This is a best prospect industry sector for this country. Includes a market overview and trade data.
The energy sector is a priority for Romania’s economy and security policy. The country is slowly shifting from coal to gas, nuclear, hydro and other renewable energies.
In April 2020 the Ministry of Economy, Energy and Business Environment submitted for public debate the Environmental Appraisal for the “National Integrated Plan for Energy and Climate Change 2021-2030” PNIESC In April 2021, PNIESC was ready for Government approval; PNIESC and the renewable targets may be revised in 2023, based on the evolution of the market and investments.
There are five national objectives taken under consideration in PNIESC, with estimated targets for 2030:
- decarbonization - decrease of GHG emissions with 40% (the consumption from renewable energy sources –34%, compared to 24% as 2020 target and fulfilled since 2017
- energy efficiency (improvement by 32.5%)
- energy security
- energy domestic market
- research, innovation and competitiveness (interconnection of energy market–15%).
To have a broader image of the market, according to PNIESC, the following forecasts have resulted after applying the modelling scenarios to 2030 level: estimated population will reach 18.4 million; GDP - approx. 28% increase; constructions – 5% decrease; services and agriculture – 35.7% increase; energy – 11.5% increase; industry – 32.4% increase.
Generation of Energy
The main electricity generation companies are state-owned:
- Cernavoda nuclear power plant (2x700 MW installed capacity for units 1+2, ensuring approximately 20% of the total energy mix - https://www.nuclearelectrica.ro/cne/en/),
- 208 hydropower and pumping plants – 6.444 GW installed capacity ensuring more than 25% of energy mix (https://www.transelectrica.ro/ro/web/tel/home), and
- Six coal-fired power plants – 2 with Hunedoara Energy Complex, under insolvency currently, providing 1-3% of the national energy mix, and 4 with Oltenia Energy Complex, providing 20% of the national electricity production.
Transmission of Energy
The electricity transmission system in Romania and the interconnection system with its neighboring countries is managed and operated by the majority state-owned Transelectrica SA company. They also manage the market operation, the grid and market infrastructure development, and the security of the national energy transmission system. (https://www.transelectrica.ro/en/web/tel/home).
Supply & Distribution of Energy
By end of 2020, five major electricity suppliers were active in Romania:
- CEZ (currently Macquarie Infrastructure and Real Assets – MIRA)
- Enel Energie
- Enel Energie Muntenia
- Electrica, covering different regions.
In July 2021 there were 176 licensed gas suppliers and licensed electricity suppliers out of which 14 were licensed for both.
In 2019, over nine million users were connected to power grids through eight licensed distribution system operators (54.72% in urban areas):
- e-Distributie Muntenia
- e-Distributie Banat
- e-Distributie Dobrogea
- Distribuție Energie Oltenia
- Delgaz Grid
- SDEE Muntenia Nord
- SDEE Transilvania Nord
- SDEE Transilvania Sud).
Oil & Gas
Romania is the largest producer of oil and gas (O&G) in Central and Eastern Europe and has the potential to dominate the European O&G market as a result of discoveries in the Black Sea, and after BREXIT.
Onshore natural oil & gas production in Romania is provided by traditional producers such as Romgaz SA, OMV Petrom SA, Amromco Energy SRL, Mazarine Energy Romania, Raffles Energy SRL, and Stratum Energy Romania.
Main offshore title-holders in the Black Sea are: Black Sea Oil & Gas BSOG - the first molecule of Romanian natural gas from the Black Sea will be extracted by BSOG in Aurora field, by the end of 2021. Also, Romania may become a regional gas provider in case the total extracted gas exceeds domestic needs. Other title holders are: ExxonMobil, Lukoil, OMV Petrom, Petromar Resources, Petro Ventures, Gas Plus Dacia, and Romgaz SA (https://rbsta.ro/about-us/#membri).
