Romania Biomass Market Handbooks for Investments 2012/2013

Page 1

T E K R A M S S A M O I B A I N A M O R bookforInvestments2012/2013 nd Ha


Inea Consulting is well established renewable energy advisory firm focused to emerging markets of Eastern Europe, CIS countries and MENA countries. Through its analytical arm Inea Research, the company provides independent renewable sectors watch, customized analysis, market outlooks and sector studies.

What makes us different is the quality and accuracy of information, which is interpreted in the best way to take your investment decisions.

www.ineaconsulting.eu


ROMANIA BIOMASS MARKET: HANDBOOK FOR INVESTMENTS 2012/2013 This Handbook represents complete, unique and the most complete guide for investments in Romanian biomass market. If you already have some background information about the market but you are wondering how to take decision to invest, then this is the Handbook you can use. In view of maturing biomass markets in Germany, Austria, France, UK, Czech Republic, Slovakia and Italy, Romania represents a stable investment environment in South-East Europe with clear rules and fair FIT rates. The report provides a complete picture of the market situation, dynamics, current issues and future prospects. It contains more than 180 pages of valuable information in this very detailed and in-depth investments guide. With comprehensive up-to date market data this handbook brings clear and concise insights, to help investors in their decision making process. For your convenience we offer opportunity for orders with customized book content. Reasons to buy this handbook include:  Romanian political and economic environment overview, including PEST Analysis  Biomass resource potential in Romania  Historical data provided from 2007 to 2012 and forecasts until 2020  Overview of Romanian biomass market development 2000 ÷ 2020  Grid connected and major upcoming biomass installations for 2012/2013  Development scenario of Romanian biomass sector until 2020  Current market prices of biomass projects with scenario to 2020  Porter Analysis, SWOT Analysis  Detailed overview of Romanian legal and regulatory framework for RES generation  Key organizations affecting development of the biomass sector  Detailed review of most relevant financing and supporting incentives  You will receive 4 free updates of this handbook for 1 year period.

At next pages you will see the full table of content of this Handbook. For sample report pages request, please do not hesitate to contact us. To order this report just fill in and send us the enclosed at the last page order form. If you have any other questions please do not hesitate to call us on ++359 887 342 475 or write an e-mail to orders@ineaconsulting.eu

3


ROMANIA BIOMASS MARKET: HANDBOOK FOR INVESTMENTS 2012/2013 TABLE OF CONTENTS FOREWORD ................................................................................................................ 9 1.

METHODOLOGY .............................................................................................. 10

2.

EXECUTIVE SUMMARY .................................................................................... 12

3.

ROMANIAN POLITICAL AND ECONOMIC ENVIRONMENT. PEST ANALYSIS ........ 17 3.1. Basic country data ............................................................................................... 17 3.2. Political Climate and Ruling Party ....................................................................... 20 3.3. GDP and Economic Growth ................................................................................. 21 3.4. Labor market and unemployment rate ............................................................... 24 3.5. Electricity Imports and Exports. Electricity prices for business and households 25 3.6. Industrial Output and Private Consumption ....................................................... 27 3.7. Foreign direct investments (FDI) ......................................................................... 27 3.8. Taxes .................................................................................................................... 29 3.8.1. VAT ............................................................................................................... 29 3.8.2. Income and Corporate Taxes ....................................................................... 30 3.8.3. Property Tax ................................................................................................. 31 3.8.4. Transfer Tax.................................................................................................. 31 3.8.5. Types of corporation in Romania ................................................................. 31 3.9. Inflation ............................................................................................................... 32 3.10. Monetary indicators ............................................................................................ 34 3.11. Banking and Credit Market ................................................................................. 35 3.12. Monetary Indicators ............................................................................................ 37 3.13. Ease of doing business in Romania ..................................................................... 38

4.

EUROPEAN BIOMASS ENERGY MARKET........................................................... 40 4.1. 4.2.

5.

Installed capacity ................................................................................................. 40 Key facts and trends ............................................................................................ 41 DRIVERS OF THE BIOMASS ENERGY MARKET ................................................... 43

5.1. 5.2. 5.3. 5.4. 6.

Co-firing and cogeneration.................................................................................. 43 Livestock and livestock growth ........................................................................... 44 Agriculture ........................................................................................................... 45 Forestry ............................................................................................................... 47 RESISTANCE AGAINST BIOMASS POWER MARKET ........................................... 49

6.1. 6.2. 6.3. 6.4.

