Opportunity Background – The Big Picture
Capitalize on Government-backed Green Certificate (GC) incentive scheme with top prices achievable for early entrants (estimated top GC trading price at least 3 years from Renewable Energy Law publishing)
- Tap in to high demand for renewable energy created by Romanian Government undertaking targets vs. EU green energy policy.
- For the next 2-3 years at least, the revenues from green energy projects (MWh price plus GC price) will slightly increase vs. the current price situation (no external market factors are considered). Application of GC subsidies system is covered by a MWh price increasing (until 2020 it is estimated a MWh price increasing up to 30%)
- Romania rated as the 3rd fastest growing country in the EU for gaining planning permission for wind turbine developments (according to European Wind Energy Association); After the coming into force of Renewable Energy Law it is expected a similar growth for PV developments.
- Since launch of trading platform, GCs have been traded at the maximum price, i.e. 241.04 Ron. GC are fully traded.
- Renewable Energy Law is applicable starting October 2011 (Government Order 88/12.10.2011)
- Romanian Government undertaking for renewable energy, including hydro, concerns an increasing of renewable energy production vs. gross internal energy production at 48% by 2020
- Renewable energy, that benefits of GC system subsidies is set at 20% from total energy production by 2020 (from 10% in 2011 and 12% in 2012)
- GC tariff schedule will operate for 15 years from commissioning date, providing project starts no later than 2016
- Solar generated power will receive 6 GCs per MWh;
- GC prices: min. €27 to max. €55; starting with 2011, the GC price will be EU inflation-indexed at set up in Ron based on average Eur/Ron at the BNR exchange rate established in December, “previous” year.
- Current average electricity price €50 per MWh (average price for interval 1-24 h for 2011); tariff used in the financial modelling, also.
- enalties of €110 per non-purchased GC, payable by non-compliant electricity suppliers -> twice the price of purchasing Green Certificates. The penalty is also EU inflation-indexed
Assumptions for revenues’ estimation:
Green Certificate price
- Considered the current price of EUR 56.16 (equiv. of RON 241 at an exchange rate of 4.25)
- Yearly adjusted with inflation rate (EUROSTAT data), estimated at 2.50% p.a. (average for 2005-2010 was 2.70%; for 2011 estimated at 2.70%)
- No changing negative adverse pricing up to 2015 (included)
- Starting with 2015 until 2020, we’ve considered a GC price decreasing of 30%, constantly distributed during the analysed period.
- 2011 MWh price considered is EUR 50 (based on 2011 quantity electricity statistics, for 0-24h intervals; for 2011 the average price was EUR 51.75)
- From 2012 (included) to 2020 we estimate a price increasing of 27,5% (according to ANRE’s publication, the price increasing of 30% is considered until 2017/2018), constantly distributed during the analysed period ;
- No external factors market considered which might affect the internal price energy
- No Romanian’s commitment considered to EU for market liberalisation of energy price
Financial figures :
- Estimated revenues: EUR 23,7 Mio. per year,
- Total investment costs: EUR 105 Mio.
- Estimated operation and maintenance costs per annum – 5% from total income
- Recovering investment period: 4,7 years
- Share Deal SPV Romania
- Selling Price is payable after Grid Connection (no Construction Risk)
Download complete project data: CONTESTI DB 4978 MW PV PLANT