Offshor Wind D v lopm nt Pro r m
OFFSHORE WIND ROADMAP FOR ROMANIA
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CONTENTS
Acknowledgements XI
Executive summary XIII
Key messages XIII
Renewable energy in Europe XIII
Renewable energy in Romania XIV
The opportunity and potential impact of offshore wind in Romania XV
About this report XVIII
Roadmap for offshore wind in Romania XIX
1. Introduction 1
2. Two scenarios for offshore wind in Romania 2
2.1 Volumes and timing 2
2.2 Potential offshore wind energy areas 5
The potential role of floating offshore wind 6
3. Low growth scenario 8
3.1 Development areas 8
3.2 Electricity mix 8
3.3 Levelized cost of energy 8
3.4 Supply chain and economic impact 9
3.5 Transmission and port infrastructure 10
3.6 Environment and social impacts 10
3.7 Finance and procurement 11
3.8 Actions to deliver the low growth scenario 12
3.9 SWOT analysis for Romania in the low growth scenario 12
4. High growth scenario 13
4.1 Development areas 13
4.2 Electricity mix 13
4.3 Levelized cost of energy 13
4.4 Supply chain and economic impact 14
4.5 Transmission and port infrastructure 16
4.6 Environment and social impacts 16
4.7 Finance and procurement 16
4.8 Actions to deliver the high growth scenario 16
4.9 SWOT analysis for Romania in the high growth scenario 16
III
5. Roadmap for offshore wind in Romania: recommendations 18
5.1 Rationale for key roadmap recommendations 19
5.2 Vision and volume targets 20
5.3 Partnerships 20
5.4 Marine spatial planning, exploration licenses, leasing and offtake frameworks 21
5.5 Permitting 23
5.6 Finance 23
5.7 Grid connection and transmission network 23
5.8 Port infrastructure 24
5.9 Supply chain development 24
5.10 Hydrogen 25
5.11 Health and safety and other standards and regulations 25
5.12 Skills and gender equality 26
5.13 Roadmap summaries 27
Supporting information 30
6. Spatial planning 31
6.1 Purpose 31
6.2 Method 31
6.3 Recommendations 39
7. Cost of energy 40
7.1 Purpose 40
7.2 Method 40
7.3 Results 41
7.4 Background: details of methodology 46
8. Supply chain analysis 55
8.1 Purpose 55
8.2 Method 55
8.3 Results 57
8.4 Discussion 70
8.5 Recommendations 70
9. Jobs and economic benefit 71
9.1 Purpose 71
9.2 Method 71
9.3 Results 72
9.4 Background: Detail of method 80
10. Gender aspects 82
10.1 Purpose 82
10.2 Method 82
IV Offshore Wind Roadmap for Romania
10.3 Results 82
10.4 Discussion 84
10.5 Recommendations 85
11. Environmental and social considerations 86
11.1 Purpose 86
11.2 Method 86
11.3 Results 88
11.4 Discussion 93
11.5 Recommendations 93
12. Health and safety 94
12.1 Purpose 94
12.2 Method 94
12.3 Results 94
12.4 Discussion 96
12.5 Recommendations 96
13. Leasing and revenue frameworks 97
13.1 Purpose 97
13.2 Method 97
13.3 Results 98
13.4 Recommendations 102
14. Permitting 103
14.1 Purpose 103
14.2 Method 103
14.3 Results 103
14.4 Discussion 107
14.5 Recommendations 108
15. Transmission infrastructure 109
15.1 Purpose 109
15.2 Method 109
15.3 Overview of generation 109
15.4 Overview of the current transmission network and future plans 110
15.5 Considerations with increased deployment of variable renewable energy 112
15.6 Offshore export system 113
15.7 Grid connection 114
15.8 Integration of offshore wind in the two scenarios 116
15.9 Recommendations 116
2 V
16. Hydrogen 118
16.1 Purpose 118
16.2 Method 118
16.3 Results 119
16.4 Hydrogen policy in Romania 120
16.5 Discussion 121
16.6 Recommendations 121
17. Port infrastructure 122
17.1 Purpose 122
17.2 Method 122
17.3 Ports Overview 122
17.4 Construction and manufacturing assessment criteria 124
17.5 Results 125
17.6 Discussion 127
17.7 Recommendations 129
18. Risk and bankability 130
18.1 Purpose 130
18.2 Method 130
18.3 Results 131
18.4 Discussion 133
19. Finance 135
19.1 Purpose 135
19.2 Method 135
19.3 Results 135
19.4 Discussion 147
19.5 Recommendations 148
20. Public institutions 149
20.1 Purpose 149
20.2 Method 149
20.3 Results 149
20.4 Discussion 154
20.5 Recommendations 154
21. Stakeholders 155
APPENDIX A: Glossary 161
APPENDIX B: Organization abbreviations 163
APPENDIX C: Concept study for an early offshore wind project in Romania 164
References 186
VI Offshore Wind Roadmap for Romania
BOXES
Box 2.1 Timing of early offshore wind activity in Romania 4
Box 3.1 Relative environmental impact of offshore wind 11
FIGURES
Figure ES.1 The start of Romania’s energy transition: the change in electricity generation in
Romania from 1990 to 2020 XV
Figure ES.2 Potential offshore wind energy areas in Romania pending Strategic
Environmental Assessment. XVI
Figure ES.3 Impact of offshore wind in Romania under low and high growth scenarios, period
to 2035 / 2050 XVII
Figure ES.4 Priority themes to create a successful offshore wind industry XX
Figure 2.1 Annual installed and cumulative operating capacity in the two scenarios 3
Figure 2.2 Estimated project program for an early offshore wind project in Romania 3
Figure 2.3 Potential offshore wind energy areas in Romania pending Strategic Environmental
Assessment 6
Figure 3.1 Electricity supplied by OSW and other sources in Romania up to 2036 in the low
growth scenario. 8
Figure 3.2 LCOE for new projects and offshore wind annual average cost of generation in the
low growth scenario. 9
Figure 3.3 FTE years created in the low growth scenario 10
Figure 3.4 Local GVA in the low growth scenario 10
Figure 4.1 Electricity supplied by OSW and other sources to 2036 in the high growth scenario. 13
Figure 4.2 LCOE for new projects and offshore wind annual average cost of generation in the
high growth scenario 14
Figure 4.3 FTE years created in the high growth scenario (low growth scenario on the right
using same scale, for comparison) 15
Figure 4.4 Local GVA in the high growth scenario (low growth scenario on the right using
same scale, for comparison) 15
Figure 5.1 Strategy, policy, framework, and delivery: the four key pillars for successful
development of offshore wind9 18
Figure 5.2 Best estimate timeline for leasing and revenue frameworks in the high growth scenario 22
Figure 5.3 Summary of recommended government and project developer responsibilities for
offshore wind activities through the project lifecycle in Romania 22
Figure 5.4 Low growth scenario roadmap for offshore wind in Romania 27
Figure 5.5 High growth scenario roadmap for offshore wind in Romania 28
Figure 6.1 Offshore wind technical potential in Romania 32
Figure 6.2 Potential offshore wind energy areas in Romania 37
Figure 7.1 Sensitivity analysis around project installed in 2029 42
APPENDIX A: Glossary VII
Figure 7.2 Estimated LCOE trajectory for Romania, compared to the trend for established
offshore wind markets 43
Figure 7.3 Schematic showing inputs and outputs for a BVGA cost model run 48
Figure 7.4 Schematic showing conversion from established to local market conditions 48
Figure 7.5 Schematic showing derivation of LCOE trends 49
Figure 8.1 Assessment of supply chain for project development 60
Figure 8.2 Assessment of supply chain for nacelle, hub, and assembly 61
Figure 8.3 Assessment of supply chain for blades 61
Figure 8.4 Assessment of supply chain for towers 62
Figure 8.5 Assessment of supply chain for foundations 63
Figure 8.6 Assessment of supply chain for array and export cables 63
Figure 8.7 Assessment of supply chain for offshore substations 64
Figure 8.8 Assessment of supply chain for onshore infrastructure 65
Figure 8.9 Assessment of supply chain for turbine and foundation installation 65
Figure 8.10 Assessment of supply chain for array and export cable installation 66
Figure 8.11 Assessment of supply chain for offshore and onshore substation installation 67
Figure 8.12 Assessment of supply chain for a wind farm operation 67
Figure 8.13 Assessment of supply chain for turbine maintenance and service 68
Figure 8.14 Assessment of supply chain for balance of plant maintenance and service 69
Figure 8.15 Assessment of supply chain for decommissioning 69
Figure 9.1 Total annual FTE years employment for a single 1.2 GW project installed in 2032,
split by cost element 73
Figure 9.2 Total GVA for a single 1.2 GW project installed in 2032, split by cost element 73
Figure 9.3 Total annual FTE years employment created by all the projects in Romania in the
high growth scenario, split by cost element 74
Figure 9.4 Total GVA created by all the projects in Romania in the high growth scenario split
by cost element 74
Figure 9.5 Total annual FTE years employment created by all the projects in Romania in the
low growth scenario, split by cost element 75
Figure 9.6 Total GVA created by all the projects in Romania in the low growth scenario split
by cost element 75
Figure 9.7 Annual local FTE years employment created by all the projects in Romania in the
high growth scenario split by cost element 77
Figure 9.8 Annual local GVA created by all the projects in Romania in the high growth
scenario split by cost element 77
Figure 9.9 Annual local FTE years employment created by all the projects in Romania in low
growth scenario, split by cost element 78
Figure 9.10 Annual GVA created by all the projects in Romania in low growth scenario split
by cost element 78
Figure 10.1 Employment gender metrics in Romania 83
Figure 10.2 Gender pay gap in Romania relative to EU neighbors 84
VIII Offshore Wind Roadmap for Romania
Figure 13.1 Best estimate timeline for leasing and revenue frameworks in the high growth
scenario 101
Figure 14.1 Outline of current permitting process for offshore wind 105
Figure 15.1 The start of Romania’s energy transition: the change in electricity generation in
Romania from 1990 to 2020 109
Figure 15.2 Power plants 110
Figure 15.3 The transmission network in Romania 111
Figure 15.4 Extract of map of offshore wind projects and integrated hub export systems in
the German Bight 113
Figure 17.1 Potential offshore wind manufacturing and construction ports in Romania 127
Figure 19.1 Accumulated number of investments made by each lender, 2010-2020 137
Figure 19.2 Onshore Renewable Financing Volume Romania, 2010-2022 137
Figure 19.3 Number of investments per individual banks, 2010-2022 139
Figure C4.1 Timeline for example early offshore wind project 167
Figure C4.2 Estimated spend profile for the development and delivery of an example early
offshore wind project 168
Figure C5.1 Preliminary layout of examples for early project at a generic location 175
Figure C7.1 Example monopile foundation installation vessel 180
Figure C7.2 Example substation installation vessel 180
Figure C7.3 Example cable-laying vessel 181
Figure C7.4 Example cable plough 182
Figure C7.5 Example turbine installation vessel 183
Figure C8.1 Example service operation vessel 184
TABLES
Table 2.1 Characteristics of the two market development scenarios explored 4
Table 3.1 SWOT analysis for Romania in the low growth scenario 12
Table 4.1 SWOT analysis for Romania in the high growth scenario. 17
Table 5.1 Summary of assessment of key conditions for OSW in Romania 20
Table 6.1 Spatial data layers relevant to offshore wind spatial planning. 33
Table 7.1 Key parameters for the typical sites modelled, against year of installation 41
Table 7.2 Indicative LCOEs for the typical sites modelled 43
Table 7.3 Cost element breakdown supporting LCOEs for 2029 44
Table 7.4 Offshore wind cost element definitions 50
Table 8.1 Categorization of the supply chain 55
Table 8.2 Criteria for assessing current and future capability in Romania 56
Table 8.3 Summary of the Romanian supply chain analysis 57
Table 8.4 Change in Romania supply chain under low and high growth scenarios 59
Table 9.1 Local content for the OSW projects in Romania completed in 2029, 2032, and 2035 76
Table 9.2 Potential local supply chain investments relating to offshore wind in Romania 79
APPENDIX A: Glossary IX
Table 11.1 RAG scale for environmental, social and technical considerations 86
Table 11.2 Key environmental, social and technical considerations 88
Table 15.1 Pros and cons of integrated hub export system compared to radial system 114
Table 16.1 Indicative levelized cost of green hydrogen generated solely from offshore wind 119
Table 16.2 Indicative levelized cost of green hydrogen generated solely from offshore wind
with a capacity factor of 90% 119
Table 17.1 Criteria for assessing Romanian port capabilities 125
Table 17.2 Port assessment summary 126
Table 18.1 General offshore wind investment risks 131
Table 19.1 Financing details of renewable energy projects 138
Table 19.2 Financing details of OSW energy projects worldwide 140
Table 20.1 Responsible organizations in England and Poland and proposed responsible
organizations in Romania 153
Table 21.1 Key stakeholders 156
Table C4.1 Estimated costs to develop and construct an example 300 MW offshore wind project 168
Table C5.1 Key parameters of the early project based on site assumptions 174
Table C6.1 Onshore substation considerations 178
Table C9.1 Summary of example early offshore wind project cost estimates 185
X Offshore Wind Roadmap for Romania
ACKNOWLEDGEMENTS
This study was prepared by the World Bank under the EC Contract No. REFORM/IM2021/027
(TF073710) signed between the European Commission and the International Bank for Reconstruction
and Development on August 16, 2021. It incorporates the expert research and analytical work
performed by BVG Associates (Bruce Valpy, Mona Pettersen), CMS and ISPE. Additionally, The
Biodiversity Consultancy contributed with a country-level biodiversity review. This report is a
deliverable under the “Internal Energy Market and Energy Transition in Romania” Trust Fund
implemented by the World Bank Group (WBG), for Romanian Ministry of Energy (MoE), with the
support and partnership of European Commission’s Directorate General for Structural Reform Support
(DG Reform). This project was carried out with funding by the European Union via the Structural
Reform Support Programme managed by DG REFORM.
The report was overseen by Mariano Gonzalez (Senior Energy Specialist, World Bank), Sean Whittaker
(Principal Wind Specialist, IFC), and Melisa Fanconi (Senior Energy Specialist, World Bank). Additional
support was provided by Daniel Kockisch (Senior Investment Officer, IFC), Christopher Lloyd (Senior
Energy Specialist, World Bank), Mark Leybourne (Senior Energy Specialist, World Bank) and Alyssa Pek
(Energy Specialist, World Bank). Peer review was carried out by The Biodiversity Consultancy, Lizet
Ramirez (Senior Analyst for Offshore Wind, WindEurope) and Nikola Mihajlovic (Investment Officer,
IFC) - we are thankful for their time and feedback. We express our profound gratitude to the Ministry
of Energy for the collaboration in this project. We are truly thankful to a wide range of stakeholders
that provided feedback during the report consultation process, such as, Authority for the Regulation
of Offshore Oil Operations in the Black Sea (ACROPO), Ministry of Development, Public Works and
Administration, Ministry of Environment, Water and Forests, Ministry of Foreign Affairs, Ministry of
National Defense, National Administration of Romanian Waters, The National Agency for Mineral
Resources, Competition Council, and Romanian Energy Regulatory Authority.
We are equally thankful to Copenhagen Offshore Partners (COP), European Energy, HENRO,
Hidroelectrica, Jan de Nul, Port of Constanța, Romanian Association for Wind Energy, TotalEnergies
and Transelectrica, among others, for participating in the industry consultation.
Finally, we thank the ESMAP-IFC Offshore Wind Development Program, led by Sean Whittaker
and Rafael Ben (Senior Energy Specialist, ESMAP) for their precedent-setting work and guidance in
development of this Roadmap.
XI
EXECUTIVE SUMMARY
KEY MESSAGES
Globally, offshore wind (OSW) technology delivers large volumes of energy from GW-scale projects at
prices competitive with those of new-build conventional generation technologies.
Romania already has 3 GW of installed onshore wind capacity and a sufficiently vigorous offshore
wind resource that could produce more energy than Romania will ever need.
This report highlights the potential for up to 7 GW of OSW capacity, located at least 50 km from
shore and mostly in relatively shallow water, that could be constructed from the early 2030s, using
Romania’s well-equipped port facilities, steel-based supply chain and other local workers.
Although the Black Sea is not as windy as much of the sea area in northern Europe, it is likely that
a regional market will establish, with the development of projects in the exclusive economic zones of
Bulgaria, Türkiye and Ukraine. The regional and the global OSW markets will offer further opportunities
for Romanian suppliers.
Environmental impacts are a key consideration, beyond the reduction in carbon dioxide production and
water use relative to conventional generation technologies. A key uncertainty in Romania in this regard
is around avian migration routes to/from the wetlands of the Danube Delta.
RENEWABLE ENERGY IN EUROPE
Operational OSW capacity in the EU totaled about 31 GW at the end of 2022. The European
Commission’s 2020 EU Strategy to harness the potential of offshore renewable energy for a climate neutral
future offshore wind set EU-wide targets of at least 60 GW of OSW capacity by the end of 2030
and 300 GW by the end of 2050, with the Black Sea designated as one of five key sea basins for
development of OSW.1
As part of the European Green Deal2, The European Commission’s 2021 Fit for 55 package (which aims
to deliver 55% reduction in the EU’s net greenhouse gas emissions by 2030 compared to 1990 levels
and to achieve climate neutrality in 2050) increased these 2030 OSW objectives to 79 GW.3 Combined
national targets of EU member states already amount to about 100 GW of OSW capacity by 2030.
The European Commission’s 2022 REPowerEU Plan seeks to accelerate plans further in the wake of the
Russia's invasion of Ukraine and the resulting need for diversifying the EU’s energy sources, recognizing
OSW as a stable and abundant energy source with a high level of public acceptance.4 The ongoing
situation in Ukraine could be a challenge for OSW development in the Black Sea. Romania is the first
member of the EU for which the WBG has developed an OSW roadmap. Various EU directives and
initiatives provide important structure to help Romania prepare for OSW, including:
XIII
■ The European Green Deal (including Fit for 55), including for energy:
• Ensuring a secure and affordable energy supply for the EU.
• Developing a fully integrated, interconnected and digitalized EU energy market.
• Prioritizing energy efficiency, improving the energy performance of buildings and developing a
power sector based largely on renewable sources.
■ The regulation on the Governance of the Energy Union and Climate Action (Regulation
(EU)2018/1999), agreed as part of the Clean energy for all Europeans package which was adopted
in 2019, that requires that each Member State drafts a 10-year National Energy and Climate Plan
(NECP), setting out how to reach its national targets. Romania published its 2021-2030 Integrated
National Energy and Climate Plan (NECP) in April 2020.5
■ The Maritime Spatial Planning Directive (2014/89/EU), mandating the form of national marine
spatial plans, for completion of a first version by end March 2021. Romania, working together with
Bulgaria, is targeting completion of its plan by end March 2023.
■ The National Resilience and Recovery Plan6 (NRRP), allocates funding through the Recovery and
Resilience Facility, created in the wake of the COVIC-19 pandemic, which is a measure through
which EU member states can implement reforms and investments that make their economies and
societies more sustainable, resilient and prepared for the green and digital transitions..
■ The Modernisation Fund, a dedicated EU funding program to support 10 lower-income EU Member
States (including Romania) in their transition to climate neutrality by helping to modernize their
energy systems and improve energy efficiency.
■ This context is beneficial as it gives support to the Romanian Government and increased
confidence to investors. The Modernisation Fund also offers a potentially significant source of
funding for OSW activities,
RENEWABLE ENERGY IN ROMANIA
Romania’s electricity supply has transitioned from being dominated by fossil fuels to well over half
coming from low carbon technologies by 2020 (45% renewable energy supply (RES)), as shown in
Figure ES.1.
Romania’s NECP targets 30.7% renewable energy in gross final energy consumption and 49.4% RES
share in electricity supply by the end of 2030. Since publication, the Government has announced that
these targets will be ‘significantly increased’ to around 34% in the next revision of the NECP, taking
benefit of significant funding through the NRRP and the Modernisation Fund. The expectation is that
the vast majority of new RES will be from wind and solar.
Think tank EPG, in its multi-sector energy and carbon analysis Recommendations for Romania’s Long-
Term Strategy: Pathways to climate neutrality, models 15 GW of OSW, 17 GW of installed onshore
wind and 21 GW of solar PV capacity installed in Romania by 2050.7
XIV Offshore Wind Roadmap for Romania
FIGURE ES.1 THE START OF ROMANIA’S ENERGY TRANSITION: THE CHANGE IN ELECTRICITY
GENERATION IN ROMANIA FROM 1990 TO 2020
8 50
40
6
Average generation (GW)
Fraction RES (Percent)
30
4
20
2
10
0 0
1990 1995 2000 2005 2010 2015 2020
Oil Coal Natural gas Nuclear Hydro Wind Solar PV RES (right scale)
Source IEA.
THE OPPORTUNITY AND POTENTIAL IMPACT OF OFFSHORE WIND
IN ROMANIA
OSW potentially offers Romania a local, competitively priced, large scale and clean source of
electricity and long-term jobs. To take full benefit of the resources that Romania has, requiresi:
■ Clarity on energy strategy and policy, including targets for OSW deployment up to 2035.
■ Establishing OSW energy areas in the most suitable locations from a technical, commercial,
environmental and social standpoint.
■ Development of a new OSW law defining frameworks for exploration licensing, leasing, permitting
and offtake.
■ Significant and targeted upgrades of the transmission network, both to transfer energy from OSW
projects and potentially to support the production, storage and use of green hydrogen; and
■ Support to key areas of the Romania supply chain, to enable export as well as manufacture for
domestic projects. The Capital Expenditure (CAPEX) for the high growth scenario to 2035 is about
€19 billion.
A vision for where OSW capacity could be installed in Romania is shown in Figure ES.2. The relative
levelized cost of energy (LCOE) shown in the figure is for projects installed in 2032. The areas shown
are likely to be sufficient for installation of up to 7 GW of OSW capacity, recognizing uncertainty about
i. These points summarise the recommendations that need to be implemented to enable the high growth scenario. Some (but not all) are needed for the low growth
scenario. Recommendations relevant to each scenario are discussed in Section 5.
Executive summary XV
avian migration routes to/from the wetlands of the Danube Delta. To address this, it is recommended
to conduct a Strategic Environmental Assessment (SEA) in line with Good International Industry
Practice (GIIP) early in the process, covering at least the areas shown in the figure. This SEA can
benefit from work already carried out on the National Maritime Plan and feed in to a future revision of
this plan. The EU Habitat and Birds Directives also require all plans and projects to be assessed as to
whether they are likely to have a significant effect on a Natura 2000 site.
The cost analysis includes the cost of the export system, connecting each OSW project to
the transmission network:
■ Offshore substation, subsea export cable and 20 km of onshore export cable, to an
onshore substation; and
■ Wind-farm specific switchgear and auxiliary equipment in the substation that is located
on the transmission network.
The analysis does not considered the onward cost of transmission network upgrades, which
will contribute to the ongoing electrification of Romania.
FIGURE ES.2 POTENTIAL OFFSHORE WIND ENERGY AREAS IN ROMANIA PENDING STRATEGIC
ENVIRONMENTAL ASSESSMENT.
Source: BVG Associates.
The outcomes of the low- and high-growth scenario considered in this report summarized in Figure ES.3.
XVI Offshore Wind Roadmap for Romania
FIGURE ES.3 IMPACT OF OFFSHORE WIND IN ROMANIA UNDER LOW AND HIGH GROWTH
SCENARIOS, PERIOD TO 2035 / 2050ii
Fraction of electricity 16 percent
2.4 times higher
supply by end 2035 37 percent
Operational OSW 3 GW
capacity by end 2035 2.3 times higher
7 GW
Electricity produced 197 TWh
2.3 times higher
by end 2050 460 TWh
Local employment 1,000 FTE job years
2 times higher
created by end 2035 2,000 FTE job years
Local gross value US$ 1 billion
2 times higher
added by end 2035 US$ 2 billion
CO2 avoided 97 million tonnes
2.3 times higher
by end 2050 230 million tonnes
Low growth scenario High growth scenario
Source: BVG Associates.
The key difference is that in the high growth scenario, 2.3 times the installed capacity by the end of
2035, compared to the low growth scenario, results in more cost reduction, 3.7 times as many local
full-time equivalent (FTE) job years and 3.7 times local gross value added (GVA) up to 2035.
Local jobs and local gross value added:
■ The larger local market, with good visibility, enables more local supply chain investment and
optimization, and also some export to the regional and global market.
■ This creates 1.5 times as many local FTE job years per MW installed.
■ With 2.3 times as many MW installed up to 2035, this means 3.7 times as many FTE job years are
created overall and about the same increase in local GVA.
The Government of Romania has the opportunity to develop a significant OSW market by providing
a robust policy framework and good market visibility. International experience shows this to be an
effective approach to generate local economic benefit without having to resort to restrictive local
content requirements. It is also the dominant way to minimize the cost to consumers and create a
more sustainable, internationally competitive supply chain.
ii. All figures are cumulative over the period to 2035, unless stated. CO2 avoided is to 2050 as 2035 is so early in the lifecycle of all OSW projects. The fraction of electricity
supply is discussed in Sections 3.2 and 4.2. Offshore wind capacity operating is discussed in Section 2. Electricity produced is discussed in Sections 3.2 and 4.2. Local jobs
and GVA are discussed in Sections 3.4 and 4.4. CO2 avoided is discussed in Sections 3.6 and 4.6.
Executive summary XVII
At the same time, like any large infrastructure, OSW developments have the potential to give rise to
adverse environmental and social impacts and higher growth means higher risk of impacts. Some of
the considerations identified in Section 11 include:
■ Almost all the coastline and large sea areas around the Danube Delta are Protected Areas and
have been excluded from the potential wind energy areas identified in this report. Surveys will be
important to establish any natural habitats, especially in relation to bringing ashore export cables,
and any necessary mitigation actions. In addition, more data is needed regarding migratory birds,
and seasonal patterns need to be considered for avian and marine life, including black sea dolphins
and porpoises.
■ Important tourism areas and heritage sites will need to be identified during the environmental and
social impact assessment (ESIA) process, as well as subsequent necessary mitigation actions.
■ Consultation with owners of larger fishing vessels will be important in identifying potential
wind energy areas. The main sea ports in Romania, including the Port of Constanța, the Midia
and Mangalia area of Constanța , and the Port of Sulina, and shipping routes will need to be
considered, as well as the impact on main naval bases in Constanța, Mangalia and Tulcea, and the
Mihail Kogălniceanu International Airport, located outside Constanța,
This places even greater importance on the need to avoid areas of highest environmental and
social sensitivity through proportionate marine spatial planning (MSP) and informed site selection.
International financing for OSW depends on environmentally and socially sustainable sector
development, in line with GIIP. This includes implementation of robust ESIA requirements and
frameworks as part of the permitting processes, and careful management and mitigation thereafter
to manage risks. Ongoing stakeholder engagement with affected communities and non-governmental
organizations will form an important part of these MSP and ESIA processes.
A key prerequisite for a significant contribution from OSW is a significantly upgraded electricity
transmission network, which is also needed for a decarbonized energy system.
ABOUT THIS REPORT
This report provides a strategic vision for development of OSW in Romania, considering both
opportunities and challenges under different growth scenarios.
The report is based on two potential scenarios for OSW development:
■ Low growth, which assumes development of OSW in line with existing government intent
regarding renewables, where 3 GW OSW supplies 16% of Romania’s electricity needs (by TWh) by
the end of 2035.
■ High growth, which assumes 7 GW OSW installed, where OSW supplies 37% of Romania’s
electricity needs by the end of 2035.
XVIII Offshore Wind Roadmap for Romania
The report starts by describing a vision of Romania OSW sector in 2035 under both scenarios,
including:
■ Where the projects are located;
■ How much energy will be generated and at what cost;
■ What jobs and local economic benefit could be created;
■ What associated infrastructure is needed;
■ What the environmental and social impacts are; and
■ How these projects are procured and financed.
The report then provides a roadmap that outlines the broad range of enabling actions that will need to
be taken by the Government to achieve either outcome.
These recommendations are based on experience from other markets, engagement with industry and
Government in Romania and on projections for regional developments.
The remainder of the report provides the supporting analysis and evidence behind each of the
recommendations.
The purpose of the report is to provide a good understanding about OSW in Romania and a roadmap
to establish OSW if it is decided that OSW fits within the energy strategy of Romania. The report does
not set targets, but rather describes potential paths that will help inform government target-setting.
The report is intended to provide an initial view of most main considerations. Inevitably, there will be
much further work to do by many stakeholders in order finalize decisions regarding policy, frameworks
and delivery, including more detailed analysis such as planning sector models and environmental
assessments.
Likewise, the preparation of the report has not included modelling of the current or future energy
systemiii – it is focused on OSW aspects only. The report therefore does not identify least-cost or
preferred technology options.
ROADMAP FOR OFFSHORE WIND IN ROMANIA
In order to develop a successful OSW industry, priority themes and a roadmap of recommended
actions for the Government to consider are highlighted in Figure ES.4.
Appendix C contains a concept study for an early OSW project in Romania. The project described is
‘small’, with a rating of 300 MW, compared to commercial scale projects of rating 1 GW or more, but
much of the description would apply if the project was an early commercial project.
iii. This includes consideration of the daily and seasonal patterns of generation and demand and the availability of competitively priced other sources of renewable energy.
It is recognised that in markets where there are large areas of land with strong wind and solar resources and few environmental and social impacts, onshore renewables
projects with scale 100 MW+ are likely to provide lower cost electricity and OSW.
Executive summary XIX
Priority themes
FIGURE ES.4 PRIORITY THEMES TO CREATE A SUCCESSFUL OFFSHORE WIND INDUSTRY
2023: Set the vision
▪ Least cost generation analysis
▪ Power systems studies
▪ Vision and targets
2023–24: Evolve the frameworks
▪ Offshore Wind Law
▪ Marine Spatial Plan
▪ Auction arrangements
Offshore ▪
▪
Capacity building in stakeholders
Government-industry forum
wind
in Romania 2023-2029: Develop and install first projects
▪ Leasing, design, permitting,
▪ Offtake, grid connection
▪ Construction
2025-2035: Develop the long-term infrastructure
▪ Transmission, ports
▪ Supply chain
▪ Pipeline of offshore wind projects
Source: BVG Associates.
Recommended actions
Vision and volume targets
1. The Ministry of Energy (MOE) establishes how OSW fits within Romania’s broader energy strategy,
including through a least cost generation analysis, considering temporal patterns for generation
by onshore wind, solar and OSW.
2. The MOE publishes its vision for OSW to 2035 and beyond as part of a decarbonized energy mix,
considering plans also for transport and heat, explaining how and why OSW is important.
3. The MOE sets OSW installed capacity targets for 2030 and 2035 in the next revision of the
NECP, showing clear plan for delivery of first projects, including the timetable for private-sector
competitions.
Partnerships
4. The MOE establishes a long-term Government-industry forum involving local and international
project developers and key suppliers, to work together to address the new OSW law, the
recommendations throughout the roadmap and other considerations, as they arise.
5. The MOE agrees, with other relevant Government departments, to define inter-departmental
cooperation and alignment on OSW, covering leasing, permitting, offtake, transmission and health
XX Offshore Wind Roadmap for Romania
and safety frameworks, and key areas of delivery including supply chain and finance, to ensure
there are no unexpected hurdles or non-unitary interpretations of legislation or frameworks.
6. The MOE leads in establishing which organization should play which role regarding the different
frameworks needed for OSW.
Marine spatial planning, exploration licenses, leasing and offtake frameworks
7. The MOE progresses a proportionate OSW spatial plan, incorporating Strategic Environmental
Assessment in line with Good International Industry Practice (GIIP), involving:
• Sensitivity mapping of environmental and social attributes
• Consideration of avian migration routes to/from the wetlands of the Danube Delta
• Better understanding of the distribution and abundance of cetaceans, and
• The cumulative impact of multiple projects.
• This should include focus on engagement with key stakeholders and will result in early
designation of offshore wind energy areas.
8. The MOE and Ministry of Development, Public Works and Administration include OSW in the next
revision of the National Maritime Plan, formalizing the proportionate OSW spatial plan described
above.
9. The MOE introduces a new, clear and investor-friendly OSW law and associated regulation relating
to OSW frameworks, involving other public stakeholders, as required. All aspects, including with
respect to transmission, need to be in compliance with national and European provisions in the
field of competition and state aid.
10. The MOE proposes that the National Energy Regulatory Authority (ANRE) is given responsibility to
grant seabed rights relating to OSW.
11. The MOE ensures curtailment compensation and indexation is in relevant contracts.
12. The MOE considers avoiding regulatory barriers for developers with regard to signing corporate
power purchase agreements as an alternative route to market than winning a revenue
competition.
13. The Ministry of Finance considers whether to signal its commitment to backstops offtaker
obligations for multiple GW-scale projects, if needed.
14. The MOE, working with the Government General Secretariat, drives stability and predictability of
the legal and fiscal regime, including stability clauses in OSW concession agreements.
Permitting
15. The Ministry of Environment, supported by the Ministry of Finance addresses any shortfalls in
Romanian ESIA requirements compared to EU Regulations, GIIP, and lender standards.
16. The Government General Secretariat establishes a one-stop-shop permitting entity in order to
simplify the decision-making process and interface for project developers and enables the use of
digital services for submitting applications and similar.
17. The new permitting entity develops an OSW specific process based on the current permitting
process, also ensuring that it meets GIIP to help de-risk projects and facilitate access to
international finance.
Executive summary XXI
18. New permitting entity explores access to (and benefits of use of) existing environmental data from
impact assessment of oil and gas activities, held by Authority for Mineral Resources (NAMR) in
order to increase efficiency of OSW environmental impact assessment.
Finance
19. MOE establishes the feasibility and attractiveness of using the Modernisation Fund to support
OSW, including any flexibility regarding timescales due to the time it takes to develop OSW
projects in a new market.
20. The MOE, with the Ministry of Finance considers financial mechanisms to reduce cost of capital
for OSW projects, including access to climate and other concessional finance and ensures
international market standards for contractual risk allocation and arbitration. Early engagement
with MDBs is encouraged, in order to shape any guaranty scheme, credit enhancement, first loss
support or other arrangement.
21. The MOE explores together with the Ministry of Finance any potential fiscal instruments relating
to the support of OSW subject to the country’s context and its position as an EU Member State.
22. The MOE works with others to ensure enforceability of contracts, both with Government and
suppliers.
Grid connection and transmission network
23. Transelectrica develops a 2050 vision for a nationwide electricity transmission network for a
decarbonized energy system, with milestone plans for 2030 and 2040 and consideration of
finance. This is a topic much wider than OSW, considering all electricity, transport and heat,
and should include viability of subsea interconnection between Ukraine, Romania, Bulgaria and
Türkiye and also with Azerbaijan, providing balancing between the relevant states. Transelectrica
incorporates MOE’s OSW development vision into its next ten-year plan, published in 2024, and
considers offshore hubs and the potential impact of international interconnects so that timely
export and transmission solutions can be delivered.
24. Transelectrica undertakes power systems studies to understand the potential impacts of
large volumes OSW on the future transmission network and ESIAs in line with GIIP and lender
requirements to understand the environmental and social implications of transmission network
upgrades, feeding these into MSP activities.
25. Transelectrica, MOE, distribution system operators (DSOs) and other relevant balancing parties
agree a softening of the network management rules to better reflect the probabilistic nature of
variable output renewables, including OSW, whilst remaining with EU regulations.
26. ANRE amends the template grid connection agreement (and any auxiliary regulations) to
incorporate compensation terms in the grid connection agreement to apply if transmission
network reinforcement is delayed and this impacts export of energy.
27. Transelectrica, potentially with WBG support, considers low cost solutions for the financing of
transmission upgrades and the use of concessional finance.
Port infrastructure
XXII Offshore Wind Roadmap for Romania
28. The MOE creates an inter-ministerial group with the Ministry of Finance, the Ministry of Economy
and the Ministry of Transport and Infrastructure. The inter-ministerial group creates and promotes
a plan for port use for OSW manufacturing and construction, interfacing with current activity
to develop the Naval Strategy. Consideration should be given to lead times for the upgrades to
ensure suitable facilities are ready in time for project deployment and environmental and social
considerations and robust ESIA analysis for any potential developments.
29. The MOE works with the Ministry of Transport and Infrastructure to encourage the publication of a
simple OSW ports prospectus, showing port capabilities against physical OSW requirements, and
use this to encourage dialogue with project developers.
30. Project developers explore any transport restrictions when entering the Black Sea for likely future
wind turbine installation vessels.
31. The MOE considers prioritizing investments through the Resilience and Recovery Fund, or similar,
into port infrastructure and supply chain for OSW, in the context of the green transition and the
commitments to build renewable energy.
Supply chain development
32. The MOE, working with the Ministry of Development, Public Works and Administration, the
Ministry of Economy and Ministry of Transport and Infrastructure, presents a balanced vision for
local supply chain development, encouraging international competition (learning from elsewhere
and avoiding restrictive local content requirements that add risk and cost to projects and slow
deployment).
33. The MOE considers steps to support the expansion of supply chain for OSW, including the use of
non-price criteria in auctions.
Hydrogen
34. The MOE finalizes and publishes domestic hydrogen policy to give clarity to industry, OSW project
developers and other hydrogen industry stakeholders. This includes hydrogen as a storage solution
to enable a greater share of variable renewable energy sources in the Romanian electricity mix.
35. The MOE encourages coordination between Transelectrica, Transgas, and other stakeholders to
create legislation, regulations, standards, tariffs, transport, storage, import, export and trading
arrangements for hydrogen.
36. The MOE explores how LCOH and interconnection policy in nearby countries will impact the
requirements for domestic hydrogen production.
37. The MOE supports international efforts to establish a certification of origin framework for green
hydrogen to allow meaningful competition with blue and gray hydrogen markets.
38. The MOE investigates small scale green hydrogen production as a flexible load that can be utilized
to absorb intermittent renewable generation from a range of sources, not just OSW.
Health and safety and other standards and regulations
39. The Ministry of Labour and Social Solidarity adapts the existing framework of labor code and
regulations to be suitable for OSW, adopting international industry standards where appropriate.
Executive summary XXIII
40. Authority for the Regulation of Offshore Oil Operations in the Black Sea (ACROPO) develops H&S
regulations specifically designed for application to the OSW industry, which should be based on
existing regulations in established EU markets, include reference to the international design and
operational standards adopted in established OSW markets.
41. ACROPO ensures H&S regulations have a firm focus on the behavioral aspects of H&S and ensure
that ongoing behavioral training forms a core element of compliance. Behavioral training forms an
integral part of modern OSW H&S practices in established OSW markets.
42. ACROPO encourages companies active in OSW and oil and gas activities in Romania to collaborate
on knowledge sharing. This will allow the OSW industry to build upon existing experience in oil and
gas by using established facilities and personnel to train OSW workers, were possible.
