Abstract

Renewable energy insolvency in Romania is becoming a structural risk as the country accelerates deployment of solar PV, wind, and battery storage (BESS). This article examines the financial distress and insolvency risks emerging across Romania’s renewable energy sector and the wider Central and Eastern Europe (CEE) market. Using the Romanian legal framework — Electricity Law 123/2012, ANRE Order 59/2013, ANRE Order 53/2024, Insolvency Law 85/2014 — and EU market rules under Regulation (EU) 2019/943, we show how grid curtailments, regulatory volatility, and fragile financing structures are creating early-stage insolvency triggers. Recent tax reforms (2024-2025) further compress project IRRs, while cases such as Getica 95, AIK Energy and CE Hunedoara, and regional precedents like Rafako (Poland) or Velika Ciglena (Croatia) demonstrate how quickly renewable SPVs can enter insolvency. Strategic recommendations are proposed for investors, lenders, and policymakers to reduce systemic exposure.

Introduction

Romania is entering a new phase of renewable development — gigawatts of PV capacity are queued for grid connection, onshore wind pipelines exceed 3 GW, and BESS projects are supported by EU financing instruments such as the Modernisation Fund. But renewable energy insolvency in Romania is rising, not declining. Insolvency is now a core feature of the energy transition, not a marginal anomaly.

The interaction between grid constraints, curtailment obligations, and financing discipline is decisive. We have analysed these issues extensively in related work:

• Romania’s CfD Scheme — Legal, Financial & Market Analysis 
• Romania’s 2026 Grid-Capacity Allocation Rules 

Revenue volatility and a low insolvency threshold (debts ≥ RON 50,000 unpaid for 60 days under Law 85/2014) expose many SPVs to distress. These dynamics are amplified by:

• node-level curtailment under ANRE Order 59/2013 
• competitive connection rights under ANRE Order 53/2024 (from 1 Jan 2026)
• market volatility documented by OPCOM 
• CAPEX inflation and tax reforms (2024–2025)
• fragile merchant project structures

As developers rush from ATR to COD, even short payment delays or permitting slippage can convert technical risk into insolvency risk within weeks.

Renewable Energy Insolvency in Romania: Legal and Institutional Drivers

Insolvency law reinforces this dynamic. Under Law 85/2014, insolvency can be triggered when debts of at least RON 50,000 remain unpaid for 60 days — a very low threshold for SPVs operating with thin equity. Meanwhile, grid curtailments under N and N-1 conditions reduce revenues and impair debt service capabilities. Even positive price periods on the day-ahead market do not guarantee cash flow alignment, as OPCOM’s published reference prices reflect volatility that merchant projects struggle to absorb.

Thus, renewable project viability and insolvency risk in Romania are directly shaped by the interaction of grid access, market design, financing structure and insolvency thresholds.

Solar PV Insolvency Risks in Romania: Merchant Exposure and Grid Constraints

Romania has experienced a rapid surge in solar PV development since 2022, with CAPEX benchmarks typically €650–800k/MWp (full EPC, utility-scale; with hard CAPEX €450–600k/MWp). This expansion, however, is accompanied by acute financial fragility. Insolvency risks are increasingly visible, not only as isolated cases but as a structural feature of the market.

One of the primary vulnerabilities lies in merchant exposure. The episodes of negative day-ahead (DAM) prices recorded in 2023–2024 demonstrated the volatility of revenues for projects without long-term offtake agreements. Developers that relied solely on merchant strategies, particularly those with thin equity capitalization, have found themselves unable to meet even modest debt obligations. This echoes the wave of insolvencies triggered by the withdrawal of green certificate subsidies in 2014, which left many PV SPVs insolvent or forced into restructuring.

A second source of fragility arises from delayed grid access and curtailment obligations. Connection approvals (ATRs) issued under the N-1 security criterion frequently include explicit curtailment clauses that reduce the firm capacity available to producers. Beginning on 1 January 2026, ANRE Order 53/2024 replaces the first-come-first-served principle with auction-based allocation of grid capacity. While this reform is designed to discourage speculative projects and align connection rights with genuine investment capacity, it introduces new uncertainty for developers who relied on earlier studies and approvals. Projects that do not succeed in the competitive allocation may find themselves stranded, raising the likelihood of distress or insolvency.

