Romania’s CfD for Renewable Energy: Design, Auctions, Settlement & Bankability
Abstract. This article provides an in-depth examination of Romania’s Contract for Difference (CfD) framework for renewable electricity generation, situating it within the broader legal, financial, and policy evolution of the national energy market. It offers a comprehensive assessment of the scheme’s design, tracing its origins in the amendments to the Electricity Law no. 123/2012 and its implementation through subsequent secondary legislation such as the Grid Connection Regulation (ANRE Order no. 59/2013, as amended) and the Capacity Allocation Methodology (ANRE Order no. 53/2024). When viewed in concert with Regulation (EU) 2019/943 on the internal electricity market and the European Commission’s state-aid rules, Romania’s CfD model stands out as a cornerstone of market-based decarbonisation policy in Eastern Europe.
Introduction
Romania is re-entering an expansion phase in renewables: solar PV pipelines have accelerated since 2022, onshore wind is returning, and storage pipelines are forming. Unlike the 2008–2014 era—driven by green certificates and followed by a prolonged investment freeze—the present cycle is anchored in market-based support through two-way CfDs. The scheme couples competitive strike-price discovery with long-dated revenue stabilization, aligning national policy with EU electricity-market and state-aid frameworks.
Legal framework and institutional roles
The CfD framework is anchored in the Electricity Law no. 123/2012, secondary legislation, and EU alignment under Regulation (EU) 2019/943. The Ministry of Energy designs policy; OPCOM acts as counterparty; ANRE regulates grid access and licensing; Transelectrica and DSOs issue ATRs; the Modernisation Fund supports liquidity. Together these institutions establish a governance ecosystem ensuring transparency, competitiveness, and bankability.
Auction outcomes (2024–2025)
The 2024 and 2025 CfD rounds awarded more than 4 GW of new capacity. Solar PV cleared at €35–45/MWh; onshore wind at €65–80/MWh. This marks Romania’s return as a large-scale, bankable renewable jurisdiction, attracting both domestic and international lenders.
CfD mechanics: How the contract works
The CfD operates as a two-way financial hedge: when the market price is below the strike, OPCOM pays the producer the difference; when above, the producer repays OPCOM. Contracts run for 15 years from COD, settled monthly in euros against the Day-Ahead Market average price. The result is revenue stability and lender confidence.
Eligibility, securities, and milestones: From bid to COD
Applicants must present advanced readiness (ATR, land rights, EIA status, technical design). Bid and performance bonds ensure delivery discipline. Developers have ~24 months to reach RTB and ~48 months to COD. Failure triggers penalties or termination, though lender step-in rights are recognised.
Bankability and financing: What lenders actually underwrite
Romania’s CfD design underpins project finance: predictable 15-year euro-denominated cash flows, typical DSCR 1.35–1.50×, leverage 70–80%. Strike prices from 2025 confirm bankable economics aligned to Romania’s levelised cost of energy benchmarks.
Grid firmness, curtailment, and capacity allocation
Under ANRE Order no. 59/2013, ATRs specify grid firmness (N/N-1). From 2026, Order 53/2024 introduces auction-based capacity allocation for >5 MW projects—ending the first-come-first-served queue. Developers must model curtailment and coordinate with Transelectrica on reinforcement timing.
Risk map: What can still go wrong after winning a CfD
Delays in permitting or grid works can jeopardise CfDs and trigger bond draws. Under-modelled curtailment or balancing costs compress DSCRs. Regulatory drift, tax changes, and contractor concentration add further risk. Robust change-in-law clauses and diversified EPC strategies are essential.
Implications for Romania’s market (2026 and beyond)
Success now depends on execution and grid delivery, not awards. Romania enters a utility-style market phase—predictable, lower-margin, execution-driven. Sponsors combine CfDs with PPAs and storage; policymakers must ensure clarity in capacity auctions and reinforcement planning.
Key takeaways for developers and lenders
- Bankability starts at the node: Integrate N/N-1 curtailment and reinforcement timelines into financial models.
- Milestone discipline: RTB ≈ 24 months, COD ≈ 48 months; plan liquidity for bond exposure.
- Financing envelope: DSCR 1.35–1.50× / leverage 70–80 % / debt tenor = 15 years.
- Contractual strength: Include step-in rights, LDs, and EPC/O&M performance linkage.
Related reading: Romania: Grid capacity allocation (2026) · Renewable-energy insolvency in Romania · All articles
References: ANRE · OPCOM · Regulation (EU) 2019/943