Skills and gender equality
43. The MOE and the General Secretariat of Government lead in helping Government departments and
other key stakeholders to grow capacity and knowledge needed to process the planned volume of
OSW projects (through all frameworks).
44. The MOE, the Ministry of Economy, The Ministry of Education, relevant universities / training
colleges and industry (through the Romanian Wind Energy Association (RWEA)) collaborate to
enable education and investment in local supply chain businesses, including in training of onshore
and offshore workers.
45. OSW project developers and suppliers collaborate to encourage women into the sector and get
involved in gender equality working groups. Women’s rights organizations in Romania, such as
the Women’s Association of Romania, the Association for Liberty and Equality of Gender and
Centrul Filia, and industry bodies, such as Global Wind Energy Council (GWEC) and Global Women’s
Network for the Energy Transition (GWNET), should be included in these working groups.
46. The Ministry of Labour and Social Solidarity and industry set diversity targets and establish
framework to measure progress.
47. OSW project developers and suppliers collaborate to publish a best practice guide for industry
stakeholders and ensures opportunities for women in OSW are well-promoted. The best practice
guide should discuss using gender decoders and gender-balanced language to ensure hiring
practices are unbiased and creating spaces and opportunities for women to network within the
OSW sector.
The MOE considers introducing diversity requirements into leasing and revenue frameworks.
XXIV Offshore Wind Roadmap for Romania
1. INTRODUCTION
This report was carried out with funding from the European Union via the Structural Reform Support
Programme and with the support and the partnership of the European Commission’s DG REFORM.
The study follows an invitation from the Government of Romania to the WBG for assistance. The study
was carried out over the period August 2022 to March 2023, with engagement and input from the
Government of Romania and relevant agencies, the Romanian supply chain and the global OSW supply
chain. See Section 21 for a list of stakeholders.
The study intends to outline options for a successful OSW industry in Romania and to support
collaboration between the Government of Romania and the wind industry. It does not represent the
views of the Government of Romania.
The report is structured as follows:
Roadmap
■ Section 2: Description of two scenarios for OSW in Romania used in the following sections of this
study.
■ Sections 3 and 4: Short summaries of the key outcomes of each of these two scenarios.
■ Section 5: Recommendations and roadmap for OSW in Romania.
Supporting information
■ Sections 6 to 21: Analysis covering all key aspects of the future of OSW in Romania.
A glossary is provided in Appendix A and a list of organization abbreviations in Appendix B.
A study of an example early project is provided separately, with the purpose of informing the
Government about the timeline and cost of early projects.
Throughout this report, we refer to WBG’s report Key Factors for Successful Development of Offshore Wind
in Emerging Markets (Key Factors report).8 It describes experiences in OSW markets to date, covering:
■ OSW as part of energy strategy;
■ Policy;
■ Frameworks; and
■ Delivery.
1
2. TWO SCENARIOS FOR OFFSHORE
WIND IN ROMANIA
Romania has a medium-speed wind resource that the World Bank’s Energy Sector Management
Assistance program (ESMAP) characterizes as having a technical potential of 76 GW (22 GW using
foundations fixed to the sea bed and 54 GW using floating foundations).
This report explores the impact of two different, possible offshore wind (OSW) growth scenarios,
chosen to illustrate realistic paths for Romania in the context of its future electricity needs, covering
a reasonable breadth of the possible routes forward for Romania based on understanding from
other emerging and established OSW markets. The purpose of the scenarios is to be able to consider
the effect of industry scale on cost, consumer benefits, environmental and social considerations,
economic benefits and other aspects in a quantifiable way. The scenarios were not established (and
have not been tested) through deep energy system modelling, which is recommended in due course.
All other conditions are unchanged between the two scenarios. The scenarios show capacity installed
from 2029. This is as early as feasible. Based on experience in other markets, it is more likely that
capacity will be installed from the early 2030s, but this does not change the relative impact of the two
scenarios.
■ Low growth, which assumes development of OSW in line with existing government intent
regarding renewables, where 3 GW OSW supplies 16% of Romania’ electricity needs by 2036 .iv
■ High growth, which assumes 7 GW OSW installed, where OSW supplies 37% of Romania’s
electricity needs by 2036.
The key differences between the two scenarios are discussed below.
2.1 VOLUMES AND TIMING
Figure 2.1 shows the annual and cumulative installed OSW capacity for the two scenarios, both
starting with a relatively small ‘pathfinder’ project. Larger projects reduce levelized cost of energy
(LCOE) and smaller, pathfinder projects are not needed with respect to technology and by experienced
project developers, so it is suggested in Romania to move straight to larger projects.v The low growth
scenario comprises 5 projects. In the high growth scenario, new capacity is installed each year,
reaching an average installation rate of 1.5 GW per year by 2035. Note that although the scenarios
appear to show smooth trends in Figure 2.1, actual annual installation rates can be expected to vary
due to specific project sizes and timings.
iv. Note that capacity installed in 2035 is assumed to provide a full year of generating capacity only in 2036. This scenario does not have any capacity installed after 2035,
but additional capability could be added to the scenario in the later 2020s that could then be operational in the later 2030s.
v. Smaller, pathfinder projects have been used in a number of markets to prove technology, frameworks and processes needed to develop an OSW project, but the need for
such projects has reduced as experience has grown.
2 Offshore Wind Roadmap for Romania
FIGURE 2.1 ANNUAL INSTALLED AND CUMULATIVE OPERATING CAPACITY IN THE TWO
SCENARIOS
2.0 8
Cumulative operating
Annual installaed
1.5 6
capacity (GW)
capacity (GW)
1.0 4
0.5 2
0.0 0
2029 2030 2031 2032 2033 2034 2035
Low growth scenario High growth scenario
Source: BVG Associates.
The first projects are assumed to be installed in 2029. The study of an example early ‘pathfinder’
project in Appendix C sets out the anticipated timescales in developing a first project, as shown in
Figure 2.2. Experience from established OSW markets is that timescales are longer than for onshore
wind and solar projects.
FIGURE 2.2 ESTIMATED PROJECT PROGRAM FOR AN EARLY OFFSHORE WIND PROJECT
IN ROMANIA
A. Early B. Site
Government exploration C. Early stage D. Revenue E. Late-stage development
activity competition development auction /construction
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9
Wind/metocean survey
Pre-FEED
Engineering Technical site surveys
FEED
Geotechnical surveys
Grid System impact study Grid connection agreement
Connection
Strategic environmental Environmental and
assessment social surveys
ESIA
Permitting Application and award of permits
(incl. ESIA) OSW spatial plan OSW added to MSP Final permits
Supply chain planning Procurement
Procurement
and Construction
Construction
Commercial operation date
Site exploration competition Revenue competition
Site exploration Award
Project license award
Management Bankability discussion with investors
and financing
Financing agreement
Final investment decision
Source: BVG Associates.
Two scenarios for offshore wind in Romania 3
BOX 2.1 TIMING OF EARLY OFFSHORE WIND ACTIVITY IN ROMANIA
The scenarios show capacity installed as early as feasible at the time of defining the scenarios. Based
on experience in other markets, it is more likely that capacity will be installed 2 or 3 years later. Timing
will depend both on the length of the project development processes but also on the time to implement
primary and secondary legislation. For example, Section 5.13 shows a first competition for exploration
rights in 2025, but the draft law at time of writing requires relevant competition rules to be finalized
only by the start of 2027.
Ultimately, changed timing does not materially change the bulk of the content of the roadmap. Any
delay drives the need for more generation using technologies with higher carbon dioxide production
but is likely to benefit from ongoing reduction in levelized cost of energy as the global OSW industry
continues to develop.
Headline characteristics of the scenarios, also beyond volume, are summarized in Table 2.1. Details of
how to deliver these scenarios are covered in Section 5. The scenarios are indicative of how the OSW
market could be built out.
The installation rates, especially in early years, will also depend on Government progress in establishing
the policies and frameworks needed to enable OSW, as covered by the recommendations in Section
5. This will depend both on Government decisions on awards and auction caps, as well as industry’s
appetite to take projects forward and ability to bid below Government’s ceiling prices. This relates to
industry cost reduction progressing at the pace anticipated.
TABLE 2.1 CHARACTERISTICS OF THE TWO MARKET DEVELOPMENT SCENARIOS EXPLORED
Low growth scenario High growth scenario
Cumulative 3 GW 7 GW
operating capacity
by end 2035
Maximum 1 project (1 GW) per year 1 project (1.5 GW) per year
installation rate
Policy environment • Good visibility of OSW installation targets • As in low growth scenario
up to 2035
• No formal local content requirement
Frameworks • New framework for exploration licensing set • As in low growth scenario
out in legislation
• Competitive auctions for offtake
agreements
• Coordinated approach to transmission
network upgrades
• Improvements to frameworks for permitting
and health and safety
• OSW incorporated into national Maritime
Spatial Plan
4 Offshore Wind Roadmap for Romania
Low growth scenario High growth scenario
Supply chain • Significant involvement of overseas project • As in low growth scenario, with
developers a higher fraction of towers,
• Project development services and foundations and services supplied
construction support services provided by locally
local companies and a fraction of tower
supply and offshore substation assembly
and installation local.
• Otherwise, mainly use suppliers active in the
regional / global OSW market
Other prerequisites • Engagement to smooth availability of • As in low growth scenario
for scenario sufficient volume of low-cost finance • Increased three-way collaboration
between government, Romania’s
industry, and global OSW industry
to proactively address barriers and
opportunities and build confidence
2.2 POTENTIAL OFFSHORE WIND ENERGY AREAS
Figure 2.3 presents potential areas OSW development, following preliminary analysis summarized
in Section 6. These areas, some of which have the space for more than one large project, have an
indicative total capacity of 6.4 GW of fixed projects and 2.3 GW of floating projects, at a density
of 3 MW/km2.vi A significant caveat is that the analysis has not accounted for avian migration
routes to/from the wetlands of the Danube Delta that could cut across these. There is little available
data relating to this, which contributes to our suggestion in Section 6 to carry out a Strategic
Environmental Assessment of these areas. The EU Habitat and Birds Directives also require all plans
and projects to be assessed as to whether they are likely to have a significant effect on a Natura
2000 site. If it is likely there is significant effects, an Appropriate Assessment would also be required.
Note the proximity of area 1 to Lobul sudic al Câmpului de Phyllophora al lui Zernov Special Area
of Conservation (SAC), which is protected for features including sandbanks, bottle-nosed dolphins
& harbour porpoises and areas 3 and 5 to Canionul Viteaz SAC which is protected for reefs and
submarine structures. Note also that area 5 is further from shore, in deeper water and with lower wind
resource, meaning that it has higher LCOE. Based on analysis to date. It is likely that other areas will be
developed first, but that should Romania seek more OSW capacity, then area 5 would seem the next-
most attractive area. Other seabed with lower associates LCOE is has been excluded for other reasons.
See Section 6.
vi. A typical project has a density of 4.5 MW/ km2 (for example, one 16 MW turbine in an area of about 3.6 km2). Projects need buffer zones between them and not all of the
potential space shown will prove to be suitable, meaning that at this stage it would be reasonable to expect to be able to install at an average density of 3 MW/ km2 over
the areas shown. These figures are indicative and may increase or decrease with further work.
Two scenarios for offshore wind in Romania 5
FIGURE 2.3 POTENTIAL OFFSHORE WIND ENERGY AREAS IN ROMANIA PENDING STRATEGIC
ENVIRONMENTAL ASSESSMENT
Source: BVG Associates.
THE POTENTIAL ROLE OF FLOATING OFFSHORE WIND
The areas with higher wind resource are generally about 50 km from shore and in shallow water, with
wind resource decreasing when moving further from shore and into deeper water. This means that
the most economically attractive sites are likely to be mainly using foundations fixed to the sea bed,
and floating technology is unlikely to be used in commercial projects in Romania until into 2040s.
This section provides a short summary relating to floating OSW technology below, but the rest of the
roadmap focusses on fixed OSW technology.
Today, floating OSW has significantly higher LCOE than fixed OSW, all parameters being equal apart
from water depth. Into the 2030s, this gap will close, such that in some places, floating projects with
higher wind resource will show lower LCOE than fixed projects nearby with lower wind resource. The
balance point between whether to develop fixed or floating sites will depend on the relative progress of
the two technologies. Current expectations are that in time, the depth at which a project developer will
choose to install floating instead of fixed technology is likely to be between 60 and 70 m.
In terms of hardware, there are minimal differences between floating and fixed OSW. Typically, turbine
design, operation and reliability is almost the same, as is the turbine maintenance activities. The
export system electrical hardware is the same, except for some mechanical aspects of cabling which
are different.
6 Offshore Wind Roadmap for Romania
Floating offshore wind offers some additional benefits beyond wind, including:
■ It enables access to a wider range of sites;
■ It allows for more onshore construction work;
■ The foundation hull design is less dependent on ground conditions;
■ The foundations are less susceptible to seismic activity and associated extreme wave events; and
■ It generally has less-invasive activity on the seabed during installation.
At the same time, floating OSW is more challenging than fixed OSW in certain respects, including:
■ Higher costs in early years; and
■ Less confidence in technology and supply chain, as less proven. Key areas of difference are:
• Floating foundation hulls;
• Mooring systems;
• Installation and major component replacements; and
• The use of dynamic subsea cables which are able to cope with potentially almost constant
movement during the life, as opposed to conventional subsea cables used in fixed OSW projects
that are buried in the seabed over most of their length.
Overall, this means that floating OSW projects do have to carry more early project technology risks,
and owners and lenders will price this. However, based on the current pace of technology activity, such
risk will have been removed before any first floating projects in Romania.
Two scenarios for offshore wind in Romania 7
3. LOW GROWTH SCENARIO
3.1 DEVELOPMENT AREAS
The low growth scenario assumes the development of five fixed offshore wind (OSW) projects located
in the potential OSW energy areas shown in Figure 2.3.
3.2 ELECTRICITY MIX
Figure 3.1 shows supply from OSW in the context of the demand for electricity in Romania over the
period. Under the low growth scenario, OSW will provide about 16% of electricity supply in 2036, by the
time the final project installed in 2035 is online. The total electricity supply does not vary between the
low and high growth scenarios, but the proportion of electricity supplied from OSW is greater in the
high growth scenario.
FIGURE 3.1 ELECTRICITY SUPPLIED BY OSW AND OTHER SOURCES IN ROMANIA UP TO 2036 IN
THE LOW GROWTH SCENARIO.
80 40
Offshore wind as fraction of total
Electricity supply (TWh)
60 30
(Percent)
40 20
20 10
0 0
2028
2028 2029 2030 2031 2032
2032 2033
2033 2034
2034 2035
2035 2036
2036
Offshore wind supply Other supply Percentage of supply from offshore wind (right scale)
Source: BVG Associates.
Note: Estimates of total supply derived from Transelectrica RET Development Plan for the period 2022-2031 (favourable scenario,
extrapolated beyond 2031)9.
3.3 LEVELIZED COST OF ENERGY
In this scenario the levelized cost of energy (LCOE) reduces over time, starting with a mid-estimate of
€80/MWh (likely range €72/MWh to €93/MWh) in 2029, reaching a mid-estimate of €61/MWh (likely
range €52/MWh to €76/MWh for a new project installed in 2035. Figure 3.2 shows this trend, along
with the average cost of generation from OSW, derived from the portfolio of projects operating in a
given year.
8 Offshore Wind Roadmap for Romania
The reductions in cost of energy and the key drivers are discussed in Section 7, but include:
■ The use of larger wind turbines;
■ Global learning about OSW technology;
■ Reduction in cost of capital due to reduction in risk and availability of significant volumes of
finance; and
■ Growth in local and regional supply, learning and competition, again driven by volume and market
confidence.
Section 7 also discusses recent volatility in prices.
FIGURE 3.2 LCOE FOR NEW PROJECTS AND OFFSHORE WIND ANNUAL AVERAGE COST OF
GENERATION IN THE LOW GROWTH SCENARIO.
100 10
Cumulative operating capacity (GW)
80 8
Cost (€/MWh)
60 6
40 4
20 2
0 0
2028
2028 2029
2029 2030
2030 2031
2031 2032
2032 2033 2034 2035 2036
Offshore wind LCOE for new project installed in year Offshore wind annual average cost of generation
Cumulative operating capacity at end of year (right scale)
Source: BVG Associates.
3.4 SUPPLY CHAIN AND ECONOMIC IMPACT
By 2035, Romania will have about 28% local content in its OSW farms, as derived in Section 8.
It will be supplying 60% of towers and all onshore and offshore substations, as well as providing
development, installation, and operations and maintenance services. It will also be exporting towers to
other markets. A coordinated, multi-agency approach will be required to maximize local benefits and
grow local capabilities.
3.4.1 Jobs
Figure 3.3 shows that by 2035, 21,000 full-time equivalent (FTE) years of employment will have been
created in Romania by the OSW industryvii. Figure 3.3 shows the FTE years created up between now
and 2035. To aid comparison with the high growth scenario, the same axis scale is used.
vii. Each FTE year of employment is the equivalent of one person working full time for a year. In reality the 21,000 FTE years of employment will be made up of some people
working on the project for much less than a year and others working on the project for many years, especially during the operational phase. The employment profile for a
typical project is shown inFigure 9.2.
Low growth scenario 9
Details of the supply chain, economic benefits of OSW and supply chain investment needs are
discussed in Sections 8 and 9, including a description of where how the local content is broken down. In
addition to this, 7,000 FTE years employment will have been created through the export of towers, as
well as towers manufactured for onshore wind projects.
3.4.2 Gross value added
Figure 3.4 shows that by 2035, €1.4 billion gross value added (GVA) will have been created through
supply to the OSW industry. In addition to this, €400 million of GVA will have been created by 2035
through the export of towers, as well as towers manufactured for the onshore wind industry.
FIGURE 3.3 FTE YEARS CREATED FIGURE 3.4 LOCAL GVA
IN THE LOW GROWTH SCENARIO IN THE LOW GROWTH SCENARIO
16 1.0
FTE years (Thousands)
0.8
12
GVA (€ billion)
0.6
8
0.4
4
0.2
0 0.0
'21-'25 '26-'30 '31-'35 '21-'25 '26-'30 '31-'35
Development and project management Development and project management
Turbine Balance of plant Turbine Balance of plant
Installation and commissioning OMS Installation and commissioning OMS
Source: BVG Associates. Source: BVG Associates.
3.5 TRANSMISSION AND PORT INFRASTRUCTURE
In the low-growth scenario, the electricity transmission system will need some reinforcement, beyond
ongoing revisions typical of regular transmission development plans, as discussed in Section 15.
At an annual installation rate of up to 1 GW per year, some investment in ports will be required to
provide approximately 44 ha of manufacturing and staging space and 400 m quay length. Ports are
discussed in Section 17. Overall Romania has good options for both construction and manufacturing
on the Black Sea. Under the low growth scenario the demand for ports could be provided entirely by
the main Constanța port area, or by a combination this and either the Mangalia or Midia area with
additional investment.
3.6 ENVIRONMENT AND SOCIAL IMPACTS
By 2035, there will be about 150 large OSW turbines in five projects.
If not carefully planned and permitted, this level of development could give rise to adverse
environmental and social effects, including on internationally important biodiversity. A proportionate
OSW spatial plan is needed to designate offshore wind energy areas for early projects. This needs to
10 Offshore Wind Roadmap for Romania
incorporate a Strategic Environmental Assessment in line with Good International Industry Practice
(GIIP). This analysis can then be incorporated into the National Maritime Plan in due course. Robust,
project specific environmental and social impact assessments (ESIAs) to the standard of GIIP and in
line with the permitting process will then be required to ensure appropriate ongoing mitigation and
management of impacts is secured. It will not be possible to completely avoid adverse environmental
and social impact, and government, developers, financiers and stakeholders will need to carefully
consider the trade-offs between securing reliable low-carbon power and these adverse effects. Key
environmental and social considerations associated with OSW development are discussed in Section 11.
Relative to using fossil fuel-based technologies to generate the same amount of electricity, OSW
development in the low-growth scenario will benefit the people of Romania and the global environment
by avoiding the emission of about 100 million metric tons CO2 by 2050. In addition, about 220,000
metric tons of SO2 and 140,000 metric tons of NOx will be avoided. Both are air pollutants known for
creating smog and triggering asthma attacks. OSW will also save about 3 trillion liters of water under
the low growth scenario by 2050. See box for further details.
BOX 3.1 RELATIVE ENVIRONMENTAL IMPACT OF OFFSHORE WIND
CO2 emissions. Fossil fuels release on average 500 metric tons of CO2 per GWh of electricity
generated.10,11 OSW releases on average about 1-2% of this.12 A typical 1 GW wind farm in Romania
with capacity factor of about 44% therefore saves about 1.9 million metric tons of CO2 per year. In the
low growth scenario, by 2050 OSW will have produced about 200TWh, saving 97 million metric tons
of CO2, cumulatively, compared to fossil fuels, based on today’s carbon intensities. Analysis has found
that an OSW farm pays back the carbon produced during construction within§ 7.4 months of the start
of operation.13 The life of an OSW farm is likely to be 30 years or more.
Other unhealthy pollutants. Fossil fuels release on average 1.1 metric tons of SO2 and 0.7 metric tons
of NOx per GWh of electricity generated.13 OSW releases hardly any. As an example of public health
benefits from other markets, the American Wind Energy Association estimated that reductions in air
pollution created the equivalent of €9 billion in public health savings in US in 2018 from the 96 GW of
onshore wind generating in US that year.14
Water consumption. Thermal power plants require water to produce electricity and cool power
generating equipment. Fossil fuels consume on average 15 million liters of water per GWh of electricity
generated.15 Wind farms use very little water. The simplified economic analysis provided in the
roadmap covers jobs and GVA from OSW. In time, more effects (including those discussed here) can be
assessed via more detailed sectoral and economic analysis.
People working on OSW farm construction and operations will be kept safe from harm through a
comprehensive approach to health and safety. We discuss this in Section 20.
3.7 FINANCE AND PROCUREMENT
In both scenarios, we propose OSW will be delivered through competitive auctions. This structure will
provide the best value to Romania. This is discussed in Section 13.
Projects will be developed by a combination of international private developers and local developers.
To achieve this scenario, the frameworks for leasing and offtake agreements will need improvements.
These areas are discussed in Section 13 including recommendations.
Low growth scenario 11
A Capital Expenditure (CAPEX) of about €9 billion will be required for projects installed by the end
of 2035. Sources of public finance will be accessed to fund projects and vital project infrastructure
including port upgrades and transmission assets. Financial instruments such as multilateral lending,
credit enhancements and the adoption of green standards can be used to attract international
finance and reduce the cost of OSW. Access to finance is likely to be dependent on meeting lenders’
performance standards, including those relating to environmental and social issues. Improvements
to the ESIA and permitting process will be required to ensure that projects can meet these standards.
This is discussed in Section 14.
3.8 ACTIONS TO DELIVER THE LOW GROWTH SCENARIO
Our recommendations for government actions are listed in Section 5.
3.9 SWOT ANALYSIS FOR ROMANIA IN THE LOW GROWTH
SCENARIO
A strengths, weaknesses, opportunities and threats analysis for Romania adopting this scenario is
presented in Table 3.1, comparing to the high growth scenario.
TABLE 3.1 SWOT ANALYSIS FOR ROMANIA IN THE LOW GROWTH SCENARIO
Strengths Weaknesses
• Delivers local, large-scale source of clean electricity • Lower volume of OSW means that higher volume of
supply, with long-term jobs and economic benefit. other sources of renewable energy will be needed.
• Going slower than in the high growth scenario • Market size will not drive as much cost of energy
enables more time to react as industry and reduction as the high growth scenario.
technology changes. • Delivers lower jobs and GVA compared to the high
• Slightly less resource and urgency needed than in growth scenario.
the high growth scenario on improving frameworks • Much work on frameworks and industry building is
and addressing other challenges. still required, but for lower benefit.
• Transmission system does not need as much
upgrade as in the high growth scenario.
Opportunities Threats
• Development can accelerate at any time, though • All Government preparatory work on policy and
with some delay to faster acceleration due to frameworks has a fiscal impact, with payback only
project development timescales. if the industry progresses as planned.
• Some local supply chain development and job • Insufficient transmission network progress could
creation. slow OSW.
• Local manufacturing of some towers and • Industry may not have sufficient confidence in
manufacturing and installation of offshore Government intent, so is not willing to invest
substations. sufficiently.
12 Offshore Wind Roadmap for Romania
4. HIGH GROWTH SCENARIO
4.1 DEVELOPMENT AREAS
The high growth scenario assumes the development off seven fixed offshore wind (OSW) projects
located in the potential OSW energy areas shown in Figure 2.3.
4.2 ELECTRICITY MIX
Figure 4.1 shows supply from OSW in the context of the demand for electricity in Romania over the
period. In 2036, OSW will provide 37% of electricity supply, 2.4 times that in the low growth scenario.
FIGURE 4.1 ELECTRICITY SUPPLIED BY OSW AND OTHER SOURCES TO 2036 IN THE HIGH
GROWTH SCENARIO.
80 40
Offshore wind as fraction
Electricity supply (TWh)
60 30
of total (Percent)
40 20
20 10
0 0
2028
2028 2029 2030 2031 2032
2032 2033
2033 2034
2034 2035
2035 2036
2036
Offshore wind supply Other supply Percentage of supply from offshore wind (right scale)
Source: BVG Associates.
Note: Estimates of total supply derived from Transelectrica RET Development Plan for the period 2022-2031 (favourable scenario,
extrapolated beyond 2031).10
4.3 LEVELIZED COST OF ENERGY
In the high growth scenario the levelized cost of energy (LCOE) reduces faster over time, starting with
a mid-estimate of €80/MWh (likely range €72/MWh to €93/MWh) in 2029, reaching a mid-estimate
of €55/MWh (likely range €47/MWh to €68/MWh) for a new project installed in 2035. The 10% lower
LCOE than in the low growth scenario is due to:
■ Faster reduction of the initial costs of starting in a new market; and
■ Lower weighted average cost of capital (WACC) from the expectation of more foreign investment
and reduced risk under the high growth scenario.
This is discussed in Section 7, along with recent volatility in prices.
13
FIGURE 4.2 LCOE FOR NEW PROJECTS AND OFFSHORE WIND ANNUAL AVERAGE COST OF
GENERATION IN THE HIGH GROWTH SCENARIO
100 10
Cumulative operating capacity (GW)
80 8
Cost (€/MWh)
60 6
40 4
20 2
0 0
2028
2028 2029
2029 2030
2030 2031
2031 2032
2032 2033 2034 2035 2036
Offshore wind LCOE for new project installed in year Offshore wind annual average cost of generation
Cumulative operating capacity at end of year (right scale)
Source: BVG Associates.
4.4 SUPPLY CHAIN AND ECONOMIC IMPACT
By 2035, Romania will have about 38% local content in its OSW farms, as derived in Section 9. It
will be supplying 60% of towers and monopiles, and all onshore and offshore substations, as well as
providing development, installation, and operations and maintenance services. It will also be exporting
towers and monopiles to other markets. Increased market size has a significant impact on local
economic benefit, as discussed in Section 9.
Details of the supply chain, economic benefits of OSW and supply chain investment needs are
discussed in Sections 8 and 9, including a description of how the local content is broken down.
4.4.1 Jobs
Figure 4.3 shows that by 2035, 77,000 full time equivalent (FTE) years of employment will have been
created by the OSW industry, which is 3.7 times as much as in the low growth scenario. This assumes
the installation of 2.3 times as much OSW generation capacity as in the low-growth scenario, and the
creation of 1.5 times as many local jobs per MW installed due to increased local supply. In addition to
this, 38,000 FTE years will have been created through the export of towers and monopiles, as well as
towers manufactured for onshore wind projects.
14 Offshore Wind Roadmap for Romania
FIGURE 4.3 FTE YEARS CREATED IN THE HIGH GROWTH SCENARIO (LOW GROWTH SCENARIO
ON THE RIGHT USING SAME SCALE, FOR COMPARISON)
60 60
50 50
FTE years (Thousands)
FTE years (Thousands)
40 40
30 30
20 20
10 10
0 0
'21-'25 '26-'30 '31-'35 '21-'25 '26-'30 '31-'35
Development and project management Turbine Balance of plant
Installation and commissioning OMS
Source: BVG Associates.
4.4.2 Gross value added
Figure 4.4 shows that by 2035, €5.3 billion of gross value added (GVA) will have been created through
supply to the OSW industry, which again is 3.7 times as much as in the low growth scenario. In
addition to this, €2.6 billion of GVA will have been created by 2035 through the export of towers and
monopiles, as well as towers manufactured for the onshore wind industry.
FIGURE 4.4 LOCAL GVA IN THE HIGH GROWTH SCENARIO (LOW GROWTH SCENARIO ON THE
RIGHT USING SAME SCALE, FOR COMPARISON)
4 4
3 3
GVA (€ billion)
GVA (€ billion)
2 2
1 1
0 0
'21-'25 '26-'30 '31-'35 '21-'25 '26-'30 '31-'35
Development and project management Turbine Balance of plant
Installation and commissioning OMS
Source: BVG Associates.
High growth scenario 15
4.5 TRANSMISSION AND PORT INFRASTRUCTURE
In the high-growth scenario significantly more transmission network upgrades will be required, as
discussed in Section 15.
It is likely that only marginally more investment in ports will be required to provide approximately 58
ha of manufacturing and staging space and 400 m quay. Ports are discussed in Section 17. Overall
Romania has good options for both construction and manufacturing on the Black Sea. Under the
high growth scenario the demand for ports could be provided by Constanța, assuming that such a
significant area could become commercially available for OSW construction, with the Mangalia / Midia
areas of Constanța supplementing supply. Alternatively, Midia area of Constanța could deploy the full
annual capacity, but only if the existing petrochemical area can be repurposed.
4.6 ENVIRONMENT AND SOCIAL IMPACTS
By 2035, there will be about 360 large OSW turbines in seven projects, with increased positive impacts
(and potential adverse impacts, due to noise and seabed disturbance during construction and ongoing
activity during operation) than described in Section 3.6.
The people of Romania will benefit from reduced local pollution from electricity generation, and the
global environment will benefit from the displacement of 230 million metric tons CO2 avoided by 2050.
In addition, about 510,000 metric tons of SO2 and 320,000 metric tons of NOx will be avoided. Both
are air pollutants known for creating smog and triggering asthma attacks. Last, OSW will save about
7 trillion liters of water under the high growth scenario by 2050. See box in Section 3.6 for further
details.
4.7 FINANCE AND PROCUREMENT
As in this low growth scenario, OSW will be delivered through competitive auctions. This structure will
provide the best value to the economy. This is discussed in Section 13. The other content of Section 3.7
is fully relevant to this scenario.
A Capital Expenditure (CAPEX) of about €19 billion will be required for projects installed to the end
of 2035. As in the low growth scenario, sources of public finance will be accessed to fund projects
and vital project infrastructure including port upgrades and transmission assets, with the same
dependencies as discussed in Section 3.7.
4.8 ACTIONS TO DELIVER THE HIGH GROWTH SCENARIO
Our recommendations for government actions are listed in Section 5.
4.9 SWOT ANALYSIS FOR ROMANIA IN THE HIGH GROWTH
SCENARIO
A strengths, weaknesses, opportunities and threats analysis for Romania adopting this scenario is
presented in Table 4.1, comparing to the low growth scenario.
16 Offshore Wind Roadmap for Romania
TABLE 4.1 SWOT ANALYSIS FOR ROMANIA IN THE HIGH GROWTH SCENARIO.
Strengths Weaknesses
• Delivers local, large-scale source of clean electricity • Transmission network needs more reinforcement,
supply, with long-term jobs and economic benefit. which will require significant vision, finance and
• Drives more innovation and supply chain investment time.
than the low growth scenario. • Requires greater commitment across Government,
• Larger market size will sustain local competition and somewhat more urgent action than in the low
and support exports, delivering 3.7 times more jobs growth scenario.
and GVA compared to the low growth scenario, by • Needs increase in capacity in the organizations
2035. administering frameworks compared to in the low
• Cost of energy 10% lower than the low growth growth scenario.
scenario.
• Displaces 2.3 times more CO2 than the low growth
scenario, with climate benefits scaled similarly.
Opportunities Threats
• Local manufacturing of a higher proportion of • All Government preparatory work on policy and
towers than the low growth scenario, manufacturing frameworks has a fiscal impact, with payback only
of some foundations and manufacturing and if the industry progresses as planned. More work is
installation of offshore substations. needed sooner than in the low growth scenario.
• Export potential for steel items to the wider • Lack of cross-Government support could increase
European market, especially if using green steel. risk.
• Insufficient transmission network progress could
slow OSW.
• Industry may not have sufficient confidence in
Government intent, so is not willing to invest
sufficiently.
High growth scenario 17
5. ROADMAP FOR OFFSHORE WIND
IN ROMANIA: RECOMMENDATIONS
Offshore wind (OSW) has seen tremendous growth in some parts of the world, most notably in
northwest Europe and in People's Republic of China.
Where OSW has been a success in Europe (for example in the UK, Germany, Denmark and the
Netherlands) it is because successive governments have implemented and sustained strategic policies
and frameworks that encourage the development of OSW farms in their waters by private developers
and investors, using marine spatial planning (MSP) processes to balance the needs of multiple
stakeholders and environmental constraints.
Governments have recognized that if they provide a stable and attractive policy and regulatory
framework, looking at least 10 years ahead, then developers will deliver OSW farms that provide
competitively priced and carbon free electricity to power their economies.
These frameworks set out robust, transparent and timely processes for seabed leasing and for project
permitting. In parallel, they consider what investment in grid and other infrastructure will be required
to deliver a sustainable pipeline of projects. Finally, they have understood what they can do to make
sure projects are financeable and can attract competitive capital by offering a stable and attractive
route to market for the electricity generated.
Much learning from the industry so far is captured in World Bank Group’s Key Factors report.9 Key
questions and topics that report addresses are summarized in Figure 5.1.
FIGURE 5.1 STRATEGY, POLICY, FRAMEWORK, AND DELIVERY: THE FOUR KEY PILLARS
FOR SUCCESSFUL DEVELOPMENT OF OFFSHORE WIND9
Successful long-term deployment
of offshore wind at scale
in emerging markets
Delivery
Frameworks What enabling elements
Policy What frameworks do we do we need to deliver
Strategy need to enact these offshore wind?
What policy decisions do
we need to make? policies? • Industry oversight
What should a successful • Supply chain
offshore wind strategy • Volume and timescales • Marine spatial planning
• Leasing • Ports
focus on? • Cost of energy • Transmission network
• Local jobs and economic • Permitting
• Security of energy • Offtake and revenue • Financing
supply • benefit
• Environmental and social • Export system and grid
• Cost-effective energy for • connection
consumers • sustainability
• Health and Safety,
• Economic benefits • standards and
• Climate and certification
environmental
obligations
• Attracting foreign
investment
18 Offshore Wind Roadmap for Romania
The key recommendations in the roadmap are presented in Sections 5.2 to 5.12 and summarized for the
two scenarios in Figure 5.4 and Figure 5.5, showing suggested timing of activities, which is somewhat
different for the two scenarios. The suggested timing is designed to enable delivery of early projects in
2029 and establish a pipeline of projects to carry on delivering the volumes shown in the scenarios. It is
recognized that urgency is required to enable delivery of projects to these timescales. Should Government
progress more slowly, then it is likely that early projects will be delayed and industry confidence somewhat
reduced. There is also a risk of delays should industry cost reduction not progress at the pace anticipated.
Each recommendation is labelled S (strategy), P (policy), F (frameworks) or D (delivery) showing what
they relate to, aiding reference to the World Bank Group’s Key Factors report.9
Many of the recommendations apply to both the low- and high-growth scenarios, but could happen
later and to a lesser degree in the low growth scenario. Those that may still be advantageous, but
could be avoided in the low growth scenario, are marked (H), indicating for high growth scenario only,
and are not shown in Figure 5.4, giving a reduced list of roadmap actions.
Those recommendations where early progress is most critical to the timely delivery of the high growth
scenario are marked *.
The roadmap timelines presented in Figure 5.4 and Figure 5.5 are based on the principle of delivering
the first projects as early as practically possible. The timelines represent the best case scenario, based
on a prompt and committed start by Government. There are several critical factors that could impact
the suggested timeline, including:
■ The effort required by Government to develop policies and frameworks for OSW and build
confidence in those frameworks with stakeholders and industry;
■ The requirement for improved data to inform spatial planning, and social and environmental
impact assessment;
■ The requirement to plan, finance and build transmission network (and potentially port)
infrastructure in time for the planned OSW capacity; and
■ OSW industry progress in developing technology and supply chain, especially relating to floating OSW.
To maximize the opportunity of delivering the roadmap to this timetable, Government should pay
particular attention to managing and mitigating these critical factors.
5.1 RATIONALE FOR KEY ROADMAP RECOMMENDATIONS
The recommendations in this roadmap are based on robust analysis, consultation and experience. The
rationale for key roadmap recommendations is provided below.
5.1.1 Evolution of frameworks, rather than major changes
We believe that there is already a strong basis for OSW development in many areas.
It will be vital, however, that Government, Romanian industry and global wind industry players work
together to address the changes in frameworks that are needed.
A summary of our assessment of key conditions for OSW in Romania is provided in Table 5.1.
Roadmap for offshore wind in Romania: recommendations 19
TABLE 5.1 SUMMARY OF ASSESSMENT OF KEY CONDITIONS FOR OSW IN ROMANIA
Condition Assessment
Wind resource Medium
Demand for clean power High
Leasing framework New framework needed
Permitting framework Needs some change
Offtake framework New framework needed
Grid connection framework Needs some change
Health and safety framework Needs some change
Transmission network Needs upgrades, especially for high growth scenario
Cost of energy May not be competitive with onshore wind and solar
Local supply chain Good opportunities in some areas, also for export
5.1.2 Timescales for industry growth
Industry experience indicates that establishing robust and bankable frameworks is critical, and that
large, nationally relevant infrastructure projects take a long time to develop, even in established
OSW markets. We believe the timescales proposed fit with reasonable expectations of progress
regarding transmission network upgrades, which are likely to be needed to facilitate OSW. . Currently,
the Romanian grid could only accommodate around 3 GW of additional wind energy capacity by
2030, which is likely to be taken up by onshore wind projects. Additional urgency could come from
requirements of the Modernisation fund (see Section 19), which we suggest is addressed early.
