Romania provides 390 million euros for the production of electricity and heat in cogeneration of high efficiency in district heating. The Ministry of Energy has decided that this type of aid cannot be allocated through the competitive bidding procedure and invokes the results of the public consultation procedure carried out by the Ministry of Energy in 2020, which “showed that the number of sufficiently mature projects submitted is limited and insufficient to ensure effective competition, ie the budget allocated under this aid scheme covers the potential supply”. The Ministry of Energy has launched a set of documents for public debate, in RO, including the Financing Guide, the description of the support scheme, other forms and model statements.
The project should focus on actions for the construction/modernization of high-efficiency cogeneration power and thermal power plants, using natural gas, ready for mixing with renewable / low-emission gases, including green hydrogen, allowing power plants to reach a maximum of 250g CO2 eq/kWh during its operation time. The maximum aid that can be granted for an investment project, per enterprise, cannot exceed 50 million euros.
The implementation period of the project cannot exceed June 30, 2026, and the Ministry of Energy expects to receive up to 6 projects through this program, totaling approximately 300 MW of installed power in cogeneration. The potential beneficiaries are the enterprises that produce electricity and heat in cogeneration in urban district heating: large, medium or small enterprises, as well as administrative-territorial units, but not associations/partnerships formed between them.
Eligible costs include new high-efficiency gas-fired cogeneration plants in the district heating sector and investment costs for the modernization of gas installations, but only those prepared for hydrogen uptake. (See the methodology for calculating eligible investment costs, in RO!) The scheme only applies to State aid that has an incentive effect, which restricts eligible projects to those that have not yet started work. Evidence of a stimulus effect also involves the identification of the factual scenario and the likely counterfactual scenario, in the absence of aid.
For a new plant, the aid fully covers the investment costs. For the modernization of an existing unit, the eligible costs are calculated as the difference between the cost of the investment and the cost of “building a coal boiler as a new installation”. Installations that do not have access to the gas network will not qualify.
The documents will remain in the public consultation for 10 days, and the Minister of Energy Virgil Popescu specified that more calls for projects will be launched at the end of March. “I am confident that this money will be accessed and we will have completed projects starting in 2024,” the minister wrote on his Facebook page.