Romanian power & renewables market forecast – June 2021

We are pleased to present our latest Romanian power & renewables market forecast report for June 2021. This forecast report presents a comprehensive outlook of key policy and technology developments in the Romanian power market, and refreshes the analysis provided in our first December 2020 forecast with the latest commodity prices, market, & modelling developments. All prices are quoted in EUR (real 2020).

Key highlights in this report:

  • Romania’s power sector will undergo significant changes in the coming decade, with more than half of its coal capacity retiring (>2.5 GW of old plants) by 2030. This creates space for 1 GW of gas capacity (CCGT and peakers) and 7 GW of renewables capacity. We expect these to come from market-driven buildout in addition to the new CfD subsidy scheme currently being discussed.
  • Baseload power price rises to 63 €/MWh by 2030, driven by a tighter capacity margin and rising CO2 & gas prices. Baseload price stabilises at 65 €/MWh in the 2030s and 2040s due to increasing renewables penetration. Capture price for wind drops from 57 (in 2030) to 55 €/MWh (2040). For solar capture price, increased cannibalisation leads to a decrease from 46 to 37 €/MWh.
  • Without a subsidy scheme for new projects in place, rising baseload price and limited cannibalisation in 2020s offer attractive conditions for RES investments and particularly solar. Finding ways to manage merchant risks is key for developers and investors. Discussions on a new CfD subsidy scheme are currently underway, with a potential scheme introduction by 2024.
  • Considering key market risks, Aurora’s downside price scenario (based on P90 sensitivities for gas, CO2 prices and demand) forecasts an average (2025-40) baseload price of 45 €/MWh, 18 €/MWh lower than in a central market development. Capture price for wind decreases by 16 €/MWh and for solar by 4 €/MWh.
  • Corporate power demand in Romania is 32 TWh in 2030. The potential for long-term corporate PPAs based on credit ratings (> investment grade) and corporates’ motivation to sign PPAs (customer proximity and hedging) is 4.7 TWh. This is approximately 35% of the expected generation from unsubsidised renewable projects in 2030.

The report and underlying data in Excel format can be downloaded from EOS and the data can also be viewed on Aurora’s scenario explorer.
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