5.2 VISION AND VOLUME TARGETS
Communicating a clear long-term vision and associated volume targets for OSW is an important
step in attracting interest and investment from the global industry and supply chain, stakeholders,
Government departments and the people of Romania. It is recommended that:
1. The Ministry of Energy (MOE) establishes how OSW fits within Romania’s broader energy strategy,
including through a least cost generation analysis, considering temporal patterns for generation
by onshore wind, solar and OSW. (see Section 13) (S, H)
2. The MOE publishes its vision for OSW to 2035 and beyond as part of a decarbonized energy mix,
considering plans also for transport and heat, explaining how and why OSW is important. (see
Section 13) (S, H)
3. The MOE sets OSW installed capacity targets for 2030 and 2035 in the next revision of the
National Energy and Climate Plan (NECP), showing clear plan for delivery of first projects, including
the timetable for private-sector competitions. (see Section 13) (D*)
5.3 PARTNERSHIPS
The large scale and high complexity of OSW projects makes it entirely different from onshore wind or solar.
Projects combine the scale of large hydroelectricity schemes and the complexity of offshore hydrocarbon
extraction. Government-industry collaboration is therefore essential to build confidence, develop a
successful new sector and deliver the benefits seen in other markets. On this basis, it is recommended that:
20 Offshore Wind Roadmap for Romania
4. The MOE establishes a long-term Government-industry forum involving local and international
project developers and key suppliers, to work together to address the new OSW law, the recommen-
dations throughout the roadmap and other considerations, as they arise. (see Section 18) (D*)
5. The MOE agrees with other relevant Government departments, to define inter-departmental
cooperation and alignment on OSW, covering leasing, permitting, offtake, transmission and health
and safety frameworks, and key areas of delivery including supply chain and finance, to ensure
there are no unexpected hurdles or non-unitary interpretations of legislation or frameworks. (see
Section 18) (D*)
6. The MOE leads in establishing which organization should play which role regarding the different
frameworks needed for OSW. (see Section 20) (F*)
5.4 MARINE SPATIAL PLANNING, EXPLORATION LICENSES, LEASING
AND OFFTAKE FRAMEWORKS
To develop a sustainable OSW energy industry Romania needs processes for exploration licenses,
leasing and offtake that are robust, transparent and timely.
International investment will be required to develop the potential volumes of OSW discussed in this
report. A stable route to selling electricity is required to make this happen. It is recommended that:
7. The MOE progresses a proportionate OSW spatial plan, incorporating Strategic Environmental
Assessment in line with Good International Industry Practice (GIIP), involving:
• Sensitivity mapping of environmental and social attributes
• Consideration of avian migration routes to/from the wetlands of the Danube Delta
• Better understanding of the distribution and abundance of cetaceans, and
• The cumulative impact of multiple projects.
This should include focus on engagement with key stakeholders and will result in early designation
of offshore wind energy areas. (see Section 6) (F*)
8. The MOE and Ministry of Development, Public Works and Administration include OSW in the next
revision of the National Maritime Plan, formalizing the proportionate OSW spatial plan described
above. (see Section 6) (F)
9. The MOE introduces a new, clear and investor-friendly OSW law and associated regulation relating
to OSW frameworks, involving other public stakeholders, as required. All aspects, including with
respect to transmission, need to be in compliance with national and European provisions in the
field of competition and state aid. (see Section13). (F*)
10. The MOE proposes that the National Energy Regulatory Authority (ANRE)) is given responsibility to
grant seabed rights relating to OSW. (see Section 13) (F)
11. The MOE ensures curtailment compensation and indexation is in relevant contracts. (see Section 18) (F)
12. The MOE considers avoiding regulatory barriers for developers with regard to signing corporate
power purchase agreements as an alternative route to market than winning a revenue
competition. (see Section 13) (F)
13. The Ministry of Finance considers whether to signal its commitment to backstops offtaker
obligations for multiple GW-scale projects, if needed. (see Section 18) (F)
14. The MOE, working with the Government General Secretariat, drives stability and predictability of the
legal and fiscal regime, including stability clauses in OSW concession agreements. (see Section 18) (F)
Roadmap for offshore wind in Romania: recommendations 21
A summary of the proposed model for leasing and revenue frameworks for OSW in Romania is shown
in Figure 5.2. The model suggested for Romania consists of two competitions, one for an exploration
license, then a later competition for revenue support and lease. The principles underpinning this design
is discussed in Section 13.
FIGURE 5.2 BEST ESTIMATE TIMELINE FOR LEASING AND REVENUE FRAMEWORKS IN THE HIGH
GROWTH SCENARIO
Compe- Auction
tition
2023-2024 2025 2025-2027 2027 2027-2029 2029-2032
Early Government Site exploration Feasibility work Revenue auction Project Project
activity competition • Winning consortia • Government opens development construction
• Government sets • Governments carry out detailed data room with • The winning and operation
OSW capacity target shortlists consortia feasibility work data from feasibility developer(s) • The winning
• Government appoints based on work progresses the site developers
Independent Engineer pre-qualification • Government development to construct the
and Transaction criteria initiates reach FID projects, and the
Advisor to undertake • Government pre-qualification projects reach
a Strategic publishes timeline and selects a operation
Environmental for auction and shortlist of
Assessment guidance on developers for the
• Government compensation for revenue
designates sites or winning consortia. competition
areas. • Government runs • The Government
• Government site exploration runs auction and
progresses OSW law. competition selects a winner for
• Government each of the sites
awards exploration • The Government
licenses and site provides
exclusivity to carry compensation to
out detailed site exploration
feasibility work to consortia per rules
winning consortia. established
A summary of recommended Government and project developer responsibilities for OSW activities
through the project lifecycle, is shown in Figure 5.3, in the format of Figure 3.4 of World Bank Group’s
Key Factors report, which presents responsibilities in a range of established OSW markets.9
FIGURE 5.3 SUMMARY OF RECOMMENDED GOVERNMENT AND PROJECT DEVELOPER
RESPONSIBILITIES FOR OFFSHORE WIND ACTIVITIES THROUGH THE PROJECT LIFECYCLE
IN ROMANIA
Wind Wind energy Project site Exploration: project Final development Wind farm
farm
process area selection selection early development & permitting construction
Export Export system
system Export system early development Final development
process construction
Ministry of Energy Not finalised* C Developer C Developer Developer
Romania
Developer** Developer** Developer**
Government led Developer led Competition
Notes: * Government may define broad areas for OSW development or define specific sites. This detail to be finalised in due
course (see Section 6). ** If only one OSW project will use the export system, then the developer will deliver. If more than one
project will use the same export system, transmission network operator, Transelectrica will deliver.
22 Offshore Wind Roadmap for Romania
5.5 PERMITTING
Key to industry confidence and ensuring careful stewardship of the environment and communities is a
transparent and bankable permitting process. It is recommended that:
15. The Ministry of Environment, supported by the Ministry of Finance addresses any shortfalls
in Romanian ESIA requirements compared to EU Regulations, GIIP, and lender standards. (see
Section 19) (F)
16. The Government General Secretariat establishes a one-stop-shop permitting entity in order to
simplify the decision-making process and interface for project developers and enables the use of
digital services for submitting applications and similar. (see Section 14) (F, H)
17. The new permitting entity develops an OSW specific process based on the current permitting
process, also ensuring that it meets GIIP to help de-risk projects and facilitate access to
international finance. (see Section 14) (F, H)
18. New permitting entity explores access to (and benefits of use of) existing environmental data from
impact assessment of oil and gas activities, held by Authority for Mineral Resources (NAMR) in
order to increase efficiency of OSW environmental impact assessment (See Section 11) (D).
5.6 FINANCE
Enabling sufficient finance and reducing the cost of capital for OSW projects in Romania are key
drivers in enabling volume delivery at low levelized cost of energy (LCOE). It is recommended that:
19. MOE establishes the feasibility and attractiveness of using the Modernisation Fund to support
OSW, including any flexibility regarding timescales due to the time it takes to develop OSW
projects in a new market. (see Section 19) (D)
20. The MOE, with the Ministry of Finance considers financial mechanisms to reduce cost of capital
for OSW projects, including access to climate and other concessional finance and ensures
international market standards for contractual risk allocation and arbitration. Early engagement
with MDBs is encouraged, in order to shape any guaranty scheme, credit enhancement, first loss
support or other arrangement. (see Section 19) (D)
21. The MOE explores together with the Ministry of Finance any potential fiscal instruments relating
to the support of OSW subject to the country’s context and its position as an EU Member State.
(see Section 19) (D)
22. The MOE works with others to ensure enforceability of contracts, both with Government and
suppliers. (see Section 18) (D)
5.7 GRID CONNECTION AND TRANSMISSION NETWORK
The transmission network currently offers only limited opportunity for grid connection of early
projects via local upgrades. To deliver a transmission network enabling large-scale OSW development
will require strategic leadership and finance. This is a topic wider than OSW, considering all electricity,
transport and heat. It is recommended that:
Roadmap for offshore wind in Romania: recommendations 23
23. Transelectrica develops a 2050 vision for a nationwide electricity transmission network for a
decarbonized energy system, with milestone plans for 2030 and 2040 and consideration of
finance. This is a topic much wider than OSW, considering all electricity, transport and heat,
and should include viability of subsea interconnection between Ukraine, Romania, Bulgaria and
Türkiye and also with Azerbaijan, providing balancing between the relevant states. Transelectrica
incorporates MOE’s OSW development vision into its next ten-year plan, published in 2024, and
considers offshore hubs and the potential impact of international interconnects so that timely
export and transmission solutions can be delivered.. (see Section 15) (S, H)
24. Transelectrica undertakes power systems studies to understand the potential impacts of
large volumes OSW on the future transmission network and ESIAs in line with GIIP and lender
requirements to understand the environmental and social implications of transmission network
upgrades, feeding these into MSP activities. (see Section 15) (D, H)
25. Transelectrica, MOE, distribution system operators (DSOs) and other relevant balancing parties
agree a the network management rules to better reflect the probabilistic nature of variable output
renewables, including OSW, whilst remaining with EU regulations. (see Section 15) (D)
26. ANRE amends the template grid connection agreement (and any auxiliary regulations) to
incorporate compensation terms in the grid connection agreement to apply if transmission
network reinforcement is delayed and this impacts export of energy. (see Section 15) (D)
27. Transelectrica, potentially with WBG support, considers low cost solutions for the financing of
transmission upgrades and the use of concessional finance. (see Section 15) (D, H)
5.8 PORT INFRASTRUCTURE
Romania has port facilities relevant to OSW. It is recommended that:
28. The MOE creates an inter-ministerial group with the Ministry of Finance, the Ministry of Economy
and the Ministry of Transport and Infrastructure. The inter-ministerial group creates and promotes
a plan for port use for OSW manufacturing and construction, interfacing with current activity
to develop the Naval Strategy. Consideration should be given to lead times for the upgrades to
ensure suitable facilities are ready in time for project deployment and environmental and social
considerations and robust ESIA analysis for any potential developments. (see Section 17) (D)
29. The MOE works with the Ministry of Transport and Infrastructure to encourage the publication of a
simple OSW ports prospectus, showing port capabilities against physical OSW requirements, and
use this to encourage dialogue with project developers. (see Section 17) (D)
30. Project developers explore any transport restrictions when entering the Black Sea for likely future
wind turbine installation vessels. (see Section 17) (D)
31. The MOE considers prioritizing investments through the Resilience and Recovery Fund, or similar,
into port infrastructure and supply chain for OSW, in the context of the green transition and the
commitments to build renewable energy. (see Section 17) (D)
5.9 SUPPLY CHAIN DEVELOPMENT
Romania has a competitive supply chain for a range of areas relevant to OSW. A proactive approach
will help increase local readiness for supply. It is recommended that:
24 Offshore Wind Roadmap for Romania
32. The MOE, working with the Ministry of Development, Public Works and Administration, the
Ministry of Economy and Ministry of Transport and Infrastructure, presents a balanced vision for
local supply chain development, encouraging international competition (learning from elsewhere
and avoiding restrictive local content requirements that add risk and cost to projects and slow
deployment). (see Section 8) (P)
33. The MOE considers steps to support the expansion of supply chain for OSW, including the use of
non-price criteria in auctions. (see Section 8) (D)
5.10 HYDROGEN
The ability to store significant volumes of energy as hydrogen (or derivatives) is a potentially
significant enabler for increased offshore wind production in Romania and other markets. Hydrogen
also offers a route to decarbonizing hard-to-abate processes such as steel manufacture. It is
recommended that:
34. The MOE finalizes and publishes domestic hydrogen policy to give clarity to industry, OSW project
developers and other hydrogen industry stakeholders. This includes hydrogen as a storage solution
to enable a greater share of variable renewable energy sources in the Romanian electricity mix.
(see Section 16) (P, H)
35. The MOE encourages coordination between Transelectrica, Transgas, and other stakeholders to
create legislation, regulations, standards, tariffs, transport, storage, import, export and trading
arrangements for hydrogen. (see Section 16) (F, H)
36. The MOE explores how LCOH and interconnection policy in other nearby countries will impact the
requirements for domestic hydrogen production. (see Section 16) (D, H)
37. The MOE supports international efforts to establish a certification of origin framework for green
hydrogen to allow meaningful competition with blue and gray hydrogen markets. (see Section 16) (F, H)
38. The MOE investigates small scale green hydrogen production as a flexible load that can be utilized to
absorb intermittent renewable generation from a range of sources, not just OSW. (see Section 16) (D)
5.11 HEALTH AND SAFETY AND OTHER STANDARDS
AND REGULATIONS
Safeguarding the environment and societal interests, designing and installing safe structures and
protecting workers needs to be a priority at all levels of the industry. Having a recognized framework
of technical legislation and design codes is an important element in establishing bankability and
attracting and sustaining international interest and investment in the market. It is recommended that:
39. The Ministry of Labour and Social Solidarity adapts the existing framework of labor code and
regulations to be suitable for OSW, adopting international industry standards where appropriate.
(see Section 12) (F)
40. Authority for the Regulation of Offshore Oil Operations in the Black Sea (ACROPO) develops H&S
regulations specifically designed for application to the OSW industry, which should be based on
existing regulations in established EU markets, and include reference to the international design
and operational standards adopted in established OSW markets. (see Section 12) (F)
Roadmap for offshore wind in Romania: recommendations 25
41. ACROPO ensures H&S regulations have a firm focus on the behavioral aspects of H&S and ensure
that ongoing behavioral training forms a core element of compliance. Behavioral training forms an
integral part of modern OSW H&S practices in established OSW markets. (see Section 12) (D)
42. ACROPO encourages companies active in OSW and oil and gas activities in Romania to
collaborate on knowledge sharing. This will allow the OSW industry to build upon existing
experience in oil and gas by using established facilities and personnel to train OSW workers, were
possible. (see Section 12) (D)
5.12 SKILLS AND GENDER EQUALITY
Strong frameworks only deliver if they are implemented through agencies with clear roles, well-defined
mandates, and sufficiently resourced staff. Gender equality is key to development of an excellent pool
of capability, both within stakeholders and with the OSW industry and is an important focus for an
establishing, future-focused industry. It is recommended that:
43. The MOE and the General Secretariat of Government lead in helping Government departments and
other key stakeholders to grow capacity and knowledge needed to process the planned volume of
OSW projects (through all frameworks). (see Section 11) (D)
44. The MOE, Ministry of Economy, The Ministry of Education, relevant universities / training colleges
and industry (through the Romanian Wind Energy Association (RWEA)) collaborate to enable
education and investment in local supply chain businesses, including in training of onshore and
offshore workers. (see Section 8) (D)
45. OSW project developers and suppliers collaborate to encourage women into the sector and get
involved in gender equality working groups. Women’s rights organizations in Romania, such as
the Women’s Association of Romania, the Association for Liberty and Equality of Gender and
Centrul Filia, and industry bodies, such as Global Wind Energy Council (GWEC) and Global Women’s
Network for the Energy Transition (GWNET), should be included in these working groups. (see
Section 10) (D)
46. The Ministry of Labour and Social Solidarity and industry set diversity targets and establish
framework to measure progress. see Section 10) (D)
47. OSW project developers and suppliers collaborate to publish a best practice guide for industry
stakeholders and ensures opportunities for women in OSW are well-promoted. The best practice
guide should discuss using gender decoders and gender-balanced language to ensure hiring
practices are unbiased and creating spaces and opportunities for women to network within the
OSW sector. see Section 10) (D)
48. The MOE considers introducing diversity requirements into leasing and revenue frameworks. see
Section 10) (F)
26 Offshore Wind Roadmap for Romania
5.13 ROADMAP SUMMARIES
FIGURE 5.4 LOW GROWTH SCENARIO ROADMAP FOR OFFSHORE WIND IN ROMANIA
1: Set the vision
onwards 5: Future phase
2: Evolve the frameworks
3: Develop and install first projects
4: Develop the long-term
infrastructure
2030
2036
2028
2026
2029
2033
2035
2034
2023
2032
2025
2024
2027
2031
Volumes
Exploration licenses awarded (GW) 2.0 2.0
Offtake contracts awarded (GW) 1.0 2.0
Projects installed (GW) 0.3 0.5 0.5 0.7 1.0
Cumulative operating capacity (at end of year) (GW) 0.3 0.3 0.8 1.3 2.0 2.0 3.0
Vision and volume targets
3. Installation targets for 2030 and 2035
Partnerships
4. Form Government-industry forum
5. Inter-Governmental agreements
6. Establishing organization roles
MSP, exploration licenses, leasing and offtake frameworks
7. OSW spatial plan and Strategic Environmental Assessment
8. OSW in the National Maritime Plan
9. OSW Law
10. Agency for awarding seabed rights
11. Curtailment compensation
12. Enabling corporate power purchase agreements
13. Consider offtake backstop commitment
14. Stability clauses in concession agreements, and beyond
Permitting
15. ESIA requirements
18. Access existing environmental data
Finance
19. Modernisation Fund feasibility
20. Mechanisms to reduce cost of capital
21. Explore fiscal incentives
22. Enforceability of contracts
Grid connection and transmission
25. Network management rules
26. Grid connection agreement
Port infrastructure
28. OSW ports plan
29. OSW ports prospectus
30. Transport restrictions
31. Investments through Resilience and Recovery Fund
Supply chain development
32 Supply chain vision
33 Steps to support supply chain development
Health and safety and other standards and regulations
39. Labor code
40. H&S regulations
41 & 42. Start H&S training and knowledge sharing
Capacity building and gender equality
43. Start growing stakeholder capacity and knowledge
44. Start supply chain and workforce education and support
45. Establish gender equality working groups
46. Diversity targets and measurement
47. Gender best practice guide
48. Diversity requirements part of frameworks
Roadmap for offshore wind in Romania: recommendations 27
FIGURE 5.5 HIGH GROWTH SCENARIO ROADMAP FOR OFFSHORE WIND IN ROMANIA
1: Set the vision
onwards 5: Future phase
2: Evolve the frameworks
3: Develop and install first projects
4: Develop the long-term
infrastructure
2030
2036
2028
2026
2029
2033
2035
2034
2023
2032
2025
2024
2027
2031
Volumes
Exploration licenses awarded (GW) 3.0 3.0 3.0
Offtake contracts awarded (GW) 2.0 3.0 2.0
Projects installed (GW) 0.3 0.5 0.8 1.2 1.2 1.5 1.5
Cumulative operating capacity (at end of year) (GW) 0.3 0.8 1.6 3 4.0 5.5 7.0
Vision and volume targets
1. How OSW fits in the energy strategy
2. Vision for OSW to 2035
3. Installation targets for 2030 and 2035
Partnerships
4. Form Government-industry forum
5. Inter-Governmental agreements
6. Establishing organization roles
MSP, exploration licenses, leasing and offtake frameworks
7. OSW spatial plan and Strategic Environmental Assessment
8. OSW in the National Maritime Plan
9. OSW Law
10. Agency for awarding seabed rights
11. Curtailment compensation
12. Enabling corporate power purchase agreements
13. Consider offtake backstop commitment
14. Stability clauses in concession agreements, and beyond
Permitting
15. ESIA requirements
16. One-stop shop entity
17. OSW-specific permitting process
18. Access existing environmental data
Finance
19. Modernisation Fund feasibility
20. Mechanisms to reduce cost of capital
21. Explore fiscal incentives
22. Enforceability of contracts
Grid connection and transmission
23. Transmission network vision
24. Power system studies
25. Network management rules
26. Grid connection agreement
27. Transmission network financing
Port infrastructure
28. OSW ports plan
29. OSW ports prospectus
30. Transport restrictions
31. Investments through Resilience and Recovery Fund
Supply chain development
32 Supply chain vision
33 Steps to support supply chain development
Hydrogen
34. Hydrogen policy
35. Hydrogen legislation and regulation
36. Hydrogen interconnection
37. Certification of origin
38. Small-scale Hydrogen plant
28 Offshore Wind Roadmap for Romania
1: Set the vision
onwards 5: Future phase
2: Evolve the frameworks
3: Develop and install first projects
4: Develop the long-term
infrastructure
2030
2036
2028
2026
2029
2033
2035
2034
2023
2032
2025
2024
2027
2031
Health and safety and other standards and regulations
39. Labor code
40. H&S regulations
41 & 42. Start H&S training and knowledge sharing
Capacity building and gender equality
43. Start growing stakeholder capacity and knowledge
44. Start supply chain and workforce education and support
45. Establish gender equality working groups
46. Diversity targets and measurement
47. Gender best practice guide
48. Diversity requirements part of frameworks
Roadmap for offshore wind in Romania: recommendations 29
SUPPORTING
INFORMATION
30 Offshore Wind Roadmap for Romania
6. SPATIAL PLANNING
6.1 PURPOSE
The purpose of this section is to present an overview of the publicly available spatial data relating to
environmental, social, and technical considerations that may impact prospective offshore wind (OSW)
development in Romania, and to recommend steps to establish suitable locations for OSW development.
6.2 METHOD
At the time of writing, Romania had almost completed a robust National Maritime Plan.viii This
plan refers to OSW but does not identify specific areas, as specific volumes of OSW had not been
formalized in Government plans.
We have not carried out a detailed parallel process to identify areas suitable for OSW, rather
highlighted key considerations and recommended next steps in this area.
We have, however, provided an indicative map (independent of the National Marine Plan) for potential
offshore wind energy areas, useful for defining typical site conditions and supply chain needs.
In the sections below, we present:
■ The technical potential for OSW in Romania based on a simplified assessment;
■ Relevant environmental, social and technical considerations and a data gap analysis;
■ Our spatial view of levelized cost of energy (LCOE);
■ Potential offshore wind energy areas; and
■ Recommended steps to establish formally suitable locations for OSW in Romania.
6.2.1 Technical potential
The WBG ESMAP program has developed technical potential for 56 OSW markets, including Romania.
It shows a technical potential of 22 GW on fixed sites and 54 GW on floating sites 16The analysis
methodology is explained in detail on the web page.17
viii. At the national level, the general framework for strategic planning, sustainable and integrated development of the various uses of marine waters is established by the
National Maritime Plan. The plan has a directive and regulatory character, having the role of identifying the spatial and temporal distribution of current and future activities
and uses in marine waters.
The National Maritime Plan was developed with the participation and consultation of the competent authorities established by Government Ordinance no. 18/2016
regarding the development of the maritime space. At time of writing, the plan was going through the strategic environmental assessment procedure, during which the
Environmental Report and the Adequate Assessment Study (together, a Strategic Environmental Assessment (SEA)) are drawn up, according to the Decision of the
framework stage regarding the plan, issued by the Ministry of the Environment, Water and Forests (no. 11/09/11/2022).
Following the completion of the environmental assessment procedure, the sectoral strategies aimed at the development objectives included in the plan will no longer be
subject to SEA, according to Government Decision no. 1076/2004 on establishing the procedure for carrying out the environmental assessment for plans and programs. For
OSW projects, it will be necessary to go through an environmental and social impact assessment (ESIA) procedure.
31
Technical potential is defined as the maximum possible installed capacity as determined by wind
speed and water depth. Mean wind speeds (at 100 m height) exceeding 7 m/s are considered viable for
OSW, and water depths of up to 50 m and up to 1000 m are considered viable for fixed and floating
foundations, respectively. The datasets used in this analysis are listed under technical considerations
in Table 6.1.
The analysis of technical potential does not consider other factors that could influence the planning
and siting of OSW projects including environmental, social and economic considerations.
The technical potential is shown in Figure 6.1.
FIGURE 6.1 OFFSHORE WIND TECHNICAL POTENTIAL IN ROMANIA
Source: World Bank Group and ESMAP.
32 Offshore Wind Roadmap for Romania
6.2.2 Environmental, social & technical considerations
Table 6.1 provides a list of the spatial layers relevant to OSW spatial planning, showing known data gaps.
TABLE 6.1 SPATIAL DATA LAYERS RELEVANT TO OFFSHORE WIND SPATIAL PLANNING.
In
National
Maritime
Data layer Notes Data Source Reference Plan
Environmental considerations
Marine Protected areas under the EU Natura Natura 2000 https://ec.europa. Yes
Protected 2000 program, protecting key eu/environment/
Areas breeding, foraging and resting sites nature/natura2000/
for rare and threatened species, index_en.htm
and important congregations of
migratory species.
This also includes multiple Special
Areas of Conservation for which
bottle-nosed dolphin and harbour
porpoise are designated features
along the Romanian coast
Critical Areas of known habitats of Habitats https://ec.europa. Yes
Habitats threatened species, designated Directive eu/environment/
under EU Habitats Directive and Birds Directive nature/legislation/
Birds Directive, including estuaries habitatsdirective/
and mudflats. index_en.htm
https://environ-
ment.ec.europa.
eu/topics/na-
ture-and-biodiversity/
birds-directive_en
Important Areas of importance for vulnerable ISRA https://sharkrayareas.
Shark and species org/portfolio-item/
Ray Areas vama-veche-isra/#-
toggle-id-1
Ecologically Areas of importance in terms of EBSA https://www.cbd.int/
or Biologically supporting a healthy ocean ebsa/
Significant
Marine Areas
Key Areas of international importance in IBAT https://www. No
Biodiversity terms of biodiversity conservation. ibat-alliance.org/
Areas sample-down-
(including loads?tab=gis-down-
Alliance loads&anchor_id=re-
for Zero source-header
Extinction
sites and
Important
Bird Areas
(IBA)
Ramsar sites Wetlands of international IBAT http://ihp-wins. No
importance that have been Ramsar unesco.org/layers/
designated under the criteria of the Convention geonode:sites
Ramsar Convention on Wetlands https://www.ramsar.
for containing. representative, rare org/country-profile/
or unique wetland types, or for their romania
importance in conserving biological
diversity.
Spatial planning 33
In
National
Maritime
Data layer Notes Data Source Reference Plan
Important Habitats important to marine Marine https://www.marine- Yes,
Marine mammal species that have the Mammal mammalhabitat.org/ unsourced
Mammal potential to be delineated and Protected imma-eatlas/ information
Areas (IMMAs) managed for conservation. Areas Task on dolphin
Dolphins are a particular Force sightings
consideration Romanian waters, but and activity
limited recent dolphin population are included
datasets are available.ix
UNESCO Natural heritage sites with UNEP http://www.un- Yes
World outstanding universal value to ep-wcmc.org
Heritage humanity.
Natural Sites
UNESCO- The MAB program is an UNESCO http://ihp-wins.une- No
MAB intergovernmental scientific sco.org/layers
Biosphere program that aims to establish a
Reserves scientific basis for enhancing the
relationship between people and
their environments.
Endemic Bird Areas of overlapping breeding ranges BirdLife http://datazone. No
Areas (EBAs) of restricted range bird species International birdlife.org/eba/
Data Zone.
Social considerations
UNESCO Cultural and/or natural heritage UNESCO http://ihp-wins. No
World sites with outstanding universal unesco.org/layers/
Heritage Sites value to humanity worldheritagesites:-
geonode:worldherita-
gesites
Fishing effort Apparent fishing effort derived from Global Fishing https://globalfish- No
satellite monitoring Watch Marine ingwatch.org/ma-
Manager rine-manager-portal/
Commercial Yes,
fisheries contains
data on
commercial
fishing. No
sources
available
Marine Yes,
aquaculture contains
data on
traditional
fishing
areas and,
mussels
Landscape No dataset No
and seascape found
Tourism areas No dataset No
found
Wrecks The Global Maritime Wrecks NASA https://cmr.earth- Yes
and historic Database (GMWD) is a worldwide data.nasa.gov/
offshore sites ArcView point shapefile of more than search/concepts/
250,000 wreck locations C1214613883-SCIOPS
ix. Some information from vessel surveys can be found in https://blackmeditjournal.org/wp-content/uploads/2-20193_266-279.pdf and http://
olteniastudiisicomunicaristiintelenaturii.ro/cont/37_2/III.%20ANIMAL%20BIOLOGY%20III.b.%20VERTEBRATES/20%20Paiu.pdf
34 Offshore Wind Roadmap for Romania
In
National
Maritime
Data layer Notes Data Source Reference Plan
Technical considerations
Airports Regions around airports may need to Openflights https://openflights. No
be avoided to reduce radar impacts. 2020 org/data.html
Exclusive Internationally recognized marine Marine Eco https://www.mari- Yes
Economic boundaries. Regions neregions.org/
Zones (EEZ)
Extreme wind Used for information. Not a PREVIEW https://preview.grid. No
speeds consideration for Romania, no risk Global Data unep.ch/
of significant cyclone wind speeds Risk Platform
recorded
Mean wind Used to determine annual energy The Global https://globalwindat- No
speed production (AEP) and LCOE Wind Atlas las.info/
v3.3, released
in 2023 (Danish
Technical
University
(DTU) and
WBG)
Military bases Locations of military bases and NATO https://www.nato.int/ No
facilities of NATO. Public dataset nato-on-the-map/
for Romania national military not
available
Military Public data not available Military
exclusion training
zones areas
identified
Offshore Locations of offshore oil and gas Global oil https://www.eia.gov/ Yes
oil and gas activity and gas maps/
activity infrastructure -
US Department
of Energy
Ports Locations and size of ports World Port https://msi.nga.mil/ Yes
Index 2019 Publications/WPI
Seismic Used for information. Details peak PREVIEW https://preview.grid. No
activity ground acceleration for a 250 year Global Data unep.ch/
return period Risk Platform
Shipping The raster layers were created using World Bank https://datacatalog. No. Some
density IMF’s analysis of hourly AIS positions worldbank.org/search/ shipping
received between Jan-2015 and Feb- dataset/0037580/ lanes
2021 and represent the total number Global-Shipping-Traf- around
of AIS positions that have been fic-Density Constanța
reported by ships in each grid cell included
with dimensions of 0.005 degree by
0.005 degree (approximately a 500
m x 500 m grid at the Equator)
Undersea Datasets includes official submarine TeleGeography https://www.subma- Yes
cables cable system name, cable system Submarine rinecablemap.com/
length and landing points. Cable Map
Additional information such as the
owners of the cable systems can be
found on www.submarinecablemap.
com.
The routes of the cables do not
accurately reflect the exact route taken
by each cable but give an indication of
approximate location.
Spatial planning 35
In
National
Maritime
Data layer Notes Data Source Reference Plan
Water depth Used to determine areas of fixed/ The General https://www.gebco. Yes
floating foundations, and as input to Bathymetric net/data_and_prod-
the LCOE model. Chart of ucts/gridded_bathym-
the Oceans etry_data/
(GEBCO_2020)
Aggregate No known data No
and material
extraction
areas
Offshore No known data No
disposal sites
6.2.3 Levelized cost of energy
The site parameters that have the most influence on cost of energy are:
■ Wind speed;
■ Water depth;
■ Distance to construction port;
■ Distance to operation port; and
■ Distance to grid.
These site parameters were used along with typical project characteristics and assumptions, to
estimate a spatial distribution of relative LCOE for a project installed in 2032 in Romanian waters.
The analysis is compatible with the LCOE trajectories for typical projects presented in Section 7. The
analysis is detailed, but not as sophisticated as one carried out for an actual OSW project, involving
months of detailed design and optimization.
The wind speed and water depth spatial datasets used were the same as those used for the technical
potential mapping.
We calculated travel distance from the port of Constanța, assuming it would be used for construction
and operation.
A grid connection point close to Constanța was assumed to avoid landfall within Natura 2000
protected areas. It is assumed that 20 km of onshore transmission cable would be required, in addition
to the offshore transmission infrastructure. We assumed floating foundations would be used for sites
with water deeper than 65 m, in line with current industry expectation. In practice, the cut-off between
fixed and floating depths will be determined on a project-by-project basis.
We considered the LCOE for the entire exclusive economic zone (EEZ), including some areas in the
south east of the EEZ with water depth greater than 1000 m, although in practice these areas may
present technical feasibility challenges in addition to being the highest LCOE areas.
We constrained distance to shore to less than 200 km to rule out sites where novel transmission
infrastructure or alternative energy conversion would be needed. This was also the limit of the wind
speed data set.
36 Offshore Wind Roadmap for Romania
6.2.4 Potential offshore wind energy areas
Indicative potential OSW energy areas are shown in Figure 6.2. These are based on:
■ Consideration of major environmental exclusions based on the Natura 2000 protected areas;
■ Shipping densities and shipping lanes; and
■ Prioritizing lower LCOE areas.
A significant caveat is that we have not accounted for avian migration routes to/from the wetlands
of the Danube Delta that could cut across these. There is little available data relating to this, which
contributes to our suggestion in Section 6.2.5 to carry out a Strategic Environmental Assessment.
This means that any updated assessment of offshore wind energy areas needs to be flexible enough to
account for new data and understanding, enabling habitat and species protection.
Given the existence of important areas with protection status in the vicinity of the potential offshore wind
energy areas proposed, it is important to comply with environmental regulations and, through the whole life
of projects, to develop solutions that are sensitive to the needs and vulnerabilities of relevant receptors.
FIGURE 6.2 POTENTIAL OFFSHORE WIND ENERGY AREAS IN ROMANIA
The total identified area covers about 2,100 km2 suitable for projects with fixed foundations and 750
km2 in water deeper than 65 m, suitable for projects with floating foundations. The latter might be
relevant should project developers want to progress this technology, or Romania choose to increase
OSW capacity beyond what it can deliver from fixed sites.
Spatial planning 37
A typical project has a density of 4.5 MW/ km2 (for example, one 16 MW turbine in an area of about 3.6 km2).
Projects need buffer zones (typically of at least 10 km) between them and not all of the potential space shown
will prove to be suitable, meaning that at this stage it would be reasonable to expect to be able to install at
an average density of 3 MW/ km2 over the areas shown. At this density. these potential wind energy areas
would facilitate 6.4 GW of fixed projects and 2.3 GW of floating capacity, with more space available for floating
projects at a later date, if required. These figures are indicative and may increase or decrease with further work.
6.2.5 Steps to finalize suitable locations for offshore wind in Romania
In order to support the long-term development of OSW in Romania, a strategic approach to OSW and
transmission network development will be needed. In support of this, we recommend that OSW is fully
incorporated into the National Maritime Plan as early as possible.
As there may be a delay in incorporating OSW fully into the National Maritime Plan, and there is a need
to de-risk and progress OSW development with urgency, it is suggested that a high-level assessment
is carried out to enable award of exploration licenses in areas that are likely to be suitable for OSW
development, especially with respect to environmental and social considerations.
This requires the completion of an OSW spatial plan (including basic technical review) and Strategic
Environmental Assessment (SEA).
Offshore wind spatial plan
This plan will:
■ Use all relevant information from the National Maritime Plan and source any other geographical
data needed (see World Bank Roadmap for the Philippines, for example) to establish potential
OSW energy areas, based on a wide range of environmental and social considerations;
■ Include a basic technical review of these provisional OSW energy areas (a desk-study considering
windspeed, ground conditions and other relevant technical parameters) in order to help finalize,
■ Involve inter-departmental engagement to enable cross-government agreement, and
■ Use the above to designate OSW energy areas, conditional on the Strategic Environmental
Assessment.
The above activity needs to follow good international industry practice, and might require assessment
under the Habitat and Bird Directives. The precise scope should be agreed with an Independent
Engineer. The output will include:
■ OSW energy areas, conditional on the SEA;
■ Justification of these OSW energy areas, including methodology to use in next update of the
National Maritime Plan; and
■ Spatial data to be made public in due course to support OSW development activities (where allowed).
Strategic Environmental Assessment
This assessment will include:
■ Assessment of an area larger than the potential wind energy areas derived above, for example
encompassing all five wind energy areas, including all space between the areas;
38 Offshore Wind Roadmap for Romania
■ A risk mapping according to biodiversity sensitivities for area under consideration, by relevant
receptor;
■ Any surveys shown to be needed by the risk mapping to establish increased confidence in the risk
mapping resultsx; and
■ Considerations important to OSW, including:
• Addressing data gaps in relation to the biodiversity baseline, which may require additional field
surveys to be completed according to Good International Industry Practice (GIIP). Based on
engagement to date, a key data gap relates to bird migration to and from the Danube delta;
• Establishing Exclusions and Restrictions based on biodiversity, social and technical
considerations:
• Exclusions – areas of highest environmental or social sensitivity to be excluded from OSW
assessment; and
• Restrictions – high risk areas requiring further evaluation for OSW site selection and
environmental and social impact assessment (ESIA);
• Establishing buffer distances to subsea cables, shipping routes and point considerations, such
as airports;
• Consideration of cumulative impact of multiple projects in a given area, including any
reasonably foreseeable projects elsewhere in the Black Sea; and
• Ongoing dialogue with OSW developers to ensure alignment in expectations regarding spatial
considerations and the incorporation of latest international thinking.
The above activity needs to follow GIIP. The precise scope should be agreed with an Independent
Engineer, based on a scoping study. The output will include:
■ Results of surveys and risk mapping;
■ Resulting changes to OSW energy areas; and
■ Guidance on the scope of an ESIA to be carried out by a developer of a specific project within a
specific OSW energy area, in due course, based on these results.
6.3 RECOMMENDATIONS
Based on this analysis, it is recommended that:
■ The Ministry of Energy (MOE) progresses a proportionate OSW spatial plan, incorporating
Strategic Environmental Assessment in line with GIIP, involving sensitivity mapping and
considering environmental and social considerations (including about avian migration routes to/
from the wetlands of the Danube Delta and the cumulative impact of multiple projects). This
should include focus on engagement with key stakeholders and will result in early designation of
offshore wind energy areas.
■ The MOE and Ministry of Development, Public Works and Administration include OSW in the
next revision of the National Maritime Plan, formalizing the proportionate OSW spatial plan
described above.
x. Currently, there is uncertainty especially about avian migration routes to/from the wetlands of the Danube Delta that could cut across potential offshore wind energy
areas.
Spatial planning 39
7. COST OF ENERGY
7.1 PURPOSE
In this work package, we determine the long-term cost trajectory of offshore wind (OSW) in Romania,
considering global cost reduction trends, resource potential, country characteristics, regional supply
chain development, and other key factors.
We do this under the two industry scenarios outlined in Section 2. This is important as it is helpful to
understand, long-term, what the cost of energy from OSW will be and how to influence this.
