In the Romanian market, the first two Contracts for Difference (CfD) auctions awarded a combined 4.2 GW of renewable capacity, exceeding the country’s initial 3.5 GW target under its Recovery and Resilience Plan. Romania is emerging as Southeast Europe’s clearest example of how long-term revenue stabilisation can spur wind investment while leaving project due diligence essential. The first auction awarded 1.5 GW of renewable capacity, including 1 GW of onshore wind. Completed in August 2025, the second round awarded another 2,751 MW of wind and solar, according to EBRD figures.
Romania’s programme uses a two-way CfD, which provides a project with long-term revenue protection around an agreed strike price while keeping it integrated into the electricity market. That arrangement substantially reduces uncertainty over prices, but does not make wind output predictable. The distinction matters for assessing both project revenues and the risks that remain with investors.
The initial official CfD register shows onshore wind strike prices ranging from €54.4898/MWh to €77.325/MWh among the contracts listed. Across all CfD contracts signed in 2025, OPCOM reported 2,630.48 MW of onshore wind capacity under 41 contracts. Their strike prices ranged from €54.4898/MWh to €79.50/MWh.
Revenue protection and project financing
For lenders, price protection can improve a project’s debt capacity by reducing revenue volatility and the risk of a prolonged period of weak merchant electricity prices. If other risks are acceptable, the resulting capital structure may support longer loan tenors or higher leverage than a comparable fully merchant project. The effect is demonstrated by the Vifor wind farm.
The EBRD participated in additional financing facilities worth €331 million for the project’s 269 MW second phase, which would bring total planned capacity to around 461 MW. A 240 MW portion of the extension secured a CfD in Romania’s first auction, according to EBRD project information.
A well-designed support mechanism reduces one of the largest uncertainties in a capital-intensive project. This allows banks to focus more closely on risks that can be managed through project design and contractual allocation. The CfD does not remove those other risks.
Production and operational risks remain
Wind output may fall short of expectations, turbine availability may decline, and wake losses may exceed assumptions. Construction delays can also affect a project, while grid outages may reduce the volume of electricity delivered. Forecasting and balancing costs remain part of the risk profile.
A CfD protects the price mechanism; it does not guarantee the number of eligible MWh a plant will generate. Investors should therefore avoid treating supported projects as quasi-sovereign bonds. The financing case still depends heavily on the technical assumptions underlying contracted revenue, and a P90 production case remains relevant even when the electricity price is substantially stabilised.
Availability guarantees, the O&M structure, grid connection and curtailment analysis remain important, as do negative-price treatment and settlement rules. European policy has increasingly focused on giving CfDs the ability to support investment without encouraging generators to keep producing when the system does not need the electricity. The European Commission says well-designed two-way CfDs can lower financing costs while preserving efficient system operation and limiting unnecessary renewable curtailment, according to European Commission guidance.
These design considerations become more significant as renewable penetration increases. A poorly structured support mechanism could shield generators so fully from market signals that they have little incentive to respond to surplus conditions. A stronger design reduces long-term revenue risk while retaining operational discipline.
Relevance for Southeast Europe
Romania’s experience has relevance beyond its own market. Across Southeast Europe, renewable projects need substantial private capital, while merchant power markets can remain too volatile to underpin efficient long-term debt. CfDs can help bridge that gap, but they are a way to allocate risk, not a replacement for bankability analysis.
Projects still need credible resource assessments, and turbines must perform as expected. The grid must be able to accept the electricity, while forecasts must be accurate enough to manage market exposure. O&M arrangements must also protect availability over two decades.
Romania’s model shows how public policy can reduce long-term wholesale electricity price risk, which private developers have limited ability to control. The remaining risks still sit with the project. That distinction is central to how the model can work.
