Romania: Energy transition, diversification and market reshaping

Romania's energy transition has accelerated sharply in recent years, driven by the ambitious targets set by the EU Green Deal and the National Integrated Energy and Climate Plan (PNIEC), which aims to achieve 38.3 % of energy from renewable sources in final consumption by 2030.

Against the backdrop of the progressive phase-out of ageing coal-fired power stations, the past five years have witnessed a second wave of renewable projects – primarily solar and wind – developed to replace fossil fuels and contribute to the EU's objective of a fully decarbonised electricity system and climate neutrality by 2050. Today, 67 % of the country's total installed capacity comes from renewable sources: hydropower accounts for 34 %, wind for 16 % and solar for 17 %.

Renewable energy momentum

Between 2011 and 2013, wind projects dominated developers' attention. Today, however, solar projects represent the majority of new capacity either under development or entering into operation.

Illustrating this shift, Romania's installed wind capacity today is virtually unchanged from 2014 (3 GW), whereas solar capacity has more than doubled over the same period, reaching 3.3 GW in 2025. Of the 26 GW of wind and solar projects currently in an advanced stage of development, projects totalling 7 GW have obtained construction permits from the energy regulatory authority and are very likely to become operational in the coming years.

The increase in renewable projects and intermittent generation has not been without consequences. Available grid capacity is being rapidly exhausted, prompting the authorities to adopt measures to address growing congestion.

In 2025, a new financial guarantee equal to 5 % of installed capacity was introduced as a condition for obtaining a grid connection permit. Furthermore, from 2026, grid connection rules have undergone a radical transformation: the previous first-come, first-served system has been replaced by a capacity allocation mechanism through auctions, with the first tenders expected from October 2026.

Energy storage

Driven by the rapid proliferation of renewables and the inherent stress that intermittent sources place on the grid, the energy storage sector is also undergoing a revolution. At the start of 2025, Romania had only 250 MW of installed storage capacity.

Newly announced investments – totalling approximately 2,000 MW of stand-alone storage systems – in addition to storage capacity integrated within numerous wind and solar projects, are set to multiply this figure several times over in the next three years.

State aid and Contracts for Difference

Unlike the initial phase of the local renewables market (2011–2013), which was stimulated by a very generous state aid scheme, the current interest in renewables appears broader and more enduring. With the dramatic fall in the price of wind and solar equipment over the past 15 years, investment decisions are today increasingly market-driven rather than contingent on incentive prospects.

Nevertheless, significant incentives have been allocated through the National Recovery and Resilience Plan (PNRR) to support renewables – particularly onshore wind and solar – and battery energy storage systems (BESS).

The PNRR has allocated approximately EUR 1.6bln to the Energy component, of which over EUR 610m has already been assigned to onshore wind and solar projects, EUR 149m to BESS and over EUR 140m to green hydrogen projects. Furthermore, in 2024, two calls for applications were launched under the Modernisation Fund to support renewable sources and energy storage, with a combined budget of EUR 815m.

In addition to the capital grants awarded through the PNRR and the Modernisation Fund, in March 2024 the European Commission approved a support mechanism based on Contracts for Difference (CfD) for low-emission electricity generation. The scheme is designed to support a wide range of technologies, including onshore and offshore wind, solar, hydropower, nuclear, hydrogen and energy storage.

In its first phase, the CfD mechanism allocated a budget of EUR 3bln to stimulate renewables through 15-year contracts for new onshore wind and solar projects, initially targeting a capacity of 5,000 MW through competitive auctions.

The scheme attracted considerable market interest: three auction rounds were successfully completed in 2024 and 2025, awarding CfD contracts for the entire projected capacity.

Offshore wind: a new frontier

A new legal framework for offshore wind projects in the Black Sea targets capacity of up to 3 GW by 2035. In the coming years, competitive tenders will be launched for the award of exploration permits in offshore areas, and a support scheme may be introduced to facilitate the construction and operation of offshore wind farms. However, the initial deadlines for mapping suitable offshore areas have been postponed.

Secondary legislation – including technical rules, grid connection and environmental impact assessments – is expected to be adopted in the near term, with the first auctions anticipated from 2028.