We focus on fixed OSW, as this is likely to be the dominant technology, due to potential floating sites
in Romania generally having lower wind resource and being further from shore, which increases cost.
7.2 METHOD
We modelled costs and levelized cost of energy (LCOE) under the two scenarios, as presented in
Section 2.
We established baseline costs (for installation in 2029, recognizing key differences between
established market and Romanian projects) and trajectories (costs in 2032 and 2035) based on key
parameters defined in Table 7.1.
We chose these years to fit with the scenarios described in Section 2. We recognize that these
scenarios both have first capacity installed in 2029, which is optimistic. Delays will slow installation
but will mean early projects should be able to benefit from marginally lower global prices as technology
continues to progress.
Note details such as project lifetime gradually extending in line with trend anticipated in established
OSW markets. We then interpolated between these points for intermediate years.
A detailed explanation of our methodology, plus detailed definitions and assumptions, is provided in
Section 7.4. The analysis also uses the supply chain assumptions presented in Section 8.
The analysis presented in this section has the same basis as (and hence is fully compatible with) the
spatial LCOE analysis presented in Section 6. It is also used directly as the basis for the economic
benefit analysis presented in Section 9.
The method is detailed and robust, breaking down project capital; expenditure (CAPEX) and operational
expenditure (OPEX) each into a number of key elements. Annual energy production (AEP) (and hence
capacity factor) is derived by combining a wind speed distribution at hub-height (based on mean
wind speed at 100 m height and a typical annual wind speed distribution and change in wind speed
with height) with a representative power curve (derived for the given turbine power rating and rotor
diameter). This AEP is then adjusted to account for a range of real-world factors presented in Table 7.4.
40 Offshore Wind Roadmap for Romania
In assessing costs, we consider the local supply chain that could be established to serve the Romanian
market, wider regional market and further afield.
TABLE 7.1 KEY PARAMETERS FOR THE TYPICAL SITES MODELLED, AGAINST YEAR OF
INSTALLATION
Parameter 2029 2032 2035
Mean wind speed (at 100 m height) (m/s)xi 7.6 same same
Water depth (m) 50 same same
Distance from construction port (km) 80 same same
Distance from operations port (km) 80 same same
Distance from grid (offshore) (km) 80 same same
Distance from grid (onshore) (km) 20 same same
Turbine rating (MW)xii 16 19 22
Rotor diameter (m) 256 279 298
Project size (MW) 1000 1000 1500
Project lifetimexiii (years) 30 31 32
7.3 RESULTS
LCOE results in this roadmap were derived as mid- (P50) estimates, meaning 50% chance of
exceedance. We are currently experiencing much volatility in commodity prices, meaning that
there is significant uncertainty about where such prices will head over the next five years,
though we expect prices of many commodities to return to previous levels before project
developers commit to significant expenditure for Romania OSW projects xiv OSW uses large
volumes of raw material (dominated by mild steel, typically followed by cast iron, aluminum,
composites and copper).
Changes in energy prices also impact OSW, both through the energy needed to manufacture
components and to fuel installation and operation vessels. Changes in energy prices have an
even greater impact on electricity prices from fuel burning.
xi. Mean wind speeds are quoted at a standard reference height to give clarity regarding trends, and because these wind speeds characterise project sites, independent
of what size turbine is used. We adjust the mean wind speeds at reference height to the mean wind speeds at hub height of a given turbine when deriving annual energy
production. This means that a higher-rated turbine with larger rotor on the same site will have a higher hub high mean wind speed than a smaller turbine.
xii. Note that industry experience is that (all other things being equal), the use of turbines with the highest rating (with associated large rotors) offers the lowest LCOE. This
applies equally for sites with lower and higher mean wind speeds – there is not a correlation between optimum wind speed and optimum turbine scale, recognising that the
optimum specific rating (ratio of turbine rating to rotor swept area, W/m2) drops with decreasing wind speed. See also Appendix C Section 5.3.1.
Separate from this is the potential challenge of the largest turbine installation vessels transiting to the Black Sea (as discussed in Section 17 to install the largest wind
turbines. This challenge relates mainly to clearance for jack-up legs, with relates as much to water depth as to turbine size. Overall, it is not considered that vessel
challenges will drive a choice to use anything but the highest rating turbines available.
xiii. Over time, as global and national market experience of technology grows and the pace of LCOE decreases, project lifetimes will continue to extend. In OSW, they started
at 20 years, the original default design lifetime of an onshore wind turbine. The anticipated lifetimes shown here reflect these trends.
Experience in northern Europe is that some early onshore wind projects were repowered with larger turbines before the end of their design life, due to the rapid pace of
technology development offering a better return from the site through repowering than continuing operation. Generally now, most owners seek to extend the operating
life of their projects beyond the initial design life. By the time first project are installed in Romania, the same situation is likely, with a drive to extend the life of operating
projects where possible.
xiv. Prices and price volatility have increased due to post-covid demand and various geopolitical events. Federal Reserve Economic data shows a peak increase of about 3.5
times for the hot rolled steel index, compared to 2020 levels, followed by a steep start to return towards 2020 levels. Freightos shows a peak in shipping price of about 7
times 2020 levels, with 2023 levels returned to 2020 levels.
Cost of energy 41
In this context, throughout the roadmap we have continued to state mid-estimates, but we
recognize uncertainties, for example due to:
• Technology. How will past trends of significant reduction in cost change looking forward.
• Supply chain (including commodity prices). How will competition in the global and local
supply chain evolve, and what will be the long-term trends in commodity prices.
• Finance. How will competition to finance OSW develop.
To give an understanding of the sensitivity of OSW LCOE to key parameters, see Figure 7.1.
FIGURE 7.1 SENSITIVITY ANALYSIS AROUND PROJECT INSTALLED IN 2029
50
40
30
20
Impact on LCOE
10
0
−10
−20
−30
-30 -20 -10 0 10 20 30
Change in input (Percent)
CAPEX OPEX Annual energy production Project lifetime WACC
Source: BVG Associates.
The LCOE under the two scenarios is shown in Table 7.2 and Figure 7.2, along with established market
trendxv and indicative uncertainty bars. The LCOE trends are compatible with the LCOE reduction
trajectories seen in established OSW markets. For a detailed discussion and background reading on
LCOE reduction, see Section 2.2 of World Bank Group’s Key Factors report.9
■ The main differences between Romania sites modelled and established market projects are that
the Romania sites have lower wind speeds; and
■ LCOE in the low growth scenario is 8% higher than in the high growth scenario in 2032. This gap
grows to 11% by 2035.
xv. The established market trends are based on the same bottom-up modelling discussed in Section 7.4, but using typical turbine sizes and site conditions anticipated in
established OSW markets over the period.
42 Offshore Wind Roadmap for Romania
The detail behind these headline LCOE trajectories is discussed in the following sub-sections. Note that
data relate to scenarios, with smooth trends shown over time. In reality for new projects the project
sizes, costs, lifetimes, cost of money and nominal capacity factors will vary from this trend. In addition,
actual generation for operating projects will vary year-by-year mean wind speeds.
Note also that the trends presented here are of technology costs on typical sites with properties
consistent over time. In reality, sites will be developed in an order driven by LCOE, transmission
network availability and other practical considerations.
TABLE 7.2 INDICATIVE LCOES FOR THE TYPICAL SITES MODELLED
Year of Romania low growth Romania high growth Established market fixed
installation scenario (€/MWh) scenario (€/MWh) (€/MWh)
2029 80 (likely range +16/-10%, 72 to 93)xvi 55
70 65
2032 48
(likely range +19/-12%, 57 to 83)
61 55
2035 42
(likely range +24/-15%, 47 to 76)
FIGURE 7.2 ESTIMATED LCOE TRAJECTORY FOR ROMANIA, COMPARED TO THE TREND FOR
ESTABLISHED OFFSHORE WIND MARKETS
100
80
LCOE (€/MWh)
60
40
20
0
2029 2030 2031 2032 2033 2034 2035
Year of installation
Fixed established market Fixed low growth scenario Fixed high growth scenario
Source: BVG Associates.
Figure 7.2 shows an ongoing reduction in LCOE, greater in the high growth scenario. This is because the
roadmap drives
xvi. LCOEs at each end of this likely range could be obtained in various ways, for example:
■ Development of a reasonable scale, long-term market based on strong logic and clear vision,
• Lower end of range €72/MWh achievable through any of:
• WACC is reduced from 6.0% to 5% through project de-risking, more balance-sheet financing and access to increased levels of concessional finance, or
and supported by robust, transparent frameworks to de-risk project development, evolved from
• Measurements show wind resource 8% better than anticipated and project life extended by 3 years (reflecting anticipated trend in established OSW markets).
• Upper end of range €93/MWh through any of:
current arrangements, rather than starting afresh.
• 15% increase in CAPEX and OPEX due to further commodity price rises beyond consumer inflation
• WACC increases from 6.0% to 7.6% due to perceived market risks / macroeconomic conditions, or
• Measurements show wind resource 16% worse than anticipated.
Note that the likely ranges are indicative, designed to represent P20 to P80 ranges. It is still possible for LCOEs to be higher or lower than these ranges. Any extreme
position is likely to be due to a combination of the above possibilities.
Cost of energy 43
■ Delivery of large-scale projects from early on, as the global industry will be mature enough by then
to not need the ramp-up seen over years in established OSW markets. These markets were also
managing significant technology and supply chain learning at the time.
■ Focus on cost reduction, through clear policy intent, with visibility of competition and without
restrictive local content requirements. This means that Romania will be able to benefit from what
will be a highly experienced supply chain by the time first projects are installed, with local supply
growing consistently over time.
■ Availability of low-cost finance, through competitive local and international commercial debt and
by accessing concessional finance through involvement of multilateral development banks (MDBs).
■ Government-industry collaboration in a forum involving local and international project
developers and key suppliers, to work together to address roadmap recommendations and other
considerations, as they arise.
2029 is optimistic for installation of a first large project. If this is delayed, then LCOE will continue to
reduce somewhat due to global trends. Whenever the first projects are installed, there will still be an
early premium due to in-country learning and as the industry establishes.
CAPEX, OPEX, energy production, project lifetime and weighted average cost of capital (WACC)
from which the LCOEs in established OSW markets and in Romania in 2029 have been calculated
are provided in Table 7.3. Note that unrounded central values output from modelling is shown for full
transparency. The uncertainty discussed above is not shown.
TABLE 7.3 COST ELEMENT BREAKDOWN SUPPORTING LCOES FOR 2029
Cost element Unit Established market Romania
CAPEX €/MW 2,700,000 2,990,000
OPEX €/MW/year 46,200 42,200
Net annual energy production (capacity MWh/MW/year 4,330 3,590
factor) (49%) (41%)
Project lifetime year 32 30
WACC* % 5.0% 6.0%
LCOE** €/MWh 55 80
Notes: * The WACC for these initial projects in Romania is assumed to be lowered by concessional finance blended with commer-
cial debt. As an example, the 6.0% is made up of 50% concessional debt at about 3.5%, 30% commercial, non-recourse project
debt at 7% and 20% equity at 11%. Currently, the view of projects in emerging markets is of higher risk than in northern Europe,
where large project developers often balance sheet finance, say with 35% debt (against their own balance sheet rather than the
project) at about 1% and 65% equity at about 7%, giving WACC below 5%. Should this practice extend to emerging markets faster
than expected, then this will offer lower WACC and hence LCOE. Likewise, should this not happen and concessional finance not
be available, then this will drive higher WACC and LCOE. ** See Table 7.4 for treatment of construction phase contingency and
decommissioning.
The global LCOE reduction in Figure 7.2 comes from improving technology and processes, increasing
turbine size, and increasing farm size.
The increases in turbine and wind farm size bring economies of scale in manufacture and logistics,
including OMS. There are also economies of scale in individual components because the larger turbines
need less infrastructure per MW. The largest turbines available for projects now are at about 16 MW-scale
and we anticipate turbines of 20-25 MW-scale to be used in projects installed in 2035. It is unclear how
44 Offshore Wind Roadmap for Romania
much larger turbines will get, as typically the percentage LCOE savings is stable (or drops) with each new
generation of larger turbines, but the cost (to the turbine supplier and the rest of the supply chain) to
develop the necessary technology, manufacturing and logistics solutions increases rapidly.
7.3.1 LCOE in 2029
In Romania, the LCOE in 2029 is about 45% higher than in established OSW markets. 2/3 of this is
due to the different site conditions, especially lower wind speeds (resulting in lower AEP, with capacity
factor estimated to be 41%, rather than 49% in established OSW markets). Other key contributions
are from increased WACC, inefficiencies from installation and other activities in a new market, and
higher transport and mobilization/demobilization costs due to Romania’s location on the Black Sea.
We derived this factor by considering each cost item in Table 7.4 in turn, assigning a multiplier relating
typical change in efficiency when working in a new market, a multiplier for change in cost base and a
multiplier for any other relevant consideration. These factors are beyond the impact of change in basic
site characteristics between established market and Romania.
7.3.2 LCOE trajectory in the low growth scenario
Over the period, the LCOE premium in Romania from setting up in a new market reduces. A solid
regulatory environment with visibility enables some investment in capacity and learning, but market
size limits this. Over time, the WACC drops somewhat due to increased certainty in all aspects of
project lifecycle and revenue. We have assumed over time:
■ Supply of some towers, most offshore substations (including installation), construction of onshore
substations and grid connections, but little other supply of local components;
■ Gradually increased localization of project development services; and
■ Gradually increased operation services, including some component refurbishment.
Much of the LCOE reduction comes from the use of larger turbines and improvements in operation,
maintenance and service strategies. This is mainly due to progress in the global market (relating also
to the scale of the global market), rather than in Romania.
7.3.3 LCOE trajectory in the high growth scenario
Over the period, the LCOE premium in Romania from setting up in a new market reduces more
significantly than in the low growth scenario. A solid regulatory environment with visibility of a
strong, constant pipeline of projects enables investment in capacity and learning. Most towers and
foundations are manufactured locally and more OSW services are provided locally, with increasing
efficiency. Competition drives innovation and cost reduction. Logistics costs are reduced and, critically,
the WACC drops due to increased certainty in all aspects of project lifecycle and revenue.
Compared to the low growth scenario, we have assumed:
■ Similar localization of project development services and offshore substation activities;
■ Localization of manufacture of foundations and more turbine towers;
■ Increased involvement of local suppliers during operation; and
■ More local supply of replacement components during operation.
Cost of energy 45
The site conditions are the same as for the low growth scenario.
The largest difference compared to the low growth scenario is increased reduction due to WACC due to
further decreased market risk and increased competitive tension between lenders. In other areas, the
savings are due to increased learning, turbine rating, competition and international collaboration.
7.4 BACKGROUND: DETAILS OF METHODOLOGY
7.4.1 Definition of levelized cost of energy
At its most simple, LCOE is the cost of the project divided by the energy produced. The technical
definition is:
It + Mt
∑t=s
n
(1 + r)t
LCOE =
Et
∑t=s
n
(1 + r)t
where:
It — Investment expenditure in year
Mt — Operation, maintenance and service expenditure in year
Et — Energy generation in years
r — Discount rate
s — Start year of the project, and
n — Lifetime of the project in years.
We use a WACC method to establish the discount rate. That is, a rate based on the weighted average
of the debt and equity portions of the financing, from inception of the project to decommissioning.
7.4.2 Method for cost analysis
The analysis presented in Section 7 is based on a significant body of work peer reviewed through many
published reports and private projects with industry clients in Europe, USA and Asia.
In effect, here we have conducted a study of studies, where we access published, but mainly
unpublished studies that we have been involved with (or have received in delivery of consultancy
projects). This gives a far better data set than is in the public domain.
This is appropriate at this stage because there are no projects operating (or even designed) at this
scale in Romania.
Key to the analysis are the following steps.
A. Create Established market baseline for projects installed in 2029, 2032 and 2035, considering
larger turbines and larger projects, but deeper water and further from shore over time. We did
46 Offshore Wind Roadmap for Romania
this using cost models proven over time. A schematic of the inputs and outputs of a typical single
BVGA cost model run is shown in Figure 7.3. This step involved 3 cost model runs.
B. Create Romania starting point in the same way but using Romania site conditions for a typical
floating and a typical fixed project in each time period. At this stage results are still for established
market conditions (and supply chain). This step involved six cost model runs. Note that this same
process, with a simplified step C is used for each individual cell in the preparation of the LCOE map
derived in Section 6.
C. Convert each to the Romania market (and supply chain) conditions for each of the two OSW
scenarios. For each cost element shown in Table 7.4, we established scaling factors to take account
of differences in market efficiency, cost base compared to an established market and other
considerations. We considered:
• Transitory effects, such as lack of industry inexperience and high regulatory risk. For example,
if we applied a cost premium in step 2, we assumed that by 2035 in the high growth scenario,
much of that premium had been removed by more rapid learning than in northern Europe during
the same period.
• Permanent effects, such as needing to bring installation vessels from established OSW
markets. In some of these cases, we assumed a larger early transitory cost penalty which
reduced in time, for example as design for typhoon resistance gets more optimized.
• To do this, we used our experience of other new markets and feedback about Romania. A
schematic of the inputs and outputs of a single conversion process is shown in Figure 7.4. This
step involved 12 conversions, each with a set of scaling factors.
D. Combined the results of the above to derive the LCOE trends shown in Figure 7.2. A schematic
showing the source of each trend is shown in Figure 7.5.
FIGURE 7.3 SCHEMATIC SHOWING INPUTS AND OUTPUTS FOR A BVGA COST MODEL RUN
Fixed
Box l(left) defines
2029 full set of cost
elements (below)
Established market site conditions
Established market conditions
Cost elements
Inputs Project development $/MW
Turbine $/MW
Water depth m Foundation $/MW
Mean wind speed (at 100m height) m/s Array cables $/MW
Distance from construction port km Installation of generating assets $/MW
Distance from operations port km Offshore substation $/MW
Distance from grid (offshore) km BVGA cost model, Export cables $/MW
Distance from grid (onshore) km with detailed Installation of transmission assets $/MW
Turbine rating MW sub-models for Operation and planned maintenance $/MW/yr
Rotor diameter m each cost element. Unplanned service $/MW/yr
Project size MW Decommissioning $/MW
Year of installation year WACC %
Project lifetime years Annual energy production MWh/MW/yr
WACC % Project lifetime years
CAPEX profile (per year, to works completion) % CAPEX profile (per year, to works completion) %
Hence, LCOE $/MWh
Cost of energy 47
FIGURE 7.4 SCHEMATIC SHOWING CONVERSION FROM ESTABLISHED TO LOCAL MARKET
CONDITIONS
Fixed Fixed
2029 BVGA supply chain and market assessment, 2029
Romania site conditions considering each cost element in turn – Romania site conditions
factors vary over time
Established market conditions Romania conditions
Cost elements Cost elements
Project development $/MW Efficiency Cost base Other considerations Project development $/MW
Turbine $/MW Turbine $/MW
Foundation $/MW Efficiency Cost base Other considerations Foundation $/MW
Array cables $/MW Array cables $/MW
Installation of generating assets $/MW Efficiency Cost base Other considerations Installation of generating assets $/MW
Offshore substation $/MW Offshore substation $/MW
Export cables $/MW Export cables $/MW
Installation of transmission assets $/MW Installation of transmission assets $/MW
Operation and planned maintenance $/MW/yr Same for each of the 15 cost elements… Operation and planned maintenance $/MW/yr
Unplanned service $/MW/yr Unplanned service $/MW/yr
Decommissioning $/MW Decommissioning $/MW
WACC % WACC %
Annual energy production MWh/MW/yr Efficiency Cost base Other considerations Annual energy production MWh/MW/yr
Project lifetime years Project lifetime years
CAPEX profile (per year, Efficiency Cost base Other considerations CAPEX profile (per year,
to works completion) % to works completion) %
Hence, LCOE $/MWh Efficiency Cost base Other considerations Hence, LCOE $/MWh
48 Offshore Wind Roadmap for Romania
FIGURE 7.5 SCHEMATIC SHOWING DERIVATION OF LCOE TRENDS
Fixed Fixed Fixed
From 2029 2032 2035
BVGA Established market Established market Established market This row defines Fixed
cost site conditions site conditions site conditions established market
trend (A)
model Established market Established market Established market
conditions conditions conditions
Fixed Fixed Fixed
From 2029 2032 2035
BVGA Romania site Romania site Romania site
cost conditions conditions conditions
model Established market Established market Established market
conditions conditions conditions
Fixed Fixed Fixed
2029 2032 2035
Romania site Romania site Romania site This row defines Fixed
conditions conditions conditions Romania low growth
scenario trend (B)
Romania supply Romania supply Romania supply
chain – low growth chain – low growth chain – low growth
Fixed Fixed Fixed
2029 2032 2035
Romania site Romania site Romania site This row defines Fixed
conditions conditions conditions Romania high growth
scenario trend (C)
Romania supply Romania supply Romania supply
chain – high growth chain – high growth chain – high growth
100
80
LCOE (€/MWh)
B
60 C
A
40
20
0
2029 2030 2031 2032 2033 2034 2035
Year of installation
Fixed established market Fixed low growth scenario Fixed high growth scenario
Source: BVG Associates.
7.4.3
Cost of energy 49
7.4.4 Cost element definitions
Table 7.4 provides definitions for cost elements.
TABLE 7.4 OFFSHORE WIND COST ELEMENT DEFINITIONS
Element Sub-element Definition Unit
Capital Project Development, permitting and project management work paid for by €/MW
expenditure development the developer up to works completion date (WCD).
(CAPEX) Includes:
• Internal and external activities such as environmental and
wildlife surveys, met ocean surveys, met mast (including
installation), geophysical, geotechnical and hydrological services
and engineering (pre front end engineering design (FEED)) and
planning studies
• Permitting services
• Further site investigations and surveys after final investment
decision (FID)
• FEED studies
• Environmental monitoring during construction
• Development costs of transmission system
• Project management (work undertaken or contracted by the
developer up to WCD)
• Other administrative and professional services such as
accountancy and legal advice
• Any reservation payments to suppliers.
Excludes:
• Construction phase insurance
• Suppliers own project management.
Turbine Includes:
• Payment to wind turbine manufacturer for the supply of:
• Rotor, including blades, hub and pitch system
• Nacelle, including bearing, gearbox, generator, yaw system, the
electrical system to the array cables, control systems, etc.
• Tower
• Assembly thereof
• Delivery to nearest port to supplier
• Warranty
• The wind turbine supplier aspects of commissioning costs.
Excludes:
• Turbine OPEX
• Research, design and development (RD&D) costs.
Foundation Includes:
• Payment to suppliers for the supply of the support structure
comprising the foundation (including floating, mooring and any
piles or anchors, transition piece and secondary steel work such
as J-tubes and personnel access ladders and platforms)
• Delivery to nearest port to supplier
• Warranty.
50 Offshore Wind Roadmap for Romania
Element Sub-element Definition Unit
Capital Foundation • Excludes:
expenditure (cont.) • Turbine tower
(CAPEX)
(cont.) • Foundation OPEX
• RD&D costs.
Array cables Includes:
• Payment to manufacturer for the supply of array cables
• Delivery to nearest port to supplier
• Warranty.
Excludes:
• OMS costs
• RD&D costs.
Installation Includes:
of generating • Transportation of all from each supplier’s nearest port
assets
• Pre-assembly work completed at a construction port
• All installation work for array cables, moorings, floating hulls and
turbines
• Commissioning work for all but turbine (including snagging post
WCD)
• Subsea cable protection mats etc., as required
• Offshore logistics such as weather forecasting, additional crew
transfer vessels (CTV) and marine co-ordination
• Shared wind-farm infrastructure such as marker buoys.
Excludes:
• Installation of offshore substation / transmission assets.
Offshore Includes:
substation • Payment to manufacturer for the supply of offshore substations
• Assembly at fabricator’s port
• Warranty.
Excludes:
• OMS costs
• RD&D costs.
Export cables Includes:
• Payment to manufacturer for the supply of onshore and offshore
export cables
• Delivery to nearest port to supplier
• Warranty.
Excludes:
• OMS costs
• RD&D costs.
Installation of Includes:
transmission • Transportation of all from each supplier’s nearest port
assets
• Pre-assembly work completed at a construction port before the
components are taken offshore
• Installation of offshore substations and onshore and offshore
export cables
Cost of energy 51
Element Sub-element Definition Unit
Capital Installation of • Supply and installation of the wind-farm specific switchgear
expenditure transmission and auxiliary equipment in the substation that is located on the
(CAPEX) assets (cont.) transmission network, including any wind farm-specific buildings
(cont.) at the onshore substation
• Substation commissioning work (including snagging post WCD)
• Scour protection (for support structure and cables)
• Subsea cable protection mats etc., as required
• Offshore logistics such as weather forecasting, additional CTVs
and marine co-ordination.
Contingency Construction contingency, and other CAPEX contingency, also Assumed
construction phase insurance cover, from start of construction until increases
operation start, including all construction risks & third party LCOE by
5%
Operational Operation Includes operation and planned (routine) maintenance, operations €/MW/
expenditure and planned phase insurance, other OPEX and transmission OPEX. year
(OPEX) maintenance Starts once first turbine is commissioned.
Operation and planned maintenance includes:
• Operational costs relating to the day-to-day control of the wind
farm (including CAPEX on operations base as an equivalent rent)
• Condition monitoring
• Planned preventative maintenance, health and safety inspections.
Operations phase insurance:
• Takes the form of a new operational “all risks” policy and issues
such as substation outages, design faults and collision risk
become more significant as damages could result in wind farm
outage. Insurance during operation is typically renegotiated on an
annual basis.
Other OPEX covers fixed cost elements that are unaffected by
technology innovations, including:
• Site rent
• Contributions to community funds
• Monitoring of the local environmental impact of the wind farm.
Transmission OPEX includes:
• All operations, maintenance and service for the transmission
assets.
Unplanned Unplanned service includes:
service • Reactive service in response to unplanned systems failure in the
turbine or electrical systems
• Unplanned service may be either proactive or reactive.
Decom- Decommis- Includes: Assumed
missioning sioning • Decommissioning, which includes planning work and design increases
(DECEX) of any additional equipment for decommissioning required to LCOE by
meet legal obligations. Includes further environmental work and 1%
monitoring.
• Removal of the turbine, foundation, mooring and offshore
substation.
• Removal or cut-off of piles / anchors, array cable and export
cable (where applicable).
• Removal of the onshore transmission asset (where applicable).
52 Offshore Wind Roadmap for Romania
Element Sub-element Definition Unit
Financing WACC The discount rate is made up of finance cost from debt and equity, -
cost weighted by their contributions to give a WACC. It is in real, pre-tax
terms.
Annual Capacity AEP averaged over the wind farm life at the offshore metering point %
energy factor at entry to offshore substation, as a fraction of AEP if at rated
production power output all year.
(AEP) Accounts for improvements in early years and degradation in later
years. Includes:
• Aerodynamic array losses
• Blockage effect
• Electrical array losses
• Losses due to unavailability of the wind turbines, foundations and
array cables
• Losses from cut-in/cut-out hysteresis, power curve degradation,
and power performance loss.
7.4.5 Generic definitions
Global assumptions
Real (2023) prices.
Standard wind farm assumptions
Turbines are spaced at nine rotor diameters (downwind) and six rotor diameters (across-wind) in a
rectangle.
The lowest point of the rotor sweep is at least 22 m above mean high water spring tide.
The development and construction costs are funded entirely by the project developer.
Meteorological regime
A wind shear exponent of 0.12.
Rayleigh wind speed distribution.
Turbine
The turbine is certified to international OSW turbine design standard IEC 61400-3-1.
Support structure
Ground conditions are good for OSW. There are only occasionally locations with lower bearing pressure,
the presence of boulders or significant gradients.
Cost of energy 53
Array cables
The array cable assumption is that a three core 66kV AC cable (132 kV AC for larger turbines) on fully
flexible strings is used, that is, with provision to isolate an individual turbine.
Installation
Installation is carried out sequentially by the foundation, array cable, then the pre-assembled tower
and turbine together.
A floating vessel is used to install monopiles.
Array cables are installed via J-tubes, with separate cable lay, survey and burial.
A jack-up vessel collects components from the installation port for turbine installation.
Decommissioning reverses the assembly process, taking one year. Piles are cut off at a depth below
the seabed which is unlikely to require uncovering and cables are pulled out. Environmental monitoring
is conducted at the end. The residual value and cost of scrapping is ignored.
Transmission
Export system costs are incurred as CAPEX and OPEX where appropriate. Transmission use of system
charges are not considered.
Operations, maintenance and service
Access is by service operation vessels (SOVs). Jack-ups are used for major component replacement.
54 Offshore Wind Roadmap for Romania
8. SUPPLY CHAIN ANALYSIS
8.1 PURPOSE
In this work package, we assessed the supply chain for offshore wind (OSW) in Romania, including
an analysis of current in-country capabilities and opportunities for future investment under the two
scenarios presented in Section 2.
We focus on fixed (rather than floating) OSW supply chain needs as this will be the dominant project
type in Romania, as discussed in Section 2.3. Ports are covered in Section 17.
We also explore potential bottlenecks that could slow the industry in each of the scenarios. This
analysis is important as it underpins the work on cost reduction and economic benefits in Sections 7
and 9.
8.2 METHOD
We established a categorization of the supply chain and robust criteria for assessing capability.
These are presented in Table 8.1 and Table 8.2. The level 2 categories broadly correspond with the
procurement packages used for buying from principal suppliers (also known as tier 1 suppliers) if a
developer is multi-contracting.
TABLE 8.1 CATEGORIZATION OF THE SUPPLY CHAIN
Level 1 category Level 2 category Description
Project Project Work by the developer and its supply chain including planning
development development consent, front-end engineering and design, project management,
and procurement
Turbine Nacelle, hub, and Supply of components to produce the ex-works nacelle and hub and
assembly their delivery to the final port before installation
Blades Supply of finished blades and their delivery to the final port before
installation
Tower Supply of tower sections and their delivery to the final port before
installation
Balance of plant Foundation supply Supply of foundations and their delivery to the final port before
installation
Array and export Supply of cables and their delivery to the final port before
cable supply installation
Offshore substation Supply of the completed offshore substation platform and
supply foundation ready for installation
Onshore Supply of components and materials for the onshore substation
infrastructure and the operations base
55
Level 1 category Level 2 category Description
Installation and Turbine and Work undertaken in the final port before installation and the
commissioningxvii foundation installation and commissioning of the turbines and foundations,
installation including vessels
Array and export Installation of the cables, including route clearance, post-lay
cable installation surveys, and cable termination
Offshore and Installation of the offshore substation and civil works for the
onshore substation onshore substation. Includes commissioning of the electrical system
installation
Operation, Wind farm Wind farm administration and asset management, including
maintenance, and operation onshore and offshore logistics
service
Turbine Work to maintain and service the turbines, including spare parts
maintenance and and consumables
service
Balance of plant Inspection and repair of foundations, inspection and repair
maintenance and or replacement of cables, onshore and offshore substation
service maintenance, and service
Decommissioning Decommissioning Removal of all necessary infrastructure and transport to port;
excludes recycling or re-use
8.2.1 Criteria for assessing capability
We developed a set of criteria for assessing the current and future capability of the supply chain in
Romania. They relate to the likelihood that existing companies in Romania can be successful in the
industry and the likelihood that new companies can be attracted to invest in Romania. The scoring
relates to the general capability of the supply chain at a country level and is not based on a detailed
analysis of individual companies. The scoring is based on an appreciation of global OSW supply chain
capability and an understanding of the factors that are key to successfully localizing OSW supply
chains. Further work is required in due course to undertake a supply chain assessment at a detailed
company level.
These criteria were scored for each level 2 category, as shown in Table 8.2. In the analysis, we
distinguished between principal suppliers (equivalent to tier 1) and lower tier suppliers. We shared this
assessment with key stakeholders (see Section 21) and gathered feedback and additional data, as well
as views on bottlenecks, recognizing Romania’s place in a regional and global market.
TABLE 8.2 CRITERIA FOR ASSESSING CURRENT AND FUTURE CAPABILITY IN ROMANIA
Criterion Score Description
Track record 1 No experience
and capacity
in OSW 2 Experience in supplying wind farm ≤300 MW
3 One company with experience in supplying wind farm >300 MW
4 Two or more companies with experience in supplying wind farm >300 MW
xvii. The manufacturing of vessels for offshore wind could be an opportunity for the supply chain in Romania, but was not considered in this analysis as not a direct supply
item for any given OSW project.
56 Offshore Wind Roadmap for Romania
Criterion Score Description
Romanian 1 No relevant parallel sectors
capability
in parallel 2 Relevant sectors with relevant workforce only
sectors Companies in parallel sectors that can enter the market with high barriers to
3
investment
Companies in parallel sectors that can enter the market with low barriers to
4
investment
Benefits of 1 No benefits in supplying projects in Romania from Romania
Romanian
supply chain Some benefits in supplying projects in Romania from Romania but no significant
2
for Romanian impact on cost or risk
projects Work for projects in Romania can be undertaken from outside Romania but only with
3
significantly increased cost and risk
4 Work for projects in Romania must be undertaken locally
Investment 1 Investment that needs market certainty from OSW for five or more years
risk in
Romania 2 Investment that needs market certainty from OSW for two to five years
3 Low investment ≤€50 million that can also meet demand from other small sectors
Low investment ≤€50 million that can also meet demand from other major sectors
4
with market confidence
Size of the 1 <2% of lifetime expenditure
opportunity
2 2%≤3.5%
3 3.5%-5%
4 >5% of lifetime expenditure
8.3 RESULTS
8.3.1 Summary
Table 8.3 summarizes our analysis. Some categories have been considered together to avoid
duplication. The sections below discuss our findings in more detail.
Scoring relates to general capability at a country level and not to individual companies.
TABLE 8.3 SUMMARY OF THE ROMANIAN SUPPLY CHAIN ANALYSIS
Track record Capability Investment
and capacity in parallel Benefits of risk in Size of the
Category in OSW sectors local supply Romania opportunity
Project development 2 4 3 4 2
Nacelle, hub, and
2 2 1 1 4
assembly
Blades 1 1 2 1 4
Tower 1 3 2 2 3
Foundation supply 1 3 3 1 4
Supply chain analysis 57
Track record Capability Investment
and capacity in parallel Benefits of risk in Size of the
Category in OSW sectors local supply Romania opportunity
Array and export
1 1 1 1 3
cable supply
Offshore substation
3 3 2 3 2
supply
Onshore
1 4 4 4 2
infrastructure
Turbine and
foundation 1 2 1 2 2
installation
Array and export
1 2 1 2 4
cable installation
Offshore and
onshore substation 1 4 1 2 2
installation
Wind farm operation 1 3 4 4 3
Turbine maintenance
1 3 3 4 4
and service
Balance of plant
1 4 3 4 3
maintenance
Decommissioning 1 2 1 2 2
Note: * A local supplier would deliver most of the work for the project in Romania. It includes foreign
headquartered companies operating in Romania.
8.3.2 Opportunities
The analysis shows that while there is little direct experience supplying to the OSW industry so far,
there is some relevant capability in most parts of the supply chain. The main opportunities lie where:
■ There is capability;
■ There is logic in supplying Romanian projects from Romania (which is sensitive to the growth
scenario); and
■ The investment risk is the lowest.
The opportunity is therefore greatest in categories such as project development, supply of onshore
infrastructure, towers, foundations and offshore substation, and the operations and maintenance phase.
The OSW industry is highly cost-sensitive and typically views competition on a global basis for many
categories of supply. This means that local suppliers will need to work hard to learn and compete, with
international collaboration likely key to success.
Like many sectors, the OSW industry globally is aiming to reduce its carbon footprint. For OSW, using
green steel for components has the biggest single impact. Romania has a strong steel manufacturing
industry, so investing in green steel manufacturing could therefore be great opportunity for Romania.
This opportunity is not covered by the modelling in this section.
58 Offshore Wind Roadmap for Romania
Many of the jobs created by the OSW industry require further skills development. This provides a good
opportunity to encourage a more diverse workforce. Section 10 makes recommendations that can help
achieve this.
Table 8.4 shows the likely changes in the supply chain in Romania under the low and high growth
scenarios. The high growth scenario creates a stronger logic for Romanian supply and lowers market
risk. We anticipate that most strategic investments will happen before 2030, if the timing is as per the
low and high growth scenarios.
TABLE 8.4 CHANGE IN ROMANIA SUPPLY CHAIN UNDER LOW AND HIGH GROWTH SCENARIOS
Low growth High growth
Activity today 2030 2030
Project development Limited
Turbine towers None
Turbine nacelles Some component supply for export
Turbine blades None
Foundations None
Subsea cables None
Installation Limited
Operation, maintenance, and service Limited
Key: = minimal change; = organic growth; = growth via significant inward investment)
8.3.3 Potential bottlenecks
Due to supply from overseas and a rapidly growing global market, Romania will compete with other
markets for the supply of key items. Should it be more attractive for key global suppliers to serve other
markets, then Romania risks delays to projects due to supply bottlenecks. The attractiveness of a
market relates to:
■ Margin available;
■ Long-term potential; and
■ Ease of doing business, without additional local certifications and standards to meet beyond the
normal international requirements.
Historically, there have been times where key items including wind turbines, subsea cables and
jack-up installation vessels have been limited. All areas of the supply chain continue to invest to
meet anticipated future demand, but there remains a risk of bottlenecks that are best managed by
experienced, globally acting project developers, especially as the supply chain has suffered in recent
times due to intense competition between project developers and the impact of commodity price
volatility.
8.3.4
Supply chain analysis 59
8.3.5 Project development
Project development is likely to be led by established OSW developers, potentially with a local partner,
and the work is likely to be split between local and global offices of an international partner as well as
local offices for local partners, drawing on the:
■ Local partner for in-country knowledge and relationships; and
■ International partner for its project management, engineering, environmental management,
procurement skills, and OSW experience and relationships.
There are no OSW farms in Romania yet, but there is capability in parallel sectors from the development
of onshore wind farms, offshore hydrocarbon extraction and other power generation projects.
There are benefits of using a local supply chain during development because these companies will have
a good understanding of relevant local regulations and local companies can minimize logistics and labor
costs. It is however likely that the local supply chain will need some capacity building and support from
international operators when it comes to undertaking Environmental and social impact assessment
(ESIA) to Good international industry practice (GIIP) for OSW. The barriers to entry are low, with
investments mainly in skills to meet the needs of OSW. These conclusions are summarized in Figure 8.1.
FIGURE 8.1 ASSESSMENT OF SUPPLY CHAIN FOR PROJECT DEVELOPMENT
Track record and capacity
in offshore wind
4
3
2
Size of the Capability
opportunity 1 in parallel
sectors
Investment risk Benefits of
in Romania local supply
4 = most favourable
Source: BVG Associates.
