EU approves Romania's €3 billion state aid for onshore wind power

Green Forum
The European Commission has approved Romania's allocation of a €3 billion aid scheme to support installations producing onshore wind and photovoltaic solar energy. This aims to promote the transition towards a „net zero" economy, in line with the Green Deal's Industrial Plan.

The scheme was approved under the Temporary Framework for Crisis and Transition State Aid Measures, adopted by the Commission on March 9, 2023, and amended on November 20, 2023, which was established to encourage support measures in sectors essential for accelerating the green transition and reducing dependence on fuels.

Romania notified the Commission, under the Temporary Framework for Crisis and Transition, of an aid scheme worth 3 billion euros to support installations producing onshore wind and photovoltaic solar energy.

Under the measure, projects for the construction and operation of new electricity production installations from photovoltaic solar and onshore wind sources will be eligible.

The aid will be granted through competitive bidding procedures and will take the form of a two-way contract for difference. The exercise price will be determined through bidding procedures ("pay-as-bid," payment corresponding to the offered price), and the reference price will be calculated as the monthly weighted average production-based market price of electricity for the following day.

When the reference price is lower than the exercise price, the beneficiary will be entitled to receive payments equal to the difference between the two prices. Conversely, when the reference price is higher than the exercise price, the beneficiary will have to pay the difference to the Romanian authorities. Therefore, the scheme guarantees beneficiaries a minimum level of profitability while ensuring that they are not overcompensated for periods when the reference price exceeds the exercise price.

The Commission found that the aid scheme notified by Romania meets the conditions set out in the Temporary Framework for Crisis and Transition. Specifically, the aid will be granted through a competitive bidding procedure and will be granted before December 31, 2025. In addition, the aid must meet a series of conditions aimed at limiting unjustified distortions of competition and is also subject to guarantees to ensure that there are sufficient participants in the competitive bidding procedure.

The Commission concluded that the scheme notified by Romania is necessary, appropriate, and proportionate to accelerate the green transition and facilitate the development of certain economic activities that are important for the implementation of the REPowerEU Plan and the Industrial Plan of the Green Deal, following Article 107(3)(c) of the TFEU and the conditions laid down in the Temporary Framework for Crisis and Transition. Given these considerations, the Commission has approved the aid measure under EU rules on state aid.

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Green Forum  |  20 June, 2024 at 8:04 AM