Financing opportunities for energy sector in Romania

Silviu StoicaGeneral Director

Managing Authority for SOP ENV – Ministry of Environment -

Content

Energy Policy in the EU Energy Policy in Romania Romanian commitments Financing programs

SOP Comp; SOP ENV; Other governmental programmes

Energy Policy in the EU

Energy – essential element for EU economic development;

Main objectives: Reduction of GHG with 20% by 2020; Increase of potential renewable energy sources; Increase of bio-fuels percentage; Reduction of global consumption of primary

energy with 20% by 2020; Directive 2001/77/EC - by 2010, 21% of the total

electric energy produced in the member States should come from renewable energy sources

Classical energy- non renewable source!

International Energy Agency estimates that in 2030 Europe will import 70% energy

Oil resources will end in 40 years! (sources IEA)

Natural gas is available for 60 more years from now on (sources IEA)

The present consumption will lead to exhaust off all coal ressources within 200 years ! (sources: AIE)

Energy Policy in Romania National Energy Strategy approved in 2007 Strategic objectives:

Energy safety; Sustainable development; Competitiveness.

Specific measures: Environmental protection – e.g. compliance with

LCP and IPPC Directives, Kyoto Protocol, promotion of green technologies;

Improvement of energy efficiency - achievement of Lisbon objectives, compliance with Directive 2006/32/EC on energy efficiency, promotion of renewable energy sources

Energetical capacities and total investment effort during

2007-2020 (according to the National Strategy for Energy Efficiency)

Necessary investment effort – approx. 6 billion Euro, out of which:

• Environmental protection – 2.6 billion Euro;

• Energy efficiency – 2.5 billion Euro;

• Renewable energy – 1.8 billion Euro

Percentage breakdown of renewable energy sources identified in Romania

(estimation for 2010)

65% biomass17% wind energy13% solar energy4% micro-hydro-power plants1% geothermal energy

Territorial distribution of renewable energy sources

I – Danube Delta (solar energy); II - Dobrogea (solar and wind energy);III - Moldova (micro-hydro, wind energy, biomass); IV - Carpathians (biomass, micro-hydro and wind energy); V - Transilvania (high potential for micro-hydro and biomass); VI – West Plain (high potential for geothermal and wind energy;VII - Subcarpathians ( High potential for biomass and micro-hydro); VIII – South Plain (biomass, geothermal and solar energy).

Green Certificates Source of additional income for producers

delivering “clean energy” in the networks.

1 Green Certificate = 1MWh of electric energy resulted from a renewable source = 24 – 42 Euro additional income per producer.

There is a green certificate market, in parallel with the electric energy market, but: All distributors are obliged to buy a fixed ratio of

energy from renewable sources. 2.20% was the annual ratio for 2006.

Advantages of renewable energy (environmental, economic, social)

Less GHG emissions; Less waste quantities; Green technologies; New opportunities for business environment; New jobs created

Critical aspects

Atmospheric pollution resulted from district heating systems leads to big environmental consequences: Climate changes through green house gas emissions; Transport of pollutants on long distances; Low air quality due to low atmospheric dispersion conditions.

Commitments according to Accession Treaty

– Environmental Section– Air quality

Reduction of emissions resulted from LCPs (Directive 2001/80/EC)

2013 – gradual reduction of SO2 emissions up to 148,000 tones/year;

2013 - gradual reduction of NOx up to 112,000 tones/year;

2013 - gradual reduction of dust emissions up to 15,500 tones/year.

Commitments in climate changes sector

Romania is the first country - among the developed and in transition countries, included in Annex I of United Nations Framework Convention on Climate Changes (UNFCCC) which ratified Kyoto Protocol to UNFCCC;

Romania committed itself to reduce the greenhouse gases emissions (GHG) with 8%, in first stage of commitment 2008-2012, referring to the baseline year (1989).

Commitments according to Convention on long distance cross-border atmosphere pollution

Ratified through the Law No 271/2003; Romania committed itself to comply in 2010,

with the level of emissions thresholds laid down in Gothenburg Protocol for SO2 and NOx emissions

Financing programmes

SOP Comp;SOP ENV;District Heating 2006-2015Environmental Fund

SOP for Economic Competitiveness Increase

Priority Axis 4 – “Increasing energy efficiency and security of supply, in the context of combating climate change”

Objective - Improving energy efficiency contributes to the three core objectives of the EU energy policy: security of supply, competitiveness and sustainable development.

