Green Energy in Romania

Iulie 2010

ROLAND BERGER STRATEGY CONSULTANTS S.R.L.

Current green energy context in Romania corresponds to a high renewable energy potential, mostly underutilized, which makes Romania an attractive location for green energy investors, developers and operators looking for alternative markets outside the conventional Western European countries. Although over 30% of Romania's electricity production comes from renewable sources, when excluding large hydro, Romania's RES (Renewable Energy Sources) potential has practically remained untapped over the last couple of years.

Recent developments, however, have determined Romania to emerge as one of the most fervent markets in the region from a renewables point of view, with wind practically representing the main focus. According to the Romanian Association for Wind Power, Romania's wind power capacity is expected to reach 545 MW in 2010, as compared to 14.1 MW installed capacity, as of 2009. 2011 and 2012 are projected to become even more promising, with an estimated installed capacity of up to 2,000 MW, by the end of 2012, in an optimistic scenario.

Despite soaring hopes for the future, the development of this sector poses nonetheless a great deal of challenges, including legislation shortcomings and restrictions, lack of land registries and bureaucracy in general, limitations of the national power grid system, as well as potential complexities in absorbing prospective imbalances in power production.

 

Romania’s RES potential

Thanks to its marine climate, southern location and varied geography, Romania shows a remarkably extensive RES potential. Between the entire theoretical potential and the technically and economically feasible one, there is nonetheless a significant gap, creating great discrepancies between the theoretical hierarchy of the different renewable sources potential and the practical orientation of actual projects.

In terms of theoretical potential, biomass and biogas account for an overwhelming 65% of the total "new" RES potential (excluding large Hydro) of around 135 TWh/year (cumulating both electric and thermal energy), with wind and solar accounting for 17% and around 12%, respectively. Small hydro (under 10 MW) and geothermal energy register a relatively low share in the total, with 4% and 1%, respectively.

In terms of geographical spread, renewable energy resources are theoretically available on the entire Romanian territory, but there are major differences in their distribution by type and exploitation capacity.

Biomass carries the highest potential for green energy production in the country, amounting around 88.33 TWh per year. It is estimated that cca. 36% of this potential is currently used, but so far, biomass usage has mainly focused on household firewood: direct burning, space heating, cooking and water heating account for around 95% of the current biomass exploitation, while industrial biomass use equals only 5%. Carpathians and Sub-Carpathians provide around 66% of the firewood and wood waste, whilst the South Plain, West Plain and Moldova regions provide approximately 58% of the agricultural waste. About 27% of Romania’s land is covered by forests, whose exploitable potential is estimated at 20,000 cm.

Wind potential in Romania is mainly concentrated in the Dobrogea, Moldova and Banat regions. It is estimated at around 14,000 MW installed capacity, generating around 23 TWh per year. Wind resources in Romania have been thoroughly analyzed over the last couple of years, revealing high potential in the practical set-up of both small independent units for rural areas and large off-shore projects. According to an Erste Bank report, Dobrogea – and most notably Constanta and Tulcea – establish Romania as the second best location for developping wind farms in Europe and the leading one in the region.

Solar energy shows a moderate potential thorughout the entire territory of the country, but the most abundant solar resources are located in the southern part of the country and Dobrogea. Considering solely thermal energy, the country’s solar potential reaches around 60 PJ per year (around 16.7 TWh/year), while solar electricity potential amounts to only approximately 1.2 TWh.

The analysis of the total small hydro potential in Romania reveals the possibility to install around 780 small hydroelectric plants (of below 10 MW/unit), with a total power of 2,150 MW, able to provide approximately 6 TWh per year. At the moment, small hydro plants in Romania account for a total capacity of 1,125 MW, but this capacity is not entirely functional, leaving the high potential of small-scale hydropower somewhat untapped.

Regarding geothermal energy, Romania shows the third highest potential in Europe, with major potential locations in the Western Plain, South Plains (Bucharest region) and Southern Carpathian regions. Total potential reaches around 1.94 TWh per year.

1

2

3

The tricky lag LUCIAN CROITORU Adviser to the Governor - BANCA NAŢIONALĂ A ROMÂNIEI Lucian Croitoru, Adviser on monetary policy issues to the National Bank of Romania Governor, talks about the NBR’s next moves and explains why the decrease ofthe policy rate hasn’t been reflected into lower interest rates on bank loans. mai mult... The turnaround CRISTIAN SPORIS Secretar de Stat - MINISTERUL ECONOMIEI ŞI FINANŢELOR Cristian Sporis, Secretary of State at the Ministry of Public Finance, in charge with the national treasury and public debt, explains how the state managed to borrow money at the lowest costs in the last seven years and how it turned from a clear market taker into a player with a strong position on the market. mai mult...