8.3.6 Turbine
Nacelle, hub, and assembly
Romania has no turbine manufacturing facilities currently, and it is unlikely that there is a business
case for investment in the country even in the high growth scenario. While there is some benefit to
local supply to minimize transport costs, nacelles, and hubs have complex supply chains and are
critical to turbine performance and reliability, and so the barriers to investment are high. It is therefore
likely that nacelles and hubs will be imported.
There has been some small component manufacture in country exported for assembly, and this is
likely to continue, which could contribute to local content of Romanian projects.
60 Offshore Wind Roadmap for Romania
These conclusions are summarized in Figure 8.2.
FIGURE 8.2 ASSESSMENT OF SUPPLY CHAIN FOR NACELLE, HUB, AND ASSEMBLY
Track record and capacity
in offshore wind
4
3
2
Size of the Capability
opportunity 1 in parallel
sectors
Investment risk Benefits of
in Romania local supply
4 = most favourable
Source: BVG Associates.
Blades
Romania has no blade production facilities currently. While transport costs of blades are high, and
manufacture is relatively easy to localize as its supply chain is mostly materials from commodity
suppliers, investment risk is high and there is not much relevant capability in parallel sectors in
Romania. Republic of Türkiye has a blade factory already, but it is not suitable for manufacture (and
onward transport) of very large blades for OSW.
Typically, an OSW blade manufacturing facility serves only one turbine supplier and is established by
(or in close partnership with) the turbine supplier due to intellectual property considerations.
These conclusions are summarized in Figure 8.3.
FIGURE 8.3 ASSESSMENT OF SUPPLY CHAIN FOR BLADES
Track record and capacity
in offshore wind
4
3
2
Size of the Capability
opportunity 1 in parallel
sectors
Investment risk Benefits of
in Romania local supply
4 = most favourable
Source: BVG Associates.
Supply chain analysis 61
Tower
There are no wind turbine tower production facilities in Romania currently.
There is a logistical benefit to local supply due to high transport costs, and the supply chain for towers
is not complex, so there could a business case for a tower production facility in Romania in both
scenarios, despite high investment risks. Such a facility could supply any of the wind turbine suppliers
in the market, as well as onshore wind projects in Romania and Romania also has a strong steel
manufacturing industry, which makes them well places for tower production.
These conclusions are summarized in Figure 8.4.
FIGURE 8.4 ASSESSMENT OF SUPPLY CHAIN FOR TOWERS
Track record and capacity
4 in offshore wind
3
2
Size of the Capability
opportunity 1 in parallel
sectors
Investment risk Benefits of
in Romania local supply
4 = most favourable
Source: BVG Associates.
8.3.7 Balance of plant
Foundation supply
In both scenarios we expect that most of the projects in Romania will use mainly monopile foundations
fixed to the seabed.
Although the transport costs for monopile foundations are high, it is unlikely that there is a business
case for investment in the rolling equipment needed to manufacture monopiles in the country in the
low growth scenario, due to the low volume of foundations needed and the high investment needed for
a potential short period of supply. Romania has a strong steel manufacturing industry, so there could
be business case for a monopile factory in the high growth scenario, enabling export to other markets
(including southern Europe and possibly also northern Europe) as well.
There is a stronger benefit of local supply for jacket foundations as Romania have experience in
manufacturing jacket foundations for the oil & gas industry. It is unlikely, however, there will be a high
enough demand for jackets even in the high growth scenario to make a business case for investment,
unless most of the production was for export, because the most cost effective foundation solution for
Romanian water depths is likely to be monopiles.
The conclusions for the supply of foundations are summarized in Figure 8.5.
62 Offshore Wind Roadmap for Romania
FIGURE 8.5 ASSESSMENT OF SUPPLY CHAIN FOR FOUNDATIONS
Track record and capacity
in offshore wind
4
3
2
Size of the Capability
opportunity 1 in parallel
sectors
Investment risk Benefits of
in Romania local supply
4 = most favourable
Source: BVG Associates.
Array and export cable supply
Romania has no subsea cable production capability currently, and cable suppliers with manufacturing
facilities currently located in Romania are not located portside.
The logistical benefits are low because in many cases a single cable vessel can transport all the cables
for a project from the factory in one or two journeys.
The investment risk for export cables is lower than for array cables, as there is likely to be a market for
interconnectors in Romania. Despite this, it is unlikely that there is a business case for investment in
Romania in array and export cable supply, driven by the OSW market.
These conclusions are summarized in Figure 8.6.
FIGURE 8.6 ASSESSMENT OF SUPPLY CHAIN FOR ARRAY AND EXPORT CABLES
Track record and capacity
in offshore wind
4
3
2
Size of the Capability
opportunity 1 in parallel
sectors
Investment risk Benefits of
in Romania local supply
4 = most favourable
Source: BVG Associates.
Supply chain analysis 63
Offshore substation supply
OSW substation supply has synergies with shipbuilding as it requires steel fabrication and systems
integration skills. Substations are typically one-off designs manufactured without significant
automation and therefore new entrants do not need to make investments to enable efficient volume
production. A challenge for new entrants has been the lower profit margins in OSW than in the oil and
gas sector.
There is a benefit to the local supply of the substation foundations and topsides, and it is possible
that both could be manufactured in Romania, as well as some of the electrical components. Romanian
manufacturers have already won the contract to supply two topsides for offshore substations for OSW
projects in other markets.
An offshore substation platform for Romania could also draw on the local supply chain for items such
as secondary steel, platforms and walkways, and other auxiliary items.
Figure 8.7 summarizes our conclusions.
FIGURE 8.7 ASSESSMENT OF SUPPLY CHAIN FOR OFFSHORE SUBSTATIONS
Track record and capacity
in offshore wind
4
3
2
Size of the Capability
opportunity 1 in parallel
sectors
Investment risk Benefits of
in Romania local supply
4 = most favourable
Source: BVG Associates.
Onshore infrastructure
Onshore infrastructure includes the onshore export cable, the onshore substation, and the operations
base. There are significant synergies with the rest of the civil engineering sector and this work is
typically provided by local companies. No significant investment by local companies is likely to be
necessary.
There is no difference between the scenarios. Figure 8.8 summarizes our conclusions.
64 Offshore Wind Roadmap for Romania
FIGURE 8.8 ASSESSMENT OF SUPPLY CHAIN FOR ONSHORE INFRASTRUCTURE
Track record and capacity
4 in offshore wind
3
2
Size of the Capability
opportunity 1 in parallel
sectors
Investment risk Benefits of
in Romania local supply
4 = most favourable
Source: BVG Associates.
8.3.8 Installation and commissioning
Turbine and foundation installation
Fixed OSW farms use specialist jack-up vessels built almost exclusively for OSW use to install the
turbines. Foundations are usually installed by either a jack-up vessel (which may also be used for
turbines) or a floating heavy lift vessel. Romania has no such vessels, so they are likely to be operated
by overseas companies, and most of the crew is likely to be provided by these companies, having
gained experience in other markets.
The manufacturing of vessels for all aspects of OSW installation and operation could be an
opportunity for the supply chain in Romania but was not considered in this analysis as not a direct
supply item for any given OSW project.
Regardless of the installation solution adopted for OSW farms in Romania, local ports and services will
be used in both scenarios.
Figure 8.9 summarizes our conclusions for fixed OSW farms.
FIGURE 8.9 ASSESSMENT OF SUPPLY CHAIN FOR TURBINE AND FOUNDATION INSTALLATION
Track record and capacity
4 in offshore wind
3
2
Size of the Capability
opportunity 1 in parallel
sectors
Investment risk Benefits of
in Romania local supply
4 = most favourable
Source: BVG Associates.
Supply chain analysis 65
Array and export cable installation
Array and export cable installation may use the same vessels and equipment, but optimal solutions
differ. Array cable laying vessels need to be maneuverable, but do not need high carrying capacity.
Export cable laying vessels are typically larger to carry the full length of an export cable. Ideally, they
can also operate in shallow water for installation up to the shoreline.
OSW cable laying is technically challenging, particularly the process of pulling in and terminating the
cable at the base of the turbine and working in shallow waters, and the risks of entering the market are
significant. As well as the investment in vessels, inexperienced cable-laying companies have suffered
project delays in established OSW markets and the financial consequences can be severe.
With little benefit of local supply and high investment risk, it is unlikely that there is a business case
for investment in cable laying vessels operated from Romania. Some of the marine crew and most port
services could however be local.
Figure 8.10 summarizes our conclusions.
FIGURE 8.10 ASSESSMENT OF SUPPLY CHAIN FOR ARRAY AND EXPORT CABLE INSTALLATION
Track record and capacity
in offshore wind
4
3
2
Size of the Capability
opportunity 1 in parallel
sectors
Investment risk Benefits of
in Romania local supply
4 = most favourable
Source: BVG Associates.
Offshore and onshore substation installation
For fixed projects in shallower water, the offshore substation foundation is often a jacket, but can be a
monopile. In these cases, offshore substation installation consists of the installation of the foundation
(as above) and then the substation topside. The substation topside is likely to weigh more than 2,000 t
and in most cases is transported to the site by barge and then lifted into position by a large, heavy lift
vessel. Romania has such a vessel, though the crane capability may need to be increased, depending on
eth design of the substation. As the vessel is needed for only one lift, mobilization and demobilization
costs dominate, meaning a local vessel is attractive.
For onshore substation installation, there are significant synergies with the rest of the civil engineering
sector and Romania has suitable expertise to undertake the work.
Figure 8.11 summarizes our conclusions.
66 Offshore Wind Roadmap for Romania
FIGURE 8.11 ASSESSMENT OF SUPPLY CHAIN FOR OFFSHORE AND ONSHORE SUBSTATION
INSTALLATION
Track record and capacity
4 in offshore wind
3
2
Size of the Capability
opportunity 1 in parallel
sectors
Investment risk Benefits of
in Romania local supply
4 = most favourable
Source: BVG Associates.
8.3.9 Operations, maintenance, and service
Wind farm operation
Wind farm operation combines asset management expertise from onshore wind and large
electromechanical infrastructure assets along with offshore logistics. Romania has some onshore wind
industry experience, as well as marine asset operation experience and barriers to entry are generally
lower than in many of the capital phase areas described above, revenue streams are long-term and
there is a benefit to local supply. It is likely therefore that there will be local asset management
combined with global resources used by the wind farm owners and turbine manufacturers.
OSW projects close to shore typically use bespoke crew transfer vessels (CTV), and these could be built
and operated locally, normally from the closest small port to the project. Projects further from shore
use larger service operation vehicles (SOVs) that will be locally crewed and have a local home port. We
anticipate that most projects in Romania will use SOVs.
Figure 8.12 summarizes our conclusions.
FIGURE 8.12 ASSESSMENT OF SUPPLY CHAIN FOR A WIND FARM OPERATION
Track record and capacity
4 in offshore wind
3
2
Size of the Capability
opportunity 1 in parallel
sectors
Investment risk Benefits of
in Romania local supply
4 = most favourable
Source: BVG Associates.
Supply chain analysis 67
Turbine maintenance and service
Turbine maintenance and service is typically undertaken by the turbine supplier, generally under a service
agreement of length up to 15 years, or by experienced international project developers who go on to be lead
owners of projects. A local workforce will be used for much of the work, and there is an opportunity for local
companies offering inspection services and for technicians (employed by a service company or the project
lead owner) during planned maintenance and unplanned service activities in response to turbine faults. The
barriers to entry are lower than in many of the capital phase areas described above, and investment will be
mainly focused on ensuring a high-quality skills base. In the early days of operation, there is likely to be a
number of overseas technicians used, but the numbers will decline as a local team is trained.
Major replacements for fixed OSW projects typically use the same large jack-up vessels used
in installation but could potentially use heavy lift vessels in benign conditions. Spare parts and
consumables will be a mixture of imported and locally supplied. There may also be opportunity for local
refurbishment of some components.
Figure 8.13 summarizes our conclusions.
FIGURE 8.13 ASSESSMENT OF SUPPLY CHAIN FOR TURBINE MAINTENANCE AND SERVICE
Track record and capacity
in offshore wind
4
3
2
Size of the Capability
opportunity 1 in parallel
sectors
Investment risk Benefits of
in Romania local supply
4 = most favourable
Source: BVG Associates.
Balance of plant maintenance and service
Balance of plant maintenance and service covers foundations, array cables, export cables, and
substations.
Cable maintenance and service is the most significant, with cable failures the biggest source of
insurance claims in OSW, typically due to mechanical damage caused to the cables. It uses similar
equipment to cable installation, in some cases with cables replaced in others with cables repaired in situ.
Foundation maintenance and service include inspections for corrosion or structural defects above and
below the water line, and cleaning and repairing areas, especially around the water line. This is likely to
use a global and local workforce.
For substations, the structural maintenance and service could be done by the local work force, but
some of the electrical system component replacements are likely to come from global suppliers.
68 Offshore Wind Roadmap for Romania
Figure 8.14 summarizes our conclusions.
FIGURE 8.14 ASSESSMENT OF SUPPLY CHAIN FOR BALANCE OF PLANT MAINTENANCE
AND SERVICE
Track record and capacity
in offshore wind
4
3
2
Size of the Capability
opportunity 1 in parallel
sectors
Investment risk Benefits of
in Romania local supply
4 = most favourable
Source: BVG Associates.
8.3.10 Decommissioning
Although some decommissioning has been carried out in established OSW markets, solutions have
not yet been optimized. It is most likely that vessels that have been used for installation will also
support decommissioning, following similar processes, with some simplifications. Much material can
be recycled, offering opportunities in the circular economy. As projects start reaching the end of life,
there will also be work to explore extending the life of generating and/or transmission assets. We may
see some projects where turbines, foundations and array cables are replaced but the export system is
retained for a second life cycle.
Figure 8.15 summarizes our conclusions.
FIGURE 8.15 ASSESSMENT OF SUPPLY CHAIN FOR DECOMMISSIONING
Track record and capacity
in offshore wind
4
3
2
Size of the Capability
opportunity 1 in parallel
sectors
Investment risk Benefits of
in Romania local supply
4 = most favourable
Source: BVG Associates.
Supply chain analysis 69
8.4 DISCUSSION
Romania has a good port infrastructure that could host local manufacturing. It has supply chain
capability relevant to some areas of OSW, including significant experience in steel manufacturing.
Both the low growth and the high growth scenario could lead to some local content, the main
difference between the two is that the high growth scenario could lead to investment in a monopile
foundations factory ready for the first project in 2029, there is a higher probability of towers being
manufactured in Romania than in the low growth scenario and more of the turbine service and
maintenance is carried out by local suppliers.
A proactive approach will help increase local readiness for supply and help create the economic benefit
discussed in Section 9. Romania has the potential for manufacture of towers under each scenario, and
monopiles under the high growth scenario. A proactive approach could support the export of these
components to other markets, both regionally, where Bulgaria, Türkiye and Ukraine are considering
developing OSW projects, and further afield.
The Government of Romania has the opportunity to develop a somewhat high volume market by
providing a robust policy framework and good market visibility. International experience shows this
to be an effective way to generate local economic benefits without having to resort to restrictive local
content requirements.xviii It is also the dominant way to reduce the cost to consumers and create a
more sustainable, internationally competitive supply chain.
One route to supporting the OSW supply chain is through the use of criteria beyond just price in
competitions, especially for in revenue auctions, later in the project development lifecycle. Other
criteria, weighted lower than price, can be used to deliver a range of policy objectives (including supply
chain development) without overly disturbing the important focus on levelized cost of energy.18 World
Bank Group’s Key Factors report Section 3.6 describes New York State’s successful approach in this
regard, though such an arrangement could not be mirrored directly to a European Union market .9
8.5 RECOMMENDATIONS
Based on this analysis, it is recommended that:
■ The Ministry of Energy (MOE), working with the Ministry of Development, Public Works and
Administration, the Ministry of Economy and Ministry of Transport and Infrastructure, presents
a balanced vision for local supply chain development, encouraging international competition
(learning from elsewhere and avoiding restrictive local content requirements that add risk and cost
to projects and slow deployment).
■ The MOE considers steps to support the expansion of supply chain for OSW, including the use of
non-price criteria in auctions.
■ The MOE, Ministry of Economy, The Ministry of Education, relevant universities / training colleges
and industry (through the Romanian Wind Energy Association (RWEA)) collaborate to enable
education and investment in local supply chain businesses, including in training of onshore and
offshore workers.
xviii. As discussed in Section 2 of the World Bank Group’s Key Factors report, protectionist practices have not delivered value-adding outcomes.9 They typically drive
inefficiency and re not compatible with global OSW businesses managing cost and risk across portfolios of projects.
70 Offshore Wind Roadmap for Romania
9. JOBS AND ECONOMIC BENEFIT
9.1 PURPOSE
In this work package, we determine the economic impact of offshore wind (OSW) in Romania, looking
at the potential for job creation and direct investment in the country’s OSW industry under the
scenarios established in Section 2.
The analysis looks at opportunities at different stages of the industry (including manufacturing,
installation, operation, and maintenance), both for in-country projects and export.
This analysis is important as it is helpful to understand, long-term, what the economic impact of OSW
is and how to maximize this.
The analysis aimed to establish the economic impacts created by wind farms in Romania globally, as
well as economic impacts created in Romania.
9.2 METHOD
We considered three types of impact:
■ Total impacts from projects in Romania;
■ Romania impacts from projects in Romania; and
■ Romania impacts from projects overseas.
We modelled direct and indirect impacts. Direct impacts are defined as those associated with project
developers and their main contractors. Indirect impacts are defined as those associated with their
sub-suppliers.
All cost data is from Section 7, ensuring that the different types of analysis presented are consistent.
Section 8 uses the supply assumptions presented in this section.
The scenarios show capacity installed from 2029. This is as early as feasible. Based on experience
in other markets, it is more likely that capacity will be installed from the early 2030s, but this does
not change the relative impact of the two scenarios. Delays will slow installation but will mean early
projects should be able to benefit from marginally lower global prices as technology continues to
progress, but lower prices are also linked to fewer jobs, as processes get more efficient.
9.2.1
71
9.2.2 Total impacts from projects in Romania
We established the total full-time equivalent (FTE) employment years and gross value added (GVA) by
year created for each market scenario if there was 100% local content (that is, there is no import of
materials, components, and services):
■ Low growth scenario (3 GW by 2035).
■ High growth scenario (7 GW by 2035).
We used our in-house model that uses multipliers to convert expenditure to FTE years and GVA. More
details of our methodology are provided in Section 9.4.
We calculated the impacts from a single 1.2 GW project installed in 2032 in the high growth scenario.
We also calculated the total impacts of the pipeline of projects in each scenario, considering the
different amounts of localization for different years of installation and in different scenarios.
Charts are to 2040, recognizing that there is further economic benefit for the full lifetime of each
project, with more operation, maintenance service (OMS) spend, followed by a one-year peak during
decommissioning (not shown).
9.2.3 Romanian impacts from projects in Romania
We established the impacts in Romania by considering the current and potential future capability of
the supply chain in Romania and assessed the likely percentage of local content for each scenario. The
capability of the supply chain in Romania and opportunities for growth are discussed in Section 8.
9.2.4 Romanian impacts from projects in Romania and overseas
This is the sum of the above and anticipated exports. We estimated the potential based on our
understanding of the regional and global market and the supply chain in Romania and how that will
develop in each growth scenario.
9.3 RESULTS
9.3.1 Total impacts from projects in Romania
High growth scenario: single project
Figure 9.1 shows the total FTE years employment created annually for a single 1.2 GW fixed project
installed in 2032 in the high growth scenario. It shows that employment peaks in 2031 at about
15,000 FTE years, when there is significant turbine and balance of plant manufacture as well as
installation. Total employment for the project is about 54,500 FTE years over the 32-year lifetime of
the project.
Figure 9.2 shows the GVA generated by this single project. The peak GVA in 2031 is about €1.3 bn. The
total GVA over the lifetime of the project is about €4.7 bn.
72 Offshore Wind Roadmap for Romania
FIGURE 9.1 TOTAL ANNUAL FTE YEARS EMPLOYMENT FOR A SINGLE 1.2 GW PROJECT
INSTALLED IN 2032, SPLIT BY COST ELEMENT
16
FTE years (Thousands)
12
8
4
0
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
Development and project management Turbine Balance of plant
Installation and commissioning OMS
Source: BVG Associates.
FIGURE 9.2 TOTAL GVA FOR A SINGLE 1.2 GW PROJECT INSTALLED IN 2032, SPLIT BY COST
ELEMENT
1.6
1.2
GVA (€ billion)
0.8
0.4
0.0
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
Development and project management Turbine Balance of plant
Installation and commissioning OMS
Source: BVG Associates.
High growth scenario
Figure 9.3 shows the global annual FTE years employment and it shows that the number of jobs grow
steadily to 2033 where it reaches about 46,000 FTE years. The number of FTE years decrease after
that based on the last OSW project entering operation in 2035, although around 2,700 annual FTE
years continues for the lifetime of the wind farms. During the lifetime of the wind farms more than
320,000 FTE years are created.
Jobs and economic benefit 73
In Figure 9.4, the GVA created by all projects shows a similar pattern, with GVA reaching about €3.9
billion in 2033. During the lifetime of the wind farms about €27 billion GVA is generated.
FIGURE 9.3 TOTAL ANNUAL FTE YEARS EMPLOYMENT CREATED BY ALL THE PROJECTS IN
ROMANIA IN THE HIGH GROWTH SCENARIO, SPLIT BY COST ELEMENT
50
40
FTE years (Thousands)
30
20
10
0
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
Development and project management Turbine Balance of plant
Installation and commissioning OMS
Source: BVG Associates.
FIGURE 9.4 TOTAL GVA CREATED BY ALL THE PROJECTS IN ROMANIA IN THE HIGH GROWTH
SCENARIO SPLIT BY COST ELEMENT
4
3
GVA (€ billion)
2
1
0
23
24
33
25
26
27
28
29
30
31
32
34
35
36
37
38
39
40
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
Development and project management Turbine Balance of plant
Installation and commissioning OMS
Source: BVG Associates.
74 Offshore Wind Roadmap for Romania
Low growth scenario
For the low growth scenario, the pattern is different, as new projects are not installed every year.
We can see the peaks of about 19,000 FTEs years created in 2031 and 2033 in Figure 9.5. Over the
lifetime of the wind farms, more than 143,000 FTE years are created.
In Figure 9.6 the GVA created by all projects in the low growth scenario shows a similar trend. Over the
lifetime of the wind farms about €16 billion is generated.
FIGURE 9.5 TOTAL ANNUAL FTE YEARS EMPLOYMENT CREATED BY ALL THE PROJECTS IN
ROMANIA IN THE LOW GROWTH SCENARIO, SPLIT BY COST ELEMENT
50
40
FTE years (Thousands)
30
20
10
0
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
Development and project management Turbine Balance of plant
Installation and commissioning OMS
Source: BVG Associates.
FIGURE 9.6 TOTAL GVA CREATED BY ALL THE PROJECTS IN ROMANIA IN THE LOW GROWTH
SCENARIO SPLIT BY COST ELEMENT
4
3
GVA (€ billion)
2
1
0
23
24
33
25
26
27
28
29
30
31
32
34
35
36
37
38
39
40
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
Development and project management Turbine Balance of plant
Installation and commissioning OMS
Source: BVG Associates.
Jobs and economic benefit 75
9.3.2 Romanian impacts from projects in Romania
Table 9.1 shows how the local content changes over time as investments are made. In both scenarios,
we show the assumed local content percentage in 2029, 2032, and 2035. The local content
percentages reflect the assumptions about the current and future supply chain in Romania developed
in Section 8. The important differences are that the high growth scenario leads to investment in a
monopile foundations factory ready for the first project in 2029, that there is a higher probability
of towers being manufactured in Romania in the high growth scenario and that more of the turbine
service and maintenance is carried out by local suppliers in the high growth scenario. Note that in
some cases, the total local content percentage drops from one year to the next. This is due to the
change in the relative cost of different OSW project elements over time, rather than any reduction in
scope or fraction of supply.
TABLE 9.1 LOCAL CONTENT FOR THE OSW PROJECTS IN ROMANIA COMPLETED IN 2029,
2032, AND 2035
Low growth High growth
Project development 60% 70% 70% 60% 70% 70%
Turbine Nacelle, rotor, and assembly 2% 2% 2% 2% 2% 2%
Blades 0% 0% 0% 0% 0% 0%
Tower 20% 30% 30% 40% 60% 60%
Balance of plant Foundation supply 0% 0% 0% 40% 60% 60%
Array and export cable supply 0% 0% 0% 0% 0% 0%
Offshore substation supply 60% 75% 75% 60% 75% 75%
Onshore infrastructure 95% 95% 95% 95% 95% 95%
Installation and Turbine installation 15% 15% 15% 15% 15% 15%
commissioning
Array cable installation 15% 15% 15% 15% 15% 15%
Onshore and offshore substation installation 85% 85% 85% 85% 85% 85%
O&M Wind farm operation 90% 90% 90% 90% 90% 90%
Turbine maintenance and service 40% 50% 50% 60% 70% 70%
Foundation maintenance and service 60% 85% 85% 60% 85% 85%
Decommissioning 50% 50% 50% 50% 50% 50%
Total local content 26% 29% 28% 35% 40% 38%
High growth scenario
Figure 9.7 shows annual FTE years employment created in Romania by all projects. It shows that the
number of FTE years peaks at about 16,000 in 2033. Over the lifetime of the wind farms 140,000 FTE
years are created, about 44% of the total created globally by the pipeline of projects in Romania.
Figure 9.8 shows annual GVA reaching a peak of about €1 billion in 2033. Over the lifetime of the wind
farms €11 billion GVA is generated, about 39% of the total generated globally.
76 Offshore Wind Roadmap for Romania
FIGURE 9.7 ANNUAL LOCAL FTE YEARS EMPLOYMENT CREATED BY ALL THE PROJECTS IN
ROMANIA IN THE HIGH GROWTH SCENARIO SPLIT BY COST ELEMENT
16
FTE years (Thousands)
12
8
4
0
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
Development and project management Turbine Balance of plant
Installation and commissioning OMS
Source: BVG Associates.
FIGURE 9.8 ANNUAL LOCAL GVA CREATED BY ALL THE PROJECTS IN ROMANIA IN THE HIGH
GROWTH SCENARIO SPLIT BY COST ELEMENT
1.2
1.0
GVA (€ billion)
0.8
0.6
0.4
0.2
0.0
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
Development and project management Turbine Balance of plant
Installation and commissioning OMS
Source: BVG Associates.
Low growth scenario
Figure 9.9 shows Romania annual FTE years employment created by all projects. It shows that the
number of FTE years peaks in 2033, with about 4,000 FTE years. The number of FTE years created
over the lifetime of the wind farms is about 44,400. To aid comparison with the high growth scenario,
the same axis scale is used.
Figure 9.10 shows that annual GVA peaks in 2033 with about €270 million. The GVA generated over
the lifetime of the wind farms is about €3.4 billion.
Jobs and economic benefit 77
FIGURE 9.9 ANNUAL LOCAL FTE YEARS EMPLOYMENT CREATED BY ALL THE PROJECTS IN
ROMANIA IN LOW GROWTH SCENARIO, SPLIT BY COST ELEMENT
16
FTE years (Thousands)
12
8
4
0
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
Development and project management Turbine Balance of plant
Installation and commissioning OMS
Source: BVG Associates.
FIGURE 9.10 ANNUAL GVA CREATED BY ALL THE PROJECTS IN ROMANIA IN LOW GROWTH
SCENARIO SPLIT BY COST ELEMENT
1.2
1.0
GVA (€ billion)
0.8
0.6
0.4
0.2
0.0
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
20
Development and project management Turbine Balance of plant
Installation and commissioning OMS
Source: BVG Associates.
9.3.3 Romanian impacts from projects in Romania and overseas
In the high scenario, we have assumed that 25% of the towers manufactured are exported to nearby
markets, and 40% of towers are for onshore wind. In addition we assume that 50% of monopiles
manufactured are for export. This creates an additional 38,000 FTE years of employment between
2029 and 2035, as well as €2.6 million in GVA. These impacts will continue after 2035 as well.
In the low growth scenario, there would also be opportunity to export tower as well as manufacture
towers for onshore wind, if a tower factory is invested in.
78 Offshore Wind Roadmap for Romania
9.3.4 Investment
Table 9.2 presents the likely large-scale investment needed to deliver the supply chain development
described above, with timing to achieve impacts for a first project installed in 2029. Investments are highly
indicative, as they depend on where investment occurs and what existing infrastructure can be used.
We have included investment in a 1 GW tower factory in both the low and high growth scenario in Table
9.2, producing 60% of the OSW demand for towers for Romania onshore wind and OSW projects, as
well as for export. In Table 9.1 the local content % for the low growth scenario is lower to represent the
lower probability of a tower factory being built in this scenario. Viability will depend on relative pricing
of towers from a new Romanian facility compared to existing facilities.
Total investment is in the range €250 to €350 million in the high growth scenario, with €100 to
€150 million required in the low growth scenario. Smaller-scale investments in the supply chain
and investments in ports have not been included, so will be additional. It is not anticipated that any
significant investment is needed to manufacture offshore substations or vessels for OSW (for use in
Romania or export, so not necessarily directly linked to projects in Romania).
TABLE 9.2 POTENTIAL LOCAL SUPPLY CHAIN INVESTMENTS RELATING TO OFFSHORE WIND
IN ROMANIA
Investment Low growth scenario High growth scenario Timing Amount
Tower New 1 GW factory to New 1 GW factory to Investment decision €100-150
factory produce up to 60% of produce up to 60% of 2026, to supply first million
Romanian OSW demand Romanian OSW demand project installed in 2029
(up to 15 towers per year), (up to 40 towers per
Romania onshore wind year), Romania onshore
demand and export. demand and export.
Monopiles Imported New 1.5 GW factory for Investment decision €150-200
up to 60% of Romania 2025, to supply first million
demand (up to 40 project installed in 2029
foundations per year) and (foundations installed in
export (same volume). 2028)
9.3.5 Prerequisites
Based on experience in other markets, there are a number of prerequisites to such investment:
■ Confidence in a strong visible future pipeline of projects to compete for;
■ A commercial and financial environment that enables investment, whether inward investment or
indigenous; and
■ A sufficient level of commitment to buy a reasonable amount of supply over a long enough period.
This last point can be a frustrating barrier, as project developers often only have limited visibility of
their own projects and seek to keep competitive tension in their supply chain, so tend not to give much
commitment. Often, commitment can only be for ‘the next project’ and then there is not enough time
for the supplier to build the new manufacturing facility and then manufacture components, because
the developer wants to construct the project as soon as possible. This may be addressed through
state intervention.
Jobs and economic benefit 79
9.4 BACKGROUND: DETAIL OF METHOD
Conventional modeling of economic impacts for most industrial sectors relies on government
statistics, for example those based on industry classification codes and use input-output tables and
other production and employment ratios.
Industry classification code data can be appropriate for traditional industries at a national level. The
development of new codes for a maturing sector, however, takes time. This means that conventional
industry classification analyses of OSW need to map existing data onto OSW activities, which is not
easy and a source of error. Analyses using industry classification codes also have to rely on generalized
data.
OSW is ideally suited to a more robust approach that considers current and future capability of local
supply chains because OSW projects tend to:
■ Be large and have distinct procurement processes from one another; and
■ Use comparable technologies and share supply chains.
It therefore enables a realistic analysis of the local, regional and national content of projects even
where there are gaps in the data.
The methodology used here was developed jointly by BVGA and Steve Westbrook of the University of
the Highlands and Islands, UK, and has been used for a series of major clients.
The methodology’s first input is the cost per MW of each of the supply chain categories at the time of
wind farm completion.
The remaining expenditure is analogous to the direct and indirect GVA created. GVA is the aggregate
of labor costs and operational profits. We can therefore model FTE employment from GVA, provided
we understand some key variables. In our economic impact methodology, employment impacts are
calculated using the following equation:
GVA – M
FTEa =
Ya + Wa
Where:
FTEa = Annual FTE employment
GVA = Gross value added
M = Total operating margin
Ya = Average annual wage, and
Wa = Non-wage average annual cost of employment.
To make robust assessments, therefore, we consider each major component in the OSW supply chain
and estimate typical salary levels, costs of employment, and profit margins, bringing together specific
sector knowledge and research into typical labor costs for the work undertaken in each supply chain
level 2 category.
80 Offshore Wind Roadmap for Romania
FTEs relate to full time equivalent job years, with part-time or part-year work considered appropriate.
A full-time job would normally be at least 7 hours per day over 230 working days of the year. If an
individual works significantly more than this over a year, FTE attribution would be more than 1 FTE (for
example, 1.5 FTEs if working long hours over 7 days per week).
FTEs are by workplace rather than by residence and will include migrant/temporary resident workers.
Where work in a local area (for example, on an assembly site) is carried out by people who have moved
temporarily from elsewhere in Romania ,or overseas and live in temporary accommodation while
working on site, their daily expenditures on accommodation, food, and drink, leisure and the like create
employment impacts locally and within Romania more widely. These impacts have been considered in
the indirect impacts because these payments are likely to be covered through subsistence expenses
rather than personal expenditures.
The GVA to gross earnings ratio for a business can be relatively high where it is charging for use of
expensive plant, equipment, boats, etc. If a specialist vessel, for example, has been built in Romania for
offshore renewables work, the prior employment and earnings impacts from this could be additional to
what it has been possible to capture in the analysis carried out for this report.
In this report, GVA and earnings impacts have not been discounted prior to aggregation.
9.4.1 Definitions and assumptions
The economic analysis was structured around theoretical projects. We have assumed that all these
projects are fixed projects.
For each of the theoretical projects, we made judgements of local content for each of the supply chain
categories defined in Section 8. Project costs in 2029, 2032, and 2035 were taken from the LCOE
modelling described in Section 7. To simplify this analysis, we assumed that there is no real term
increase in salaries and that changes in cost for the projects between 2029 and 2035 are due to
changes to technology and industry learning. As a result, the analysis is likely to underestimate the GVA.
To model economic impacts years between 2029 and 2035, we interpolated costs and local content
based on the three years; 2029, 2032 and 2035.
81
10. GENDER ASPECTS
10.1 PURPOSE
This work package presents the status of gender equality in Romania and reviews the policies and
legislation that affect the creation of a diverse offshore wind (OSW) workforce. We also look at
learning around gender diversity from the development of OSW in other countries to highlight possible
ways of eliminating or lowering common barriers to gender equality. We recommend a proactive
approach to ensure the OSW industry that evolves in Romania is gender equal.
10.2 METHOD
This section contains the results of the desk-based research and stakeholder engagement carried out
to understand:
■ The current position of men and women in the Romanian workforce and education system;
■ The prevailing legal and regulatory environment around gender equality issues in Romania;
■ Gender discrimination and diversity targets; and
■ How other countries have approached gender equality issues in the wind industry.
This enabled the creation of policy recommendations that can help remove barriers to the equal
participation of women in Romania’s OSW industry.
10.3 RESULTS
As OSW establishes itself as a global industry it is important that it can address the gender, diversity
and inclusion challenges of our time. Research has established that more jobs are held by women in
the renewable energy sector (32%) than in oil and gas (22%).19 Analysis suggests that OSW performs
poorly compared to the rest of the renewable energy sector when it comes to gender, with a global
average rate of female employment of 21%, and with 26% female employment in the best performing
nations, People's Republic of China and Taiwan, China.20 Poor gender diversity is a structural threat to
the health of the OSW industry. Multiple studies have shown that a diverse workforce is beneficial to
the growth, innovation, resilience, and sustainability of all industries. A diverse workforce also gives the
biggest opportunity to attract the best talent into the industry workforce.21
The pursuit of gender equality is mandated by existing legislation and soft-law treaties to which
Romania is a signatory. The 2015 Paris Agreement states that nations should “respect, promote
and consider” their obligations toward gender equality and the empowerment of women as they
reduce their emissions. Romania is also committed to the UN’s 17 Sustainable Development Goals
(SDGs). Gender aspects play an important role in SDG 5 (Gender equality) and SDG 8 (Decent work
and economic growth). The development of the OSW industry in Romania will also benefit women
82 Offshore Wind Roadmap for Romania
as consumers by providing affordable, sustainable energy to the grid, which will help meet SDG 7
(Affordable and clean energy). Romania has also ratified the UN Convention on the Elimination of all
Forms of Discrimination against Women (CEDAW) which commits signatories to implement provisions
to achieve equal opportunities for women and report on progress in this area22.
Under EU law, the Equal Treatment Directive (2006/54/EC) mandates the implementation of the
principle of equal opportunities and equal treatment of men and women in employment, including
equally pay for equal work and equal access to opportunities.23 There are two further important pieces
of legislation – the Pregnancy Directive (92/85/EEC), which protects pregnant and breastfeeding
women and women who have recently given birth, and the Work-life Balance Directive (2019/1158/
EU), which provides legislative and non-legislative measures that enhance rights to leave and flexible
working arrangements for parents.24,25
Domestically, the country’s Gender Equality law (Law No. 202/2002) establishes the legal framework
for equal opportunities for women and men and defines measures for achieving them.26 This law has
been subject to several amendments. Companies with more than 50 people are mandated to appoint
equal opportunity experts to develop equality action plans with the support of human resources
(HR) and Trade Unions. These plans should clearly state policies that prevent harassment, allow for
promotion and pay increases without discrimination, set up a complaints process, and reconcile
professional life with family life. Companies must implement projects, training programs, and
information campaigns for their employees about gender discrimination. Gender equality measures are
implemented the National Agency for Equal Opportunities for Women and Men, with the Ministry of
Education responsible for monitoring compliance within the academic sphere. There are also clear civil
remedies and criminal penalties covering sexual harassment in employment27.
According to the World Economic Forum’s Global Gender Gap Report 2022, Romania is ranked only
90 overall out of 146 listed countries, but is the third highest scoring Eastern European Country after
Slovakia (67) and Hungary (88).28 Figure 10.1 shows that a gender gap around educational attainment
at secondary and tertiary level has been closed. The data highlight that significant gender gaps exist
around other key metrics, including the workforce participation, the number of women relative to men
in the senior roles and science, technology, engineering and mathematics (STEM) attainment rates.
STEM attainment is highly relevant to accessing many higher-paid jobs within OSW.
FIGURE 10.1 EMPLOYMENT GENDER METRICS IN ROMANIA
Labour Force participation rate
Employed in senior and middle management
Completion of lower secondary education
Enrollment in tertiary eductaion
Tertiary graduates in STEM subjects
0 20 40 60 80 100
Percent
Men Women
Source: World Economic Forum.
Gender aspects 83
Romania performs well for wage equality, however, with a gender pay gap that is five times lower than
the EU average, as shown in Figure 10.2.
