Energy crisis accelerates Romania’s transition to renewables

As the winter season looms over Europe with little hope of the Ukraine conflict ending anytime soon, one country is gearing up for the challenge in a different way. 

Romania is racing ahead with its transition to renewable energy as a way to tackle spiralling energy prices and upcoming shortages.

The eastern European country, which has traditionally relied on coal as a primary fuel, recently released long-overdue funds for rooftop solar panels, and has been introducing laws that will help the nation of 19 million people step away from fossil fuels. 

Data published by the Administration of the Environmental Fund (AFM), a public fund which supports sustainable development programmes, shows that in the last two months alone the government approved subsidies to more than 6,000 applicants who want to install rooftop solar panels. 

Speaking to TRT World, Eugenia Gusilov, the director of the Romania Energy Centre (ROEC), an energy studies think tank said that the authorities have accelerated processing applications compared to previous years.

“There is a strong desire among Romanian consumers to be independent," she said.

Amid what the International Energy Agency (IEA) called “the first truly global energy crisis in history”, Europe faces gas shortages as deliveries from its main supplier Russia dropped in recent months. Moscow is facing western economic sanctions over the war in Ukraine.

As European countries rush to fill their gas reserves ahead of winter, the shortage in the continent has been driving up gas prices and inflation, affecting traditional gas buyers elsewhere. 

In Asia, for instance, Bangladesh has been priced out of the market for Liquefied Natural Gas (LNG), leaving it to face rolling power cuts and putting a strain on its economy.

European countries are moving to implement contingency plans to deal with the impending crisis. Germany is reopening coal-fired power plants and France is planning to extend the life of its nuclear power plants – raising concerns about the European Union’s ability to meet its own target to become climate-neutral by 2050.

Catching up on its energy transition

Romania’s energy transition is not just driven by fear of facing fuel shortages. In 2018, the government introduced legislation to allow so-called “prosumers” - electricity consumers who simultaneously generate power for the grid - to sell the excess electricity they produce.

In 2021, the number of prosumers increased by more than 700 percent over the previous year to more than 13,000.

This development comes on the back of Romania’s plan to implement reforms aimed at speeding up its energy transition and qualify for funds under the EU’s pandemic “recovery and resilience” funding programme.

As an energy producer, Romania is one of the European countries least dependent on Russian oil and gas. 

In 2020, it relied on Russia to cover 17 percent of its energy imports, below the EU average of 24 percent. 

However, as energy prices in Europe surge to unprecedented levels, Romania had to take measures to ameliorate impacts of the crisis. In September last year, its parliament passed a law to cap electricity and natural gas prices for households and small businesses. Non-efficient consumers do not benefit from the subsidies, and some heavy industries have had to put production on hold or downsize.

After the start of the war in Ukraine, Romania’s plan to phase out coal by 2030 was pushed back by two years in order to maintain its energy security. That plan included replacing most of the country’s coal fleet, controlled for the most part by state-owned company CE Oltenia, with fossil gas.

In May, the government also passed a law to facilitate gas extraction in the Black Sea by reducing taxation and removing export restrictions. 

The project, which is expected to come on stream in 2026, aims to make Romania a regional energy exporter. Environmental groups oppose the building of more gas infrastructure. 

“If you’re planning to go there and drill for gas and production starts in a couple of years, [it will] definitely go further than 2050,” Alin Tanase, a climate and energy campaigner at Greenpeace Romania, tells TRT World. 

“Our concern is that the project would take 20 to 30 years, [which means] we would miss the 2050 target [to reach climate neutrality].” 

Despite this, Romania appears to be catching up fast on its energy transition. An emergency law introduced last June includes a plan to purchase solar panels with minimum installed power of 3-5 kW for every coal miner that is laid off. Another bill currently going through parliament will compensate small producers connected to the national grid for the electricity they produce.

“In January 2021, there were only 2,000 prosumers,” Tanase says. By the end of the year, an additional 15,000 consumers-producers are expected to be connected to Romania’s electricity grid.

“We need to speed up investments in renewables,” he adds, “overall, the direction is good.”