European Commission approves 3 billion Euro state aid scheme to support onshore wind and solar photovoltaic installations in Romania

The European Commission has approved a 3 billion Euro (15.22 billion RON) Romanian scheme to support installations producing electricity from onshore wind and solar photovoltaic to foster the transition towards a net-zero economy, in line with the Green Deal Industrial Plan.

The scheme was approved under the State aid Temporary Crisis and Transition Framework, adopted by the Commission on 9 March 2023 and amended on 20 November 2023, to support measures in sectors which are key to accelerate the green transition and reduce fuel dependencies.

Romania notified to the Commission, under the Temporary Crisis and Transition Framework, a €3 billion (RON 15.22 billion) scheme to support installations producing electricity from onshore wind and solar photovoltaic.

The measure will be open to projects for the construction and operation of new installations for the generation of electricity from (i) solar photovoltaic; and (ii) onshore wind.

The aid will be granted through competitive bidding procedures and will take the form of a two-way contract for difference. The strike price will be determined through the bidding procedures (“pay as bid”) and the reference price will be calculated as a monthly output-weighted average of the market price of electricity in the day ahead markets.

When the reference price is below the strike price, the beneficiary will be entitled to receive payments equal to the difference between the two prices.

However, when the reference price is above the strike price, the beneficiary will have to pay the difference to the Romanian authorities. The scheme therefore guarantees a minimum level of return to the beneficiaries, while at the same time ensuring that the beneficiaries will not be overcompensated for periods when the reference price is higher than the strike price.

In particular, the aid (i) will be granted through a competitive bidding process; and (ii) will be granted before 31 December 2025. Furthermore, the aid is subject to conditions to limit undue distortions of competition, including safeguards to guarantee that there are enough participants to the competitive bidding process.

The Commission concluded that the Romanian scheme is necessary, appropriate and proportionate to accelerate the green transition and facilitate the development of certain economic activities, which are of importance for the implementation of the REPower EU Plan and the Green Deal Industrial Plan, in line with Article 107(3)(c) TFEU and the conditions set out in the Temporary Crisis and Transition Framework.