On Wednesday, the Commission approved a €3 billion state aid scheme announced by Romania for investments in wind and solar power to achieve a “net zero” economy. The scheme was approved under the Temporary Crisis and Transitional Framework for State aid measures adopted by the Commission on 9 March 2023 and amended on 20 November 2023, the Commission announced.

Which projects will be eligible for state aid

Projects for the construction and operation of new power generation capacities from solar photovoltaic and onshore wind sources will be eligible under this measure.

The aid will be provided through competitive bidding procedures and will take the form of a bilateral contract for difference. The execution price will be established through bidding procedures (“pay-as-bid”, payment corresponding to the offered price), and the base price will be calculated as the average monthly market price of electricity on the markets for the next day.

The scheme guarantees the beneficiaries a minimum level of income

If the base price is lower than the strike price, the beneficiary will be entitled to receive payments equal to the difference between the two prices. Conversely, if the base price is higher than the exercise price, the beneficiary will have to pay the difference to the Romanian authorities.

The scheme guarantees beneficiaries a minimum level of return, ensuring that beneficiaries are not overcompensated for periods when the base price is higher than the strike price.

Aid for solar energy will be provided through a competitive bidding process, and for wind energy – until December 31, 2025.

The aid must comply with a number of conditions designed to limit unjustified distortions of competition, and is also subject to safeguards aimed at ensuring a sufficient number of participants in the competitive bidding procedure.

The Commission adopted a temporary crisis and transition framework to encourage support measures in key sectors for the transition to a net zero economy under the Green Deal industrial plan. The framework partially amends and expands the interim crisis framework adopted on March 23, 2022.