The European Commission has approved a €3 billion (RON 15.22 billion) 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.
The Romanian measure
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.
The Commission found that the Romanian scheme is in line with the conditions set out in the Temporary Crisis and Transition Framework. 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.
On this basis, the Commission approved the aid measure under EU State aid rules.
Background
On 9 March 2023, the Commission adopted a Temporary Crisis and Transition Framework to foster support measures in sectors which are key for the transition to a net-zero economy, in line with the Green Deal Industrial Plan. The Framework amends and prolongs in part the Temporary Crisis Framework, adopted on 23 March 2022, to enable Member States to use the flexibility foreseen under State aid rules to support the economy in the context of Russia's war against Ukraine.
The Temporary Crisis and Transition Framework has been amended on 20 November 2023 to prolong by six months a limited number of sections aimed at providing a crisis response following Russia's aggression against Ukraine and the unprecedented increase in energy prices.
The Temporary Crisis and Transition Framework, as amended, provides for the following types of aid, which can be granted by Member States:
- Limited amounts of aid (section 2.1), in any form and granted until 30 June 2024, for companies affected by the current crisis or by the subsequent sanctions and countersanctions up to €280,000 and €335,000 in the agriculture, and fisheries and aquaculture sectors respectively, and up to €2.25 million in all other sectors;
- Liquidity support in form of State guarantees and subsidised loans (sections 2.2 and 2.3). In exceptional cases and subject to strict safeguards, Member States may provide to energy utilities for their trading activities public guarantees exceeding 90% coverage, where they are provided as unfunded financial collateral to central counterparties or clearing members. These sections are applicable only until 31 December 2023 and have not been amended;