High capital costs................................................................................................. 50 Need for secure biomass stock supply ................................................................ 51 Significance of unconventional gas ..................................................................... 52 Liquid biofuels for transport ............................................................................... 53

7.

BIOMASS ECONOMICS .................................................................................... 54

8.

ROMANIAN RENEWABLE ENERGY MARKET ..................................................... 56 8.1. General electricity market information .............................................................. 56 8.1.1. Electricity Consumption and Production ..................................................... 57 8.1.2. RES targets ................................................................................................... 57

4


ROMANIA BIOMASS MARKET: HANDBOOK FOR INVESTMENTS 2012/2013 8.1.3. Romanian renewable energy action plan .................................................... 61 8.2. Country attractiveness index for renewable investments .................................. 62 9.

ROMANIAN BIOMASS ENERGY MARKET .......................................................... 64 9.1. Summary ............................................................................................................. 64 9.2. Romanian biomass energy market...................................................................... 64 9.2.1. Biomass in Romanian energy mix ................................................................ 65 9.2.2. Porter Five Forces Analysis .......................................................................... 70 9.2.3. Renewable energy support schemes ........................................................... 74 9.2.4. Overview of Romanian biomass market development ............................... 76 9.2.5. Market prices for biomass projects in Romania .......................................... 78 9.2.6. Key biomass project developments in Romania .......................................... 79 9.3. Biomass supply .................................................................................................... 83 9.3.1. Biomass from agricultural land and by products ......................................... 84 9.3.2. Biomass from forestry.................................................................................. 85 9.3.3. Biomass from waste sector .......................................................................... 87 9.4. Heat from biomass .............................................................................................. 88 9.4.1. General overview ......................................................................................... 89 9.4.2. District heating and cooling ......................................................................... 90 9.5. Electricity from biomass ...................................................................................... 91 9.5.1. Generation ................................................................................................... 92 9.5.2. Combined Heat and Power (CHP) ................................................................ 94 9.6. Biofuels for transport .......................................................................................... 96 9.6.1. Overview ...................................................................................................... 97 9.6.2. Bioethanol and biodiesel ............................................................................. 98 9.7. Pellets .................................................................................................................. 99 9.7.1. Pellets production ...................................................................................... 100 9.7.2. Pellets trade ............................................................................................... 101 9.7.3. Pellets consumption................................................................................... 102 9.8. Biogas ................................................................................................................ 103 9.8.1. General overview ....................................................................................... 104 9.8.2. Resource potential ..................................................................................... 105 9.8.3. Biogas for electricity .................................................................................. 106 9.8.4. Biogas for heat ........................................................................................... 107 1.1.1. Key biomass companies operating on Romanian market ......................... 108

10.

EUROPEAN RENEWABLE ENERGY POLICY LANDSCAPE ................................... 111

10.1. Romanian RES Regulations and EU Directives .................................................. 111 10.1.1. Precedent EU regulations .......................................................................... 111 10.1.2. Most recent EU renewable energy policy developments ......................... 112 10.2. Renewable energy mandatory targets for Romania set out by the EU ............ 113 10.2.1. Interim targets set out by the EU .............................................................. 113 10.2.2. National support schemes flexibility allowed by the EU ........................... 114 10.3. RES LEGAL Project ............................................................................................. 115 11.

ROMANIAN RENEWABLE LEGAL AND REGULATORY FRAMEWORK................. 117

11.1. Main laws and regulations ................................................................................ 118 11.2. Zoning, planning and construction related authorizations ............................... 119

