Biomass leader energy investment ‘a big mistake’ due to law delay

Due to delays in the implementation of Romania’s law on renewable energy, leading biomass producer Holzindustrie Schweighofer believes it made ‘a big mistake’ to invest in renewable energy in the country

March 2011 - From the Print Edition

The Austrian company, whose main business is in the wood industry, built three biomass plants in Romania with the understanding that a law - which was passed in 2009 - would triple the level of subsidies given to producers of biomass.
Owner of the company Gerald Schweighofer told The Diplomat he believes he has lost out on access to ten million Euro from a delay in this incentive scheme.
“I operate all three cogeneration plants negatively,” he says. “I cannot make money. I made a big mistake to invest in alternative energy in Romania.”
State authorities have indicated to The Diplomat that the new renewable energy law may pass in mid-2011 – two years after its initial inception, but Schweighofer is not optimistic.
“If nothing is happening with the law change I will consider taking down this plant and moving it to the Czech Republic,” he says. “I cannot lose another year of money here.”
In total Holzindustrie Schweighofer has invested 50 million Euro in biomass plants in Romania.
Holzindustrie Schweighofer has one biomass plant in Radauti, Suceava county and two in Sebes, Alba county. All three work as cogeneration plants and use heat to dry the lumbar from the company’s sawmills, while the electricity goes to the power grid.
Romania’s 2009 renewable energy law aimed to triple the incentives given to biomass producers through a ‘green certificate’ scheme. Under this system, Romanian power suppliers must buy a quota of ‘green certificates’ per year from renewable power producers. In the 2005 scheme biomass producers received one ‘green certificate’ for each MW of power produced and under the 2009 scheme, revised in 2010, the producers receive three, with an option of a fourth certificate, for energy efficient plants.
But for nearly two years the law from 2005 has remained in place - giving producers only one green certificate.
The delay is due to a failure of the authorities to draw up secondary legislation. Also the European Commission has complained that it was not pre-notified about the law and it will probably change once more, to ensure it does not violate EU state aid rules.
Holzindustrie Schweighofer has also shown interest in investing a further 50 million Euro in cogeneration projects and had established pre-contracts with city councils.
“Now no longer,” says Schweighofer. “Not one Euro.”