In the absence of investments in small and fast facilities, balancing the energy system falls upon thermoelectric power plans running on coal and hydropower plants. This means high costs and higher carbon dioxide emissions. Moreover, green power drove prices down on the electricity exchange, which is bad news for the thermoelectric power plants whose costs are rising.
“We have no facilities that can be brought online fast to balance the system against the fluctuations of green power production. Not even the new power plant that Petrom built in Brazi can do it fast enough,” says Carmencita Constantin energy and environment division director with the Institute for Studies and Power Engineering (ISPE).
“Thermoelectric power plants are either up or down depending on how the wind blows, and this means higher costs and higher CO2 emissions. With all the investments in clean power, Romania ended up polluting more. These are costs unfairly booked by thermoelectric power plants because ultimately the way they operate is a consequence of the operation of the system.”
ISPE official’s statements are backed by real time data from national grid company Transelectrica. The amount of power generated by thermoelectric and hydropower plants varies every day depending on the amount of wind power produced.
Carmencita Constantin believes that part of Romania’s government support for green power investors should go to investments in transmission networks and flexible facilities capable of balancing the system fast.
“The reduction of the support scheme can be done once a new tax is introduced to develop this capacity reserve. The impact on the [electricity] bill would be the same but would also benefit the system. Why should we pay so much for renewable projects when green power and energy efficiency projects can be paid for with European funds?” says Carmencita Constantin.
This is not the only problem thermoelectric power plants have.
After green power, which is generated at virtually no cost, started being traded in significant amounts, the spot electricity price plummeted. Whereas the spot price on March 12, 2012 was 232 lei (EUR53) per MWh, the same MWh was trading for RON183 per MWh on March 21, 2013.
The downward trend also shows in bilateral contracts where deals are closed at prices about 10% lower than in January-March 2012. Although this is a very good thing for major consumers, it is not really good news for thermoelectric power plants, whose costs are rising.
“Thermoelectric power investors are losing their appetite and the companies already operating in this business are finding it impossible to recoup costs,” ISPE’s official explains.
The problem is that while Romania imports oil and gas, coal is a domestic resource that could last hundreds of years and building new facilities would also create new jobs.
Romanian authorities are currently considering reducing the green power support scheme as a result of its impact on bills. Moreover, they are unhappy that the renewable energy boom did not lead to a horizontal industry development.
The final version of the bill so far stipulates rewarding wind power with 1 or 1.5 green certificates instead of the current 2, micro-hydropower plants with 1.4 instead of 3, solar PV investments with 3.5 instead of 6 and biomass with 1.6 instead of 2.
It also says that green power certificates should be traded for no more than EUR30 instead of the current EUR55, while retaining the minimum guaranteed level of EUR27. Green certificates are the core of the renewable power investment support scheme in Romania and are awarded per megawatt of clean energy generated depending on the technology used.
The green certificates are then sold to electricity supplies, which have to supply a mix including green power to consumers. As this comes at a cost, the electricity bills increased.
The support scheme might also see a limitation introduced, such as a cap of 3,500 MW of green power capacity installed. Romania already has almost 2,500 MW, out of which about 2,000 MW are installed in wind farms. The new support scheme should enforce on July 1.
(English version by Loredana Fratila-Cristescu)