5


ROMANIA BIOMASS MARKET: HANDBOOK FOR INVESTMENTS 2012/2013 11.2.1. Availability of Land ..................................................................................... 120 11.2.2. DZP ............................................................................................................. 120 11.2.3. Change of Designation of Agricultural Land .............................................. 121 11.2.4. Design Visa ................................................................................................. 121 11.2.5. National Institute for Protection of Immovable Cultural Valuables .......... 121 11.2.6. Parcel Plans for Power Lines ...................................................................... 122 11.2.7. Approval of an Investment Project ............................................................ 122 11.2.8. Construction Permit ................................................................................... 122 11.2.9. Operating Permit ....................................................................................... 123 11.3. Environmental related authorizations .............................................................. 123 11.3.1. Ecological Assessment ............................................................................... 123 11.3.2. Environment Impact Assessment .............................................................. 124 11.3.3. Natura 2000 Network ................................................................................ 125 11.3.4. Joint Implementation ................................................................................. 126 11.4. Energy law authorizations ................................................................................. 127 11.4.1. Power Generation Licensing ...................................................................... 127 11.4.2. Grid Interconnection .................................................................................. 127 11.4.3. Power Off-Take .......................................................................................... 129 11.4.4. Green certificate prices .............................................................................. 130 11.4.5. Guarantees of Origin (Green certificates).................................................. 131 11.4.6. Scheme of Administrative procedure for biomass energy plants in Romania 132 11.5. Financial Incentives and Support for RES electricity ......................................... 135 11.6. Future market pricing mechanisms................................................................... 136 11.7. Key Co-financing opportunities ......................................................................... 137 11.7.1. Romanian Energy Efficiency and Renewable Energy Credit Line .............. 137 11.7.2. European Local Energy Assistance ............................................................. 143 11.7.3. Operational Program Competitiveness ..................................................... 144 11.7.4. Implementing Energy Saving Technologies in Enterprises Scheme .......... 144 12.

KEY ORGANIZATIONS AND INSTITUTIONS ..................................................... 145

12.1. Government ...................................................................................................... 145 12.1.1. The Ministry of Economy, Energy and Tourism (MEET) ............................ 145 12.1.2. The State Energy and Water Regulatory commission (SEWRC) ................ 146 12.1.3. Agency for Sustainable Energy Development (ASED) ................................ 146 12.1.4. Ministry of Agriculture and Food ............................................................... 147 12.1.5. BEH ............................................................................................................. 147 12.1.6. NEC ............................................................................................................. 148 12.1.7. ESO ............................................................................................................. 148 12.1.8. MOEW and RIEW ....................................................................................... 149 12.1.9. MOH and RIPCP.......................................................................................... 149 12.1.10. Napoitelni Sistemi EAD ......................................................................... 149 12.2. Electricity Distribution Companies (EDC’s) ....................................................... 150 12.2.1. Transelectrica ............................................................................................. 150 12.2.2. Electrica S.A. ............................................................................................... 151 12.2.3. E.ON Romania ............................................................................................ 152 12.2.4. CEZ.............................................................................................................. 153

6


ROMANIA BIOMASS MARKET: HANDBOOK FOR INVESTMENTS 2012/2013 12.2.5. ENEL ........................................................................................................... 154 12.3. NON-GOVERNMENT ORGANIZATIONS ............................................................. 155 12.3.1. Romanian Biomass Associations (RBIOM) ................................................. 155 12.3.2. Romanian Biogas Association (ARPB) ........................................................ 156 12.3.3. Energy Utilization Biomass Association (EUBA) ......................................... 157 12.3.4. Centre for Promotion of Clean And Efficient Energy In Romania(ENERO) 158 12.3.5. American Chamber of Commerce – RES Group......................................... 159 12.4. Key biomass companies operating in Romanian market .................................. 160 12.5. Lobby groups ..................................................................................................... 162 12.6. Stаkeholder Аnаlysis ......................................................................................... 162 13.

RISKS ABOUT RENEWABLE INVESTMENTS IN ROMANIA ................................ 165

13.1. Risks Associated with the Renewable Energy Industry in Romania ................. 165 13.1.1. Regulatory Risk........................................................................................... 165 13.1.2. Competition within the Renewable Energy Industry................................. 166 13.1.3. Public Attitudes towards Renewable Energy Projects ............................... 167 13.1.4. Emerging Market Risk ................................................................................ 167 13.1.5. Insurance Risk ............................................................................................ 168 13.1.6. Force Majeure Risk .................................................................................... 168 13.2. Risks Associated with the Investor’s Finance Arrangements ............................ 168 13.2.1. Asset Sale Risk ............................................................................................ 168 13.2.2. Borrowing Risk ........................................................................................... 168 13.2.3. Foreign Exchange Risk ................................................................................ 169 13.3. Risks Associated with the Development of Renewable Energy Plants ............. 169 13.3.1. Variability in the Source of Renewable Energy .......................................... 169 13.3.2. Development of the Project and Construction Risk .................................. 170 13.3.3. Capital Cost Risk ......................................................................................... 170 13.3.4. Permits ....................................................................................................... 171 13.3.5. Land Options .............................................................................................. 171 13.3.6. Construction ............................................................................................... 172 13.3.7. Dependency on Suppliers .......................................................................... 172 13.3.8. Technology Risk.......................................................................................... 172 13.3.9. Operation and Maintenance Risk .............................................................. 173 13.3.10. Market Price of Electricity ...................................................................... 173 14.

