According to the new policy framework on the Governance of the Energy Union, the National Energy-Climate Plans (NECP) constitute obligations of the EU Member States to develop one-decade-long energy-climate policies starting with 2021-2030. The Romanian Government published the NECP draft at the end of November 2018.
Spread on 169 pages, this first NECP draft 2021-2030 provides a comprehensive summary on the Romanian energy system, including the sources of greenhouse gas (GHG) emissions. At the same time, the draft sets the
national targets for 2030 regarding the reduction of GHG emissions, the share of renewable energy sources (RES) in the final energy consumption, and the increase of energy efficiency.
However, the NECP draft also has a number of important deficiencies. From the beginning, the document surprises with a proposed RES target of only 27.9% for 2030, far below the national potential of cost-efficient development of RES and also well below the collective EU target of 32%.
The analysis carried out in this report shows that the manner in which the NECP draft accommodates the net increases in electricity generation capacity by 2030 for virtually all forms of primary energy – except for the natural gas units, whose aggregate capacity stagnates, and of coal, for which an implausibly low decrease is expected – is to rely on a massive increase in final energy consumption to 341 TWh in 2030 compared to 269 TWh in the PRIMES 2016 projection, and 300 TWh in the Romanian Energy Strategy 2019-2030, with an Outlook to 2050.
It must be noted that both the National Energy Strategy and the NECP draft are avowedly based on the results of the PRIMES 2016 quantitative modeling, which was carried out in the elaboration of the National Energy Strategy 2016-2030 with an Outlook to 2050, whose draft was published in December 2016. Unfortunately, the differences from the PRIMES 2016 projections are not adequately explained in any of the two more recent strategic documents.
The NECP draft anticipates 86.6 TWh of final electricity consumption in 2030, well above the 51 TWh of the PRIMES 2016 projection. As argued in this report, simply by considering a more realistic electricity consumption, in the range of 60-70 TWh, the RES target in 2030 is achieved without additional policies for RES support. At the same time, the report also looks at the realistic prospects of the coal-fired power generation sector.
The report recommends an assessment of the measures and mechanisms included in the Romanian legislation. Thus, it is expected that RES will be provide impetus by the introduction of “contracts for difference” (CfDs); the draft NECP, however, mentions a suspicious delay until 2025 of the use of the CfD for RES installed capacities. On the other hand, the coal sector will face ever more severe obstacles and restrictions: the rising price of EU ETS allowances, the exclusion of the new coal-fired power plants from the Capacity Market after 2025 (by limiting the admitted emissions to 550g CO2/kWh), as well as the more severe BAT limits on emissions of pollutants. At the same time, absent any tempestuous regulation that would oppose the EU policies, the high price of the ETS will facilitate the substitution of the coal by natural gas in the power generation mix.
Generally, the NECP draft suffers from a lack of transparency and rigor regarding the analytical basis and the needed methodological clarity. No public consultations with experts and stakeholders were held in preparation of the document, nor did a new, dedicated modeling take place, although this would have been utterly justified, considering the changes in the EU targets and the regulatory framework over the last two years, as well as developments in the international fuels and technology markets.
Furthermore, the NECP draft is not accompanied by a comprehensive and transparent methodology annex that would explain unequivocally the link between the scenarios used in the PRIMES 2016 modeling and those mentioned in the NECP draft (recall that the projections in the National Energy Strategy 2016-2030 were presented for Optimum Scenario, POPT), as well as the calculations thorough results were reached that differ from those of the PRIMES 2016 modeling. Such an annex is mandatory for the next version of the NECP draft.
Methodological transparency and a better public involvement of experts and stakeholders in drafting the NECP would have made it possible to avoid the impression that some projections of strategic relevance, such as the energy production and consumption, are rather a matter of political commitment than a result of rigorous
After careful scrutiny of all sections of the NECP draft, the report ends with a number of constructive suggestions, intended to support an improvement of the draft’s next version and, of course, of the final version of the NECP 2021-2030.