Third, liquidity has been affected by compensation and support scheme delays. During the 2022–2023 retail price cap mechanism, large suppliers such as Getica 95 accumulated over RON 150 million in unreimbursed receivables from the state budget. PV producers selling to such intermediaries faced delayed or partial payments, undermining cash flow stability. Given the low insolvency threshold under Law 85/2014 (RON 50,000 of unpaid debt for 60 days), even short-term liquidity interruptions can trigger formal insolvency proceedings.

In sum, the PV sector illustrates the interplay between regulation, market design, and insolvency law.

Bankability is increasingly conditional on securing predictable offtake arrangements – whether through corporate PPAs, Contracts for Difference (CfDs), or hybridization with storage solutions.

Projects that rely solely on merchant exposure are not merely high risk; in the Romanian legal context, they are highly susceptible to insolvency within a short timeframe. The legal, financial, and technical architecture must therefore be aligned from the outset to prevent the rapid erosion of project viability.

Wind Sector Insolvency in Romania: Curtailment and Contractor Exposure

Romania has more than 3 GW of new wind projects in the pipeline after a decade of near‑complete stagnation. This revival is driven by the combination of falling technology costs, EU decarbonisation targets, and the promise of stable revenues under forthcoming CfD schemes. Yet the enthusiasm must be tempered by structural risks that directly affect the solvency of project companies.

A first challenge lies in grid bottlenecks. Transelectrica’s connection queue remains heavily over‑subscribed. Under the Grid Connection Regulation (ANRE Order 59/2013, as amended) and technical guidance, wind projects above 50 MW must demonstrate security of evacuation both in N and N‑1 scenarios. This often leads to curtailment obligations or reinforcement works imposed through the ATR. In practice, stress cases modelled in solution studies can reduce deliverable output by several percentage points each year. For developers, such reductions are not minor; they directly influence IRR calculations and can compromise bankability if not transparently reflected in contracts and financial models.

A second source of fragility is the legacy of past insolvencies. The collapse of Romania’s green certificate scheme in 2013–2014 left banks with large portfolios of distressed wind SPVs. Many of these projects had relied on overly optimistic assumptions and thin equity structures. The resulting restructurings created an institutional memory among lenders, who now approach wind financing with heightened caution. This collective experience shapes today’s credit committees: merchant exposure is penalised, DSCR thresholds are stricter, and developers must provide credible mitigation strategies for curtailment and balancing costs.

The regional context provides additional warnings. In Poland, the bankruptcy of Rafako SA in 2024, triggered by a PLN 1.3 billion EPC dispute with Tauron over performance at the Jaworzno coal unit, illustrates how a single contractual claim can destabilise a large engineering company and strand subcontractors across multiple projects. Although Rafako’s core activity was not renewables, the precedent underscores how EPC and contractor disputes can cascade into insolvency across the energy sector. For Romania’s next wave of wind farms, the allocation of EPC risk and the robustness of contractual protections such as LD caps and step‑in rights are decisive.

Taken together, these factors show that the wind sector’s future depends on how effectively grid firmness, contractual allocation of risks, and financing discipline are managed.

Without careful alignment, Romania’s wind revival could reproduce the insolvency cycles of the past; with discipline, it can establish a more resilient foundation for long‑term growth.

Battery Storage Insolvency in Romania: Revenue Volatility and Capital Pressure

Battery energy storage systems represent the newest and perhaps most ambitious frontier of Romania’s renewable sector, with more than 1 GW currently in the development pipeline supported by allocations from the EU’s Modernisation Fund and Recovery and Resilience Facility. This segment is often presented as the necessary complement to intermittent solar and wind, yet the pathway to bankability is far from secure and insolvency risks are visible even in these early stages.

The first major concern relates to revenue volatility. Ancillary service markets such as frequency containment reserve (FCR) and automatic frequency restoration reserve (aFRR) saw revenues peak in 2022, only to halve by 2024. Developers that structured projects around pure arbitrage or speculative participation in balancing markets are discovering that such models cannot sustain debt service. Without long-term contracted revenues, cash flow projections remain fragile, and insolvency becomes a likely scenario under Law 85/2014 once liquidity dries up.

