Even though, Romania traditionally had the third lowest energy dependency rate in the EU, due to natural gas and oil reserves and to an oversized electricity production system; in the last several months, because of drought that affected the hydro power generation, the country has shifted from electricity exporter to net importer. Romania’s electricity mix is one of the most balanced in the European Union, with coal, hydropower, natural gas, nuclear energy and wind power having comparable shares of capacity and power generation. With the exception of wind and solar, almost all units in the systems are fairly old . Thus, although there is an official installed capacity of 22GW, the average power delivered to the system is around 7GW, with many experts believing that a demand above 11GW is hard to cover relying exclusively on national resources.
Yearly production, GWh
Production 2014- 2018, Translelectrica, National grid operator
|Coal||Gas & fuel oil||Hydro||Nuclear||Wind||Solar||Biomass|
All nuclear and hydropower, 98% of coal and 73% of natural gas units are state-owned through the Ministry of Economy, Energy and Business. Decisions to retire or even build new conventional units are therefore primarily in the hands of the Ministry of Economy, Energy and Business. The most important planned units in the yet not adopted Energy Strategy covering 2018-2030 are 1400 MW on natural gas, 1170 MW hydropower, 700 MW nuclear and 600 MW coal. By promoting these projects, the Ministry of Economy, Energy and Business limits the space in the energy system for new clean units and risks investing in infrastructure that will be uneconomic to operate, especially given the current overcapacity laying idle.
Officially, 21 units are operating in the 8 functioning coal power plants in Romania, having an installed gross capacity of 5315 MW.
None of the coal power plants are fully compliant with the Industrial Emissions Directive, most of the power plants benefit from derogations for SO2, NOx and/or PM. This will, however, expire in June 2020. Some are operating without an environmental (IPPC) permit and some of the hard coal units have emissions 10-15 times more than the allowed threshold for SOx.
There are also plans for a new 600 MW unit at Rovinari, being pursued more actively by Chinese government officials than by the Romanian authorities since 2012. However in the final draft of the National Energy and Climate Plan (NECP) published by the Romanian Government on 31 January 2020, this project is no longer listed.
There are two main coal companies, managing both power plants and mines: Oltenia Energy Complex (OEC) manages 4 plants and 10 mines, all lignite-based, and it normally delivers around 90% of the country’s coal-based electricity. The main hard coal processing company, located in the neighbouring county, is Hunedoara Energy Complex (HEC). Both companies are over-staffed, involved in corruption cases, and their finances depend on the success of other companies. HEC has not paid for its CO2 allowances for the last 3 years, while OEC has taken commercial loans worth over EUR 105 million in 2019 to be able to pay for its CO2 allowances under the Emissions Trading Scheme.
Adopted at the end of 2019, the restructuring plan for Oltenia Energy Complex (OEC) states that the company will receive EUR 251 million in the form of “salvation aid” to pay for last year’s ETS certificates. The aid is described by the Government to be in accordance with all the laws on state aid and approved by the EU Commission. The aid became necessary as they have to pay EUR 11 million for their CO2 allowances, while the company only has the capacity to pay 3 million.
6 months after the aid is given, OEC will either give the money back, or present the government with a restructuring programme that will be given to the EU Commission as a means of getting the state aid approved. This programme will serve as a basis for a 5 year state aid scheme. Under this programme, emissions should fall from 0.91 t CO2/MWh in 2019 to 0.71 t CO2/MWh in 2024, getting to 0.62 t CO2/MWh in 2025.
In the restructuring proposal some lignite capacity will have to close as follows:
- The 2 units (150 MW each) at Craiova II will be closed in 2025. They will be replaced in 2024 with a 200 MW gas unit.
- Ișalnița unit 8 will be closed in 2025, and unit 7 in 2026. Both will be replaced one year prior to their closing with a 400 MW unit working on gas.
- Unit 3 at Turceni (330 MW) will be closed in 2025. It will be replaced on year prior with a 400 MW gas unit.
In May 2018, Romania was taken to the Court of Justice of the European Union for repeated failures to tackle air pollution and risks having to pay hefty fines, in addition to the price paid already by the population through damage to their health.
Electricity production from wind sources has experienced rapid growth in Romania, due to the high wind potential and supporting policies for renewable energy production. Romania’s potential in wind energy is considered to be the highest in South Eastern Europe, estimated at around 14 000 MW, able to generate around 23 TWh per year.
Between 2008 and 2013, the main investments were made in wind turbines, which in 2020 had an installed power of 3023 MW, and in photovoltaic panels which have an installed capacity of 1391 MW. The development of electricity production from renewable sources received a heavy blow in 2013 though due to a change in the subsidy scheme which reduced the awarded number of green certificates. This reform triggered a quick response by market actors which slowed the trend for new installed units.
Following the positive development of the wind sector, investors started showing interest in the field of solar energy production, which is also virtually inexhaustible in the medium and long term. According to the National Energy Strategy, Romania’s solar potential can generate 1.2 TWh of electricity per year, meaning 2.5% of current national consumption, which is a very conservative estimate, compared to other analyses of potential.
The fact that the energy intensity of Romania’s economy is twice the European average is an indicator that there is plenty of room for improvement. Buildings account for the largest share of energy use in Romania. Together, the household sector and the tertiary sector (i.e. offices, retail premises and other non-residential buildings) account for 46% of total national energy consumption. Most savings in the industrial sector so far have come not from modernisations, but from closures of industrial capacities and according to the latest report, Romania is expected to meet its 2020 energy efficiency target due to a mixture of the economy’s restructuring, the impacts of global recession and policy.
Rovinari, 600 MW lignite planned power plant. China Huadian Engineering Co. Ltd (CHEC) was selected in 2012 to build a new brownfield unit at the Rovinari Power Plant, part of the Oltenia Energy Complex (OEC) and its most profitable plant because it receives coal on transport belts directly from the surrounding mines. The project implementation company was established in 2015, with CHEC set to provide at least 30% of the capital (cash), 9% coming from OEC (buildings) and the rest to be covered through a loan from a Chinese bank. The (undisclosed) feasibility study anticipated a cost of EUR 847m, a lifetime of 30 years and the unit beginning operation in 2019. Although Rovinari 600 featured as one of the priority projects in Romania’s draft Energy Strategy (2019-2030) in final version of the NECP published for consultation in January 2020, this coal unit is no longer mentioned. If we take the NECP as the most up to date information, we are looking at the first Chinese driven coal power plant project to be dropped in the region.
 Average age of coal, gas, hydro and nuclear units >50MW is 39 years: 40 years for coal, 47 years for gas (some units previously running on coal), 31 years for hydro and 18.5 years for nuclear.
More on coal in the Balkans
Grasping what a 600% breach of allowed SO2 emissions means is not an easy job, but our data visualisation does just that. In addition to choking the communities where coal power plants are located, SO2 pollution from the Western Balkans often reaches as far as Russia and the Black Sea Coast to the east and Germany to the West!
Despite this deadly legacy, just two years ago, all the Western Balkan countries except Albania still planned to build new coal power plants. Since then, three out of five have abandoned these plans. The region has split, creating a two-speed energy transition.
ContourGlobal is quitting the planned 500 MW Kosova e Re lignite power plant project in Kosovo. The company stated that it is now impossible for the project to meet the required milestones, citing, among others, the recent formation of a government led by a Prime Minister publicly opposed to the project.