Romania is accelerating its transition to renewable energy, aiming to expand wind and solar power as key components of its energy mix. In 2024, several new regulations were introduced to incentivize private investment and streamline project approvals, fostering a more attractive environment for green energy development.
One of the recent policies implemented by the Romanian authorities is the first Contracts for Difference (CfD) auction. In January 2025, the electricity market operator published the list of 21 companies that signed contracts after winning this first CfD auction. These companies will develop wind and solar power projects with a total capacity of 1,500 megawatts, benefiting from the CfD scheme for 15 years. Winning bids for wind projects ranged from EUR 54.5 to EUR 77.3 per megawatt-hour, while solar projects secured prices between EUR 45 and EUR 54.1 per megawatt-hour. The CfD scheme, backed by EUR 3 billion from the Modernization Fund, aims to ensure stability by covering the difference between the market price and the contracted execution price. Another major pillar for the development of the renewable energy sector which has been under the spotlight in 2024 is the grid capacity allocation. The National Regulatory Authority in Energy (NRAE) introduced a two-phase amendment to the grid connection framework in 2024.
The first phase included immediate changes such as a new financial guarantee requirement, where projects over 1 megawatt must provide 5% of the connection tariff before receiving a grid connection permit (ATR), meant to prevent grid congestions caused by speculative or unfunded projects. Additionally, investors experiencing uncontrollable delays can extend the building permit deadline by up to 12 months, provided they submit proof and a 5% financial guarantee. The second phase, effective from 2026, introduces a competitive grid capacity allocation system. Projects of at least 5 megawatts will obtain access through annual auctions and investors must provide a participation guarantee of 1% of the auction price. The full impact remains uncertain, as the TSO is expected to finalize auction procedures by July 2025. This marks a fundamental shift toward a competitive grid access model, increasing transparency, but potentially creating financial barriers for smaller investors.
In 2024, the national framework also saw additional and long-awaited new developments, such as the new regulations for developing offshore wind projects. This new law regulates key aspects of offshore wind energy, including the responsibilities of authorities, concession blocks, licensing conditions, construction, and operation.
Additional regulations are still required to fully implement its objectives, part of them, at the time of writing, being expected by March 31, 2025, when the government should approve the list of relevant offshore wind blocks, as well as specific rules on concession procedures, royalties, guarantees, and potential support schemes.
Looking forward, the government plans on approving to transpose RED III. Key provisions cover joint projects with EU states, guarantees of origin, renewable energy in heating, cooling, and transport, and sustainability criteria for biofuels. These amendments support Romania’s National Energy and Climate Plan, reinforcing commitments to EU climate targets for 2030 and 2050. While things seem to be headed in the right direction in many matters, there are outstanding issues that still require review from the competent authorities and lawmakers.
For example, in October 2024, the European Commission called on Romania to remove restrictions on electricity and gas price setting and exports. Romania’s national measures, including mandatory contributions from electricity producers to a transition fund and fixed gas prices for certain clients, were deemed incompatible with the EU energy market. The Commission argued that these measures violate free price formation and cross-border trade principles. Additionally, the Commission initiated a formal infringement procedure regarding Romania’s export restrictions on electricity.
In November 2024, Romania’s Constitutional Court ruled as unconstitutional the mandatory contribution to the Energy Transition Fund for certain electricity producers. The Court found the contested provisions violated fair taxation principles and economic freedom while discouraging fair competition and renewable energy production. Following the release of the full ruling, the Ministry of Energy will determine the next steps.
Romania’s renewable energy sector presents promising opportunities for growth and investment, driven by supportive government policies, EU directives, and the country’s natural resources. The 2024 regulations represented a significant step toward overcoming some of the challenges faced by the sector, with others still to be addressed.
By Gabriela Cacerea, Partner, and Emanuel Flechea, Senior Managing Associate, Nestor Nestor Diculescu Kingston Petersen
This article was originally published in Issue 12.3 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.