A second vulnerability is the CAPEX squeeze. Benchmark costs in 2025 stand at €220–320k/MWh turnkey AC (with DC‑only equipment at €140–200k/MWh), a significant decline from the €350–450k/MWh levels signed in 2022 EPC contracts. Developers locked into those earlier high‑priced contracts now confront stranded obligations and uncompetitive cost structures. Such mismatches between current market prices and contracted EPC terms create balance sheet stress and can precipitate insolvency filings when repayment schedules cannot be adjusted.

A third and particularly acute pressure is the guarantee burden. Pursuant to the Connection Regulation (ANRE Order 59/2013, as amended by Orders 208/2018 and 60/2024) and Transelectrica’s grid code, developers must post substantial guarantees at the time of ATR issuance and contract execution. For a 100 MW/200 MWh BESS, these guarantees can reach millions, depending on node congestion and the outcome of solution studies. Such sums are immobilised for years, effectively freezing capital that could otherwise support equity injections or working capital. For SPVs without deep-pocketed sponsors, this requirement alone is sufficient to push them toward imminent or actual insolvency.

All of these factors demonstrate that BESS in Romania is not a “gold rush” but a high‑risk investment environment.

Only projects anchored in contracted capacity payments, stable ancillary service agreements, or hybrid structures combining PV, wind and storage under bankable PPAs have the resilience to withstand the financial and regulatory pressures currently shaping the market.

Taxation and Insolvency in Romania’s Renewable Energy Projects

Taxation reforms adopted in Romania during 2024 and 2025 have reshaped the financial landscape for renewable energy developers. The increase of the dividend tax from 8% to 10% under Law 296/2023, effective 1 January 2025, directly compresses IRRs, particularly in holding structures that depend on dividend repatriation. This measure, though seemingly modest in numerical terms, requires a recalibration of shareholder distribution policies and makes treaty‑based tax optimization more relevant for cross‑border investors.

The introduction of the minimum turnover tax for companies with revenues above €50 million has also altered the economics of EPCs and utility groups. Instead of being taxed solely on profits, such entities are now obliged to contribute based on turnover, which changes pricing strategies and may limit their willingness to extend flexible payment terms to project SPVs. For renewable developers, this can translate into stricter upfront payment conditions and less negotiating power when securing EPC contracts.

A further pressure point is the Energy Transition Fund levy, extended through 2025 by Government Emergency Ordinance 6/2025. While its stated purpose is to stabilize consumer prices and finance decarbonisation, in practice it reduces supplier liquidity and complicates generator settlements. Cash flow blockages arising from delayed reimbursements or higher levies amplify insolvency risks under Law 85/2014, where even debts of RON 50,000 unpaid for 60 days can trigger proceedings.

Finally, the VAT reform under Law 141/2025, effective from 1 August 2025, increased the standard rate from 19% to 21% and unified reduced rates at 11%. This seemingly technical change has far‑reaching consequences: EPC contracts and financing models signed before the reform may need re‑pricing of milestones, while DSCR and LLCR covenants in financing agreements must be recalculated to reflect higher tax burdens on construction and operational expenditures.

In conclusion, these taxation changes are not peripheral; they go to the heart of project bankability.

Developers must now integrate dividend withholding tax, IMCA exposures, VAT sensitivity, and Energy Fund levies into their financial modelling. Contracts require explicit change‑in‑law clauses, and lenders increasingly expect robust tax stress tests before approving financing.

For investors, this means taxation is no longer an afterthought but a core determinant of solvency and long‑term viability in Romania’s renewable energy market.

Developers must include WHT, IMCA impacts, VAT sensitivity, and Energy Fund levies in DSCR/LLCR stress tests and add change-in-law clauses to contracts.

Common insolvency triggers in PV, wind and BESS

The financial distress observed in the Romanian renewable energy sector is not random but follows recurring patterns that can be identified across PV, wind and BESS projects. One of the most significant triggers is grid curtailment under N and N-1 conditions, as defined by ANRE Order 59/2013 and its subsequent amendments. When developers ignore the modeled dispatch limits derived from solution studies, they inevitably overstate expected production volumes and IRRs. This mismatch between technical reality and financial assumptions leads to liquidity gaps and eventually to the opening of insolvency proceedings.

