News 20111229 cernavoda

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News 20111229 cernavoda

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News 20111229 cernavoda

  1. 1. News December 29th, 2011 Wind turbines will produce as the power plant in Cernavodă In 2012, if everything goes by the book, the wind turbines capacity in Romania will reach 1.5 GW whilst having 1.4 GW in Cernavodă NPP. Wind turbines will reach in 2012, if all goes well, to have a capacity of 1.5 GW, more than power plant in Cernavodă, which has about 1.4 GW. In 2011, due to drought, they have got a strategic importance producing in some periods more than Hidroelectrica. Investment could total in 2012 to €1.5 billion and the total capacity will increase to almost 1.6 GW, double the 2011, according to Dana Duică, Executive director of the Romanian Association for Wind Energy (RWEA). "In 2012, we expect investment that can reach up to €1.5 billion, an optimistic scenario in which the companies will carry their announced plans out successfully", she says. In the 800 MW will participate next year projects of major players such Enel, EDP, CEZ and others smaller, local like Holrom and Monsson. Will be completed next year projects of Verbund, CEZ with the second part in Cogealac, Enel and Iberdrola. Payback period will remain still about 8 years and the profit margin required by ANRE, is about 10%.Eng. Paul Keisch Page 1
  2. 2. News December 29th, 2011 Wind turbines this year Also in 2011, growth was spectacular: from 462 MW in 2010 reached to 850 MW. The growth rate last year was unprecedented, when the capacity increased from 14 MW to 462 MW. After finalizing legislation this autumn, the main factor that led to this progress is sustained pace of project implementation. Basically, in 2011, were built projects started in 2008-2009. In 2011, the area has been invested around €600 million. The suggested retail price of ANRE for investment is €1.57 million per MW built. "Only in 2012 we’ll see a decrease in price per MW, mainly due to lower equipment prices. Remaining costs will remain the most likely as: construction, consulting, etc. About 80% of the project is the equipment", said Duică. The turbines get cheaper Such equipment price decreases as technology advances and market becomes more competitive. Thus, in addition to established brands, with a considerable market share, such as Vestas and General Electric, appear new brands, cheaper, usually built in China. In Romania, currently, there are no installed Chinese wind turbines. These plants, although cheaper, is much weaker guarantee to an investor who wants to take a bank loan. Financial institutions don’t provide easy credit for the purchase of equipment that hasn’t been proven, over time, efficiency, even if it’s cheaper. Basically, banks would prefer to give greater credit for a safer investment than less money for a less secure one. Despite some fears in the market, the increase of electricity price for consumers caused by the scheme to promote renewable energy isn’t significant. According to a study by (PwC) PricewaterhouseCoopers, the price of 1 MWh will be increased by €6.1 in 2012 and €9.8 in 2013, amid the state subsidization of renewable energy. Total energy cost, supported by a household in Romania, these years will increase by €9.8 per year respectively €16.3, i.e. 0.03% - 0.05% of average net income of the household. PwC study starts from premises that in the years 2012-2013, average net consumption of a household in Romania will be 1,600-1,700 KWh, and estimates are based on the final price of energy available to households in 2010 which is €104 per MWh. Is there a "bubble" risk in the wind? "But I don’t see any risk of industry failure in the future, especially since it had a normal and predictable growth in recent years and this rate will be kept in the future", said Duică. However, there is a danger in terms of investors, because banks need stability when giving credit to know what scheme can be placed. Thus, if ANRE is a radical and sudden, many projects are "trapped" during development, because they were designed after a specific plan. If they were designed, for example, 2 green certificates for 1 MW and scheme changes to 1.5 green certificates, funding problems may occur.Eng. Paul Keisch Page 2
  3. 3. News December 29th, 2011 Batteries are the future A new trend is Batteries that could store wind energy. Yet, a battery system cannot be designed to store the energy produced by a wind farm. Problem is not money, but of technology. Regardless of the amount invested, now such a project cannot be made. Wind energy should be consumed on the spot, and if there is no consumption when is produced then it is lost. Romania has great potential to have also wind turbines plant (factory), considered Duică. But to see such unity in Romania, investors should be encouraged. It’d not be difficult, because Romania has great potential: it has the suitable locations and the necessary technology. Businessmen, however, were discouraged by legislative instability that was established between 2008 and 2011. If there were 1 or 2 years of legislative stability, investors say they would be tempted to make such investments.Eng. Paul Keisch Page 3

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