Romania wants to become the most important energy hub in Europe. Burduja: We will be able to help Moldova, Ukraine and other neighboring countries

Romania is emerging as an energy power through new offshore gas drilling projects, the expansion of its nuclear capacity and a second wave of investments in renewable sources, according to fdiintelligence.com.

Sebastian Burduja, the Minister of Energy, tells fDi that Romania’s objective is to become a leader in the field for the entire region of South-Eastern Europe. But he warns that this must be based on the reality of the “energy trilemma” – the need for energy to be secure, competitively priced and green.

Romania has one of the most diverse energy mixes in the EU, with hydropower plants, renewable energy capacity, its own fossil fuel reserves, a history in nuclear power and one of the lowest net energy importers in the bloc — at just 10.9 % in 2021. The medium and long-term plan is to use gas and nuclear power as the base generation to help produce as much intermittent renewable energy as possible and develop storage capacity.

Exploitation of natural gas

In June 2023, Austria’s OMV Petrov reached a final investment decision on its €4 billion plans in the Black Sea. In the Neptun Deep offshore block, OMV is co-developing two gas fields with Romgaz, the country’s largest supplier, with an estimated production of 140,000 barrels per day from 2027. This will make Romania the largest producer in the EU.

“[Neptune Deep este] a way to help the Republic of Moldova, possibly Ukraine, and other neighboring countries with our gas reserves”, says Burduja. The Minister of Energy is of the opinion that Hungary, which is still dependent on Russian gas, could use alternative suppliers such as Romania in the future.

“Before 2027, the goal is to increase gas-intensive industries in Romania, such as pharmaceuticals and fertilizers. We can create value from this gas and not just export it or burn it.”

Not everyone buys into the plan. On March 27, Greenpeace activists from Romania, Bulgaria and the Czech Republic organized a protest against the Neptun project in front of the headquarters of OMV Petrom in Bucharest. They painted “No New Gas” in big yellow letters on the company building.

The strategy of the Romanian government is to rely on gas as a transition fuel in the short and medium term, according to Minister Burduja. Coal-fired plants are being closed and replaced by gas-fired ones, including a 1,700-megawatt gas-fired plant at Mintia, western Romania.

Nuclear energy

Romania’s plan to generate more base energy is also supported by nuclear power. The effort to generate electricity in this way began during the Communist era under Nicolae Ceaușescu, who ruled Romania with an iron fist for 25 years before being overthrown and executed in 1989.

“Romania has a long tradition in the nuclear sector, dating back to the 1970s, where we made the strategic decision to rely on Canadian technology called Candu,” says Burduja. “That was very different from anything anyone else decided behind the Iron Curtain, which was to go to the Soviet Union for technology, fuel and so on.”

Two reactors are currently in operation at the Cernavodă nuclear power plant, which is about an hour’s drive from the port of Constanța on the Romanian Black Sea coast. In November 2023, the Canadian government signed an agreement with local engineering company AtkinsRéalis and Romania’s state nuclear operator Nuclearelectrica to renovate a Candu reactor at Cernavodă.

Two more reactors are scheduled to be commissioned by 2031 and 2032, says the energy minister, who is also enthusiastic about small modular nuclear reactors (SMRs). He says the “very ambitious” goal is for Romania to be among the first countries in the world to have SMRs in operation by 2029.

Energy from renewable sources

Figures from fDi Markets indicate an increase in capital entering Romania’s energy sector. Last year, foreign renewable energy developers pledged $3.1 billion for solar and wind projects in Romania, the highest level in ten years.

This new wave of renewables in Romania is expected to bring a significantly higher generation capacity to the market. The country will also launch its first Contract for Difference (CfD) later this year, which aims to encourage developers to commit to building five gigawatts of combined wind and solar generation capacity over the next two years.

CfD will guarantee an electricity price for the next 15 years – when the price of electricity falls, the government will pay the developers the difference, while the developers will reimburse the government whenever the price exceeds this reference price.

Burduja is also keen for Romania to play a role in building European energy supply chains. “We don’t want to subsidize production from other parts of the globe that don’t follow the same rules of a market economy, the rule of law and so on,” he says, in a veiled reference to China’s dominance of solar and wind.

“For Europe to pour all this money into the green transition and not have its own supply chain is a huge loss and a huge vulnerability. There are critical components of this energy infrastructure that could be subject to security risks”, says the energy minister, referring to the risk of cyber attacks.