Brussels delays billions in recovery funds after Romania halts coal unit closures

By the end of 2022, Romania had met only 33 of the 55 milestones established in its multi-billion euro National Recovery and Resilience Plan (NRRP). Most problematically, major provisions around lignite-fired power plant closures remain blocked. Days before the first coal units were set to shutter, citing the ongoing war in Ukraine, lawmakers in Bucharest decided to delay closure until October 2023. While also moving forward with the construction of both new EU-funded fossil gas plants as well as U.S. subsidized nuclear reactors, NGOs and activists worry Bucharest is simply trying to cash in on the recovery monies while playing the European Union. Now regulators in Brussels have taken notice by delaying disbursement of billions in much needed green energy funding. Continuing the Romanian Power Move series, lead blogger and podcaster, Michael Buchsbaum reviews the unfolding situation.

The Rovinari Power Station in Romania. Credits: CristianChirita | WikiMedia (CC BY-SA 3.0).

Dubious decisions

After years of negotiations between the European Union and Bucharest, as of early December 2022, Romania’s energy transition, specifically the winding down of coal mining and burning following the long delayed and highly controversial restructuring plan of state-owned energy producer, Oltenia Energy Complex (CEO), was seemingly a done deal.

With the first units set to switch off by year’s end, officials in Brussels and civil society were looking forward to celebrating the start of a ten-year coal phase out concluding no later than 2032.

But hardly was the ink dry on the approved closure schedule before Romania’s parliament passed a series of amendments, including an Emergency Ordinance, to delay unit shutdowns.

Following rancorous debates around the scheduled decommissioning of Rovinari 3 and Turceni 7, with a combined total of 660 MW, amendments were first adopted to place both into a strategic reserve.

But then two weeks later another decision was made to delay closure, scheduled to commence on December 31, 2022, until October 2023, nine months later.

In the weeks since negotiations with Brussels ended, “there have been a lot of dubious decisions,” Alexandra Doroftei, a coal campaigner at Bankwatch Romania related in an email following queries about the nation’s evolving energy situation.

Claiming these changes have largely been made without proper public consultation, in an interview with, Bankwatch accuses the government of using the war in Ukraine and fears of an energy crisis to impede progress.

As it stands, the law’s “final form contradicts the commitments assumed through the National Recovery and Resilience Plan (NRRP) in terms of the decarbonization timeline,” said Laura Nazare, Bankwatch’s National Campaign coordinator in an emailed response to questions.

After approval by the European Commission last year, that plan included a firm coal power plant retirement and mine closure calendar, one Bucharest has now violated.

Forest cut down to expand coal mines

In January, again contrary to the NRRP, the Romanian government decided to cut down a 106-hectare forest so that state-owned CEO could expand the Timișeni-Pinoasa mine in Gorj county to some 8 million tonnes per year.

However, as Doroftei reminds, the combined deforestation and increase in production “will have a double negative effect on the environment by increasing both emissions and reducing absorption capacities.”

Moreover, since meeting each step of Romania’s decarbonisation laws remains central towards the nation actually receiving the full funding of its EU approved and financed NRRP, Brussels has taken notice.

Funding delayed

The purpose of the decarbonization law within the NRRP is to establish the framework for reducing CO2 emissions in the energy sector, however, “the most recent changes will have exactly the opposite effect, lamented Doroftei.

“The actions of the Romanian government […] show that cashing in recovery funds is its main motivation, not real measures to decrease CO2 emissions and advance the energy transformation,” continued Doroftei.

Given that both the decarbonization law as well as steps towards closure needed to be completed by the end of 2022 for the nation to receive the second rich tranche of EU recovery funds, as of February 2023, Brussels began formally delaying disbursements.

Though as of this writing negotiations continue, so long as the mining and coal-unit closure schedule remains either undetermined or in disagreement, Romania, with the second lowest GDP within the European Union, is risking almost €3.25 billion in vital EU funds, almost two-thirds of which come in the form of grants, from this second tranche.

And if this impasse continues, Romania’s coal addiction may jeopardize the scheduled third tranche as well.

Gas and nuclear moving ahead

While Romania is actively stalling CEO’s coal phase out, it is moving ahead with both the construction of new fossil gas power plants as well as more nuclear capacity.

Of Romania’s five lignite-fired power plants, three are planned to be switched to fossil gas.

With their conversion supported by financing from the NRRP, at least two will supposedly be “ready for hydrogen” when built.

All the planned new gas plants will burn fossil gas coming from either the Neptun Deep offshore project in the Black Sea (with operations to begin in 2027), or from other national onshore or offshore gas resources as well as imports through existing gas interconnections.

Commissioning for the new plants is scheduled for 2026

Simultaneous to its coal-to-gas conversion plans, with backing from the United States, the government continues preparations to become the first European nation to host a small modular nuclear reactor plant (SMR).

In early 2023, producer NuScale Power signed a contract for Front-End Engineering and Design (FEED), a significant step toward its planned deployment at the formerly coal-fired Doicesti Power Station, about 90 km from Bucharest.

Each SMR is projected to generate 77 megawatts of electricity (MWe), with state-owned companies planning to construct a six-module 462 MWe plant.

Though authorities have already started clearing the site to make space for the new SMRs, Greenpeace Romania claims the location was determined without properly consulting the local community, nor providing enough information on the associated risks, costs and other relevant details.

Additionally, last December, the Ministry of Energy put forward a draft law regarding two new reactor units at the Cernavoda Nuclear power plant. With financing from the U.S., and a combined 1400 MW capacity, Unit 3 is scheduled to being operating in 2030, followed by Unit 4 the following year.

But with costs still estimated to exceed €7 billion, “imagine how many rooftop PVs could be installed all over the country instead?” asked Nazare in our interview.

Instead of actually supporting vulnerable consumers suffering today from energy poverty with the deployment of solar and wind energy, Nazare fumes that authorities are unfortunately accelerating expensive, risky and environmentally dangerous investments.

€2 bln received from the EU Just Transition Fund 

While holding up its coal phase out, Romania has begun receiving billions from the EU’s Just Transition Fund (JTF) designated to support the movement towards a greener economy. In the next blog we’ll review plans to rapidly expand re-training programs for affected coal workers as well as examine Bucharest’s scheme to more broadly install rooftop solar.


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.

Leave a Reply

Your email address will not be published. Required fields are marked *