Romania Preparing Framework for 3 GW of Offshore Wind and Contract for Difference Auction

Authorities

July 20, 2023, by Adrijana Buljan

The Romanian Ministry of Energy has published a draft law on the requirements for the development and procurement of offshore wind energy projects. If enacted in its current form, the proposed framework would enable auctioning off 3 GW of offshore wind capacity in the country’s sector of the Black Sea and supporting the projects through a Contract for Difference (CfD) mechanism.

The draft law, now put up for 30-day consultation, also sets out necessary measures for the modification and completion of some normative acts in the field of energy.

Under the proposed framework, the Ministry of Energy will organise the tender(s) to procure 3 GW of offshore wind capacity that should be in operation by 2035 and award Contracts for Difference (CfDs) to winning projects. The Ministry is also responsible for setting the offshore wind capacity targets for 2040 and 2050 and any support schemes applicable thereafter.

The CfD scheme will be developed by 1 January 2027, including the procedures for granting the concession and the exploration permit for offshore sites, both through direct award and through auction, as well as details on the establishment of qualification criteria, selection and designation of the winner, as well as other procedures necessary to carry out the tenders.

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The procedures will be developed in consultation with the market, potential interested investors, the Ministry of Environment, Water and Forests, CN Transelectrica SA, and the National Authority for Public Procurement, and will be put to public consultation for a period of at least three months.

The Ministry of Energy is required, under the draft law, to have the procedure for awarding offshore wind concessions through public auction developed and approved, by Government decision, until 30 July 2027, specifying the qualification criteria, the process of selection and designation of the winner, as well as other rules.

“Establishing an appropriate legislative and fiscal framework is essential in the development of offshore wind energy, in the current context marked by the accelerated expansion of these production capacities worldwide”, the Ministry of Energy said in a press release on 18 July.

In its “Statement of reasons” for establishing the new framework, the Ministry cites figures from the World Bank, which estimates Romania’s technical offshore wind potential to be 76 GW, of which 22 GW are marked as suitable for fixed-bottom wind turbines and 54 GW for floating.

The first offshore wind turbines that should be installed in Romania’s waters are the fixed-bottom ones, according to the Statement, due to this technology currently being the more cost-efficient of the two.

The Ministry also noted that even in the absence of a regulatory framework for offshore wind, and thus a real possibility to invest in these projects at this time, some developers have already announced their intention to develop offshore wind projects in Romania.

As reported in 2020, the country’s power producer Hidroelectrica said it wanted to build an offshore wind farm with a capacity of between 300 MW and 500 MW by 2026, subject to the results of feasibility studies.

Last year, wpd offshore, now Skyborn Renewables, revealed that it had submitted application documents to the Romanian government that contain plans for two offshore wind farms in Romania’s sector of the Black Sea.