Romania’s natural gas distribution network has increased four times in the last three decades, from 10,772 kilometers in 1990 to 43,563 kilometers in 2020, according to data synthesized by the National Institute of Statistics (INS). The average annual growth rate is 4.8%, with the highest advances over the previous year recorded in 1995 (11.58%) and 1994 (11.19%). The pace has slowed since 2005, with an average annual growth rate of 3.32%, with the best performance in 2007 (6.14%). The length of the natural gas distribution network increased by 3% in 2020, compared to 2019, and reached 43,563 kilometers, for about 6.5 million customers, with an average annual consumption of about 9 billion cubic meters. https://www.energynomics.ro/en/romanias-natural-gas-distribution-network-has-increased-4-times-in-30-years/
LNG by the Black Sea
To date, the Black Sea has no LNG terminal. Romania had plans to build aLNG terminal at Constanta (land based). Since Romania’s priority was to complete the BRUA pipeline in 2020 and to start the gas production in the Black Sea (see above – BSOG production), the Constanta LNG project might have a potential start-up in 2026, yet is still awaiting private investment. https://www.energyworldmag.com/black-sea-lng-dreams-vs-reality/.
This is also based on the Development Plan of the Gas National Transport System SNT for 2020-2029, drawn up by the system operator, Transgaz state-owned company.
Natural gas is seen as an important resource in the process of transition to the clean energy, and Romania has large potential for LNG developments in the Black Sea. With infrastructural investments and the development of competitive market mechanisms, Romania can succeed in becoming a major European LNG supplier and transport hub.
Nuclear energy will continue to play an important role in the energy mix for years to come.
Romania currently has one nuclear power plant, Cernavodă, with two operational reactors and two more under construction (pressurized heavy water reactors of CANDU 6 design - CANadian Deuterium Uranium), each with a design gross output of 706.5 MWe. The two reactors in operation supply approx. 20% of total energy production.
In the first five months of 2020, the coal production has decreased by 41%, while the production of oil dropped by 20% according to National Statistics Institute. This is due to the pandemic induced worldwide crisis.
The role of traditional fuel such as oil, natural gas, coal, and uranium in the energy mix is currently being reconsidered / renegotiated according to European Union new context and trends (EU Green Deal). Romania produces pit coal and lignite and maintains several coal-fired powerplants – all needing upgrades in the immediate future in order to comply with European Commission guidelines. (6 coal-fired power plants – 2 with Hunedoara Energy Complex, under insolvency currently, providing 1-3% of the national energy mix, and 4 with Oltenia Energy Complex, providing 20% of the national electricity production).
Renewable Energy Sector
In order to reach its 2030 renewables target of 30.7%, Romania plans to add around 7 GW of new renewables capacity, of which around 3.7 GW is intended to be solar projects, according to the plan.
In terms of energy consumption, in 2019, little over of 24% energy consumption originated from renewable energy sources, placing our country in 10th place in the EU and above the union’s average level.
In 2020, electricity production in Romania was comprised of 12.4% wind power, 3.4% from photovoltaic solar panels, while 27.6% of the electricity production was coming from hydropower. In total, renewable energy production (wind, photovoltaic and biomass) amounted to 16%.
Currently Romania is seeking to derive more of its energy needs from renewable sources. Romania is seen as a fast-growing market for wind energy in the Southeast European region, with installed wind generation capacity skyrocketing from as little as 7 MW in 2007 to 3,029 MW in 2019.
In July 2021, approximately 50% of generated power had renewable resources: hydro power – above 34%, wind above 15%, photo-voltaic – above 7%, and biomass – above 0.5%.
In March 2021, OMV Petrom group announced that they will invest at least EUR 250 mln. in a new bioethanol plant in Romania. In July 2021, Belgo-American New-Energy announced that they plan to invest at least EUR 60 mln. in a corn-based ethanol facility in Nadlac, near Arad.
Other investing perspectives are upcoming as well. Romania has promising biomass potentials and several ongoing projects are focusing on its monetization. However, there are some concerns regarding the sustainability of Romanian biomass (conversion of primary production for energy purposes, partially driven by the growing biogas production). In recent years, Romania increased its production of liquid biofuels, mostly on the account of biogas, conventional biofuel and biodiesel, with installed capacities for approx. 80 Mt/y.