SWOT Analysis .............................................................................................. 174

15.

CONCLUSIONS .............................................................................................. 180

16.

LIST OF ABBREVIATIONS ............................................................................... 183

17.

REFERENCES ................................................................................................. 186

18.

DISCLAIMER .................................................................................................. 196

19.

APPENDIX I. BIOMASS MAPS OF EUROPE AND ROMANIA .............................. 197 LIST OF MAPS, CHARTS AND TABLES

Map 1: Where is Romania on the European map ............................................................. 17 Map 2: Major transport corridors passing through Romania............................................ 18

7


ROMANIA BIOMASS MARKET: HANDBOOK FOR INVESTMENTS 2012/2013 Map 3: Romanian regions .................................................................................................. 19 Map 4: Biomass potential of Romania ............................................................................... 73 Map 5: Biomass potential in Romania according to Romanian Academy of Science ....... 76 Map 6: NATURA 2000 areas in Romania ......................................................................... 125 Map 7: Electricity grids networks of Transelectrica ........................................................ 151 Map 8: Districts covered by E.ON Romania ..................................................................... 153 Map 9: Districts covered by CEZ ...................................................................................... 154 Chart 1: Real GDP growth for the period 2000-2012 (including estimates)...................... 22 Chart 2: Romanian GDP growth compared to EU-27 for the period 2002-2011(Q1) ....... 23 Chart 3: Unemployment rate in % from 2000 to 2011 ...................................................... 25 Chart 4: Electricity imports and exports for the period 2004-2011 (in million MWh) including estimations ......................................................................................................... 26 Chart 5: FDI for the period 2000-2011 (in million EUR) ..................................................... 28 Chart 6: Lowest corporate income tax rate in Central / Eastern Europe ........................ 31 Chart 7: Inflation Rate per year for the period 2004-2012................................................ 34 Chart 8: Structure of Romanian electricity market............................................................ 56 Chart 9: Gross electricity production 2011 ........................................................................ 57 Chart 10: Romanian RES targets in % set by the EU .......................................................... 58 Chart 11: Biomas indices May 2012 by E&Y analysis, ........................................................ 62 Chart 12: Comparison of the recent biomass installations growth (in MW) in the EU including estimations ......................................................................................................... 68 Chart 13: Trajectory to reach share of renewable energies in the EU in 2020 ................. 70 Chart 14: Biomass equipment supply in Romania in % by countries for 2012 .................. 85 Chart 15: Cumulative developments of biomass power plants in Romania in MW from 2000 to 2020, including estimates ..................................................................................... 87 Chart 16: Scheme of administrative procedure for biomass energy plants in Romania . 132 Chart 17: BEERCL structure .............................................................................................. 138 Chart 18: Structure of BEH ............................................................................................... 148 Chart 19: Market Shares by Sales of the Major Utility Companies in Romania in 2011 . 150 Chart 20: Structure of E.ON Romania .............................................................................. 152 Table 1: Electricity prices for business and households .................................................... 26 Table 2: Support schemes for RES generation in the EU countries ................................... 69 Table 3: Market prices for biomass projects in Romania for 2011.................................... 79 Table 4: Selected operational, under construction and planned biomass projects in Romania ............................................................................................................................. 82 Table 5: Market prices for biomass equipment supply in Romania in 2012 ..................... 86 Table 6: Feed-in-tariffs for electricity from biomass sources in Romania ....................... 131 Table 7: Types of Renewable Energy and Energy Efficiency Projects Financed by ERECL .......................................................................................................................................... 139 Table 8: Benefits of renewable energy and energy efficiency projects .......................... 139

Š 2012, Inea Consulting Ltd., Romania; All rights reserved. Last Edition on 18.06.2012

8


Turn static files into dynamic content formats.

Create a flipbook
Issuu converts static files into: digital portfolios, online yearbooks, online catalogs, digital photo albums and more. Sign up and create your flipbook.