Poland and Romania are the leading lights of the emerging wind markets in the EU. In 2011 Romania installed 520MW, followed by Poland at 436MW. Both rank in the top 10 EU wind energy markets for the second year running. Poland had installed 1,616MW in total by the end of 2011, while Romania had 982MW installed. Bulgaria is not too far behind with a total of 612MW installed at the end of last year.
However, these markets have not avoided destabilising discussions on their support mechanisms in the context of the sovereign debt crises. Fortunately, the Romanian President has recently signed a law implementing the renewables directive. This will be extremely helpful to investors in Romania as its support scheme had until now been under the scrutiny of the European Commission. The EU Competition authority had concerns that the 2008 version of the Romanian law was not compatible with EU rules. Lengthy discussions resulted in the new version being agreed between the two sides, confirming that each MWh of wind power will get two Green Certificates at the price dictated by the market.
Poland also seems to be headed in the right direction in spite of their sometimes unhelpful position on energy and climate at EU level. In December 2011 the government proposed ill-advised changes to their legislation, including retroactive changes which would have undermined the confidence of investors and jeopardized Poland’s chances of reaching its 2020 renewable targets. Now, the discussion seems to be moving in the right direction. In fact, Poland plans to attract new investments in the offshore sector with an objective of 1 GW by 2020.
In Bulgaria, an April 2011 law on energy from renewable sources introduced difficulties whereby the Feed-in Tariff would be re-defined every year. The amount that the tariff could be cut had been set at 5%, but this was scrapped, resulting in a 2012 cut of 22%. Also, wind energy producers now only receive the tariff at the end of the entire process of planning, building and testing a new production plant. This obviously results in uncertainty for investors, as they are unsure of their revenue in advance. Under such conditions investing in wind projects is extremely challenging in Bulgaria.
Overall, the biggest barriers in these countries remain administrative barriers and the development of the electricity grid. In Romania, for example, most of the production is located in the Dobrogea region, which is not where the load is. Developing the grid would be instrumental in unlocking the potential of this region. This is by no means exclusively a central or Eastern European problem. In fact the output of existing wind farms in Italy could be increased by 5% if the grid were upgraded.
To learn about the new opportunities in the wind industry in emerging European markets, register to attend EWEA 2013 in Vienna, a location where emerging and mature markets meet. A special report on emerging markets will be launched at the event, taking place from 4-7 February 2013.