FIGURE 10.2 GENDER PAY GAP IN ROMANIA RELATIVE TO EU NEIGHBORS
Romania
EU Average
0 2 4 6 8 10 12 14
Percent
Source: Eurostat.
10.4 DISCUSSION
Experience from the development of OSW in Northern Europe shows that strong equality laws
alone will not ensure that a gap does not emerge over time between the number of women and men
employed in the industry and the types of role they occupy. The Global Wind Energy Council (GWEC)
Women in Wind Program and the International Renewable Energy Agency (IRENA) have found that
women make up 21% of the global wind energy workforce and that 65% of all women working in the
sector perceive gender-related barriers.29 Just 8% of senior management positions in wind energy are
taken up by women, who generally occupy roles in administration and non-STEM occupations within
the sector.
Early experience from the UK shows how OSW can suffer from even more acute gender imbalance.
The UK installed its first OSW project in 2000 and by 2018 had 7.5 GW of installed OSW capacity with
7,200 people directly employed in the sector. Women, however, made up just 16%of that workforce,
despite the UK having robust equality legislation in place. This highlights that external policies alone
are not enough to foster a gender equal industry. Since 2018, the Government and industry in the UK
have moved to address this gender disparity as part of the UK Offshore Wind Sector Deal signed in
2018.30 An aspirational target of ensuring women make up at least 33% percent of the OSW workforce
by 2030 has been set. Meeting this target will be challenging, but educational institutions and OSW
industry programs have been established to eliminate the significant barriers that exist to prevent
women from either joining or staying in the OSW. These barriers include:
■ Sociocultural norms that drive men and women to pursue different educational and employment
opportunities;
■ Hiring practices that unconsciously or inadvertently discriminate against women;
■ A lack of gender targets within the industry;
■ Workplace conditions and policies that discourage women;
■ A lack of networking spaces and opportunities for women in a male-dominated sector; and
■ A lack of awareness about these barriers in a male-dominated sector.
Since the publication of the Offshore Wind Sector Deal, the UK has incorporated gender equality
requirements in a scored ‘supply chain plan’ assessment which developers must pass as a before they
can participate in revenue auctions to aid progression towards its 33% target for women employed.
84 Offshore Wind Roadmap for Romania
10.5 RECOMMENDATIONS
Based on the above analysis, it is recommended that:
■ OSW project developers and suppliers collaborate to encourage women into the sector and get
involved in gender equality working groups. Women’s rights organizations in Romania, such as
the Women’s Association of Romania, the Association for Liberty and Equality of Gender and
Centrul Filia, and industry bodies, such as Global Wind Energy Council (GWEC) and Global Women’s
Network for the Energy Transition (GWNET), should be included in these working groups.
■ The Ministry of Labour and Social Solidarity and industry set diversity targets and establish
framework to measure progress.
■ OSW project developers and suppliers collaborate to publish a best practice guide for industry
stakeholders and ensures opportunities for women in OSW are well-promoted. The best practice
guide should discuss using gender decoders and gender-balanced language to ensure hiring
practices are unbiased and creating spaces and opportunities for women to network within the
OSW sector.
■ The Ministry of Energy (MOE) considers introducing diversity requirements into leasing and
revenue frameworks.
85
11. ENVIRONMENTAL
AND SOCIAL CONSIDERATIONS
11.1 PURPOSE
In this work package we describe and rate the environmental and social considerations relevant to
offshore wind (OSW) in Romania.
11.2 METHOD
The assessment presents the environmental and social considerations relevant to the development,
installation and operation of OSW projects. The rating shown in Table 11.1 has been used to show the
potential impact of OSW on key receptors.
Further detailed studies, surveys and consultations will be required to be undertaken by Government,
stakeholders, and project developers in relation to the environmental and social considerations. This
will be required at both a country-wide and at a project-specific level. These studies and surveys
should include the consideration of cumulative impacts between projects.
TABLE 11.1 RAG SCALE FOR ENVIRONMENTAL, SOCIAL AND TECHNICAL CONSIDERATIONS
Scale values Description
OSW development has the potential to have significant impact or influence on the
(R) Red
environmental or social consideration.
OSW development has the potential to have an impact or influence on the environmental or
(A) Amber
social consideration.
OSW development is unlikely to have an impact or influence on the environmental or social
(G) Green
consideration.
These categories are defined based on a combination of our knowledge and professional judgement of
considerations relevant to OSW in other markets, and through limited early engagement with some
relevant stakeholders in Romania. Beyond this roadmap, further work is needed to provide a full view
of environmental and social considerations. Best practice would mean inclusion of stakeholders from
neighboring countries in such work.
Key Romanian stakeholders that have a concern for the environmental and social considerations
relating to the development of OSW include:
86 Offshore Wind Roadmap for Romania
Government Institutions/Agencies:
■ Local, provincial, regional, and national government units and community leaders, including:
• Danube Delta Biosphere Reserve Authority;
• Ministry of Environment, Water and Forests;
• Ministry of Labour and Social Protection;
• National Agency for Fishing and Agriculture; and
• National Agency for Protected Natural Areas.
Non-governmental organizations(NGOs)/Academes/Private Entities:
■ Businesses and project developers with relevance or potential interest to OSW project in Romania.
■ NGOs with relevance or interest to OSW project in Romania such as Agreement on the
Conservation of Cetaceans of the Black Sea, BirdLife Romania, Mediterranean Sea and Contiguous
Atlantic Area, Mai Bine, Mare Nostrum, Romanian Ornithological Society, REPER 21 and the World
Wildlife Fund Romania.
■ Romanian academic organizations with relevance or interest in OSW such as Dunărea de Jos
University of Galați, Danube Delta National Research and Development Institute, National
Research and Development Institute for Marine Research, National Research-Development
Institute for Marine Geology and Geoecology - GeoEcoMar Bucharest and Politehnica Bucharest
University.
■ Communities, and fisherfolk that may be affected.
Consideration has also been given to the World Bank Environmental and Social Framework (ESF).31 It
consists of 10 core environmental and social standards (ESS) listed below. These core standards, along
with good international industry practice (GIIP)xix. have been used to evaluate the environment and
social risks posed by OSW development in Romania setting to refine project outcome.
■ ESS1: Assessment and Management of Environmental and Social Risks and Impacts.
■ ESS2: Labor and Working Conditions.
■ ESS3: Resource Efficiency and Pollution Prevention and Management.
■ ESS4: Community Health and Safety.
■ ESS5: Land Acquisition, Restrictions on Land Use, and Involuntary Resettlement.
■ ESS6: Biodiversity Conservation and Sustainable Management of Living Natural Resources.
■ ESS7: Indigenous Peoples/ Traditional Local Communities.
■ ESS8: Cultural Heritage.
■ ESS9: Financial Intermediaries.
■ ESS10: Stakeholder Engagement and Information Disclosure.
xix. Good International Industry Practice (GIIP) is defined as the exercise of professional skill, diligence, prudence and foresight that would be reasonably expected from
skilled and experienced professionals engaged in the same type of undertaking under the same or similar circumstances globally. World Bank ESS Standards are technical
reference documents which provide examples of approaches that are based upon Good International Industry Practice. Equator Principles (a financial industry benchmark
for determining, assessing and managing environmental and social risk in projects) and IFC Performance Standards call upon these guidelines for establishing acceptable
levels of performance.
Environmental and social considerations 87
11.3 RESULTS
The key environmental and social considerations are discussed in Table 11.2. As stated above, further
detailed studies, surveys and consultations will be required to be undertaken before any invasive
project works, including consideration of cumulative impacts between projects.
TABLE 11.2 KEY ENVIRONMENTAL, SOCIAL AND TECHNICAL CONSIDERATIONS
Romania-specific
Definition and potential considerations, mitigation
OSW impact (without measures and impact on
Consideration Category Rating mitigation) projects of mitigation
A. Protected Environ- Environmentally designated Almost all of the coastline of
Areas and Key mental sites of regional, national, Romania and large sea areas
Biodiversity and international around the Danube Delta are
Areas (KBAs) significance which are Protected Areas and have been
considered as high-risk excluded from the potential
areas. This includes wind energy areas, and a 5 km
identified freshwater and/or buffer has been assumed.xx
marine KBAs. We assume export cables will
R OSW development during not cross these areas. Both
pre-construction and these measures add to levelized
construction stages can cost of energy (LCOE) for OSW
cause displacement and in Romania.
habitat changes and pose Project-specific mitigation may
a threat to marine species relate to projects bordering the
and surrounding biodiversity buffer zone.
due to noise and vibration
levels, and reduced water
quality during construction.
B. Natural Environ- Coastal and marine Key habitats have been
Habitats mental habitats such as wetlands excluded. The key coastal
and deltas. construction activity will be
Construction in coastal bringing ashore the export
areas and marine cables.
ecosystems can lead to Surveys are important to
biodiversity disturbance and establish key local receptors,
possibility of local increased then relevant mitigation
erosion caused by scouring measures can be taken,
around new structures including limiting the season of
and water pollution activity and use of temporary
R during construction. solutions such as newt fencing.
Wastes anticipated Horizontal directional drilling
for the project include can be used as an alternative
domestic wastewater, to cable trenching for crossing
solid wastes (hazardous short stretches of sensitive
and non-hazardous), oil habitat.
and lubricants during
construction. Indirect
effects include interruption
or changes to natural
coastal processes such as
tidal flows and sediment
movement.
xx. We have assumed that a 5 km buffer is appropriate but there might be non-soaring bird species of concern that do cross the sea area, including passerines, ducks and
shearwaters.
88 Offshore Wind Roadmap for Romania
Romania-specific
Definition and potential considerations, mitigation
OSW impact (without measures and impact on
Consideration Category Rating mitigation) projects of mitigation
C. Sensitive Environ- Includes dolphins, sharks, Black sea dolphins and other
marine species mental whales, and other marine species have seasonal behavior
species sensitive to patterns that need to be
survey, construction and considered, especially in the
operational activities. design of foundation installation
Includes various endangered methods and the timing of
species. installation programs, to avoid
Noise, acoustic vibration, times when receptors are most
and light produced during sensitive.
OSW construction can Monopiles are likely to be the
impact sensitive marine most used foundation type in
species causing changes Romania. Typically, these are
in feeding and breeding driven into the seabed using
patterns through habitat piling hammers, but in some
disruption. Increased cases, drills and vibro-piling
sediment loading during solutions can be used. Gravity-
R construction and operation base for alternative foundations
could cause smothering of can also be used, but at a cost
habitats and species. premium.
Operational sources Much work has been done to
include mechanical and reduce the piling noise and to
aerodynamic noise. minimize its propagation to
receptors, including through
the use of bubble curtains or
temporary solid barriers put
in place round foundations
during installation. Use of such
solutions adds to installation
cost.
Typically, effects of operating
projects are believed to be much
less significant.
D. Bats and Environ- Habitats for resident and We have found little data
birds mental migratory bird species, especially regarding migratory
particularly intertidal birds, but recognize the
feeding grounds and international importance of the
high-tide roost sites which Danube Delta, especially for
support populations of avian life.
threatened species. This is why we recommend an
Offshore foraging sites and early Strategic Environmental
R Assessment with focus on avian
migration of bats.
flightpaths, especially for the
OSW poses risk of injury or
Yelkouan Shearwater.xxi
death from turbine collision,
habitat displacement, This could have a significant
disruption of feeding effect on potential wind energy
grounds, and changes in areas.
breeding patterns during Studies show that many birds
construction and operation. navigate OSW projects
xxi. The Yelkouan Shearwater has been seen in large numbers from the coast, but no spatial data on their movements around Romania exists. Habitat suitability modelling,
combined with boat surveys and coastal counts, show the coast of Romania to have good suitability for Yelkouan Shearwater with areas in the non-breeding season
overlapping with the proposed OSW areas. Surveys in these areas should therefore be targeted for Yelkouan Shearwaters. More information is available at: https://www.
sciencedirect.com/science/article/abs/pii/S096706451630193X?via%3Dihub
Environmental and social considerations 89
Romania-specific
Definition and potential considerations, mitigation
OSW impact (without measures and impact on
Consideration Category Rating mitigation) projects of mitigation
D. Bats and successfully, but casualties
birds (cont.) have been seen and the impact
of disruption is not fully
understood. In some cases,
turbines on some projects have
been temporarily stopped,
R
either at defined times of year
or based on real-time avian
tracking. Such measures impact
LCOE, so a better solution is to
only construct projects where
such measures are not needed.
E. Artisanal and Social Comprises commercial Romania is a minor EU producer
commercial fishing areas, and small- of fishery products. Romania’s
fishing grounds scale fisheries for individual fishing fleet is mostly small-
households or communities. scale (vessels less than 12
In many countries, larger meters in length). In 2020,
fishing vessels are not Romania had 175 registered
permitted to enter OSW vessels, with the majority (133)
farms, driving changes to being less than 12 meters. Five
fishing areas and practices, vessels are between 18 and
though changes in risk 29 meters. This suggests the
perceptions are in some majority of fishing in Romania
cases softening such is artisanal and is unlikely to
restrictions. be at the distances from shore
relevant for OSW or excluded
from within OSW project areas.
A For owners of larger vessels,
consultation is likely to lead to
satisfactory outcomes, which
may include:
Site adjustment to avoid
interference with the most
important commercial fishing
grounds and their biologically
linked habitats, such as
spawning or nursery areas;
Use of compensation schemes,
including retraining, community
investment, or disruption
payments; and
Agreements on multiuse areas.
F. Aquaculture Social Areas for coastal In 2020, Romania had an
aquaculture and mariculture aquaculture production
of fish, shellfish, and of 12,200 tons, with over
seaweed in the country. 30 species cultivated, the
OSW construction such most important belonging
as piling may cause noise to the Cyprinidae family,
G / vibration impacts to the particularly common carp,
marine environment. Civil as well as bighead, silver, and
works increase the potential crucian carps. The majority
for water pollution that of aquaculture is inland,
could result in potential freshwater aquaculture with
economic displacement limited mariculture production.
through reduced yields.
90 Offshore Wind Roadmap for Romania
Romania-specific
Definition and potential considerations, mitigation
OSW impact (without measures and impact on
Consideration Category Rating mitigation) projects of mitigation
F. Aquaculture Established aquaculture sites
(cont.) should be avoided by developers
to minimize disturbance. This
is easy due to the anticipated
location of OSW projects.
G OSW projects may provide new
opportunities for aquaculture
due to the availability of fixed
structures, refuges, power and
communication. Pilot programs
are running in some markets.
G. Landscape Social Any significant viewpoints Protected landscape and
and seascape (landscape, seascape, seascape in the country that
or visually significant could be impacted by OSW
landforms/structures) that development include the
will be affected by the visual Danube Delta and Vama Veche -
impact of wind turbines and 2 Mai Marine Reserve.
associated facilities, such Stakeholder engagement and
G as transmission lines and avoiding protected landscapes
substations. and seascapes through marine
Impacts can relate to the spatial planning is key to
presence of infrastructure addressing this consideration.
but also flicker or shadow Wind Energy Areas are mostly
effects changing as turbine at least 30 km from shore,
rotors rotate. sufficient to minimize concerns.
H. Historical Social Shipwrecks and heritage The are no marine or coastal
and cultural sites that have significance UNESCO cultural heritage sites
areas to local culture or local in Romania. There are known
setting. shipwrecks within the Romanian
OSW construction can pose waters of the Black Sea.
risks to potential offshore Early identification of important
artifacts, which may have heritage sites through
cultural or tourist value. marine spatial planning is
Visual considerations are recommended to minimize harm
also relevant. and local conflict. It is possible,
however, that important sites
and finds may arise during
A the ESIA process and from
stakeholder engagement.
Protection of underwater
archaeology and historical
settings will be secured through
the permitting process, and
local siting of turbines and
subsea cables within wind farms
can be adjusted relatively easily
to avoid sensitive sites.
Wind Energy Areas are mostly
at least 30 km from shore,
sufficient to minimize concerns.
Environmental and social considerations 91
Romania-specific
Definition and potential considerations, mitigation
OSW impact (without measures and impact on
Consideration Category Rating mitigation) projects of mitigation
I. Tourism areas Social Tourism areas consist of The main coastal tourist areas
beaches, hotels, natural in Romania include Constanța,
areas, cultural/heritage Jupiter, Mamaia, Mangalia
buildings and locations Neptune, Vama Veche and
spots for water activities Venus. These sea resorts rely
such as diving, surfing, on the tourist economy that is
recreational fishing, boating, supported by the scenery and
sailing and cruise ships. activities found on the Black
Construction activities Sea.
A can cause disruption. International experience
Visual considerations are suggests that OSW developers
also relevant. Early OSW avoid areas with important
projects can create new tourism activities, but it is
local tourism opportunities. relevant to note that early OSW
projects have created local
tourism opportunities via boat
trips and visitors centers. Public
consultation is key to managing
this consideration.
J. Ports and Technical Ports and shipping routes The Port of Constanța, including
shipping routes for a range of vessel sizes. the Midia and Mangalia area,
Construction activities can and the Port of Sulina are
cause temporary disruption, Romania’s main sea ports.
and larger vessels are not There a number of major
permitted to enter OSW ports along the Danube River,
farms, potentially driving with major shipping routes
changes to navigation originating at Constanța.
routes. The presence of Exclusion zones and minimum
structures at sea can risk safety zones are required during
R collision. construction and operational
Road traffic due to stages to mitigate impacts.
associated onshore works Consultation with the Ministry
(grid connection and of Transports and Infrastructure
transmission and port and the Romanian Navel
upgrades) can impact Authority is key to managing
locally. this consideration. At present,
we have assumed a minimum
distance of 12 km between
potential wind energy areas to
allow for shipping.
K. Military Technical This comprises military There are naval bases in the
exercise areas bases, firing ranges, coastal cities of Constanța,
exclusion zones (including Mangalia and Tulcea. The 57th
due to radar) and military Air Base is located at Mihail
no fly zones. Kogălniceanu International
Potential impacts are as Airport which is 20 km from the
directly above, plus OSW coast.
A projects can affect radar Consultation with the
and defense systems due Ministry of National Defence,
to the presence of large, coordination with coast guard,
moving structures at sea (as and clearance application for
rotors turn). OSW development are keys to
managing this consideration.
It is likely to lead to exclusion
zones, and site-specific
restrictions.
92 Offshore Wind Roadmap for Romania
Romania-specific
Definition and potential considerations, mitigation
OSW impact (without measures and impact on
Consideration Category Rating mitigation) projects of mitigation
L. Aviation Technical This comprises local and Mihail Kogălniceanu
international airports, International Airport, located
flightpaths and related outside Constanța, is the only
radar systems. airport within 20 km of the
Potential impacts are risk of coast and could potentially be a
collision plus OSW projects consideration.
can affect radar, as above. The location and design of
projects can be adapted to
A
minimize the impact on aviation
services. Advanced sensor
systems can also be employed
to reduce radar interference.
Consultation with the Romanian
Civil Aeronautical Authority
(RCAA) is key to managing this
consideration.
11.4 DISCUSSION
This section describes and rates relevant environmental and social considerations. Section 6 describes
how information about the location and sensitivity of receptors should be used in defining the location
of OSW projects in Romania. Guidance and standards for environmental and social impact assessment
(ESIA) aligned with GIIP and lender requirements are important to:
Minimize environmental and social impacts;
Enable financing of projects; and
Avoid damage to the reputation of the industry, slowing inward investment opportunities and future
growth prospects.
11.5 RECOMMENDATIONS
Based on this analysis, it is recommended that:
The Ministry of Environment, supported by the Ministry of Finance addresses any shortfalls in
Romanian ESIA requirements compared to EU Regulations, GIIP, and lender standards.
The Ministry of Energy and the General Secretariat of Government lead in helping Government
departments and other key stakeholders to grow capacity and knowledge needed to process the
planned volume of OSW projects (through all frameworks).
New permitting entity explores access to (and benefits of use of) existing environmental data from
impact assessment of oil and gas activities, held by Authority for Mineral Resources (NAMR) in order to
increase efficiency of OSW environmental impact assessment.
93
12. HEALTH AND SAFETY
12.1 PURPOSE
The management and regulation of health and safety (H&S) is a vital aspect of developing a sustainable
and responsible offshore wind (OSW) industry. The purpose of this section is to undertake a high-level
review of H&S guidance and law in Romania. The review will show the extent to which current legislation
and best practice aligns with OSW activity. It will also recommend ways of ensuring Romania can
develop an OSW industry that conforms with international H&S requirements and best practice.
12.2 METHOD
Our assessment has been based on our existing knowledge of OSW H&S issues, primary research in
relation to H&S frameworks in Romania and engagement with relevant stakeholders.
12.3 RESULTS
12.3.1 General guidance and law
In Romania, the Ministry of Labour and Social Solidarity is the competent authority in the H&S field.
Its main responsibilities are:
■ Drawing up national policy and strategy;
■ Drawing up drafts of normative acts in order to implement the national strategy; and
■ Monitoring the enforcement of the legislation.
■ The Romania Labour Inspectorate checks compliance with H&S legislation and grants permits
through the local territorial labor inspectorates.
■ Romanian H&S legislation hierarchy has a three layer structure:
■ Constitution and Labour Code
■ The Law on Safety and Health at Work and the Methodological Norms for its application.32 This
provides the main legal framework for H&S. It sets out the following obligations of the employer:
• To carry out (and be in possession of) a labor H&S risk assessment;
• To decide on the protective measures to be taken and, where appropriate, the protective
equipment to be used;
• To keep records of occupational accidents; and
• To draw up for the competent authorities, reports on labor accidents suffered by its employees.
■ A larger base of Government Decisions that have more detailed provisions. Generally, these are
transpositions of different EU Directives on H&S matters such as types of hazards, and protective
or work equipment.
94 Offshore Wind Roadmap for Romania
12.3.2 Oil and gas
For Romania’s oil and gas sector, H&S requirements are set out in the Law No 165/2016 on the Safety
of offshore oil operations (Law 165). The specific H&S rules for offshore extraction include measures
to prevent labor accidents and illnesses specific to offshore oil and gas extraction work. Law 165 is
complementary to the Law on Safety and Health at Work.33
In the absence of OSW specific regulations, it is logical that Law 165 is a robust starting point for
OSW H&S.
To determine any gaps in the current framework and make it fit for OSW, it is important to understand
the various H&S documents that are often applied to OSW activities in established OSW markets.
Table 12.1 provides a non-exhaustive list of the main guidance. In addition, there are many international
standards including EN, ISO and IEC standards that cover specific areas such as engineering design
and processes.
Table 12.1 Main health and safety legislation and guidance documents relevant to offshore wind
Applicable
Project to Romania
Stage/Area Document Summary Projects
Design DNVGL-ST-0145, General safety principles, requirements and Yes (international
Safety/ Offshore Substations guidance for platform installations associated standard applied
Emergency (OSSs) for Windfarms.34 with offshore renewable energy projects globally).
Response (substations).
Inspection
Emergency
Response
Design DNVGL-ST-0119, Principles, technical requirements and Yes (international
Inspection Floating Wind Turbine guidance for design, construction and standard applied
Structures.35 inspection of floating wind turbine structures. globally).
Design DNVGL-ST-0126, support General principles and guidelines for the Yes (international
Construction Structures for Wind structural design of wind turbine supports. standard applied
Turbine.36s globally).
Design DNVGL-ST-0437, Loads Principles, technical requirements and Yes (international
Construction and Site Conditions for guidance for loads and site conditions of wind standard applied
Wind Turbines.37 turbines. globally).
Design IEC 61400, Wind Turbine Minimum design requirements for wind Yes (international
Generator Systems.38 turbines. standard applied
globally).
Design EN 50308: Wind Turbines Defines requirements for protective measures Yes (international
Operation – Protective Measures relating to H&S of personnel (commissioning, standard applied
– Requirements for operation and maintenance). globally).
Maintenance Design, Operation and
Maintenance.39
Various G+ Good Practice Good practice guidance intended to improve Yes (international
Guidelines and Safe the global H&S standards within OSW farms standard applied
by Design Workshop and workshop reports that explore current globally).
Reports.40 industry design and investigate improvements.
Health & RenewableUK Health & Various H&S guidelines for OSW farms UK specific but
Safety Safety Publications41 including Emergency Response guidelines. may be applied
internationally.
Health and safety 95
Applicable
Project to Romania
Stage/Area Document Summary Projects
Safety/ Safety of Life at Sea Sets minimum safety standards for life saving Yes (international
Emergency Regulations (SOLAS).42 appliances and arrangements. standard applied
Response globally).
Arrangements
Helideck ICAO Heliport Manual.43 Criteria required in assessing the standards for Yes (international
Design offshore helicopter landing areas. standard applied
globally).
12.4 DISCUSSION
Romania does not currently have any H&S regulation in place specifically for the OSW industry.
OSW specific considerations will need to be incorporated into existing oil and gas regulation or new
regulation, based on the findings of the project Wind Harmony as appropriate.xxii This should be
managed by the Authority for the Regulation of Offshore Oil Operations in the Black Sea (ACROPO).
The evolution of OSW in other markets has shown that project developers can make effective use
of international regulations, standards and guidelines in conjunction with any overarching national
frameworks in place for the instead of drawing up a whole set of H&S rules.
12.5 RECOMMENDATIONS
Based on this analysis, it is recommended that:
■ The Ministry of Labour and Social Solidarity adapts the existing framework of labor code and
regulations to be suitable for OSW, adopting international industry standards where appropriate.
■ ACROPO develops H&S regulations specifically designed for application to the OSW industry,
which should be based on existing regulations in established EU markets, and include reference to
the international design and operational standards adopted in established OSW markets.
■ ACROPO ensures H&S regulations have a firm focus on the behavioral aspects of H&S and ensure
that ongoing behavioral training forms a core element of compliance. Behavioral training forms an
integral part of modern OSW H&S practices in established OSW markets.
■ ACROPO encourages companies active in OSW and oil and gas activities in Romania to collaborate
on knowledge sharing. This will allow the OSW industry to build upon existing experience in oil and
gas by using established facilities and personnel to train OSW workers, were possible.
xxii. The project Wind Harmony has worked on harmonizing the different H&S requirements for OSW.
96 Offshore Wind Roadmap for Romania
13. LEASING AND REVENUE
FRAMEWORKS
13.1 PURPOSE
In this work package, we provide an overview of the proposed framework for leasing and revenue
for offshore wind (OSW) in Romania, key considerations for the Government to consider and
recommendations for next steps. We also provide recommendations for other early work needed to
establish a viable, confident OSW industry.
13.2 METHOD
Balanced, transparent, and efficient processes for granting project leases and for procurement of
large volumes of energy are required for Romania to deliver the volume of OSW discussed in the two
scenarios in Section 2.
World Bank Group’s Key Factors report Sections 3.2 and 3.6 discuss different ways of organizing
leasing and revenue frameworks and the different options available regarding energy procurement.9
We considered two of the models discussed in the Key Factors report, a one-competition model and a
two-competition model, as used in a number of other markets.
A one-competition model (as used in Denmark and Netherlands, for example) would require significant
capacity building and resource within Government to do early-stage development work, and this was
seen as a challenge to address within the timeframe discussed. It would also risk the progress slowing
down while developers wait for Government to carry out the necessary activities and would leave little
room for developers to input into project design decisions.
A two-competition (as used in UK and US, for example) would not work well in a smaller market like
Romania, where there would likely not be enough liquidity of leased projects to make the revenue
auction competitive, and not enough future auctions for developers who lost in the first auction to
have confidence in the value of their assets.
Taking the learning from this and significant discussion with industry and the MOE about the best
frameworks model to adopt for Romania, we concluded that a hybrid model would be best solution for
Romania, which has parallels with the current solution for oil & gas in Romania. The hybrid solution is
similar to a one-competition model, but with developers (rather than Government) leading the early
stage development work and being compensated for this if they do not win the revenue auction. This
reduces competitive and policy risk for developers, but it does leave the risk that a developer secures
the exploration license but that the site could be won by another developer in the revenue auction. In
this case, costs are reimbursed, but the opportunity value is lost.
Section 13.3.2 outlines this model, and the stages and milestones to deliver.
Leasing and revenue frameworks 97
13.3 RESULTS
13.3.1 Seabed rights
According to Romanian legislation, the seabed is part of the state’s heritage. As a consequence,
in order to secure the right over a block of seabed, an applicant needs to enter into a concession
agreement.
This is where the grantor (on public land this is the local authority,), transfers, for a maximum period
of 49 years, to the concessionaire, the right and obligation to exploit public property, in return for a
royalty. It is a requirement that the concession agreement is awarded through a tender procedure with
criteria:
■ The level of the royalty;
■ The economic and financial capacity of the applicant;
■ Environmental protection; and
■ Specific considerations relevant to the nature of the concessioned asset.
13.3.2 Proposed leasing and revenue frameworks for Romania
Following analysis of the suitability of framework model options, industry engagement and
government consultation, a hybrid model is recommended for leasing and revenue, which has parallels
with the current solution for oil and gas in Romania. The proposed hybrid model would include the
following steps:
1. Early government activity and Strategic Environmental Assessment (SEA)
2. Site exploration competition
3. Revenue auction
It is recommended that the Ministry of Energy (MOE) drafts details in law and secondary legislation,
working with a transaction advisor as required before consultation with industry and other relevant
stakeholders, to ensure that key considerations are addressed and equitable compromises found,
where needed. All aspects, including with respect to transmission, need to be in compliance with
national and European provisions in the field of competition and state aid. The above steps apply to
both the low growth and high growth scenarios (with further rounds of competitions in the high growth
scenario), and are described in more detail below.
Early government activity and Strategic Environmental Assessment
■ Potential OSW energy areas are established based on economic analysis and using available
environmental and social data. See Section 6.
■ The Government retains an Independent Engineer and Transaction Advisor and undertakes a SEA
on the potential OSW energy areas and a basic technical review to confirm windspeeds, other
metocean conditions (such as wave climate and sea currents) and geotechnical conditions.
• A key consideration would be bird migration and the Appropriate Assessment would likely need
baseline survey data.
98 Offshore Wind Roadmap for Romania
■ It designates three 1 GW sites.
■ In parallel with the above the Government progresses the OSW law.
■ The Government establishes how OSW fits within Romania’s broader energy strategy, including
through a least cost generation analysis, considering temporal patterns for generation by onshore
wind, solar and OSW. Currently, it is unclear how much energy could be generated at lower cost
than OSW by more onshore wind and solar projects. A further consideration is how Romanian
OSW fits within a wider European context, recognising that levelized cost of energy (LCOE) in
Romania is expected to be significantly higher than in established OSW markets. This also brings
consideration of security of supply and international interconnect costs.
■ The Government establishes an OSW capacity vision to 2035 and beyond as part of a
decarbonized energy mix, considering plans also for decarbonizing the transport sector and
domestic and industrial heat sectors), explaining how and why OSW is important.
■ The Government sets OSW installed capacity targets for 2030 and 2035 in the next revision of
the National Energy and Climate Plan (NECP), showing a clear plan for delivery of first projects,
including the timetable for private-sector competitions.
Site exploration competition
■ The Government initiates a site exploration license competition.
■ It uses pre-qualification criteria in line with good industry practice, enabling a suitable range
of entrants (including utilities, energy companies and investment funds) and meeting legal
requirements, for example:
• Financial / Commercial. Evidence that the bidder has the required capital to deliver the project.
This ensures both that immediate payments can be made (any deposit or bond required
up-front to secure an exclusive exploration license), as well as ensuring that the capital to bring
the project through development (typically to financial investment decision) is available and
that the project will not be abandoned due to lack financial resource.
• Legal. Evidence the bidder passes certain thresholds for compliance with local regulations
and ethics and understands the process it is signing up to. This minimises risk of reputational
damage to the Government competent authority and de-risks the competitive process and
increases the likelihood of a project being developed well and on time.
• Technical / capability. Evidence that the bidder has both the experience and capability to
develop a and deliver the project. This combines track record and evidence of a credible plan and
ability to deliver, potentially in a market with supply chain bottlenecks. This further increases
the chances of a project being developed well and on time.
• Commitment. Evidence of commitment to Romania-specific policy objectives, for example:
• Combining experience of local conditions and international OSW good practice, through
collaboration between local and international players.
• To deliver first OSW capacity operating in the early 2030s at a cost minimised for consumers
• To meet environmental protection obligations, and
• To support local supply chain to compete in an open market and invest in local workforce
development.
Leasing and revenue frameworks 99
■ In introducing commitment criteria, it is important to establish how these are assessed and
how developers are then made accountable. One important consideration is at what stage the
commitments are made. For example, in the UK, supply chain commitments are made quite late in
the process (when project developers know much about their project and the supply environment)
and as part of prequalification for the revenue auction and accountability is relatively weak. In New
York State, commitments are made earlier and accountability is higher, with commitments scored
along with an electricity price element as part of the auction. Further discussion is provided in
Section 3.6 of the Key Factors report.9, xxiii Specific solutions should be developed in conjunction with
the proposed transaction advisor.Based on the criteria above the Government decides on a shortlist
of consortia and issues guidance, including a timeline for the revenue auction for the sites and an
outline of how the winning consortia will be compensated under different scenarios. These include:
1. If the Government decides not to award a revenue contract: the site exploration consortium
will be reimbursed in full for their exploration expenses up to that decision.
2. If another developer wins the revenue auction: the winning developer will reimburse the site
exploration consortium for their development expenses.
3. If the site exploration consortium wins the revenue auction: they will include their expenses
into the project.
■ The Government runs the site exploration competition among short-listed consortia to undertake
full feasibility work at the site.
• The site data from the feasibility work will be made available to all bidders in the revenue
auction and will therefore need to be consistent with international norms and provide enough
information for other developers to be able to bid.
• Competition criteria will include those that are legally required, as described above:
• Royalty payment (that could potentially be capped);xxiv
• The economic and financial capacity of the applicant;
• Environmental protection; and
• Specific considerations relevant to the nature of the concessioned asset. xxv
■ Government awards exploration licenses for 3 GW, and the successful site exploration consortia
gets site exclusivity to carry out the detailed feasibility work within a reasonable timeframe,
recognizing that activities in a new market can sometimes take longer than initially expected.
Revenue auction
■ Once the feasibility work has been carried out, the Government opens a data room with all
the data defined as required by Government and provided by the holders of the exploration
licenses.xxviThe Government initiates pre-qualification for developers interested in bidding on
xxiii. As discussed in the Key Factors report, restrictive local content requirements add risk and cost to projects and slow deployment. This is because new suppliers often
have much to learn before supplying offshore wind projects in volume and restrictions typically limit competition.
xxiv. We understand that some form of royalty payment is legislated in Romania, Many (but not all) markets have some sort of one-off or ongoing payment at this
stage. One relevant consideration is that additional cost to project developers typically will be recouped via eventual per MWh bid prices, meaning that royalty payments
eventually act rather like a tax paid by consumers. For this reason, there is logic to implement a small, capped royalty payment, but for this not to be excessive. Specific
solutions should be defined in conjunction with the proposed transaction advisor.
xxv. We understand that this criterion is legislated in Romania. It would be reasonable to focus this on local benefit commitments, as discussed above. Specific solutions
should be defined in conjunction with the proposed transaction advisor.
xxvi. Example datasets are available, for example relating to OSW auctions in the Netherlands, where information is made public. Specific details (to be communicated prior
to the site exploration competition) should be defined in conjunction with the proposed transaction advisor.
100 Offshore Wind Roadmap for Romania
the site(s) and selects a shortlist. Pre-qualification criteria will be defined in conjunction with the
transaction and will be generally in line with the pre-qualification criteria for the site exclusivity
competition, covering deliverability, environmental protection and local economic benefit and any
other policy objectives relevant at the time.
■ The Government runs auction for 3 GW among shortlisted companies, and selects a winner for
each site. The competition criteria should be dominated by per MWh price, but could also include
non-price criteria (see Section 8.4).
■ The winner(s) compensates the site exploration consortia where applicable.
■ If any of the sites do not proceed beyond this point, then the Government compensates site
exploration consortium.
■ The winner(s) progresses the development of the site to operation.
Note that in the early stage of OSW markets, public financial support has been required. In time, as
costs reduce, the subsidy-free corporate PPAs have become an option. Although Romania is not likely
to host a large offshore wind market, keeping this route to market open is a relevant consideration.
Figure 13.1 shows a best estimate timeline for the above process in the high growth scenario, based on
typical timing from other markets. The purpose of the timeline is to serve as a guide, which is different
from the optimistic scenarios presented in Section 2, and used to calculate LCOE is Section 7 and the
economic benefits in Section 9. It will be important to establish an agreed timeline once frameworks
and responsibilities are better defined. This is especially relevant considering possible use of the
Modernisation Fund, as discussed in Section 19.
FIGURE 13.1 BEST ESTIMATE TIMELINE FOR LEASING AND REVENUE FRAMEWORKS
IN THE HIGH GROWTH SCENARIO
Compe- Auction
tition
2023-2024 2025 2025-2027 2027 2027-2029 2029-2032
Early Government Site exploration Feasibility work Revenue auction Project Project
activity competition • Winning consortia • Government opens development construction and
• Government sets • Governments carry out detailed data room with • The winning operation
OSW capacity target shortlists consortia feasibility work data from feasibility developer(s) • The winning
• Government appoints based on work progresses the site developers
Independent Engineer pre-qualification • Government development to construct the
and Transaction criteria initiates reach FID projects, and the
Advisor to undertake • Government pre-qualification projects reach
a Strategic publishes timeline and selects a operation
Environmental for auction and shortlist of
Assessment guidance on developers for the
• Government compensation for revenue
designates sites or winning consortia. competition
areas. • Government runs • The Government
• Government site exploration runs auction and
progresses OSW law competition selects a winner for
• Government each of the sites
awards exploration • The Government
licenses and site provides
exclusivity to carry compensation to
out detailed site exploration
feasibility work to consortia per rules
winning consortia. established
Leasing and revenue frameworks 101
13.4 RECOMMENDATIONS
Based on this analysis, it is recommended that:
■ The MOE introduces a new, clear and investor-friendly OSW law and associated regulation relating
to OSW frameworks, involving other public stakeholders, as required. All aspects, including with
respect to transmission, need to be in compliance with national and European provisions in the
field of competition and state aid.
■ The MOE establishes a long-term official Government-industry forum involving local and
international project developers and key suppliers, to work together to address the new OSW law,
the recommendation throughout the roadmap and other considerations, as they arise.
■ The MOE proposes that The National Energy Regulatory Authority (ANRE) is given responsibility to
grants seabed rights relating to OSW.
■ The MOE establishes how OSW fits within Romania’s broader energy strategy, including through a
least cost generation analysis, considering temporal patterns for generation by onshore wind, solar
and OSW.
■ The MOE publishes its vision for OSW to 2035 and beyond as part of a decarbonized energy mix,
considering plans also for transport and heat, explaining how and why OSW is important.
