Romania’s Electrica has signed an implementation contract for a new plant in Craiova that is intended to support electricity-market flexibility alongside district heating. The project marks a move beyond the conventional gas-fired CHP model. It combines power and heat capacity designed to respond to short-term conditions in the electricity market.
The plant is set to include approximately 82 MW of electrical capacity and about 208 MW of thermal output. It will replace part of the city’s coal-based heat supply. The company said the investment is approved at up to €235 million plus VAT, with financing authority of up to €250 million.
Fast-start engines and thermal storage design
The project is structured to avoid continuous co-production of electricity and heat. Instead, it pairs fast-start gas engines with thermal storage so electricity generation and heat delivery can be separated in time. Electrica says the engines can run when power prices are attractive, while stored heat can be delivered when the district-heating system requires it.
This operating approach affects how combined heat and power is scheduled. Conventional CHP units are constrained by thermal demand, meaning electricity output may need to be reduced when heat consumption is low even if power-market prices remain attractive. Thermal storage provides an operational buffer that allows more active optimisation against electricity-market signals.
Electrica states that the units should be able to reach full load in roughly two minutes. Synchronisation is expected in less than 30 seconds. These technical characteristics are positioned closer to balancing capability than a conventional baseload thermal station.
Market role under higher solar volatility
The company links the project’s flexibility needs to changing generation patterns in Romania. Rapid solar development increases output during daylight hours, while evening prices can rise sharply when photovoltaic production falls. On recent trading days, the difference between midday and evening prices has exceeded €150/MWh.
Electrica expects the Craiova units to operate in line with that price spread. When solar production is abundant and prices are weak, the plant can reduce electricity output. When demand rises and renewable availability falls, it can ramp quickly and sell into higher-price periods.
The plant is also expected to provide black-start capability for the Romanian system. Black-start assets can restore sections of the grid after a major system outage without relying on external electricity supply. As European systems become more dependent on inverter-based renewable generation, dispatchable plants with restoration capability are expected to play a larger role .
Hydrogen readiness and flexibility stack context
The project includes hydrogen readiness as an additional design feature. Electrica says this should not be read as an indication that hydrogen will immediately replace natural gas in Romanian power generation. It notes that commercial renewable hydrogen remains expensive and supply is limited, while infrastructure designed for future fuel blends can reduce the risk of technological stranding before end-of-life .
Craiova reflects a broader shift in thermal capacity requirements within Southeast Europe’s power systems. The region does not necessarily need additional generation fleets built for continuous operation; it increasingly needs assets that can remain idle during periods of abundant renewable electricity and respond rapidly when system conditions tighten. Batteries are described as providing the fastest balancing functions, while gas engines can support longer-duration needs lasting several hours.
The flexibility stack also includes reservoir hydro, demand response and interconnectors. For Electrica, the investment creates optionality across multiple revenue pools including district heating, electricity sales, balancing services and system reserves, with potential links to future capacity mechanisms . In this context, 82 MW of flexible generation is presented as potentially more valuable than larger volumes of inflexible capacity for filling gaps between renewable output.
