The European Commission has initiated a formal inquiry into the Romanian government’s proposed financial backing for the refurbishment of Unit 1 at the Cernavodă nuclear power plant. This investigation underscores concerns regarding compliance with EU competition regulations, as Brussels intensifies scrutiny over state aid measures.
Romanian officials have outlined plans to extend the operational lifespan of Unit 1 by an additional 30 years, pushing its shutdown date beyond 2027. Since its inception in 1996, this unit has been integral to Romania’s energy landscape, contributing approximately 10% of the nation’s electricity and playing a vital role in maintaining a low-emission energy portfolio.
The refurbishment project is estimated to cost around 3.2 billion euros and is spearheaded by Nuclearelectrica. The financing strategy proposed includes a direct grant of 600 million euros, state-backed loan guarantees, a long-term two-way contract for difference (CfD), and safeguards against potential regulatory shifts.
While acknowledging the project’s potential to bolster economic activity and enhance energy security and climate goals, the Commission has expressed reservations about the scale and design of the proposed aid. Key concerns include whether such measures could impose excessive financial risks on the state or disrupt competition in the electricity market.
A significant aspect of the investigation focuses on the CfD mechanism, with regulators evaluating its alignment with EU market standards. There are apprehensions that it might confer undue advantages to Nuclearelectrica or lead to unforeseen repercussions for consumers.
The commencement of this investigation opens avenues for feedback from Romanian authorities and various stakeholders. Brussels has clarified that this step is part of standard procedure and does not imply any preconceptions regarding the final decision.