Hydrogen: a long-term strategy

Romania's PNRR has highlighted the fundamental role of green and low-emission hydrogen in achieving the EU's decarbonisation objectives in the short and medium term. Recognising the importance of diversifying renewable sources, in 2025 the Government approved the National Hydrogen Strategy Roadmap 2025–2030, with an extended outlook to 2050.

The strategy aims to produce 153,000 tonnes of renewable hydrogen annually by 2030, requiring over 2,100 MW of electrolysis capacity and 4,200 MW of new renewable energy. The primary focus is on the transport and heavy industry sectors.

The Strategy identifies four key segments of the future hydrogen value chain: production, storage, transmission and distribution, and diversification of hydrogen uses. A further fundamental objective is the development of so-called "hydrogen valleys" – ecosystems concentrated in specific geographical areas covering the entire value chain, from production and storage through to distribution and final consumption.

Nuclear power and conventional energy

The accelerated expansion of the renewables sector, largely driven by private investment, is accompanied by the Government's ambitious development plans in the nuclear sector.

A programme is under way for the development of two additional units at Cernavodă – Romania's only nuclear power plant – being carried out by EnergoNuclear (EN), a subsidiary of Nuclearelectrica (the state company that operates the facility). The project involves the completion of construction and commissioning of two units of at least 724 MWe each, using CANDU nuclear technology.

Nuclearelectrica also plans to deliver Romania's first nuclear project based on NuScale small modular reactors (SMRs) by 2030, comprising six modules with a total capacity of 462 MWe.

In May 2022, Nuclearelectrica and NuScale signed a memorandum of understanding for the development of the project, and the Final Investment Decision (FID) was approved in February 2026. In the first phase, Romania will finance a single 77 MW mini-reactor – one of the six planned – while the remaining five will be installed in subsequent phases.

In the conventional energy sector, the Mintia gas-fired power station project envisages the conversion of a former 1,285 GW coal-fired plant into a highly efficient 1.7 GW combined cycle gas turbine (CCGT) facility.

The project is expected to be fully operational by the end of 2026, making it one of the largest of its kind in Europe. Another 430 MW gas-fired power station project is being developed by Romgaz, Romania's largest gas producer, and is expected to enter service between 2026 and 2027.

A system still taking shape – and an opportunity not to be missed

Taken as a whole, the Romanian energy system is undergoing a phase of structural transformation in which, unlike many Western European markets, the majority of value chain segments are still being developed simultaneously.

The expansion of renewables, the deployment of storage capacity, the upgrading and digitalisation of grids, nuclear programmes and the launch of hydrogen initiatives all imply a significant requirement not only for generation capacity, but also for infrastructure investment, flexibility services, balancing platforms, storage solutions and specialised industrial operators.

Despite the strong economic ties between Italy and Romania, the participation of Italian operators in the local energy market has so far remained limited compared to other European investors.

This is a particularly noteworthy circumstance in light of the support mechanisms now available – including Contracts for Difference, PNRR funds and the Modernisation Fund – which, combined with growing domestic electricity demand and the progressive exit from coal, are reshaping the sector's competitive structure.

For industrial, financial and infrastructure operators, Romania presents itself not as a mature market, but as an energy system under construction, in which the future configuration of market players has not yet consolidated. At this stage, the entry of new participants can allow stable industrial positions to be established along the value chain – from generation to storage, through to system services and energy infrastructure – with long-term prospects that are difficult to replicate in more saturated markets.

In this context, the current phase of Romania's energy transition represents a limited window of opportunity. As the first CfD auctions are progressively completed, grids developed and major nuclear and offshore projects launched, the degree of market openness will naturally tend to diminish, favouring those operators who established their presence during the initial phase of the investment cycle.

Monica Cojocaru | Partner | Schoenherr Romania
T: +40 21 319 67 90 | E: m.cojocaru@schoenherr.eu

Vlad Cordea | Managing Attorney at Law | Schoenherr Romania
T: +40 21 319 67 90 | E: vl.cordea@schoenherr.eu

Radu Dancau | Partner | Schoenherr Romania
T: +40 21 319 67 90 | E: ra.dancau@schoenherr.eu

Daniele Iàcona | Head of Italian Hub | Senior Attorney at Law
T: +40 733 730 119 | E: d.iacona@schoenherr.eu