Romanian Association for Wind Energy RWEA launched RESInvest program dedicated to localization of a value chain for renewable energy in Romania, by encouraging the local production of renewables technology and creation of investment opportunities based on EU funds existing 3,000 MW installed capacity. RWEA considers that important sectors that could be attracted and relocated in Romania, like the production of equipment for renewable energy installations, training of qualified personnel for the operation and maintenance of such. Romania could become a know-how hub based on national research and innovation plans and on adjacent technological concepts such as storage, hydrogen, transport and digitization.
Power production & distribution
American companies can find opportunities (equipment, know-how, technologies, design and construction, installation, upgrading, maintenance, and repairs) in electrical power systems, products and services related to energy efficiency, smart grid, power distribution, power and gas storage, and refurbishment/construction of power generation capacities.
According to the national gas transport system SNT operator Transgaz’s Investment and Development Plan 2020-2029, there are several strategic investment projects potentially to be run:
- BRUA (Bulgaria-Romania-Hungary-Austria, the Romanian part of the pipeline)
- New developments to take over the Black Sea extracted gas
- Interconnection of SNT to the LNG terminal by the Black Sea (to be built by 2026; interconnection of pipes T1 and T2 to the terminal)
- Regassification installation by the Black Sea, to take over the liquified gas imported with specialized ships and to prepare the gas for the entry into Transgaz SNT pipelines.
- Modernization of stations Isaccea and Negru Voda (for exports and imports for Bulgaria and Ukraine, via T2 and T3 pipes)
Onshore and Black Sea offshore fields development, operation, and maintenance: the discovery of new gas reserves in the Black Sea basin offers opportunities for companies with expertise in drilling, transmission, refining, and retrofitting existing facilities.
Cernavoda Nuclear Plant – maintenance & refurbishment for active reactors 1 & 2; construction of two new reactors (2 × 700 MW; total estimated value approx. $8 billion).
In June 2020, the Romanian Government canceled the related MOU signed with China-based CGN.
The law to ratify the Intergovernmental Agreement between Romania and the US regarding cooperation on Cernavoda nuclear-energy projects and re. civil nuclear energy has been promulgated on July 16 2021. The agreement targets several fields of cooperation: Units 3 and 4 Cernavoda new projects; revamping of unit 1; regulating, research and development; exchanges between research labs and universities; personnel training. The cooperation agreement has been signed in December 2020 in Bucharest and in the US. The entry into force of mentioned agreement allows the development of the civil nuclear program by ensuring the technical, regulating, nuclear security and safety expertise. It will contribute implicitly towards enhancing the security, diversity, safety in exploitation, energy and environmental stability of Romania, through re-technologization of Unit 1 and extension of Cernavoda plant capacity.
The Ministry of Economy, Entrepreneurship and Tourism recently launched a program called “Modernization Fund”. This program is a key tool for the development of investments in energy projects, which provide for improvements in energy efficiency, modernization of energy systems and the transition to coal-dependent regions in Member States with GDP per capita at market prices below 60% of the EU average. The fund will be financed by bidding on the market 2% of the total certificates allocated to Member States through the EU ETS scheme for the period 2021-2030, the amount of which is between € 6.2 and € 9.3 billion.
The above program is a breath of fresh air, since Romania has registered a decline in terms of renewable energy attractiveness, due to the lack of governmental support and appropriate regulations or support schemes.
