Romanian Power Move: Just Transition and EU funds jumpstart new green projects

After the European Commission’s (EC) announcement that Romania receives over €2 billion from the EU Just Transition Fund (JTF) to support a just climate and energy transition, the nation pursues its coal phase-out over the next decade. L. Michael Buchsbaum reports.

Set to help impacted regions where carbon intensive activities are now ongoing, the JTF supports the rehabilitation of abandoned industrial sites and worker retraining and reskilling programmes. Brussels knows a lot is riding on Romania’s coal phase out going well as it may prove an attractive model for other eastern European coal dependent nations like Poland, which could unlock billions in EU support to help fund a green transition. Officials in Bucharest are helping by cutting red tape and increasing rooftop and prosumer solar subsidies.

Happy Valentine’s Day

Government officials, the public and civil society NGOs are nervously watching as the funds from Romania’s €2 billion slice of the much larger EU Just Transition Fund (JTF) start getting distributed.

Earmarked to target projects in the six counties which still host active coal mining, have carbon-intensive industries or where coal power is still used for heating, the JTF will support the construction of solar projects in the mining sector, the rehabilitation of abandoned industrial sites, foster new green energy industries and eventually help retrain an estimated 30,000 affected workers.

Perhaps with this in mind, Romania’s public was blown another little kiss from Brussels in mid-February when EC officials approved a new €259 million scheme to support investments in solar energy.

Set to run until the end of 2024, the aid will take the form of direct grants to companies active in the production, assembly and recycling of batteries, photovoltaic cells and panels, the EU’s executive arm said in a press release.

Partly funded through the EU’s Recovery and Resilience Facility (RRF) following the Commission’s positive assessment and adoption of Romania’s National Recovery and Resilience Plan (NRRP), seven regions, along with 28 municipalities covering 89.34% of Romania’s population are eligible.

Large enterprises located in these areas can access between 30% and 60% of the eligible investment costs. Investments made by medium-sized enterprises may be supported with an additional 10%, while small enterprises may benefit from an additional 20% for initial investments.

“The measure approved today will promote the economic development of the most disadvantaged areas in Romania, in line with the Union’s cohesion objectives, while contributing to the acceleration of the green transition,” said Margrethe Vestager, executive vice-president in charge of competition policy.

Installing solar PV has never been easier

Under a new €610 million scheme, Romania is set to subsidize households to start installing photovoltaic (PV) solar power panels.

And to smooth the way, government officials in Bucharest have been enacting changes to existing laws and introducing new ones to support increasing investments in and deployment of both large and small scale renewable electricity projects.

Key measures have already been passed simplifying the permitting process for prosumers to connect solar PVs to the national distribution grid.

Bucharest has also enacted new provisions for renewable energy projects to be built on parcels of agricultural land that are less than 50 hectares.

Additionally, lawmakers have removed bans of certain types of power purchase agreements (PPAs) as well as reformed Romania’s existing net metering regime.

With four times more funding than last year, the nation’s revamped Casa Verde Fotovoltaice programme intends to help over 150,000 homeowners erect panels, a huge increase over 2022 when approvals were issued for 39,000 applicants.

Thus far, the programme has covered an average of 30% to 40% of costs for its beneficiaries.

Initially launched in 2019, Romanian media reports that some households have waited for up to three years to actually install photovoltaic systems on their roofs. Backlogs are worsening as demand for solar panels nationwide went up sevenfold in 2022.

Nevertheless, new figures report there were 23,785 prosumers connected to the distribution grid in Romania at the end of August 2022 – some 75% more than at the beginning of the year.

Looking ahead, Minister of Environment, Water and Forests, Tánczos Barna now says the government is also analysing the possibility of granting funds for battery storage as well.

With the new scheme set to start in March, discussions are underway with local authorities to make the procedure easier.

However, with so many new connections straining the grid, the minister also stressed there are issues with available quantities of imported solar panels.

Coal to solar projects still stalled

While many of Romania’s citizens are looking for ways to ease their electricity costs by installing panels, regulators in Brussels and NGOs throughout Romania and Europe are eagerly watching for signs of progress on several large solar projects, specifically the installation of over 700 MW of new solar capacity within or adjacent to existing lignite mines.

According to the restructuring plan of state-owned lignite miner and burner, Oltenia Energy Complex (CEO), the photovoltaic parks will begin to be functional starting in 2024.

The 8 solar PV projects, totalling 735 MW in capacity, have been submitted for finance from the Modernisation Fund and are expected to receive almost €470 million for their construction. So far the process of granting environmental permits has started for four projects including the construction of a 115 MW solar PV park on the dump pile of the Tismana mine and a 75 MW solar PV project on the closed slag and ash deposits of the Rovinari power plant.

State-owned Hidroelectrica to get concession for Europe’s biggest solar power project

Outlet Balkan Green Energy News reported that state-owned power producer Hidroelectrica may lead a massive 1.5 GW solar project to be constructed across 3,000 hectares of relatively unproductive agricultural land near several open pit lignite mines.

Under the same energy emergency legislation passed in mid-December 2022 used to delay closure of two coal units, the project has been declared of national interest by the Supreme Council of National Defence, which should accelerate the approval process.

“In the context of the energy crisis generated at EU level by the Russian-Ukrainian war, the European Commission launched the REPowerEU plan of measures in May 2022, aiming to ensure Europe’s independence from fossil fuel imports from Russia well before the 2030 time horizon,” reads the background note to the emergency ordinance.

As such, “Romania has to respond to a challenge and an opportunity: that of increasing its energy production capacity at a fast pace, with particular emphasis on the renewable energy sector, so as to respond both to new realities and to the European Union’s strategic policies,” reads the note.

If built, it would be more than twice as large as Europe’s largest currently operating solar park, the Iberdrola-owned Francisco Pizarro energy center in Spain.

The views and opinions in this article do not necessarily reflect those of the Heinrich-Böll-Stiftung European Union.



L. Michael Buchsbaum is an energy and mining journalist and industrial photographer based in Germany. Since the mid-1990s, he has covered the social, environmental, economic and political impacts of the transition from fossil fuels towards renewables for dozens of industry magazines, journals, institutions and corporate clients. Born in the U.S., he emigrated to Germany and Europe to better document the Energiewende. He is also the host of The Global Energy Transition Podcast.

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