Results Reducing of energetic resources losses; Reducing of climate changes due to CO2 emissions;

Key areas of intervention 4.1 - Efficient and sustainable energy (improving energy efficiency

and environmental sustainability of the energy system) 4.2 - Valorisation of renewable energy resources for producing

green energy 4.3 - Diversification of interconnection networks in view of

strengthening security of energy supply

SOP Competitiveness (2)KAI 4.1 - Efficient and sustainable energy

(improving energy efficiency and environmental sustainability of the energy

system)Indicative operations:

a. supporting investment in installations, equipment for industrial operators, in order to improve energy efficiency leading to energy savings.(Beneficiaries – industrial companies)

b. supporting investments in expanding and upgrading electricity, natural gas and oil transportation grids and electricity and natural gas distribution grids, in order to reduce losses and secure the continuity and safety of transport and distribution services(Beneficiaries – large, small and medium enterprises)

c. Investments in flue gas de-sulphurization installations, burners with reduced NOx and filters on refurbished/upgraded groups of large combustion plants(Beneficiaries- large enterprises)

SOP Competitiveness(3)KAI 4.2 - Valorisation of renewable energy

resources for producing green energy

Indicative operations: investments in upgrading and building new power and heating

production capacities by valorization of renewable energy sources: biomass, micro hydro, solar, wind, geothermal, bio fuels and other renewable resources.

Eligible beneficiaries: Local public authorities, Large, small and medium enterprises, urban microentreprises

(excepting for those which produce energy or biofuels based on agricultural products processing, as listed in Annex 1 to EC Treaty).

SOP Competitiveness(4)KAI 4.3 - Diversification of interconnection

networks in view of strengthening security of energy supply

Indicative operations: supporting investments for interconnecting the national

electricity and natural gas transport networks to European networks.

Eligible beneficiaries: National transport operator for electric energy and natural gas

SOP EnvironmentPriority Axis 3 „ Reduction of pollution and mitigation of climate change by restructuring and renovating urban heating systems towards energy efficiency targets in the identified local environmental hotspots”

Objectives:• Mitigation of climate change and reducing pollutant emissions

from urban heating plants in the identified local environmental hotspots;

• Ameliorate ground level concentrations of pollutants in the localities concerned;

• Improve the health condition of the population in the localities concerned.

Strategy - integrated approach, considering both demand-management and energy-efficiency measures and direct improvement of the environmental performance of urban heating boilers.

Budget and beneficiaries

Community financing source –

Cohesion Fund

Allocated budget – 458 million Euros;

Co-financing rate – 50%;

Beneficiaries – local public authorities

Operations envisaged

• Introduction of BAT (best available techniques) for SO2, NOx and dust reduction (de-SO2, de-NOx and reduction of dust emissions);

• Rehabilitation of boilers and turbines;• Introduction of improved metering;• Rehabilitation of non-compliant slag and ash landfills;• Rehabilitation of heat distribution networks (including

redesign of networks if justified by more cost-efficient reasons).

Final target- to promote the efficient use of the non-renewable energy sources and, where possible, the use of renewable or less polluting sources of energy for urban heating plants

Complementarity of SOP ENV with Governmental Programme

“District Heating 2006 – 2015 – Quality and efficiency”

Governmental Programme for rehabilitation of district heating systems;

Extended up to 2015; Objectives – thermal effective power of district heating

systems is supposed to be of at least 80%, by mitigation of transport and distribution network losses and introduction of metering systems;

Budget – 2,7 billion Euros; Co-financing rate:

70% - state budget; 30% - beneficiaries (local authorities who managed the

district heating systems).

Environmental Fund investment in energy sector

Amount : 50,000 – 20,000,000 Lei (12500 – 5000000 euro)

Co-financing: Up to 50 % (for economic agents) or up to 60% (for local

authorities), out of the total eligible costs.

Thank you for your kind attention!