Romania could get another 1.4 GW of wind farms in the next five years, the investments being estimated as much as EUR 2 billion. According media outlets, it would be the second wave of investments in wind energy in this country. In the period 2009-2014, Romania attracted investments of over EUR 4.5 billion in the sector. Currently, the country has about 3 GW, which covers about 10% of electricity consumption. Wind projects with an installed capacity of 307 MW have grid connection contracts with Romania’s transmission system operator Transelectrica. The documents guarantee that power plants will be connected to the transmission system when the construction is finished. In addition to the 307 MW with connection contracts, another 460 MW obtained technical approvals for connection. One of those projects is a 363 MW plant under development by Romania’s Pechea Eolian Ltd. from Galați. (https://balkangreenenergynews.com/romania-has-1-4-gw-of-wind-farms-in-the-pipeline/)
Photovoltaic (PV) energy
According to the International Renewable Energy Agency, Romania had installed about 1.38 GW of solar at the end of 2019. The country is expected to become European Union’s wind and photovoltaic hub, with such power plants installed throughout the country. In the near future Banat, Satu Mare and Moldova are considered to be the regions with the most significant investments in these fields. The only utility-scale PV projects currently under development are those of Romania’s Complexul Energetic Oltenia (CE Oltenia), which wants to deploy 310 MW at one of its coal power facilities. The company is now seeking consultants to conduct feasibility studies to build four facilities, which are part of its restructuring efforts and decarbonization plan. According to Romanian media sources, four projects will span 595 hectares, and their capacities will range from 60 MW to 95 MW. Recently, a group of international investors announced that they are planning to build a 700 MW solar park, the largest in the country, in Arad county, western Romania. The PV plant will be built on an area of 1,079 hectares and will require an investment of approx. EUR 700 million.
The European Union’s energy strategy for 2020 established that up to 50% of renewable energy produced by EU member states will derive from biomass, by burning agricultural, forestry, livestock residues and municipal or industrial biodegradable waste. Studies conducted in Romania reveal the potential in the field of green energy production: 65% biomass, 17% wind energy, 12% solar energy, 4% micro hydropower, and 2% geothermal. Although it is desirable to reach the 50% target, studies conducted in 2016 showed that only 0.34% of electricity produced in Romania is obtained from biomass, while thermal energy produced from biomass is up to 46%. The use of biomass for electricity production is a much more sustainable way to benefit from it, because electrical power can be used in a wide range of applications.
In terms of energy potential of biomass, Romania’s territory is split into eight regions: Danube Delta (Biosphere Reserve), Dobrogea, Moldavia, Carpathian Mountains (Eastern, Southern, Apuseni), Transylvanian Plateau, Western Plain, Carpathians Hills and South Plain. Even if the production of energy based on biomass would be extremely profitable, a big issue is represented by the high costs necessary to install and commission a single biomass-fired cogeneration plant. The initial investment is high, in conditions in which biomass and biogas projects represent: specifically, a genuine factory, with non-stop production. Waste collection is, at the same time, a costly activity, and for raw material there are also purchase or planting costs. Currently, there are very few investors who have dared to invest in modern technologies based on sawdust to generate heat, or in wood gasification technologies for cogeneration. One example is the thermal power plant in Suceava, which operates on biomass and natural gas, in which Adrem Invest has invested over EUR 80 million, this being one of the most important investments in Romania that use biomass. Several dozen MW (just over 30) installed in biomass power plants do not cover even 1% of national consumption. So, biomass electricity production is a potential that needs to be capitalized on.
· Romania Energynomics Energy events 2021: https://www.energynomics.ro/en/
- The World Energy Committee - SIREN the Romanian Energy Symposium
- Romania Petroleum Club events
- BLACK SEA OIL & GAS
- RoEnergy Bucharest (https://bucuresti.roenergy.eu/en)
- Romanian Energy Center CRE
Other relevant organizations and info:
- National Regulatory Agency for Energy
- National Agency for Mineral Resources (NAMR)
- Romania Production of crude oil, 2018-2020
- Romania Crude Oil Production | 1994-2020 Data
- Romanian Petroleum Exploration and Production Companies Association
- Romania Primary coal production, 1973-2019
- Nuclear and Radioactive Waste Agency
- Romania Energy Center (ROEC)
- Romanian Association for Biomass and Biogas ARBIO)
- Employers Federation of Companies Associations in Energy Utilities: ACUE
- Romanian Photovoltaic Industry Association (RPIA) :
- Romanian Association for Wind Energy
- Romanian Association for Biomass and Biogas
- A European Green Deal | European Commission 2020-2024
Name: Mihaela Dodoiu