The Romanian Wind Energy MarketEMERGING vs CHALLANGING

ROMANIAN WIND ENERGY ASSOCIATIONEuropean Wind Energy Association Conference 2012,

Emerging Markets Session, April 19, 2012

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CONTENT:

1. Current status of wind energy production

2. Estimations on installed wind power by 2020

3. Challenges

4. Perspectives

CURRENT STATUS

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There were 982 MW installed at the end of 2011, out of which 520 MW were installed during 2011, most of the capacities in the South-Eastern part of the country (Dobrogea area)

COUNTRY/YEAR 2009 2010 2011

TURKEY 801 1329 1799

POLAND 724 1180 1616

ROMANIA 14 462 982

CURRENT STATUS VS ESTIMATIONS

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TARGETS

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YEAR Law 220/2008 (%)

Law 220 Amended (%)

Achieved

2010 8.30 8.30 1,6%

2011 8.30 10 3,5%

2012 8.30 12

2013 9.00 14

2014 10.00 15

2015 10.80 16

2016 12 17

2017 13.20 18

2018 14.40 19

2019 15.60 19.5

2020 16.80 20

CURRENT STATUS

GE 34%

Vestas 31,5%

Gamesa17,9%

Nordex 2%

Fuhrlander 0,9%

Suzlon 0,8 %

AREAS

2011- 97% of the installed capacity was in Dobrogea area

2012- a shifting towards NE is noticed

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Green-operationalBlue-Connection ContractRed-Connection Permit

RWEA ESTIMATIONS

RWEA has a more ambitious forecast based on the plans of the investments but the forecast needs to be correlated with a

healthy grid improvement plan

clear plan for decommissioning old inefficient coal power plants plan

stable legal framework

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1850

2450

1975

2800-3000

2012 2013

ANRE

RWEA

MW to be installed in wind

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CHALLENGE NO 1: GRID CONNECTIONCHALLENGE NO 1: GRID CONNECTION

Status of wind projects TOTAL MW

With grid connection permit 10 378

With grid connection contract 10 216

Wind farms in operation 1140

The large number of contracts and permits raises concern, as Transelectrica declared only approx. 4000 MW could be integrated

CHALLENGE NO 2: LEGAL FRAMEWORK STABILITY

Law 220 promoting renewables was published in 2008 and applied in November 2011 due to :

lack of secondary legislation long process of notifying the European

Commission-DG Energy on state aid matters long national procedures before enforcing the

law

New provisions Individual notification to the European

Commission of the projects with installed capacity over 125 MW

Priority access is redefined Monitoring mechanism introduced in order to

avoid overcompensation

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CHALLENGE NO 3: LEGAL FRAMEWORK PREDICTABILITY

Monitoring mechanism -imposed by the decision of the EC-DG Competition and

enforced by the regulator

-introduces the possibility for the support mechanism to be changed yearly

-analyses the specific investment cost and adjusts the support in case this cost decreases

-the number of green certificates for each technology can change but the IRR accepted should remain constant (10.9% for wind energy)

-the new number of green certificates resulted from the analysis of year n is announced in n+1 and applied in n+2

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PERSPECTIVES

Currently the Parliament debates an Emergency Ordinance containing the new provisions.

Clarification is expected regarding the predictability of the support scheme.

Investors and financing institutions plead for stability. Some investment decisions are standing by for a clear picture of the future related to the support scheme.

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Thank you for your attention!Thank you for your attention!

ROMANIAN WIND ENERGY ASSOCIATION

Dana Duica

Executive Director

dana@rwea.ro