AMID THE RUMORS OF CHANGES IN LEGISLATION, Banks have stopped the financing for photovoltaic parks

The banks are no longer granting loans for the production of photovoltaic energy since the beginning of the year, when the first rumors began appearing concerning the change in the aid method - the drop in the number of green certificates and the reduction of the maximum value of certificates.

The leaders of the Romanian Association of the Photovoltaic Industry (RPIA) said yesterday in a press conference, that the banks have notified developers that they reserve the right to change the terms of the loans if the support scheme gets changed substantially, and that they are reevaluating the all the projects in the field of renewable energy which they have financed.

The RPIA understand the problem of industrial consumers, which are experiencing difficulties in remaining competitive amid the increase in the expenses incurred with the green certificates, and are asking the authorities not to make any potential changes that are radical enough to affect the investments in the sector. The makers of conventional energy are also complaining that they are seeing losses due to the fact that renewable energy gets priority at being admitted in the system, and it also raises issues over balancing.

The president of the Board of Directors of the RPIA, Doru Voicu, had the following statement for BURSA: "There are less invasive methods of cutting the consumers' bills. And we want to inform the government about them. Renewable energy is the cheapest on the market, and consumers who pay for green certificates should benefit from it.

The authorities may include renewable energy in the basket on the regulated market to help reduce the prices paid by the population and the SMEs. Also, the authorities can approve the option for PPA contracts to be signed between the makers of renewable energy and those based on coal and natural gas. Thus, the producers which have high production costs can create a mix and can sell energy at lower prices on the OPCOM markets, where they can find buyers easier, and the end-consumers can see lower bills. If the state-aid scheme gets amended starting in the second half of this year, if the maximum price of the green certificates is reduced and access to the network is restricted, then all the investments in renewable energy will be frozen, the existing investments will be seriously affected as well, and Romania's sovereign risk will increase".

He said that these planned changes will send a strongly negative signal to all investors, who will see Romania as a high-risk country due to the legislative instability, they will stop the projects and there is also the possibility of the banks making loans more expensive. "We do not need something like that just as the authorities are getting ready to privatize the energy production", Mr. Voicu said.

The RPIA official also said that the change of the support scheme with the retroactive application of the reduction of the certificates granted does not solve the issue of the high cost of the green certificates which the industry is complaining about: "At the moment, we have about 2,000 MW of wind energy and about 5,070 MW installed in the photovoltaic parks. The wind energy is not faced with overcompensation and no significant reductions of the number of certificates are expected. Overcompensations exist for the photovoltaic industry and for micro-hydroelectric plants. So it doesn't make sense to reduce the number of certificates this year for these industries because the bulk of the energy comes from the wind energy. All you are doing is driving away some investors who knew that according to the law, the number of certificates for the photovoltaic industry would be reduced starting in 2014. That is why we are also asking the authorities to carefully review the problem and to comply with the provisions of the law. There are non-invasive regulation solutions, which would satisfy investors and consumers alike".

• The amendment of the legislation will cause Romania to lose four billion Euros

The leaders of the RPIA also said that if the Government will change the support scheme for the production of renewable energy, investors will no longer bring into the country four billion Euros - the value of the renewable energy projects which had been announced. The representatives of the association are saying that approximately 4,000 people work in the Romanian renewable energy industry, of which approximately 1,000 in the photovoltaic sector alone.

According to the RPIA, last year, the government collected 500 million Euros from renewable energy (taxes, VAT, social security contributions deducted out of the salaries etc). "We have nothing against the reduction in the number of green certificates, if it is done according to the law", Doru Voicu further said.

Green certificates are granted for the volume of energy produced in wind farms, photovoltaic, biogas and biomass energy production units. The law requires the providers to buy these certificates from the producers. The cost of the acquisition of these certificates is reflected in the bills paid by the producers, which means that the price of electricity has increased and is continuing to grow.

The management of the RPIA claims that investors in the sector of green energy will see massive losses if the number and the value of the certificates, as stipulated in a draft emergency ordinance made by the delegated minister for energy, Constantin Niţă, and sent for consultation to the Government and the Competition Council.

Official sources subordinated to minister Niţă said that no such draft has been completed and that several alternatives and scenarios are being reviewed for the adjustment of the state aid scheme. Minister Niţă also promised that he will consult with investors in the renewable energy sector before promoting the changes in the legislation.

• Green energy is not the main cause for the increase of the prices set by law

The RPIA states that the prices set through the law were hiked on January 1st, and the main cause for that increase is represented by the price hikes which the producers, distributors and the energy transporters were allowed, rather than renewable energy. The RPIA claims that the makers of green energy have contributed to the reduction of the price of electricity traded on the OPCOM markets, and consumers have benefited from this reduction as well: "The drop of the price on the wholesale market, of almost 20%, is due to the renewable forms of energy. Even if the weight of the green certificates out of the total bill were taken into consideration, consumers should have seen an increase of at least 5%. It's possible some providers aren't transferring this advantage to the consumers".

Investors in the photovoltaic industry are getting ready to sue the government if the support scheme gets changed this year. They say that other countries cut the subsidies for renewable energy as well, (Spain, Italy, UK) and that the government saw a many lawsuits filed against them. According to the RPIA, the Spanish press reported that the first rulings have been rendered, and the Spanish judges ruled in favor of the investors.