Another recurring vulnerability is the prevalence of thin equity capitalization and speculative merchant exposure. Under Law 85/2014, insolvency is presumed if a debtor fails to pay a liquid and due debt within 60 days. In practice, merchant-only SPVs with minimal equity buffers are the first casualties of market volatility. The episodes of negative day-ahead prices in 2023-2024 proved devastating for such structures, where even small deviations from projected revenues resulted in defaults.

Delayed state payments represent a further systemic trigger. The 2022–2023 retail price cap scheme revealed how the accumulation of unreimbursed receivables at the supplier level cascaded down to producers. Getica 95’s difficulties illustrate how reimbursement delays from the state budget erode liquidity, undermining the entire contractual chain and exposing both suppliers and RES producers to insolvency.

Finally, EPC disputes have repeatedly shown their destructive potential. The bankruptcy of Rafako in Poland in 2024, following a PLN 1.3 billion claim by Tauron, exemplifies how unbalanced contracts and high liquidated damages can push even large contractors into collapse. In Romania, smaller PV and wind integrators have faced similar pressures, with disputes over performance guarantees or delivery delays precipitating insolvency filings.

These triggers highlight the close interdependence between technical compliance, financing structures, regulatory stability, and contractual balance.

Insolvency emerges not only from extreme shocks but also from incremental mismatches between obligations and revenues. For investors and lenders, awareness of these patterns is critical to structuring resilient projects.

Implications for Romania’s energy market

The broader implications for Romania’s renewable energy market can be grouped into several interconnected dynamics that are shaping investor behaviour, financing practices and policy priorities. A first trend is consolidation. Distressed sales are expected to accelerate during 2025–2026 as under‑capitalized SPVs struggle to meet obligations and cross the low insolvency threshold of RON 50,000. Larger institutional investors and international utilities are already positioning to acquire such distressed portfolios, turning insolvency from a terminal failure into a mechanism for market concentration.

Another important aspect is the return of financing discipline. Banks that had previously retreated from renewables are once again active, but their approach has fundamentally changed. Financing committees now demand that projects secure PPAs or CfDs and that developers stress‑test cash flows against curtailment risks and episodes of negative day‑ahead market prices. The statutory presumption of insolvency after 60 days of unpaid debt under Law 85/2014 forces both lenders and sponsors to monitor liquidity more aggressively and intervene early.

The third dimension is the role of CfDs. The planned 2025–2026 CfD auctions could, if implemented transparently and with realistic strike prices, provide the stable revenue base that the Romanian market has lacked for a decade. By reducing merchant exposure, these instruments would not only stabilise cash flows but also mitigate insolvency risks. At the same time, Law 85/2014 obliges directors to file for insolvency within 30 days of actual inability to pay, which makes the timing of CfD revenues and interim financing arrangements crucial to avoiding liability.

Finally, the viability of battery storage remains uncertain. Without functioning capacity markets, long‑term ancillary service agreements, or integration into hybrid structures, many BESS projects face the risk of repeating the insolvency cycle experienced by PV operators in 2014. While storage is strategically essential for grid stability, its financial sustainability depends on market design catching up with technical potential. Unless revenue stabilisation mechanisms are introduced, insolvency will remain a structural risk in this segment.

Conclusions

The Romanian renewable energy sector illustrates both the promise of rapid capacity growth and the fragility of its financial underpinnings. Insolvency has emerged not as an exception but as a recurring feature across PV, wind and BESS projects, shaped by grid curtailments, volatile revenues, regulatory uncertainty and taxation reforms. Law 85/2014 sets a low threshold for triggering insolvency, meaning that liquidity shocks translate quickly into formal proceedings. The recent experiences of Getica 95, AIK Energy, CE Hunedoara and others underscore that insolvency can arise from state payment delays, merchant exposure or unbalanced contractual structures. Regional precedents such as Rafako in Poland or Velika Ciglena in Croatia reinforce the same message: the energy transition is financially disruptive, and insolvency is part of its landscape.

For investors and lenders, this reality demands greater attention to bankability criteria: credible offtake agreements, balanced EPC contracts, careful tax modelling, and robust liquidity buffers. For policymakers, consistency in support schemes, clarity in grid allocation rules and predictability in taxation are essential to transform renewable enthusiasm into sustainable growth. Without such alignment, the insolvency cycle will continue to undermine value. With it, Romania and its CEE peers can turn insolvency risk into an instrument of discipline that strengthens rather than weakens the transition to clean energy.