Disagreement Over Proposed CfD Mechanism
Romania’s decision to allocate EUR 3 billion from the Energy Transition Fund to finance a Contract for Difference (CfD) scheme for green energy investments has sparked debate among experts. While aimed at boosting green energy generation, some argue that the funds could be better utilized elsewhere.
Expert Opinion
According to Razvan Nicolescu, former vice-president of the Association of Energy Regulatory Agencies in Europe (ACER), the CfD mechanism may not be the most effective approach. Nicolescu suggests that investors already utilize Power Purchase Agreements (PPAs), which are more common in Europe and do not involve unnecessary state intervention.
Concerns and Criticisms
Critics argue that the current CfD design may incentivize investors to prioritize maximizing output rather than aligning production with demand. Additionally, there are doubts about whether the allocated EUR 3 billion will be sufficient to finance the entire CfD scheme, raising concerns about its feasibility and effectiveness.
Alternative Use of Funds
Nicolescu proposes that the allocated funds could be better utilized to encourage investments in infrastructure that enhances the stability of the power grid. By directing investments towards grid stability, Romania could potentially achieve greater long-term benefits for its energy sector.
Source：romania-insider.com