■ The MOE sets OSW installed capacity targets for 2030 and 2035 in the next revision of the
NECP, showing clear plan for delivery of first projects, including the timetable for private-sector
competitions.
■ The MOE considers avoiding regulatory barriers for developers with regard to signing corporate
power purchase agreements as an alternative route to market than winning a revenue
competition.
102 Offshore Wind Roadmap for Romania
14. PERMITTING
14.1 PURPOSE
A transparent and efficient process for granting permits is required for Romania to deliver the volume
of offshore wind (OSW) discussed in Section 2.
In this work package we assess the existing regulatory and permitting frameworks in Romania and
identify any gaps which need to be addressed to ensure they are capable of underpinning and guiding
the future development of a sustainable OSW industry, based on EU Regulations, good international
industry practice and other lender standards.
14.2 METHOD
There is currently no legislation in force that applies to OSW projects specifically, so we have mapped
out the current key legislation that applies to energy generation projects, specifically highlighting laws
that apply to offshore oil and gas operations.
We also mapped the permitting process that applies for construction projects in Romania, especially
ones that apply to similar industries, such as oil and gas and onshore wind.
Further work will be required by Government to consult on, design, and implement a permitting
framework for OSW projects that meets the needs of Government, stakeholders, developers, and
investors.
14.3 RESULTS
14.3.1 Key legislation
The existing legal and regulatory framework for energy in Romania is covered by several laws on
energy, electricity, the use of energy, environment and construction. A non-exhaustive list of relevant
Romanian laws is provided below:
■ Law 123/2012 on electricity and natural gas, published in the Official Gazette no. 485 dated 16
July 201244;
■ Law No 165/2016 on the safety of offshore oil operations (Law 165)45; and
■ Law No 256/2018 on certain measures necessary for the implementation of petroleum operations
by holders of petroleum agreements relating to offshore and onshore oil blocks (Law 256)46.
A non-exhaustive list of legislation related specifically to permitting is provided below:
■ Law 292/2018 on assessing the impact of certain public and private projects on the environment,
published in the Official Gazette no. 1043/10.12.2018 (Law 292)47;
Permitting 103
■ Law 265/2006 for the approval of the Government Emergency Ordinance no. 195/2005 on
environmental protection, published in the Official Gazette np. 586/ 06.07.2006 (Law 265)48;
■ Law no. 50/1991 on the authorization of the execution of construction works, as further amended
and supplemented, published in the Official Gazette no. 933/13.10.2004 (Law 50)49;
■ Law no.17/1990 on the legal regime of inland maritime waters, the territorial sea and the
contiguous area of Romania, republished in the Official Gazette no. 252/8.04.2014 (Law 17)50;
■ Law no. 395/2004 on maritime hydrographic activity published in the Official Gazette no.
941/14.10.2004 (Law 395)51;
■ Law 107/1996, with subsequent amendments and completions and Order 828/2019 on the
procedure and powers of issuance, amendment and withdrawal of water management permits,
including the procedure for assessing the impact on water bodies (Law 107);52
■ Government Ordinance no. 57/2002 on scientific research and technological development
published in the Official Gazette no. 643/30.08.2002 (GEO 57)53; and
■ Government Decision no. 967/2004 for approving the Regulation for organization and functioning
of the National Research-Development Institute for Marine Geology and Geo-ecology -
GEOECOMAR Bucharest, published in the Official Gazette no. 619/ 8.07.2004 (GD 967).
Specifically for OSW, over the last years, there were two legislative initiatives in the Parliament, in
2020 and in 2022, but these have not progressed.
In addition to national legislation listed, significant EU legislation is relevant.
14.3.2 Resources
In Romania the main public entities that are responsible for the energy industry policy and regulatory
framework are:
■ The Competent Regulatory Authority for Oil and Gas Operations at Black Sea (ACROPO). A
central administration body that has been set up especially for the offshore petroleum operations,
based in Constanța, as a result of the transposition of the Directive 2013/30/EU for the offshore
oil and gas safety operations.
■ The Ministry of Energy (MOE). The competent authority at national level responsible for the
development of energy efficiency policies and legislation in the energy industry.
■ The Ministry of Environment, Water and Forest: Government department responsible for the
conservation, management, development, and appropriate use of the environment and natural
resources within the country.
■ The National Agency for Mineral Resources. An administrative body functioning under the
Romanian Government, is in charge with managing the mining and oil and gas resources, including
awarding concessions, monitoring, exploration and exploitation activities in the designated
sectors, providing regulatory framework and other permits for conducting operations.
■ The National Energy Regulatory Authority (ANRE). An autonomous administrative authority
with legal personality, under parliamentary control, independent in decision-making,
organizational and functional terms. ANRE drafts, approves and monitors the application of
mandatory regulations at national level, necessary for the functioning of the electricity, heat and
gas sector in conditions of efficiency, competition, transparency and consumer protection. The
above are likely to have a role in the permitting process for OSW.
104 Offshore Wind Roadmap for Romania
14.3.3 Permitting
There are currently no specific regulations detailing the permitting process for OSW projects. Below
is therefore an outline of the process for obtaining permits for other construction works in similar
industries, such as offshore oil and gas platforms and onshore wind projects. The process for grid
connection is discussed separately in Section 15.7.
Figure 14.1 shows the five steps of this permitting process.
FIGURE 14.1 OUTLINE OF CURRENT PERMITTING PROCESS FOR OFFSHORE WIND
Stage 1 Stage 2 Stage 3 Stage 4 Stage 5
Obtaining necessary documents Obtaining design and Obtaining Obtaining Final approval and
to get Building Permit connection approvals Establishment Conformity commissioning
The following documents must be from the TSO Authorisation Certificate • After the project is
obtained: • A grid connection • Allows the • Technical constructed, the project
• Urbanism certificate from the local request will be establishment of a conformity will enter in a process of
municipality submitted to new electricity certificate issued approval of the
• Permit from the National Agency for Transelectrica. production unit. by the grid construction and
Environmental Protection; • The technical project • Issued by ANRE at a operator commissioning. The final
• Permit from the National will be discussed with late stage in the • Prerequisite for approval will be granted
Administration "Apele Romane”; a company that will development generation license by a committee formed by
• Permit from the Constanta put together a process, typically a representative of
Maritime Hydrographic Directorate; solution study. after the ATR. Transelectrica, a
• Permit from the Romanian Naval • The solution study representative of the local
Authority; will be further municipality, a
submitted to representative from the
• Permit from the Romanian Border
Transelectrica. investor side and
Police
• The TSO will issue representatives of any
• Permit from the Ministry of Foreign other authorities that
Affairs the grid connection
approval (ATR). might need to approve the
• Permit from the General Major State connection with
• Approval from the Competent Transelectrica.
Regulatory Authority for Offshore • A generation license for
Petroleum Operations in the Black commercial operation of
Sea; electricity generation
• Technical authorisation capacities and energy
documentation; storage related to the
• Order for declassification and the generation capacity must
certificate of archaeological be obtained before after
clearance issued by the Ministry of commissioning (of first
Culture; turbine) and before
• Declaration on bearing the costs of commercial operation.
repairing environmental damage.
The Building Permit
All construction works carried out in Romania must be performed based on a Building Permit (BP)
obtained by the beneficiary following the securing of a real right over the land where the construction
will be erected. This can be an ownership right, a superficies right, an easement right or a concession
right over public owned land, which would likely apply for the seabed.
The first procedural step is for the beneficiary of the construction to obtain the urbanism certificate
(UC) from the local municipality, which includes a list of all endorsements and approvals that must be
in place before submitting the application for the BP. The beneficiary must obtain all endorsements
and approvals mentioned in the UC. Usually, these endorsements are issued by the National Agency for
Environmental Protection, the National Administration for Romanian Waters and the local authorities
(or the Ministry of Agriculture and Rural Development if it relates to agricultural land), although other
authorities may also be involved in the initial endorsement process, depending on the location of any
neighboring constructions (if any), the grid connection solution, and other particularities of the project.
Permitting 105
In the absence of specific OSW regulations, it is likely that Law 256 will be taken as a logical starting
point for authorizing works on OSW plants. Currently, Law 256 provides for an authorization issued by
the MOE, as a derogation from the standard procedure. Under Law 256, the following documents are
required for the building authorization:
■ Permit issued by the National Agency for Environmental Protection;
■ Notification for starting the works, or the permit issued by the National Administration “Apele
Române”;
■ Permit issued by the Constanța Maritime Hydrographic Directorate, where applicable;
■ Permit issued by the Romanian Naval Authority, for the part of the works carried out in the
territorial waters of Romania;
■ Permit issued by the Romanian Border Police, for the works to be located in its area of
competence;
■ Order for total or partial declassification and the certificate of archaeological clearance, as the
case may be, issued by the Ministry of Culture; and
■ Permit issued by the Ministry of Foreign Affairs, in the case of perimeters located in sectors where
the delimitation between the maritime spaces of Romania and the maritime spaces of neighboring
States has not been carried out.
Provided a project has a grid connection permit (ATR), the BP needs to be secured within 24 months
following the ATR date and within 18 months following the signing of the grid connection agreement.
The environmental permit
The environmental permit agreement includes the specific requirements needed to ensure a high
degree of environmental protection during the project construction, including the organization of the
site, and during the development of the project, and during decommissioning.
The establishment authorization (set-up authorization)
This allows the establishment of a new electricity production unit (required for new electricity
production units with an installed capacity higher than 1 MW). This authorization is issued by ANRE
within 30 days from the submission of all the required documents and payment of the corresponding
fee (0.32% from the total value of the investment for maximum charge capacity between 1 MW < 10
MW, 0.1% maximum charge capacity between 10 < 100 MW and 0.05% for maximum charge capacity
higher than 100 MW).
The establishment authorization is required in an advanced stage of the development process, and
typically is requested after the issuance of the grid connection permit, however it is not conditional
on the BP.
The validity term will be established by ANRE according to the schedule of construction works and
commissioning, considering the terms specified in the supporting documentation.
106 Offshore Wind Roadmap for Romania
Conformity certificate
This is the technical conformity certificate issued by the grid operator, which is a prerequisite for the
generation license, and acknowledges the compliance of solar/wind projects with an installed capacity
above 1 MW with the technical requirements for grid connection.
Generation license for commercial operation of electricity generation capacities and energy storage
facilities related to the generation capacity
This must be obtained from ANRE after the plant is commissioned and before the commencement of
commercial operations. The license is issued by ANRE within 60 days of submission of the complete
documentation and payment of the corresponding fee. The validity term of the license is 25 years.
The generation license may only be extended if the validity period is less than the maximum duration
allowed according to the law. We understand that it will be possible to apply for the license after the
first turbine is commissioned and amend this later. This will allow each turbine to start generating soon
after its installation, in line with normal industry practice, rather than waiting to start generating after
the whole project is installed. Waiting adds significantly to the levelized cost of energy, as equipment
will have been paid for, but is not yet generating.
At least 60 days before the fulfilment of the maximum validity period, the holder may apply for a
new license.
14.4 DISCUSSION
There is currently no OSW-specific permitting process in Romania, and this should be developed
based on the current permitting process, and good international industry practice (GIIP) for OSW
development.
A one-stop shop entity leading the process can help simplify, and under EU Directive 2014/89
on establishing a framework for maritime spatial planning, it is recommended to create a single
administrative entity, which can clarify responsibilities and levels of authorization (e.g. national vs.
regional) in order to simplify decision-making processes. This is currently under consideration by the
Government.
The purpose of a one-stop shop is to simplify and expedite the permitting process by providing a
single point of contact for project developers, thereby reducing administrative burdens and enhancing
efficiency. Typically, an effective one-stop shop will do this by providing:
■ A single point of contact: Offering developers assistance and guidance throughout the permitting
journey, expediting progress, resolving queries, and providing updates on applications, eliminating
the need to engage with multiple agencies separately.
■ Centralized Coordination: Bringing together government departments, agencies, and stakeholders,
facilitating communication and collaboration to enable smooth progress and avoid delays.
■ Streamlined procedures: Consolidating requirements, helping to simplify and harmonize the
process through clear guidelines, standardized documentation and a streamlined application
process. This reduces duplication of effort and time-consuming interactions with and between
different regulatory bodies.
Permitting 107
■ Regulatory expertise: Holding knowledge of the permitting landscape , helping both developers
and consultees regarding applicable laws, regulations, environmental considerations, and other
criteria that need to be addressed during the permitting process.
■ Stakeholder engagement: Facilitating stakeholder engagement, ensuring that concerns
and viewpoints are considered, and promoting transparency and public participation in the
permitting process.
■ Timelines and deadlines: Establish clear timelines and deadlines for each stage of the permitting
process. By setting reasonable and achievable targets, it helps maintain project momentum and
provides developers with certainty regarding the progress of their applications.
See WBG’s Key Factors report for more details, including examples.9
Note that the one-stop shop does not take responsibility for decisions, rather smooths the process for
stakeholders to provide feedback and for responsible bodies to make decisions.
14.5 RECOMMENDATIONS
Based on this analysis, it is recommended that:
■ The Government General Secretariat establishes a one-stop-shop permitting entity in order to
simplify the decision-making process and interface for project developers and enables the use of
digital services for submitting applications and similar.
■ The new permitting entity develops an OSW specific process based on the current permitting
process, also ensuring that it meets GIIP to help de-risk projects and facilitate access to
international finance.
108 Offshore Wind Roadmap for Romania
15. TRANSMISSION
INFRASTRUCTURE
15.1 PURPOSE
In this work package, we summarize the existing transmission network and planned transmission
upgrades as well as changes in transmission network management that may be required to support
development of offshore wind (OSW) under the scenarios presented in Section 2. We also summarize
the current grid connection process for new plants.
15.2 METHOD
Our assessment has been based on sources as cited within this section along with industry knowledge
from which suggestions have been made for the upgrading of the transmission network to facilitate
the development of OSW projects in Romania. It is recognized that parts of the proposed transmission
network development may pass close by to environmentally sensitive areas. This will need to be
considered and incorporated during the future planning and detailed option appraisals for the future
transmission network upgrading works but should not fundamentally change the principles suggested.
Environmental and social aspects have only been considered at a headline level and would need to be
incorporated fully during future more detailed option appraisal.
15.3 OVERVIEW OF GENERATION
Romania’s electricity supply has transitioned from being dominated by fossil fuels to well over half coming
from low carbon technologies by 2020 (45% Renewable Energy supply (RES)), as shown in Figure 15.1.
FIGURE 15.1 THE START OF ROMANIA’S ENERGY TRANSITION: THE CHANGE IN ELECTRICITY
GENERATION IN ROMANIA FROM 1990 TO 2020
8 50
Average generation (GW)
Fraction RES (Percent)
40
6
30
4
20
2
10
0 0
1990 1995 2000 2005 2010 2015 2020
Oil Coal Natural gas Nuclear Hydro Wind Solar PV RES (right scale)
Source: IEA Electricity Information54
Transmission infrastructure 109
Figure 15.2 shows the location of power generation by type, with large coal plant to the south west and
the largest generation plan, 1.3 GW nuclear with onshore wind to the south east. Future OSW would be
located further to the south east.
FIGURE 15.2 POWER PLANTS
Source: Transelectrica, via Adrian_Judu55
In its National Energy and Climate Plan (NECP), Romania has a target of 31% renewable energy in
gross final energy consumption and 49% RES share in electricity supply by the end of 2030. Since
publication, the Government has announced that these targets will be ‘significantly increased’ to
around 34% in the next revision of the NECP, taking benefit of significant funding through the National
Resilience and Recovery Plan7 (NRRP) and the Modernisation Fund. The expectation is that the vast
majority of new RES will be from wind and solar.
At the end of 2022, Romania had about 3.4 GW onshore wind operating and in its RET Development
Plan for the period 2022-203156, Transelectrica anticipates this increasing to 5.3 GW by the end of
2031 in its Reference scenario (with similar capacity of solar and up to about 50% more combined
wind and solar capacity under its Favourable scenario). With such increases, it has significant focus on
managing variable renewable energy. The latest plan references OSW but does not reference specific
capacity allocated to OSW.
15.4 OVERVIEW OF THE CURRENT TRANSMISSION NETWORK
AND FUTURE PLANS
The Romanian transmission network is operated by Transelectrica. The current status is presented
in Figure 15.3. It consists of about 9,000 km overhead lines above 110 kV, about 45% of this length is
rated at 220 kV, just over 50% at 400 kV and just under 2% at 750 kV. Romania has interconnects
110 Offshore Wind Roadmap for Romania
with Ukraine, Moldova, Bulgaria, Serbia and Hungary. Planned upgrades are shown with dashed lines.
Transelectrica has a long-term vision to establish a 400 kV high voltage direct current (HVAC) loop
around Romania, also shown.
FIGURE 15.3 THE TRANSMISSION NETWORK IN ROMANIA
Source: Transelectrica.57
The RET Development Plan also discusses Romania’s part in establishing three multi-state new
priority corridors for energy which open further eventual opportunities for OSW in Romania.58
These corridors are:
■ NSI East Electricity. Interconnections and internal lines in the north-south and east-west
directions to complete the internal market and for the integration of production from renewable
sources. Member States concerned: Austria, Bulgaria, Croatia, Czechia, Cyprus, Germany, Greece,
Hungary, Italy, Poland, Romania, Slovakia and Slovenia.
■ SE offshore. Development of the offshore electricity grid, development of the integrated offshore
electricity grid, including, where appropriate, the development of the hydrogen grid and related
interconnectors in the Mediterranean, Black Sea and waters adjacent, for the transport of
electricity or hydrogen from offshore renewable energy sources to consumption and storage
centers or for the intensification of cross-border exchange of energy from renewable sources.
Member States concerned: Bulgaria, Croatia, Greece, Italy, Cyprus, Romania and Slovenia.
■ HI East. Hydrogen infrastructure and gas infrastructure reconfiguration enabling an integrated
hydrogen backbone, directly or indirectly (through interconnection with a third country), which
connects countries in the region and addresses their specific hydrogen infrastructure needs,
supporting the creation of an EU-wide network for hydrogen transport. Target Member States:
Bulgaria, Czechia, Germany, Greece, Croatia, Italy, Cyprus, Hungary, Austria, Poland, Romania,
Slovakia and Slovenia.
Transmission infrastructure 111
More recently, the governments of Azerbaijan, Georgia, Hungary and Romania, with EU support,
entered into an agreement under which the four countries committed to developing a subsea link in the
Black Sea that will, among other things, transfer electricity from future OSW projects in Azerbaijan’s
part of the Caspian Sea. This opens further opportunities for OSW in Romania. 59
15.5 CONSIDERATIONS WITH INCREASED DEPLOYMENT
OF VARIABLE RENEWABLE ENERGY
Key considerations are:
■ The need for substations and transmission upgrades. Inevitably as new power plants are
brought online, new substations and transmission line upgrades will be needed. New transmission
infrastructure will also be required to bring renewable energy (RE) (including OSW) and other power
from areas of remote generation.
■ Inclusion of suitable energy storage systems. The inclusion of suitable and strategically placed
energy storage systems in the transmission network will enhance the grid robustness and
resilience to handle increased RE sources through peak load management, frequency regulation
and reduction of the required spinning reserves.
■ Grid harmonics. A wind turbine contains variable-speed generator technology with a power
converter, which emits harmonic currents. In addition, they impact the resonance frequencies
of the grid due to the presence of large amounts of capacitance in subsea cables and capacitor
banks. At the point of connection, harmonic compensation must be considered.
■ Reactive compensation. Connection of OSW by onshore and subsea cables also gives rise to
voltage increases during energization and low load situations, needing reactive compensation
locally through SVCs.
■ Dispatching and wind farm control. Increased wind capacity warrants the use of forecasting
systems to estimate the variable infeed. Dispatch procedures and reserve calculations may need to
be changed to consider variations in output. Where the amount of conventional generation is low,
system stability can be a major issue. A mix of wind farm control and other control technologies
are therefore required to ensure security of supply which could otherwise lead to periods of wind
farm curtailment which if uncompensated will lead to an unacceptable investment risk.
■ System frequency and inertia. Following the disconnection of a generator, the frequency of
the transmission and distribution system will decrease. The frequency drop and rate of change
depends on the contribution to system inertia from the offline generator, duration of fault,
available inertia from other generators on the network and network demand. With the increased
penetration of wind, the overall system inertia will decrease. To balance this, however, inertial and
frequency response can also be provided by wind power by balancing controls between maximizing
performance, reliability, and stability provision to the transmission network. OSW farms can
control active power to respond to grid frequency events to assist in overall grid stability. A similar
performance to conventional generators can be achieved by using controlled inertial response
technology. Wind farm capabilities can also provide flexibility to transmission and distribution
network operations through inertial response which can assist system reliability. In many power
systems, ancillary service markets have been developed and provide incentives towards developing
technologies which provide support to transmission system reliability.
112 Offshore Wind Roadmap for Romania
15.6 OFFSHORE EXPORT SYSTEM
In most markets so far, individual OSW projects have been connected to the closest onshore
substation with sufficient capacity, potentially after local transmission network upgrades. In some
markets, where a strategic approach has been taken and where projects are located close together,
offshore hubs have been established to take power from a number of OSW projects. The best example
of this is in Germany, as shown in Figure 15.4. See also Key Factors report Figure 3.11.9
FIGURE 15.4 EXTRACT OF MAP OF OFFSHORE WIND PROJECTS AND INTEGRATED HUB EXPORT
SYSTEMS IN THE GERMAN BIGHT
Source: Wikimedia Commons60
Transmission infrastructure 113
Should Romania seek to develop OSW projects close together, then an offshore hub option should be
considered. Pros and cons of the two options are presented in Table 15.1. It is understood that should
an export connection be required for a single OSW project in Romania, then this radial system would
be constructed, owned and operated by the OSW project owner. If an integrated hub serving more
than one OSW project was required, then regulations require that this would have to be operated by
Transelectrica. For such a model to be successful, it is likely that the hub would need to be constructed
using public money, with each project owner paying a fraction of the cost when it was ready to
connect. The hub could be connected directly to the round-Romania link via an HVDC connection.
Germany has led in the adoption of integrated offshore hubs serving mutiple projects, so is a good
basis for exploring this option. It is suggested that any refinements to process in this area follows good
practice established in other markets.9,61
TABLE 15.1 PROS AND CONS OF INTEGRATED HUB EXPORT SYSTEM COMPARED
TO RADIAL SYSTEM
Pros Cons
• Overall, lower cost (as long as all planned projects • Risk to first developer that system is not
are built within a reasonable timeframe). constructed in time to connect its project.
• Likely lower environmental impact. • Risk to owner that it receives delayed/incomplete
income if OSW projects are delayed/cancelled.
15.7 GRID CONNECTION
There is currently no OSW specific process, but the current process for connecting new energy
generation capacity is outlined below:
New electricity production capacities may be connected to the grid under the terms and conditions
of the grid connection permit, aviz tehnic de racordare (ATR). The connection to the grid of new
generation facilities is regulated by The National Energy Regulatory Authority (ANRE) Order no.
59/2013, approving the regulation on connection of users to electricity networks in the public interest
(Order 59).62 This order regulates a procedure for the connection to the public power grid of the new
capacities:
■ Preliminary request for information (optional): The applicant can request that the grid operator
(transmission or distribution operator) provide information regarding the conditions to connect to
the power grid. The grid operator must provide general information regarding the necessity of a
location notice, general options for the grid connection, the steps and estimate duration of the grid
connection process, the requested documents, and the costs of the procedure.
■ The request for the grid connection: The request regarding the connection to the public grid shall
be submitted to the:
• Distribution operators acting in the respective geographical area or other owners of electricity
networks of public interest, if the electricity produced is less than 50 MW; or
• The transmission and system operator if the electricity produced exceeds 50 MW. The
request must contain the applicant information and technical details about the project and
must be submitted together with several documents, including the Urbanism certificate (UC),
114 Offshore Wind Roadmap for Romania
the location of the energy unit, the title over the land (e.g. property title, right of use, lease
agreement).
■ The connection solution: The grid operator determines the connection solution based either on:
• A solution study (studiu de solutie). Assesses two connection options and is drafted for
capacities that will be connected to a grid with a nominal voltage of 110 kV or higher; or
• A solution report (fisa de solutie). Assesses one connection option to the grid and is drafted for
capacities under 30 kVA.
■ ATR: The ATR includes the connection solution and represents the offer of the grid operator to
the request for connection submitted by the applicant. The ATR is issued by the grid operator
in accordance with the approved solution study and contains all the technical and economic
conditions for the connection to the grid. If the ATR requires network consolidation works
upstream of the connection point, the user has to provide the grid operator with a financial
security, as indicated in the ATR (up to 20% of the value of the respective works, although it is
typically set as a percentage of the ATR tariff, which in practice ranges from 5% to 10%). This
must be provided within 12 months from the issue date of the ATR, to ensure that the ATR is
valid beyond the 12 months period. In principle, the ATR is valid until the date of issue of the grid
connection certificate agreed through the ATR.
■ Grid connection agreement: Upon receipt of ATR, applicants may require the relevant grid operator
to execute the grid connection agreement, subject to the submission by the applicant of the
documents indicated in the Order 59, including ATR, written approvals of the owners of the land
affected by the execution of the connection works, and Trade Registry excerpt regarding the
applicant. The grid operator is compelled to submit to the applicant the draft grid connection
agreement within 5 business days from submission of the indicated documents.
■ Connection to the grid: After the grid connection agreement has been concluded, the grid operator
is obliged to find solutions to all tasks related to the connection of the project and implement them
in accordance with the terms set out in the agreement, including:
1. Design to the connection point;
2. Obtaining consent/authorization for the execution of the connection installation;
3. Build, acceptance and commissioning the connection installation;
4. Necessary reinforcement works in the installations upstream of the connection point in
order to fulfil all the technical conditions for ensuring the capacity of the electricity network
to supply/prevail the power approved by the technical connection permit, at the quality
parameters corresponding to the standards in force; and
5. Energize the user installation.
The grid operator is obliged to submit the certificate of grid connection to the user after the grid
connection installation has been commissioned. The certificate of grid connection specifies the
technical requirements the project has to fulfil when being connected to the grid and which are outlined
by law. The grid operator is obliged to connect the project to the grid after issuing the certificate
of grid connection and after the grid user concludes the contract on transport, distribution and/or
delivery of electricity.
Transmission infrastructure 115
OSW project connections, which may be at a scale of 1 GW or more, are likely to require significant
transmission network upgrades that need to be planned and delivered over a few years. The ATR
process can be used for OSW, but timing and risk management need to be considered. As discussed in
Section 18, due to the high capital cost and long lead time to construct and OSW project, robust terms
are needed in the grid connection agreement, with compensation for the developer if reinforcement is
delayed. Likewise, a developer should be held to account for timely delivery of the wind farm.
15.8 INTEGRATION OF OFFSHORE WIND IN THE TWO SCENARIOS
With current plans and network management rules, Transelectrica suggests that 3 GW of additional
wind capacity could be added in the region of Dobrogea, or off the coast, by 2030. Beyond this,
further upgrades would be required. It is likely that 3 GW of additional onshore wind capacity will be
added in this timeframe, requiring new plans for OSW. Softening of the network management rules,
by not modelling such extreme scenarios but in turn using more sophisticated models, is likely to
enable integration of more capacity, but not up to 7 GW. In general, with higher capacity factors than
onshore wind and solar, OSW is considered closer to baseload generation. Continually improving wind
forecasting also eases management.
Upgrading the part of the 400 kV loop from western Muntenia to Bucharest will be key for the transfer
of large volumes of energy from OSW to the location of greatest demand. Also critical would be a link
from Dobrogea, home of much of Romania’s existing wind and nuclear capacity into this loop. Relevant
also are the plans for international interconnects discussed in Section 15.4 that could progress in
relevant timescales.
A pipeline of OSW projects can be more helpful in facilitating strategic transmission network upgrades
than onshore renewables, as projects have larger scale and longer (7-10 year) development timescales.
The planning and financing of transmission network upgrades will be critical as they typically can take
more than ten years to plan, design and implement but will allow the connection of OSW projects and
is therefore a key recommendation for this study.
Project developers seek clarity regarding transmission network upgrade plans and transparency and
rational risk and cost sharing regarding grid connection agreements. Other countries manage this
through clear responsibilities and robust processes agreed with relevant stakeholders, including OSW
project developers. See World Bank Group’s Key Factors report for good practice.9
Depending on the scale and eventual locations of projects, the development of international interconnects
and export options cost analysis, it may be advantageous to use either a radial or an offshore hub model.
Early assessment of options is needed, so that agreements with developers can be made in parallel with
site exploration, enabling construction in time for first generation from OSW projects.
15.9 RECOMMENDATIONS
Based on this analysis, it is recommended that:
■ Transelectrica develops a 2050 vision for a nationwide electricity transmission network for a
decarbonized energy system, with milestone plans for 2030 and 2040 and consideration of
finance. This is a topic much wider than OSW, considering all electricity, transport and heat, and
116 Offshore Wind Roadmap for Romania
should include viability of subsea between Ukraine, Romania, Bulgaria and Türkiye and also with
Azerbaijan, providing balancing between the relevant states. Transelectrica incorporates Ministry
of Energy’s (MOE)’s OSW development vision into its next ten-year plan, published in 2024, and
considers offshore hubs and the potential impact of international interconnects so that timely
export and transmission solutions can be delivered.
■ Transelectrica undertakes power systems studies to understand the potential impacts of large
volumes OSW on the future transmission network and ESIAs in line with good international
industry practice (GIIP) and lender requirements to understand the environmental and social
implications of transmission network upgrades, feeding these into marine spatial planning
activities.
■ Transelectrica, MOE, distribution system operators (DSOs) and other relevant balancing parties
agree a softening of the network management rules to better reflect the probabilistic nature of
variable output renewables, including OSW, whilst remaining with EU regulations.
■ ANRE amends the template grid connection agreement (and any auxiliary regulations) to
incorporate compensation terms in the grid connection agreement to apply if transmission
network reinforcement is delayed and this impacts export of energy.
■ Transelectrica, potentially with WBG support, considers low cost solutions for the financing of
transmission upgrades and the use of concessional finance.
117
16. HYDROGEN
16.1 PURPOSE
In this work package, we explore the role of offshore wind (OSW) as a basis for producing hydrogen (or
other derivatives), the levelized cost of hydrogen (LCOH) manufactured this way and how hydrogen
from OSW could contribute to the national strategy. The ability to store significant volumes of energy
as hydrogen (or derivatives) is a potentially significant enabler for increased offshore wind production
in Romania and other markets.
It is likely hydrogen, whether from Romanian OSW or elsewhere, will be a small but significant part
of the energy mix in Romania, with its use focused on hard to abate areas, such as industrial steel
production and as feedstock for industrial processes. Green steel, manufactured by using green
hydrogen rather than coking coal, will become the norm over the next 10 to 15 years, and Romania’s
steel making capability will need to convert.xxvii
16.2 METHOD
The LCOH from electrolysis is sensitive to the costs of electricity. To provide comparison with
competing technologies, it is assumed that electrolyzers are linked directly to OSW projects, not
receiving any power from the transmission network.
Hydrogen could be produced at individual wind turbines, centrally at the offshore substation, close
to the grid connection point, close to a large demand or elsewhere on the transmission network. We
anticipate that the most economically attractive location will be close to the grid connection point.
It is assumed that Proton Exchange Membrane (PEM) electrolyzers are used in all cases, due to their
ability to ramp up and down production quickly in response to changing output from OSW.
The LCOH depends on three key factors:
■ The LCOE of the electricity used;
■ The cost of the hydrogen infrastructure including:
• DEVEX;
• Electrolysis stacks;
• Compression and balance of plant;
• Commissioning and installation ;
• Operational and maintenance costs, and
• Decommissioning.; and
■ The capacity factor of the hydrogen plant (average output compared to maximum output).
xxvii. Green hydrogen is defined as having been produced from low carbon renewable energy sources. Grey hydrogen is defined as having been produced from natural gas,
or methane, typically through a steam reforming. Blue hydrogen is defined as having been produced through a process where the carbon generated is captured and stored
through industrial carbon capture and storage (CCS).
118 Offshore Wind Roadmap for Romania
The LCOE for the input electricity from OSW for projects installed in different years is taken from Table
7.2. Each cost element listed above is modeled with cost reductions over time due to the global learning
rate in hydrogen manufacture. We have looked at two cases:
A. Rated input power of the hydrogen plant matches the rated output of the wind farm and that the
primary use of the electricity from the wind farm is for producing green hydrogen.
B. Rated input power of the hydrogen plant is much lower than the rated output of the wind farm.
Priority is given to power the electrolyzers, then additional power is fed into the transmission
network. This means that the electrolyzers can run at (say) 90% capacity factor.
Two other cases may be relevant:
C. Power from the transmission network is used to keep the hydrogen plant at full capacity,
whenever OSW output is insufficient. Depending on the origin of that energy, this would mean that
the hydrogen would no longer be green. In this case, LCOH would be lower but the amount depends
on the pricing dynamic of the wholesale market.
D. Smaller electrolyzers could be placed in conjunction with wind farms to make use only of energy
that otherwise would be curtailed, but this would result in lower utilization. LCOH would again
depend on the pricing dynamic and operation of the wholesale market.
We have not considered storage and transport of hydrogen, with the presented cost covering the cost
of hydrogen production only.
16.3 RESULTS
Table 16.1 shows the Indicative levelized cost of green hydrogen generated solely from OSW for Case A,
such that when wind is low, the electrolyzers are not at full capacity. Table 16.2 is for Case B, where the
rated output of the electrolyzers is lower, so although they are still only using energy from OSW, their
capacity factor will be higher. In case B, LCOH is approximately 15% lower.
TABLE 16.1 INDICATIVE LEVELIZED COST OF GREEN HYDROGEN GENERATED SOLELY FROM
OFFSHORE WIND
From OSW in Romania From OSW in Romania From OSW in established
Year of low growth scenario high growth scenario market
installation (€/kg) (€/kg) (€/kg)
2029 5.5 4.0
2032 4.9 4.7 3.5
2035 4.4 4.1 3.2
TABLE 16.2 INDICATIVE LEVELIZED COST OF GREEN HYDROGEN GENERATED SOLELY FROM
OFFSHORE WIND WITH A CAPACITY FACTOR OF 90%
From OSW in Romania From OSW in Romania From OSW in established
Year of low growth scenario high growth scenario market
installation (€/kg) (€/kg) (€/kg)
2029 4.8 3.5
2032 4.2 4.0 3.5
2035 3.8 3.4 2.8
Hydrogen 119
16.4 HYDROGEN POLICY IN ROMANIA
Romania has a national hydrogen strategy in preparation for publication in 2023. A range of national
and European documents refer to hydrogen:
■ The National Resilience and Recovery Plan contains a plan to deliver a new gas distribution network
in the Otlenia region, able to carry 20% hydrogen on upon its construction in 2026 and with plans
to be converted to use 100% green hydrogen in 2030.7
■ The National Resilience and Recovery Plan sets a target of electrolyzers with a total capacity of 100
MW by end of 2025.7
■ Recommendations for Romania’s Long-Term Strategy: Pathways to climate neutralit”, published by EPG
in 2022, modelled future energy scenarios for Romania and found that under 10% of final energy
demand in all scenarios comes from the direct use of hydrogen.63
■ The European Commission’s 2020 Hydrogen Strategy sets targets of 6 GW of installed capacity of
electrolysis by 2024 and 40 GW by 2030 across Europe.64
The European Commission has approved a €149 million Romanian scheme to support renewable
hydrogen production under the Recovery and Resilience Facility.65 There are two key uses for hydrogen
produced in Romania:
■ Decarbonizing hard to decarbonize sectors:
• Hydrogen can be used in industrial processes as a feedstock, high heat applications such as
direct reduced iron (DRI) steelmaking and large transport applications such as freight and
aviation.
• The Dobruja region is of particular interest for a domestic hydrogen cluster due to:
• Proximity to OSW areas and significant onshore renewable energy development;
• Existing demand for hydrogen from steel production plants and refineries; and
• Proximity to the port of Constanța for construction, supply chain and as a potential route
to hydrogen export. 66
■ Export into a future cross border hydrogen market:
• Romania is part of two EU-wide planned hydrogen projects, under Article 34(1) of Regulation
(EU) 2019/943, which covers a 10 year plan for coordinated energy network development at an
EU level.67
• HI East. Priority corridor no. 10 for hydrogen and electrolyzers: Central and South-East
European Hydrogen Interconnections. This targets Bulgaria, Czechia, Germany, Greece,
Croatia, Italy, Cyprus, Hungary, Austria, Poland, Romania, Slovakia and Slovenia and aims
to deliver a hydrogen backbone network to interconnect these countries and reconfigure
existing network infrastructure to be suitable for hydrogen transmission.
• SE offshore. Aims to support the development of offshore electricity networks infrastructure,
interconnection and hydrogen infrastructure in the Mediterranean and Black Sea, with a
specific focus on offshore renewables and storage. This project targets Bulgaria, Croatia,
Greece, Italy, Cyprus, Romania and Slovenia.
120 Offshore Wind Roadmap for Romania
16.5 DISCUSSION
Hydrogen produced by OSW will need to compete directly with hydrogen produced by other generation
sources, such as onshore wind and solar, as well as blue hydrogen, made from steam methane
reformation with carbon capture.
Wider interconnection of energy systems within Europe and a developing pathway towards cross
border hydrogen trading creates further competition for domestic hydrogen, although export
opportunities also exist, it is likely that neighboring countries will have a lower LCOH.
Based on the above, hydrogen production from OSW alone is unlikely to be cost competitive with
a similar situation in established OSW markets or compared to hydrogen production from other
renewable sources in locations with excellent resource and sufficient alternative power to keep the
hydrogen plant at a high capacity factor.
A domestic source of hydrogen could be important, however, should international supply be limited at
any time.
16.6 RECOMMENDATIONS
Based on this analysis, it is recommended that:
■ The Ministry of Energy (MOE) finalizes and publishes domestic hydrogen policy to give clarity
to industry, OSW project developers and other hydrogen industry stakeholders. This includes
hydrogen as a storage solution to enable a greater share of variable renewable energy sources in
the Romanian electricity mix.
■ The MOE encourages coordination between Transelectrica, Transgas, and other stakeholders to
create legislation, regulations, standards, tariffs, transport, storage, import, export and trading
arrangements for hydrogen.
■ The MOE explores how LCOH and interconnection policy in other nearby countries will impact the
requirements for domestic hydrogen production.
■ The MOE supports international efforts to establish a certification of origin framework for green
hydrogen to allow meaningful competition with blue and gray hydrogen markets.
■ The MOE investigates small scale green hydrogen production as a flexible load that can be utilized
to absorb intermittent renewable generation from a range of sources, not just OSW.
121
17. PORT INFRASTRUCTURE
17.1 PURPOSE
In this work package, we assess Romania’s port infrastructure against offshore wind (OSW) industry
requirements.
