Romanian power company Complexul Energetic Oltenia (CEO) has signed contracts with fellow Romanian firms OMV Petrom and Tinmar Energy to build eight solar PV projects, with a combined capacity of 735MW, in the country.
While CEO announced the deals on the same day, the agreements with OMV Petrom and Tinmar Energy were separate transactions. The deal with OMV Petrom will see the companies enter into a 50-50 joint venture arrangement to build and manage four solar plants with a combined capacity of 455MW, which are expected to come online in 2025. CEO also noted that the partners will offer tenders for the engineering, procurement and construction (EPC) of the projects, so a third party will soon join the joint venture.
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These projects will receive €400 million (US$448.91) in funding, with 70% of this to come from the EU Modernisation Fund, a project offering financial support for ten lower-income EU countries to decarbonise their energy mixes by 2030. Romania is one of the countries eligible for support from the fund, which holds total cash reserves of €25 billion, drawn from the sale of allowances under the EU’s Emissions Trading System.
The remaining 30% will be funded by OMV Petrom, which CEO selected as the primary private investor for the projects in December 2021.
The second deal, signed with Tinmar Energy, will see the company and CEO work together to build and manage four solar projects with a combined capacity of 280MW.
CEO plans to build these solar projects on the slag and ash deposits generated by two of its larger coal-fired power plants, Rovinari and Turceni, both of which are in southwest Romania. It expects the solar projects to begin commercial operation next year.
As with the other deal, CEO will enter a 50-50 joint venture to operate the projects, and 70% of the funding for these projects will come from the Modernisation Fund. This deal also includes a plan to construct a 475MW natural gas plant in Romania.
While CEO did not specify the cost of the solar and gas projects in particular, it noted that the total cost of these five facilities would reach €595 million, more than the cost of the solar projects backed by OMV Petrom, and highlighting the importance of financial support mechanisms such as the Modernisation Fund in helping countries alter their energy mixes.
Growing support for solar
Foreign support for Romania’s growing renewables sector has also come from the private sector. Last week, Spanish solar tracker supplier Soltec shipped its trackers for a Romanian project operated by Greek renewables developer Myilineos.
Investments in Romanian renewables such as these have helped the country balance its energy mix, with its clean energy capacity steadily increasing, as its use of coal-fired power has fallen, over the last decade. Between 2012 and 2022, energy consumption from coal-fired sources fell from 88.01TWh to 45.84TWh, while energy consumption from solar sources increased from 0.02TWh to 4.62TWh over the same period.
Similarly, Romanian companies are increasingly eager to invest in solar power, with those based in the fossil fuel sector keen to diversify their portfolios. OMV Petrom, for instance, purchased a 710MW project in June this year, and expects commercial operations to begin in the second quarter of next year. These companies’ transition from oil and gas to solar power could be integral to shifting the balance of Romania’s energy mix.