Water tax for Hydroelectric Power Plants

This analysis focuses on the tax applied to the water used by hydroelectric power plants in Romania. This study also includes information on similar water taxes around Europe and a comparison between them and that applied in Romania.

Although set in Romania in 2000 as a small tax meant to raise funds for development of hydro projects, this fee has increased significantly over the years, making it even harder for the hydroelectric producers’ activity.

In the category of invented-out-of-nothing taxes one can find the fee imposed by NARW – the National Agency “Romanian Waters” (ANAR, in Romanian) for water used by power plants producing electricity from hydro sources (micro or large scale). True, this is not a fee that exists only in Romania, but it is nonetheless a bizarre cost that hydroelectric producers must pay. Actually, more than 40% of the energy produced from hydro sources in the 27 countries analyzed, at European level, incurs different types of water taxation.

Out of these countries, 11 (9 of which are EU member states) pay different types of fees for hydro power generation, with Romania paying the most for water expenses, according to Hidroelectrica‟s (the main hydro electricity producer in Romania) special administrator.

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