Romania is undergoing a significant transformation in its energy sector, driven by sustainability, security, and alignment with European Union directives. The country’s energy landscape is diverse, encompassing renewable energy, electricity, natural gas, oil, hydrogen, nuclear energy, biofuels, LNG, and geothermal energy. This article provides an in-depth overview of the current state of Romania’s energy sector as of August 2024, highlighting key legislative frameworks, emerging trends, and future opportunities.
A Drive Toward Sustainability: The Role of Renewable Energy
Romania has made remarkable progress in integrating renewable energy into its national grid, reflecting the country’s commitment to EU mandates for decarbonization. Central to this is the Electricity and Natural Gas Law No. 123/2012, which governs renewable energy sources such as wind, solar, hydro, and biomass. Legislative frameworks like the green certificate system and Contracts for Difference (CfD) mechanisms have been instrumental in encouraging investment and ensuring market stability.
The introduction of the CfD scheme in Government Decision No. 318/2024 is a pivotal development, guaranteeing renewable energy producers a fixed price for their electricity, thus reducing market risks and encouraging the growth of wind and solar energy projects.
Notably, the rise of prosumers—individuals or entities that both produce and consume electricity—has been a key trend, with over 100,000 prosumers by the end of 2023. The growth of this sector aligns with Romania’s decentralization goals but poses challenges to the grid, which needs modernization to handle increased capacity.
While Romania’s renewable energy sector shows promising growth, challenges remain. Grid infrastructure modernization is essential, and regulatory uncertainty could deter investors if not addressed promptly. Nonetheless, Romania’s focus on creating energy communities—where consumers manage local renewable energy resources—could further accelerate the transition to a more sustainable energy future.
The Electric Energy Sector: Navigating Market Liberalization and Modernization
Romania’s electricity sector is evolving rapidly, driven by legislation like Law No. 123/2012 and shaped by regulatory oversight from the National Energy Regulatory Authority (ANRE). This law ensures that market competition is maintained while outlining the roles of various market participants, including producers and suppliers.
The modernization of Romania’s national grid is critical as the country integrates increasing amounts of renewable energy. Smart grid technologies, mandated by ANRE Order No. 53/2024, are essential for improving grid reliability and efficiency, particularly as renewable energy sources become more prominent.
Romania has also implemented a price capping mechanism to protect consumers from volatile energy prices, a measure extended through 2025. However, this intervention has put financial strain on electricity suppliers and raised concerns about the long-term sustainability of such policies. The ongoing challenge is to balance consumer protection with market stability.
Looking ahead, Romania’s electricity sector must continue to focus on grid modernization, ensuring the stability needed to support growing renewable capacity while aligning with EU directives promoting market liberalization.
Natural Gas: Key to Energy Security and Market Liberalization
The natural gas sector remains a cornerstone of Romania’s energy security. Governed by Law No. 123/2012 and the Offshore Law No. 256/2018, Romania’s natural gas legislation emphasizes market competition, transparency, and the development of offshore resources in the Black Sea.
The offshore Neptun Deep project is expected to significantly boost domestic production, reducing reliance on imports and enhancing Romania’s energy security. Additionally, infrastructure projects like the BRUA pipeline are vital in diversifying supply routes and integrating Romania into the broader European energy market.
Despite these advances, regulatory stability and infrastructure development are essential for Romania’s natural gas sector. The removal of restrictive requirements for selling offshore gas domestically under Law No. 228/2024 is a positive step toward attracting investment, but the sector still faces hurdles in implementing regulatory changes and modernizing existing infrastructure.
Oil: A Legacy Sector Under Modern Scrutiny
Romania’s oil sector, long a pillar of its economy, continues to be governed by the Petroleum Law No. 238/2004 and the Offshore Law No. 256/2018. These laws ensure that oil resources are developed transparently, balancing economic interests with environmental protection.
The Black Sea offshore reserves represent a significant opportunity for Romania’s oil industry, with the potential to increase both domestic production and export capabilities. However, regulatory stability and environmental safeguards are critical as the sector expands into more sensitive areas.
The renaming of the National Agency for Mineral Resources (NAMR) to the National Authority for Regulation in the Field of Mining, Petroleum, and Geological Storage of Carbon Dioxide (ANRMPSG) in 2024 highlights Romania’s commitment to aligning oil sector operations with climate change initiatives, particularly carbon capture and storage technologies.
Hydrogen: The Future of Romania’s Energy Landscape
Hydrogen has emerged as a crucial component of Romania’s long-term energy strategy. Enshrined in the Hydrogen Law (2023), the country is positioning itself as a leader in green hydrogen production, supported by renewable energy sources.
Romania’s National Hydrogen Strategy envisions the development of hydrogen production hubs and the repurposing of natural gas pipelines to transport hydrogen. This forward-looking strategy is designed to align Romania with EU hydrogen goals, contributing to both national energy security and the broader European energy transition.
Other Energy Sources: Nuclear, Biofuels, LNG, and Geothermal Energy
Romania’s diversified energy mix includes nuclear energy, biofuels, LNG, and geothermal energy, each governed by specific legislative frameworks that promote their development while adhering to safety and environmental standards.
Nuclear energy remains a critical part of Romania’s energy supply, with plans to expand the Cernavodă Nuclear Power Plant. Biofuels play an essential role in meeting Romania’s carbon reduction targets in the transport sector, governed by Law No. 220/2008. LNG infrastructure is expanding, contributing to energy security by diversifying supply sources. Meanwhile, geothermal energy holds promise for regions with high geothermal activity, providing a stable and renewable energy source.
Conclusion: A Sector Poised for Growth and Transformation
Romania’s energy sector is undergoing a profound transformation, driven by the dual imperatives of sustainability and energy security. While the challenges of regulatory uncertainty, infrastructure modernization, and market volatility remain, the sector’s potential is vast.
Romania’s continued alignment with European Union directives, its commitment to renewable energy, and its focus on new technologies like hydrogen all signal a promising future. By maintaining a stable regulatory environment and encouraging investment in infrastructure and innovation, Romania’s energy sector is well-positioned to emerge as a regional leader in sustainable and secure energy production.
Read the full report here!
