Conventional energy sources have been depleting by the year, and today, coal and oil reserves are almost exhausted
Conventional energy sources have been depleting by the year, and today, coal and oil reserves are almost exhausted. Furthermore, their exploitation generates greenhouse effects which in turn trigger significant climate changes. This is one of the reasons why special attention is being paid to the production and consumption of renewable energy. Green energy has gained ground in Romania, too, especially in the past years.
Cătălina Dragomir, an energy expert has more on renewable sources and Romania's energy consumption.
"Specific targets have been set at EU level for 2020. Romania has been more aggressive from this point of view, setting for itself a daring target, namely energy from renewable sources accounting for 24% of the total electricity consumption, a target that it actually met in the 2015 - 2016 timeframe. As regards the energy output, reported in April 2017, as no other capabilities have been rendered operational since, given that the renewable energy support scheme expired in December 2016, we already have some 5,300 megawatts installed in renewable sources, the collective effort of 791 producers. Wind energy holds pride of place, with 3,025 megawatts, followed by sun-powered equipment, with 1,350 megawatts, the difference being covered by biomass, bio-gas and small hydro-power plants. According to official statistics, in the 2015-2016 time span, renewable sources accounted for 20.6% of Romania's total consumption. According to estimates, a slight increase will be reported in 2017. Naturally, these percentage points depend on external factors, which influence the energy output obtained from renewable sources, such as wind, sunny days or the hydro-power capacity, which depends on the level of precipitations. 20.6% is an annual average. Depending on weather conditions and the consumption needs, there are days when the output injected in the system can reach 30-40%, of course when there are extremely favourable weather conditions, whereas on other days, the output can drop to 7, 8 or 10%."
Cătălina Dragomir will now give us further details on the foreign investment in the production of renewable energy.
"If we think that at least 50% of the approximately 5,300 installed megawatts, if not more, are actually parks owned by big operators or international companies, we can easily do the math. I would say that at least 75% of the investment, be it direct or indirect, has been made with foreign funds by big companies. Actually, these are loans granted by foreign firms, through foreign banks, with the cooperation of local banks. Overall, financing from internal sources, which is money from the environment funds or from own funds, with bank loans or on lease, stands at 10% of the total value of investments at the most. This is 10, maximum 15% of the total value of investments in renewable capacities".
But how profitable is it to produce energy from renewable sources? Cătălina Dragomir explains:
"This is not a profit making business, not even for big producers of renewable energy, and I'm referring to big international companies which are constantly investing in renewable energy sources. It is not profitable for them, either, because they can't recover investment costs within a reasonable period of time. Analyses of the investors' financial records show that the first five largest players in 2016 reported a loss of approximately one billion lei from operating such renewable capacities, which means over 200 million Euros."
The support scheme that the Romanian state has created to promote the production of energy from renewable sources was based on the so called "green certificates". They are issued by the energy transport and system operator and reach the producers of renewable energy, adding to the energy sale price, set by the market. The legislation has undergone many changes over the past few years.
Here is energy expert Cătălina Dragomir again:
"Obviously, when the first support scheme was implemented, it was a success. Unfortunately, frequent changes have turned that generous scheme into one that almost stifles investors, or bring them in situations in which a 20-year long investment is recovered in 30-35 years, which is a non-sense from an economic point of view. That is why investors have become reticent to new support schemes and the way they are implemented, also with regard to their long-term predictability."
Under these circumstances, which are the prospects of producing green energy in Romania? Here is Cătălina Dragomir once more:
"In the absence of a support scheme or of long term lending mechanisms to assure incomes which are necessary to recover the investment, I don't think that, on short term, we will see any increase in renewable resources and production capacities. When I say short term, I'm thinking two-three years. On the other hand, given the targets that the EU has set for 2030, Romania has aligned to them, which means 27% of the total energy consumption. As regards the 24% level that we have already reached, we should say there is room for further investments." (translated by Diana Vijeu)