The Minister of European Investments and Projects, Adrian Cachiu, does not agree with the fact that the population should support investors in renewable energy through the contract for difference scheme, because, according to him, it is the duty of the state to guarantee the implementation of these investments. In response, representatives of suppliers and manufacturers responded that investments in energy ultimately pay off for consumers.

“They are talking about contracts for difference. From the bottom of my heart, with only one condition: that they never pay the public, this is my personal opinion, which I will support even after I am no longer a minister,” Cachiu said at the Energy Forum conference organized by DC News.

According to him, the guarantee of investments should be from the state.

“But not people to carry investments. Investments are usually returned through the price,” the minister added.

The consumer still pays

In response, Silvia Vlascanu, director of HENRO, the association of energy producers, said: “Even if they are funded by the Modernization Fund, it will still be public money, citizens will still pay for the scheme.”

“Maybe I’m shocked, but everything that happens in the energy sector is ultimately paid by the consumers,” said Laurentiu Urluescu, president of the Suppliers Association.

What are CFDs and where does the money come from?

In short, contracts for difference are effectively subsidies that the government provides to producers in the renewable energy sector.

In particular, a fixed price is guaranteed. If the market price is lower, the state pays the producer the difference. If it is higher, the investor pays.

To meet its 2030 commitments, the Romanian Government, through the Ministry of Energy, is implementing a Contracts for Difference (CfD) support scheme to encourage priority investments in low-carbon electricity generation technologies needed by Romania’s energy sector, it is mentioned in an information note for of CfD participants on renewable energy sources, published by the Ministry of Energy and cited by Agerpres.

The purpose of the CfD scheme is to support Romania in achieving its decarbonisation targets while maintaining security of electricity supply. The duration of support through the CfD scheme will be a maximum of 15 years from the start date of payment.

The contracts for difference will be offered to the respective producers through a competitive bidding process conducted by Transelectrica.

Financing of the CfD scheme is carried out at the expense of funds provided by the Ministry of Energy from the Modernization Fund and transferred to the CfD Liquidity Fund.

OPCOM, as CfD counterparty, will be responsible for managing CfD payments to and from the Liquidity Fund.

The Ministry of Energy is obliged to ensure that the Liquidity Fund always has sufficient resources.

The liquidity fund will be supplemented by a CfD contribution that will be covered by consumers.

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