Repsol Renewables CEO João Costeira warned that auctions are not always the right answer in response to Romania’s plan to make renewables developers pay for grid access, as the Eastern European country nears passing a long-awaited offshore wind law.
Speaking via video to a panel at the WindEurope 2024 summit in Bilbao, George Niculescu, president of the Romanian Energy Regulatory Authority, informed about Romania’s plan to make renewables developers bid to connect to its electric grid in an auction.
Money generated would be used to build up the grid, helping make space to bring more renewables online further down the road.
The auction will pit wind and solar against each other, Niculescu said, while there will be no cap on the amount developers can bid.
He predicted that next year there could be a “high price” for connecting projects and it may be “economically wise” to wait a few years for the price of connection to drop.
“I’m not sure that auctions are always the right answer,” Repsol's Costeira said at the panel.
Creating expensive new mechanisms developers have to compete in “will translate into a higher price of energy, inevitably,” he said, comparing it to expensive bidding processes for seabed rights that are abhorred by the wind industry.
The sector must, he said, “avoid as much as possible the creation of a secondary market for interconnections.”
Other options, including making developers pay “substantial security” for their connection spot to make sure they are not taken up by phantom projects that clog up grid queues, could have “less side effects.”
When it comes to interconnections, Costeira joked that this tends to cause a “fight between the energy minister and the finance minister. And the finance minister normally wins.”
Romania hopes to pass offshore wind law within months
Romania is meanwhile nearing passing an offshore wind law that will help kick-start its ambitions to have 3GW of offshore wind capacity in the water by 2032.
The country's Senate approved the draft legislation in February and Niculescu said that “hopefully in a couple of months” it will be adopted by parliament as well, and “we will finally have an offshore wind energy law.”
Romania is planning to implement a contracts for difference (CfD) scheme to support offshore developers, which he said have already shown “a lot of interest” in investing.
The “infrastructure is there” to support such projects, he continued, with the Black Sea city of Constanța boasting a large port that can support manufacturers’ needs.
Romania will focus on fixed-bottom offshore wind turbines to start, he said. Later, “we will see about floating.”
There will be opportunities in Bulgaria, he said. And after the war finishes between Russia and Ukraine, Romania will also provide its technical expertise and experience to help the latter country develop its offshore potential.
Those future wind farms will be connected to a “highway of green energy” that Niculescu said will connect offshore wind power generated in the Caspian Sea all the way to countries in Western Europe.
The governments of Romania, Azerbaijan, Georgia and Hungary signed an agreement in December to build a subsea link. The link will begin in upcoming COP29 host Azerbaijan and travel all the way to Hungary, bringing green energy to the EU and helping cut reliance on Russian gas.
