“We revised our schedule twice because we needed permits from the SRI (Romanian Intelligence Service i.e.) to the Order of Architects no less. And all these permits cost money,” said Vladimir Barbu, head of the department that promotes renewable energy resources within Electrica. “The one from SRI for instance cost 300 lei and I honestly don’t know why we had to get it,” he added.
Electrica has two wind farms under development, one with a 48 MW capacity in Chirnogeni commune in Constanta and a 45-MW farm in Frumusita commune in Galati county. The overall value of the investment will amount to around EUR190 million, with the Galati farm to be completed in the first half of next year, and the one in Constanta scheduled for the end of 2012.
“The first project, the one in Galati, will be self-funded, with the money we have left from privatizations, and for the second one we will take out loans by the end of the year,” the Electrica representative also said.
Getting the necessary permits, although it is a very time consuming activity for developers of wind farms, is in fact one of the least costly, accounting for less than 1% of the overall costs of a project, data supplied by Electrica reveal.
Around 70% of the funds currently involved in developing a wind farm go to the acquisition of wind turbines. Since there is no plant that manufactures such equipment in Romania, the money goes into the accounts of companies like Siemens, General Electric and Vestas, which only import the windmills.
The second-highest costs are those entailed by building roads and foundations, which account for up to 12% of the project’s value. Electrica data also show electric works account for up to 10% of the wind farm’s value.
Despite the very high costs, of nearly EUR2 million per every MW installed by Electrica, more than twice more than the cost of one MW in a natural gas fired power plant, for instance, company representatives say they will recoup their EUR190 million investment in just six years.
This is explained through the system of green certificates through which are used to subsidize renewable energy. Market specialists recently said under normal circumstances such an investment should not be recouped in less than ten years, while a shorter period of time is a clear indication that the certificate system is oversized.