Abstract
This paper analyzes the impact of policy changes on the Romanian renewable energy producers. Attracted by a generous subsidy scheme, foreign and domestic investors flocked to the market. Consequently, the sector witnessed remarkable progress, especially in the wind power category. Romania fast approached the national target set by the European Union concerning the share of the country’s energy consumption from renewable sources. However, frequent changes in the support scheme and in the regulations issued by public authorities led to chaos. The aim of the paper was to emphasize the evolution of renewable energy policy in Romania, to investigate the incentives and their effects, and to critically assess the impact of the changes on renewable energy producers. It highlights, by means of an exploratory study and several interviews with executives of renewable energy companies, the challenges and shortcomings of policymaking. The main finding was that the revision of the subsidy scheme and the changes in energy policy that followed are the major determinants for the declining financial performance of renewable energy producers. Subsequently, some recommendations for improved policymaking are suggested, so as to re-establish the trust of investors and to promote the sustainable development of the sector.
Highlights
The use of renewable energy has been encouraged and supported by the European Union (EU) to reduce greenhouse gas emissions, achieve energy policy goals of sustainability, security and increased efficiency, and to reduce its dependency on foreign energy suppliers
From the exploratory analysis of the evolution of the Romanian renewable energy policy and the consistent opinions expressed by the interviewed executives, some final conclusions can be drawn
In most of the European Union member states, it seems clear that the development of energy generation from renewable sources is still very dependent on public support and, as such, vulnerable to political changes
Summary
The use of renewable energy has been encouraged and supported by the European Union (EU) to reduce greenhouse gas emissions, achieve energy policy goals of sustainability, security and increased efficiency, and to reduce its dependency on foreign energy suppliers. The EU set three main objectives related to climate change and energy: to achieve a reduction of 20% in greenhouse gas emissions from the 1990 level; to produce 20% of energy consumed from renewable sources; and to raise energy efficiency by 20% by the year 2020 [1]. Other renewable energy sources for generating electricity include biogas, wood, waste, and geothermal energy [2,3]. The balanced mix of Romania’s energy resources and its relative energy independence decrease the risks of supply shortages and contribute to a better response in the face of climate changes. The aim of this paper was to critically assess the evolution of the Romanian renewable energy policy together with the changes in the regulations that transformed the market, analyze the impact of these changes on the actors involved, and formulate recommendations for future policymaking
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