy in Romania.
“Mrs. Elena Popescu (deputy general director in the Ministry of Energy, n.r.) had a dream and told me about it since she took over the mandate. It was called CfD (contracts for difference, n.r.). I am glad that today we can formalize the steps that have been done so far and, of course, the ones that will follow, so that we fulfill Mrs. Elena Popescu’s dream, but not only her dream, but also our dream, for all of us, because it is a good thing for Romania. We have a CfD which is an example of success. I am speaking in English because I hope that there is an international audience and that we have interested investors from all over the world to come and invest in this wonderful mechanism, let’s set a price for the next 15 years that will provide stability for everyone,” stated the Minister of Energy, Sebastian Burduja, quoted by Agerpres.
The European Commission approved, at the beginning of this month, the granting by Romania of an aid scheme worth 3 billion euros (15.22 billion lei) in support of installations that produce onshore wind and solar photovoltaic energy, in order to promote the transition to a “net zero” economy, in accordance with the Industrial Plan of the Green Pact.
According to the Minister of Energy, the contracts for difference will contribute to the achievement of our country’s goal of reaching 10 Gigawatts installed in renewable capacities by 2030, as established in the National Integrated Plan in the field of Energy and Climate Change (PNIESC).
“All this is possible with one condition, if the market reacts. Therefore, please announce that we are doing this. I will be careful that everything is transparent and competitive, because this is what we need, as a country,” he also said Sebastian Burduja.
He emphasized that Romania provided this scheme through the Modernization Fund, without pressure on the consumer.
“We hope that we will have a successful auction for the sake of consumers and the energy market – not only for a good price on the market, but also to attract investors. The first time I heard about Contracts for Difference was talking about attracting investors to these technologies with a low carbon level. I am grateful to the internal team for the fact that they gave importance to stakeholders from Romania”, said Elena Popescu.
“CMS and Nera (CMS Cameron McKenna and NERA Economic Consulting – e.n.) have actually been working on this project since 2018, the team being led by me and my colleague, Munir Hassan, Head of Energy, CMS London… We would like to especially thank the European Bank for Reconstruction and Development, and especially the project leader Maria De Melo, as well as the country director Victoria Zinchuk and the deputy country director Mihaela Mihailescu… It was a pleasure to work with such leaders in the field. Also, we would like to thank for the support and expertise of the working group formed by ANRE, Transelectrica, OPCOM and the Competition Council for the help provided in completing this work,” said Varinia Radu, Partner, CMS, Head of Energy and Projects- Romania, Head of CEE Oil and Gas.
The financing of the CfD scheme is carried out through funds provided by the Ministry of Energy from the Modernization Fund and transferred to the CfD Liquidity Fund. OPCOM, as CfD counterparty, will be responsible for managing CfD payments to and from the Liquidity Fund. The Ministry of Energy, according to the Government Decision, has the obligation to ensure that the Liquidity Fund has adequate resources at all times. The Liquidity Fund will be supplemented by a CfD contribution that will be borne by consumers.