We focus on conventional fixed OSW supply chain needs and focus on ports to support coastal manu-
facturing and construction. In general terms, there are a limited number of available ports in Romania,
and the main port focused on in this roadmap is Constanța, including the Mangalia and Midia area.
Ports that support project operation over the 25 or more years of generation typically have much lower
requirements and any investment is easier to justify over the long operating life of an OSW project.
We look at the Romanian port capabilities and gaps and provide recommendations how best to
address potential bottlenecks. This is important as good ports are critical for safe and efficient
construction of OSW projects.
17.2 METHOD
We started by establishing port requirements for construction of conventional fixed OSW looking
towards 2035. As the industry continues to develop quickly, a 15-year horizon for investment in ports
is a reasonable timescale.
We then used team and stakeholder knowledge, including from local contractors, to assess existing
ports in locations relevant to OSW, categorizing ports as:
■ Suitable with little or minor upgrades (cost less than €5 million);
■ Suitable with moderate upgrades (cost between €5 million and €50 million); or
■ Suitable only with major upgrades (cost greater than €50 million).
We then shared this assessment with key stakeholders and gathered feedback and additional data.
A map of manufacturing and construction ports relevant to OSW is provided in Figure 17.1.
17.3 PORTS OVERVIEW
Romanian ports play an important role as a portal for imports and exports around the Black Sea and
through the Bosphorus Strait. There are sea ports on the river Danube, the Danube-Black Sea canal
and on the Black Sea itself, to the south of the Danube wetlands.
Danube ports relevant to manufacturing include Galați (where shipbuilder Damen and steel supplier
Mittal have large facilities) and Tulcea (where shipbuilder STX Europe has facilities).
122 Offshore Wind Roadmap for Romania
Black Sea ports include Constanța (the largest port on the Black Sea) with a total quay length of
30 km, and its satellite ports, Mangalia (to the south; mainly used for shipbuilding) and Midia (to the
north, mainly used for crude oil).
The Bosphorus Strait is a 30 km waterway that narrows to about 700 m. With high traffic volumes and
significant currents and two significant changes of direction at narrow points, it has an air draft limit of
58 m, which is typically too low to permit the transit of large wind turbine installation vessels with legs
raised in the normal transit position. Given the reasonable water depths at the bridges, it may be possible
to partially submerge the jack-up legs. Water depth maps suggest that vessels with legs of less than 100
m in length could physically transit, but local marine authorities would need to be consulted. This access
restriction would likely exclude new-build jack-up vessel which have legs in excess of 120 m, but older
vessels (retrofitted with cranes capable of lifting next generation turbines) could be used. Mobilizing such
vessels to the Black Sea could come at a high cost, which we have included in our levelized cost of energy
estimates. We have not limited the size of turbines that can be used in Romania, however.
The new Istanbul Canal provides another option to access the Black Sea from about 2027. It will have
similar air draft restriction as the Bosphorus Strait, however, and does not have adequate water depth
for partial submersion of the jack-up legs.
17.3.1 Location of potential OSW suppliers
It is possible that wind turbine foundations will be manufactured in Romania, including using
Romanian-manufactured steel. Likewise, offshore substation topsides could be fabricated and
assembled with electrical components. Separately, Romanian shipbuilders may be used for vessel
manufacture, but this may not necessarily be aligned with Romanian OSW projects.
Due to the relatively small scale of the Romanian OSW market, it is unlikely that any wind turbine
blade manufacture or nacelle assembly will be established locally. Both have complex supply chains
and high investment barriers, and need a larger pipeline of projects to justify investment than even the
high growth scenario provides. Likewise, it is unlikely that new subsea cable facilities will be established
in Romania unless a large Black Sea market for such power cables (also for interconnectors)
establishes, as existing suppliers typically seek to extend facilities rather than establish new. The above
activities could be based in Black Sea or Danube-based facilities.
17.3.2 Operation ports
Ports that support project operation over the 25 or more years of generation typically have much lower
requirements and any investment is easier to justify over the long operating life of an OSW project. Many
wind farms to date have used crew transfer vessels (CTVs) to transfer crews from shore to turbines each
day, with vessels being about 25 m in length and capable of hosting a crew of 10-20. CTVs are designed
to move personnel and small quantities of cargo safely and efficiently between the wind farm and port
and will berth in port following each shift. CTVs are limited in their capabilities and operating conditions,
but modern CTVs have walk-to-work systems allowing for turbine access in harsher weather conditions.
CTVs can service wind farms up to 50 km from shore. As the industry has matured and wind farms
are often located further from shore, service operation vessels (SOVs) have been used more. SOVs are
about 90 m in length and can host a crew of 80-140. Being significantly larger than CTVs, SOVs enable
crews to live at sea for 2 weeks at a time and provide walk-to-work access to turbines, improving the
utilization of technicians by reduced time spent transiting between port and site. While SOVs require
Port infrastructure 123
larger berths in ports, they will spend far less time in port overall. In Romania, where projects are likely to
be located between 50 and 100 km from shore, either operational strategy may be used.
■ A port to support CTV operation needs about 3 ha of onshore space for the O&M base, storage
facilities, and car park. There must be berthing space for 2-3 CTVs of length 25 m with a draft of
4 m. The port must have an entrance width of at least 12 m. A port to support CTV operation is
typically the closest such port to the site.
■ A port to support SOV operation needs equal onshore requirements to a CTV port. It must be able
to berth at least one SOV of length 90 m with a draft of 8 m. The port must have an entrance
width of at least 18 m. A port supporting SOV operation can be further from site, as the vessel only
visits every 2 weeks or so.
17.4 CONSTRUCTION AND MANUFACTURING ASSESSMENT CRITERIA
The criteria used to assess both construction and manufacturing ports are defined in this section and
are summarized in Table 17.1.
Construction ports must accommodate the delivery of materials, foundations and storage space
for components. These ports must be capable of facilitating full or partial assembly of turbines and
foundations prior to load out and transport to the wind farm site. Load out of components normally occurs
in batches of four or more turbines or foundations at a time, depending on the capacity of the vessel used.
The main difference between construction and manufacturing port requirements is space.
Manufacturing facilities require large areas for warehouses and storage space for components before
onward transportation. In some cases, manufacturing ports may facilitate construction activities
through co-location or clustering. The feasibility of this solution depends on storage space and
quayside access constraints, ensuring each process can continue simultaneously without hinderance.
17.4.1 Manufacturing port requirements
As discussed in Section 8, it is likely that projects will use monopile foundations for turbines
which could be manufactured in Romania. The minimum space required for a monopile foundation
manufacturing yard to serve 400 MW per year is approximately 15 ha. 30 ha is needed to deliver up to
1 GW annually. A similar amount of space is required for jacket foundations for turbines. In Table 17.1 we
have specified a range of 20 to 30 ha of space for a quayside manufacturing port catering for at least
one component.
Offshore substations (OSSs) tend to be large but are often built as single units or two units at a time
and require about 6-8 ha. Substations use less serial manufacturing processes, so are more similar to
one-off oil and gas fabrications.
17.4.2 Construction port requirements
Construction ports will often receive components in batches which are temporarily stored before
load-out for installation. The minimum storage space for a construction port is specified as 13 ha. For
larger-scale projects, up to 20 ha may be required.
124 Offshore Wind Roadmap for Romania
Quay length requirement is between 350 and 400 m, which will accommodate up to two mid-sized
installation vessels or feeder barges. The channel is required to be 60 m wide and 10-12 m deep to
permit access of installation vessels. Above-water clearance may need to be more than 60 m to allow
for overhang of blades and other components in a horizontal configuration.
Quaysides need bearing capacities of up to 50 metric tons/m² for load-out to adjacent vessels while
storage areas need a capacity of at least 25 metric tons/m².
Quayside cranes can be used to lift turbine components and foundations in port areas. Suitable cranes
have capacities between 500 and 1,000 metric tons for turbine components and between 1,400 and
2,200 metric tons for medium to large monopiles. Lifting is often completed by installation vessels or
temporary land-based cranes during load-out, so the importance of this criteria has been reduced in our
analysis. Self-propelled modular transports (SPMTs) facilitate the onshore transport of cargo between
storage and quayside areas. Mobile and crawler cranes are also used for materials handling but as ports
can temporarily hire this equipment, weightings were applied to reduce the significance of this criteria.
Ports also need workshop areas, personnel facilities and good onshore transport links, which are
included in Table 17.1 under ‘other facilities’.
TABLE 17.1 CRITERIA FOR ASSESSING ROMANIAN PORT CAPABILITIES
Port criterion Value
13-20 for marshalling and preassembly
Storage space (ha)
20-30 for manufacturing, per facility
Quay length (m) 350-400
Quayside bearing capacity (metric tons /m2) 50
Storage area bearing capacity (metric tons /m2) 25
Channel depth (m) 10-12
Channel width (m) 60
Crane capacity – turbine components (metric tons)* 500-1,000
Crane Capacity – foundations (metric tons)* 1,400 – 2,200
Overhead Clearance (m) 140
Workshops, skilled workforce, personnel facilities, road
Other facilities
and rail links
Note: *Lifting capacities may be provided by vessel cranes during load out.
17.5 RESULTS
We assessed five potential ports. A summary is provided in Table 17.2 in order of relevance. Note that
assessment is only against criteria – it does not consider availability or commercial considerations. A
map of the port locations is provided in Figure 17.1.
We found that Port of Constanța is best suited for both construction and manufacturing activities,
with many terminals that meet the above requirements. The channel entrance is more than adequate
at approximately 200 m, and the cruise terminal has a depth of 13.5 m, making it suitable for berthing
installation vessels. Minimal investment will likely be required, although the bearing capacity of the
relevant quays may need to be increased to support both construction and manufacturing activities.
Port infrastructure 125
We consider the Port of Constanța – Mangalia area (Mangalia) to be the next best option, assuming
the existing Damen shipyard can be repurposed for OSW. The shipyard covers about 70 ha and has
about 1 km of berthing space. The channel entrance is over 100 m wide, however, the depth of the
berths is only 9 m, meaning dredging would be required to make suitable for larger installation vessels.
Of the considered ports, the Port of Constanța – Midia area (Midia) was the least suitable option. The
existing petrochemical area is about 170 ha, and the adjacent marine terminal is about 18 ha, which
is adequate for construction but likely not enough for manufacturing. Both areas have berthing space
for two installation vessels. The port entrance is about 150 m wide, however, the entrance depth is
stated to be only 5.6 m. With over 2 km from port entrance to quayside, significant dredging would be
required to permit access for installation vessels.
Manufacturing may best be suited to an inland port on the Danube where much of the country’s steel
manufacturing is located. Two such ports are Galatia and Tulcea. Galati is the second largest port in
Romania, and the largest on the Danube, but it currently only has about 4 ha of open area which is
insufficient for new tower or foundation manufacturing. There are large brownfield areas around the
port that would need to be redeveloped to permit manufacturing, such as the 80 ha space adjacent
to the New Basin Terminal. The minimum water depth between Galati and the Black Sea is about 7 m,
making Danube ports unsuitable for hosting construction so barges would likely be used to transport
the manufactured components to a Black Sea port such as Constanța. The Port of Tulcea has similar
limitations to Galati but with even less available area – the port area is about 10% that of Galati and
has only 1 ha of available open space. There is an adjacent greenfield area that would need to be
redeveloped if the port is top host manufacturing activities, but this area is not controlled by the port.
At this stage, we have not assessed port availability and interest in OSW. Any potential port facility
upgrades or expansions would require full environmental and social impact assessment (ESIA).
TABLE 17.2 PORT ASSESSMENT SUMMARY
Suitability for Suitability for
Port construction manufacturing Comments, including on potential upgrades
Constanța Likely requires little to no upgrades to be used for
construction or manufacturing, assuming the suitable
Suitable for Suitable for
terminals are commercially available, other than an
construction manufacturing
improved bearing capacity. This makes is Constanța
preferable from an environmental perspective.
Mangalia Likely requires some dredging of the channel between
Suitable for Suitable for berths and open sea, assuming the existing Damen
construction manufacturing shipyard can be repurposed for OSW activities. Bearing
after minor after minor capacity upgrades are also likely required. Note also that
investment investment the Marine Protected Area and Special Protected Area
Marea Neagră extends into the port area,
Midia Likely requires significant dredging to permit access to
installation vessel. The existing petrochemical area would
Suitable for Suitable for
need to be repurposed if the port is to host component
construction manufacturing
manufacturing. The marine terminal could be used for
after major after major
construction activities but available lay down area may
investment investment
be somewhat constrained. Bearing capacity upgrades are
also likely required.
126 Offshore Wind Roadmap for Romania
Suitability for Suitability for
Port construction manufacturing Comments, including on potential upgrades
Galati The water depth of the Danube eliminates the possibility
Suitable for
of construction. Large areas of the port’s brownfield
Unsuitable for manufacturing
land would need to be redeveloped, with suitable bearing
construction after major
capacity, to build new manufacturing facilities, though
investment
water depth at some times of year could still be an issue.
Tulcea The water depth of the Danube eliminates the possibility
of construction. The port is too small and has no suitable
Unsuitable for Unsuitable for
areas to redevelop for new manufacturing facilities. It is
construction manufacturing
also unsuitable from an environmental perspective as all
traffic would have to pass through the Danube Delta.
FIGURE 17.1 POTENTIAL OFFSHORE WIND MANUFACTURING AND CONSTRUCTION PORTS
IN ROMANIA
Source: BVG Associates.
17.6 DISCUSSION
Overall, Romania has good options for both construction and manufacturing on the Black Sea. The
Port of Constanța is especially suitable for both activities, with minimal upgrades required aside
from likely bearing capacity improvements. Constanța is large enough to host construction and
multiple manufacturing facilities simultaneously which would simplify logistics during construction
Port infrastructure 127
as components would not need to be double handled. Ports could potentially also be used for projects
developed in Türkiye, Bulgaria and Ukraine.
While it may make sense to locate manufacturing near Romania’s steel manufacturing industry
in the Danube ports, neither port assessed has much available open space. Galati does have large
brownfield areas that could be redeveloped for manufacturing facilities, from which components could
be transported to a construction port on the Black Sea.
The ongoing situation in Ukraine is also a concern for OSW development in the Black Sea. In the short-
term, Romanian ports are busier and the time before there is stability in the region is uncertain.
17.6.1 Low growth scenario
The anticipated pattern for installation of a commercial-scale OSW project in the low growth scenario is:
■ Year 1: Local manufacture of offshore substation, installation of offshore substation and turbine
foundations (imported) and installation of array cables and export system (imported and not being
staged at port). This requires approximately 18 ha and 400 m quay length for a 1 GW project.
■ Year 2: Local manufacture of 60% of towers, installation and commissioning of turbines
(imported) and the start of operation. This requires approximately 26 ha and 400 m quay length
for a 1 GW project.
This means that a port being used for installation of just one project only has to have space for each of
these activities, separately, but a port being used for installation of projects in consecutive years has
to have space for both of these activities, simultaneously (requiring approximately 44 ha and 400 m
quay length for an installation rate of 1 GW per year). With multiple projects being executed in parallel,
berthing space must be planned and utilized efficiently to ensure deliveries are not delayed and
installation vessel operation is not interrupted.
In the low growth scenario shown in Section 2, Peak port demand is in 2033 (0.75 GW of foundations,
substations, and cables, and 0.5 GW of turbines), and requires approximately 34 ha and 400 m quay
length. This could be provided entirely by Constanța, or by a combination of Constanța and either the
Mangalia or Midia area with additional investment. The use of multiple ports may require further space
usage for extra handling / storage.
17.6.2 High growth scenario
The anticipated pattern for installation of a commercial-scale OSW project in the high growth scenario is:
■ Year 1: Local manufacture of offshore substation and 60% of foundations, installation of offshore
substation and turbine foundations and installation of array cables and export system (imported
and not being staged at port). This requires approximately 26 ha and 400 m quay length for a 1.5
GW project.
■ Year 2: Local manufacture of 60% of towers, installation and commissioning of turbines
(imported) and the start of operation This requires approximately 32 ha and 400 m quay length
for a 1.5 GW project.
128 Offshore Wind Roadmap for Romania
In the high growth scenario, peak port demand is in 2035 (1.5 GW of foundations, substations, and
cables, and 1.5 GW of turbines), and requires approximately 58 ha and 400 m quay length, although
600 m of quay length would reduce risk.
■ Again, this could be provided entirely by Constanța, assuming such as large area could become
commercially available for OSW construction, with the Mangalia and Midia area supplementing
supply.
■ Midia has the space to deploy the full 3 GW per year only if the existing petrochemical area can be
repurposed.
■ Using Mangalia or Midia to supplement supply would require additional investment compared to
using Constanța, only.
17.7 RECOMMENDATIONS
Based on this analysis, it is recommended that:
■ The Ministry of Energy (MOE) creates an inter-ministerial group with the Ministry of Finance, the
Ministry of Economy and the Ministry of Transport and Infrastructure that creates and promotes
a plan for port use for OSW manufacturing and construction, interfacing with current activity to
develop the Naval Strategy. Consideration should be given to lead times for the upgrades to ensure
suitable facilities are ready in time for project deployment. Activities to develop the plan include:
• Engaging with relevant ports to determine interest and availability to deliver manufacturing and
construction activities and identify the specific upgrades required to facilitate each activity.
• Working with relevant ports and potential tower and foundation manufacturers (both
Romanian and overseas) to explore the feasibility of local manufacture (for Romanian offshore
and onshore wind markets and export), bringing in project developers if results are positive. For
manufacture starting in 2027 (for a project to be completed in 2029), investment decisions
would likely be required in 2025, most likely before revenue auction results.
• Careful consideration should be given to environmental and social considerations and robust
ESIA analysis for any potential developments.
■ The MOE considers prioritizing investments through the Resilience and Recovery Fund, or similar,
into port infrastructure and supply chain for OSW, in the context of the green transition and the
commitments to build renewable energy.
■ The MOE works with the Ministry of Transport and Infrastructure to encourage the publication of a
simple OSW ports prospectus, showing port capabilities against physical OSW requirements, and
use this to encourage dialogue with project developers.
■ Project developers explore any transport restrictions when entering the Black Sea for likely future
wind turbine installation vessels.
129
18. RISK AND BANKABILITY
18.1 PURPOSE
The purpose of this work package is to define project and market elements which impact the
bankability of offshore wind (OSW) projects in Romania. Our focus is the risks that have the potential
for high commercial impact which may be perceived as a barrier by international or local investors.
We have considered a project developer’s market risks associated with construction, commencement
of commercial operations, and generation of revenue. Project risk relating to supply and technology are
important, but not directly relevant to this roadmap. Broader financial market risks are addressed in
Section 19. Risks to the Government are covered in the SWOT analyses in Sections 3 and 4.
18.2 METHOD
Developing an OSW project involves different risks and considerations to onshore wind and solar
project development. There are however benefits in taking elements of onshore renewables frameworks
as a basis for the OSW frameworks, where relevant.
We have looked at specific activities or commercial arrangements that have the greatest potential for
impact to future cash flows of a project, for example, local grid capacity and skills level of local labor
force for OSW.
We have assumed that a new OSW law is put in place, in line with Section 13.
Throughout, our guiding principle has been that risk should be placed where it can be best managed.
There are some risks, such as higher than expected operating costs, which investors should bear as
they are well placed to manage them. If risks are placed with investors that are outside of their control,
such as regulatory or policy risks, they will require an increased rate of return for bearing them. In
the limit, they will decide not to invest and to allocate their capital to other international investment
opportunities. As a result, in some cases it can be more efficient for these risks to be placed on the
Government or directly on customers, as this will result in a lower cost to customers than the cost of
paying investors to bear them.
We have suggested changes where we have found that the existing regime may allocate risks
inappropriately in a way which may create a barrier to the rollout of OSW.
Each of the risks identified has been assigned a risk magnitude (considering likelihood and impact of
risk) based on the following scale:
■ Red. Significant financial risk to investors that is likely to stop investment happening, requiring
mitigation from the Government.
130 Offshore Wind Roadmap for Romania
■ Amber. Moderate financial risk to investors that will have significant cost or contractual
implications and may need mitigation from the Government.
■ Green. Low-level financial risk is not likely to stop investment, the Government may consider
mitigation.
18.3 RESULTS
The main financial risks for OSW in Romania are summarized in Table 18.1 and then discussed,
alongside possible mitigations for the Government to consider. See also Chapters 3 and 4.5 of the Key
Factors report.9
TABLE 18.1 GENERAL OFFSHORE WIND INVESTMENT RISKS
Risk
Project magnitude Suggested Government
Risk Description phase RAG mitigation / measures
1. Development Developers carry low Project Government can increase appetite
risks prior to risk in bidding for an development for bidding by:
exploration exploration license Establishing clear and investor-
license friendly legal frameworks; and
G
Giving clarity about long-term
vision for OSW volume in Romania
and showing clear plan for delivery
of first projects.
2. Development Developers carry the Project Good spatial planning and
risks with risk of finding that the development strategic environmental
exploration site is not viable or the assessment will reduce risk of
license Government deciding finding that the site is not viable.
not to auction it or A full alignment between all
losing it in the offtake government stakeholders should
auction. be in place to ensure there are
The proposed OSW law no unexpected hurdles or non-
is not yet in place and unitary interpretations of the
has not been tested. legislation, especially relating to
A change of leadership the permitting process.
may lead to a change Clarity about OSW plans will
in policy towards OSW. increase confidence in Government
auctioning sites. Government
A compensation in this case should
be written into exploration license
terms.
The developer is reimbursed if it
loses the auction, but this does not
compensate for opportunity value
of effort. This could be mitigated
by a small scoring advantage
in the auction, but at the risk of
decreasing competition from those
without exploration license.
Good Government-industry
engagement regarding draft law
will increase confidence in its
suitability.
Risk and bankability 131
Risk
Project magnitude Suggested Government
Risk Description phase RAG mitigation / measures
2. Development Cross-party commitment
risks with within parliament to long-term
exploration development of OSW will increase
A
license (cont.) industry confidence in long-
term policy continuity, including
through changes in government.
3. Environmental Potential Project Need to take account of
and social risks environmental and development/ stakeholder views and follow Good
social risks leading to Construction International Industry Practice
A
permitting challenges (GIIP) in selecting sites and
and construction providing permits.
delays.
4. Grid A mismatch between Construction Need robust terms in grid
connection risks the timing required connection agreement, with
by Transelectrica compensation for the developer
to reinforce the if reinforcement is delayed, due
transmission network to the high capital cost and long
to the grid connection R lead time to construct the OSW
point and the OSW project. Likewise, a developer
developer’s project should be held to account on
timetable could lead to timely delivery of the wind farm.
delay in grid connection
being available.
5. Curtailment Limitations in Operation Currently, there is no curtailment
risks transmission network compensation, and to date, it
strength and grid does not seem to have been
management, or excess a significant consideration.
supply of electricity Transelectrica manages
compared to demand curtailment decisions. As the
could result in the proportion of variable renewable
curtailment of OSW and energy increases, it is suggested
A
impact project revenues. that curtailment compensation
As the proportion of will need to be written into
variable renewable relevant contracts.
energy generation
increases, this is likely
to become more of a
consideration, as seen in
other markets.
6. Counterparty High volumes of OSW Operation Government backstops offtaker
risks could challenge the obligations for multiple GW-scale
creditworthiness of projects, if needed.xxviii
Transelectrica. In case of strategic investments,
the Romanian Government may
decide to provide government
A guarantees or further support. For
example, the Ministry of Finance
is guaranteeing the financing
scheme for Nuclearelectrica for
Cernavodă Units 3 and 4, with
approval from the European
Commission.
xxviii. The risk that needs to be mitigated relates to certainty of income for electricity generated. It may be that risks are already sufficiently mitigated to satisfy
international investors via electricity contracts and CfD, but this should be confirmed.
132 Offshore Wind Roadmap for Romania
Risk
Project magnitude Suggested Government
Risk Description phase RAG mitigation / measures
7. Policy / Changes in government Operation Contract for difference (CfD)
regulatory risks could jeopardize long- contracts with OpCom will be
G
term power contracts. covered by private law, so are not
dependent on policy or regulation.
8. Exchange rate Adverse movements in Operation Romania is likely to have joined
and inflation Leu relative to € could the Eurozone before main CAPEX
risks lead to reduced foreign committed on first project(s).
investor appetite. Although CAPEX is the major
contribution to levelized cost of
energy, OPEX and energy prices
G will increase in nominal terms.
it will be important to ensure
suitable indexation of revenue:
Between revenue setting at
competition and CAPEX setting at
financial investment decisionxxix
During operation.
9. Country risks Local conditions Project Enforceability of contracts, both
stemming from the lifecycle with government and suppliers, is
Romania political, key, with access to international
economic and legal arbitration essential.
framework could The stability and predictability
impact focus on OSW of the legal, regulatory and
and the stability of the fiscal regime is paramount for
industry and project A developing long term projects such
earnings. as OSW. Stability clauses in OSW
concession agreements should be
considered, to address such risk,
over the project lifecycle, as well as
minimizing unnecessary changes
within agencies, regulation and
national initiatives.xxx
10. Regional Risks due to the Project Support actions to end conflict
security risks current Russia/Ukraine lifecycle R and address unexploded ordinance
conflict. and other associated risks.
18.4 DISCUSSION
Many of the investment risks discussed do need to be addressed in order to make the market
sufficiently attractive for investors, because the overall market size is not that large. This leads to a
range of recommendations that are incorporated into Section 5.
Based on this analysis, it is recommended that:
■ The MOE introduces a new, clear and investor-friendly OSW law and associated regulation relating
to OSW frameworks, involving other public stakeholders, as required.
xxix. This has become a greater consideration in recent times due to increases in commodity prices (such as steel and transport) that have been far higher than general
inflation – see Section 7 for more details. Ireland (for example), incorporated indexation in its recent ORESS1 auction – see https://assets.gov.ie/239377/556f7efc-b401-
40d8-b1d8-bc8785527286.pdf.
xxx. Stability clauses are to protect the terms of long-term, capital-intensive investments against non-commercial changes to the investment environment – for example
changes of government. OSW projects are an example of such investments, with operating contracts over 20 years or more.
Risk and bankability 133
■ The MOE agrees with other relevant Government departments, to define inter-departmental
cooperation and alignment on OSW, covering leasing, permitting, offtake, transmission and health
and safety frameworks, and key areas of delivery including supply chain and finance, to ensure
there are no unexpected hurdles or non-unitary interpretations of legislation or frameworks.
■ The MOE establishes a long-term Government-industry forumxxxi involving local and international
project developers and key suppliers, to work together to address the new OSW law, the
recommendations throughout the roadmap and other considerations, as they arise.
■ The MOE, working with the Government General Secretariat, drives stability and predictability of
the legal and fiscal regime, including stability clauses in OSW concession agreements.
■ The National Energy Regulatory Authority (ANRE) amends the template grid connection
agreement (and any auxiliary regulations) to incorporate compensation terms in the grid
connection agreement to apply if transmission network reinforcement is delayed and this impacts
export of energy.
■ The MOE ensures curtailment compensation and indexation is in relevant contracts.
■ The Ministry of Finance considers whether to signal its commitment to backstop offtaker
obligations for multiple GW-scale projects, if needed.
■ The MOE works with others to ensure enforceability of contracts, both with Government and
suppliers.
xxxi. For example, UK’s Offshore Wind Industry Council (OWIC) – see www.owic.org.uk for details of membership and work.
134 Offshore Wind Roadmap for Romania
19. FINANCE
19.1 PURPOSE
The cost of finance is among the key drivers of the economic assessment of offshore wind (OSW)
projects and as such has a significant impact on prices agreeable to developers under power
purchase agreements (PPAs) and ultimately the cost to consumers. This section presents a high-level
assessment of the potential role of broader public policy (including concessionary and climate finance)
in the OSW rollout in Romania. It presents examples where public financial support has been used
to enable other types of large infrastructure industries. It also considers the availability of local and
international bank finance.
19.2 METHOD
We identified relevant financial instruments that could play an enabling role in the development of the
Romanian OSW industry. We have also identified several case studies that show a successful path to
utilizing public and concessionary financing relevant to OSW.
19.3 RESULTS
We discuss six categories of financial support relevant to minimizing cost of OSW to consumers,
beyond equity provided by project owners:
■ Enabling local and international bank lending;
■ Tax and policy incentives;
■ Multilateral lending;
■ Credit enhancement mechanisms;
■ Climate finance;
■ Green debt instruments; and
■ Green equity instruments.
19.3.1 Enabling local and international bank lending
Much debt finance in OSW globally has been provided by international banks. Enabling a competitive
market for bank finance is a key way to minimize levelized cost of energy (LCOE). Over the last years,
Romania has lost ground in attractiveness for renewable investments, for example Iin EY’s Renewable
Energy Country Attractiveness Index (RECAI). Romania dropped out of the top 40 countries in the
RECAI in 2015 and has not yet returned. On the positive side, the country currently is ranking 28th in
terms of PPA attractiveness.68
Finance 135
Regulatory background
Climate mitigation is an urgent priority for Romania. The country remains behind its EU peers in terms
of air quality, the intensity of energy use, and waste management. Romania had the fifth highest GHG
emissions intensity (emissions per GDP unit) among all EU countries in 2019.69 From a global climate
change perspective, the country ranks 49th globally in fossil CO2 emissions, with over 78 million metric
tons of CO₂ equivalent emitted annually.70
As part of the European Green Deal, the European Commission has set a target of reducing CO₂
emissions in the EU by 55% by 2030. The related Sustainable Finance Action Plan aims to incorporate
environmental, social, and governance criteria into the European financial system to promote more
eco-friendly investments and business models.
According to Romania’s Integrated National Energy and Climate Plan for 2021–30 (NECP),5 €150
billion will be needed to meet its nationally determined contribution (NDC) to climate change
mitigation, especially in the renewable energy and energy consumption sectors and including buildings
of all types. The lack of depth and diversification in the Romanian financial sector constrains its ability
to mobilize capital to reach this climate action target. According to the National Bank of Romania
(NBR), banks’ green portfolio represents on average only 3 percent of the total banking loan portfolio.
Although the Government has committed in its National Resilience and Recovery Plan7 (NRRP)
to phase out all production from coal fired power plants by 2032 at the latest, natural gas has a
significant role in the energy transition of Romania as a transition fuel in the NECP.
Local banks
Romania has a strong local banking market, which is highly connected to the European banking sector,
not only through EU banking regulations but also ownership relations. Overseas banks currently hold
approximately 68% of total banking assets. Eight out of the ten largest local banks in Romania in
terms of total financial assets are part of leading European banking groups from Austria (Erste Group,
Raiffeisen), France (Société Générale), The Netherlands (ING), Italy (UniCredit), Greece (Alpha Bank),
Hungary (OTP) and Türkiye (Garanti). As such, strategic and operational decisions can be expected to
be driven by their headquarters, in particular related to larger exposures. There are 34 banks in the
market and the sector is relatively concentrated, with the five largest banks holding approx. 63% of the
market share. The largest bank in the country is Banca Transilvania with a 20% market share.
Emerging from the pandemic, the banking system has maintained its strong capital, liquidity, and
profitability position. The sector’s asset quality has improved substantially with the non-performing
loan (NPL) ratio falling to 3% of total loans as of June 2022, down from over 21% in 2014. Romania has
the highest NPL coverage ratio in Europe at 70%, far exceeding the EU average of 44%. NPLs are likely
to increase due to exposures to non-financial corporations with a higher concentration of trade to
affected countries and second-round effects on households that are likely to suffer from a drop in real
disposable incomes.
The sector’s total capital adequacy ratio (CAR) was 21% as of June 2022, comfortably above the NBR’s
8% target. In June 2022, return on average assets (ROAA) and return on average equity (ROAE) stood
at about 1.45% and 16%, respectively, among the highest in the EU. The increasing cost of funding and
pressure on asset quality may however impact the profitability of the banking sector in the near future.
136 Offshore Wind Roadmap for Romania
Romanian banks together with their European holdings had historically been active in financing
renewable energy projects starting with the first wave of onshore renewables during 2011 to 2015.
The surge in new capacity was based on a supportive regulatory regime that included the issuance
of green certificates over a period of 15 years as an incentive mechanism to make those projects
attractive for investors.
A number of Romanian banks have implemented sustainability strategies and defined guidelines
for their investments. Romania’s largest bank, Banca Transilvania, has already implemented an exit
strategy from fossil fuels and has no exposure to such sources of power generation71 though other
banks are not yet as advanced.
Two Multilateral Financing Institutions (MFIs), European Bank for Reconstruction and Development
(EBRD) and World Bank Group’s International Finance Corporation (IFC), kicked off the lending activity
in the sector through jointly raising financing for the first utility scale renewable energy project in
Romania through €188 million (excluding VAT financing) for the Cernavoda (138 MW) and Pestera (90
MW) onshore wind projects, sponsored by the Spanish investor EDPR. Three European commercial
lenders – two of them with local banking units - joined this financing under a B-Loan umbrella.
Commercial lenders later continued financing with or without MFIs through either their European
parents on larger projects, as shown in Table 19.1, or local units on smaller projects (many not published).
Long-term project finance on a non/limited recourse basis with tenors between 12 and 15 years
represented almost all the financing transactions, in one instance a 12-year corporate loan with export
credit coverage was put in place of €180 million to the utility client ENEL covered by the Danish Credit
Export Agency, EKF.
A series of adverse measures introduced by the government since 2013 with the aim at reducing the
cost of electricity to the end-consumer brought the sector to a halt in 2015, as shown by financing
activity shown in Figure 19.2.
FIGURE 19.1 ACCUMULATED FIGURE 19.2 ONSHORE RENEWABLE FINANCING
NUMBER OF INVESTMENTS MADE VOLUME ROMANIA, 2010-2022
BY EACH LENDER, 2010-2020
600
500
11
12
US$ (milioane)
32 400
Banci europene/ locale
MFI-uri
Banci comerciale locale
Agenție de creditare a exportului
300
200
100
0
11
13
14
15
16
18
19
17
20
10
12
21
22
20
20
20
20
20
20
20
20
20
20
20
20
20
Source: Dealogic. Source: Dealogic.
Finance 137
Driven by increasing electricity prices, financing activity was revived in 2021, generated through
M&A activities for brownfield renewable projects or portfolios. A second wave of financing greenfield
renewable projects without support measures is expected to start in 2023. This is expected to be
driven by high market prices for electricity and the increasing efforts of larger industrial offtakers to
procure electricity over a longer term through commercial PPAsxxxii.
All recorded financing transactions since 2011 are denominated in Euros given the integration of the
Romanian energy market into the European markets as well as the price floor of the Green Certificates
(as available for existing renewable generators) being indexed to Euros. This implicit currency hedge,
together with low attractiveness of local currency financing due to higher levels of local interest rates
led to limited demand for local currency funding for renewable projects.
On the supply side, (international) banks that do not have a funding base in local currency are facing
constraints with raising Romanian Lei through hedges in the international derivative markets, which
are related to liquidity (only small sizes of €20 to 30 million available for hedging without price impact)
and tenors (up to three years usually possible without limitations). Going forward, it is expected for
Romania to join the Eurozone in 2024.
Table 19.1 outlines a selection of bank financed onshore wind farm and PV solar projects in Romania
where lender groups have been publicly disclosed (including MFIs in bold).
TABLE 19.1 FINANCING DETAILS OF RENEWABLE ENERGY PROJECTS
Approximate
Project Project amount Financing
Name developer Debt providers (€ million) year
Cernavoda La Caixa, Societe Generale, UniCredit, EBRD,
EDPR 140 2011
Power SA IFC
Pestera Wind
EDPR La Caixa, Societe Generale, UniCredit, EBRD 62 2011
Farm
Cernavoda IFC, La Caixa, Societe Generale, UniCredit Bank
EDPR 74 2011
Power Austria AG
La Caixa, SG (Societe Generale) Corporate &
Pestera Wind
EDPR Investment Banking, UniCredit Tiriac Bank, 97 2011
Farm
EBRD, IFC
Enel Green Enel Green
Export Credit Agency (EKF) 221 2012
Power Power
Chirnogeni EP Global EBRD, UniCredit Bank Austria, ING Bank, Erste
85 2012
wind Energy Bank
EP Wind
EP Global Erste Bank, ING Bank, UniCredit Bank Austria
Project (Rom) 115 2012
Energy AG, EBRD
Six
VS Wind
EDPR EBRD, Erste Bank Group, UniCredit 60 2012
Farm
LJG Green
Samsung
Source Intesa Sanpaolo, UniCredit 109 2013
C&T, LJG
Energy Alpha
Cujmir Solar EDPR Black Sea Trade & Development Bank, EBRD 38 2014
xxxii. Legally possible since 31 December, 2021 through the Emergency Ordinance GEO no. 143/2021 and confirmed by the regulator ANRE in April 2022.
138 Offshore Wind Roadmap for Romania
Approximate
Project Project amount Financing
Name developer Debt providers (€ million) year
Corni Eolian ERG Renew ING Bank, Raiffeisen Bank International 86 2014
Mireasa Monsson
China Development Bank Corp 43 2015
Energies group
Macquarie
Felix Alpha Bank, Banca Transilvania, Erste Bank,
Infrastructure
Renewable OTP Bank, Raiffeisen Bank International, 300 2021
and Real
Holdings UniCredit
Assets
LJG Green
Source Greenvolt Raiffeisen Bank Internationa, UniCredit 63 2022
Energy Alpha
Enery Power
Enery Kommunalkredit Austria 33 2022
Ro Holding
Source: Dealogic.
International banks
Other than purely domestic banks and local banks with European parents, there has been no active
engagement of large international banking groups (e.g. any of the top 20 largest banks in the S&P
ranking72) in financing the renewable sector in Romania. This is seen to be due to the relatively small size
of the economy, the banking market itself and the comparably small deal size in the market. A limited
number of international, mostly European, lenders without banking operations in Romania such as
Kommunalkredit (Austria) or La Caixa (Spain) shown in Figure 19.3 are active lenders to the renewable
sector and are now looking at Romania mostly on an opportunistic basis or driven by client relations.
FIGURE 19.3 NUMBER OF INVESTMENTS PER INDIVIDUAL BANKS, 2010-2022
UniCredit
EBRD
La Caixa
Societe Generale
Erste Bank
IFC
ING Bank
Raiffeisen
Export Credit Agency (EKF)
Intesa Sanpaolo
Black Sea Trade & Development
China Development Bank
Alpha Bank
Banca Transilvania
OTP Bank
Kommunalkredit
0 1 2 3 4 5 6 7 8 9 10
Number of investments
Source: Dealogic.
Finance 139
It is worth mentioning that some banking groups that are active in Romania, in particular Société
Générale, ING and UniCredit as well as European Investment Bank (EIB) among the MFIs are already
experienced lenders to OSW projects in other regions including Europe, Asia and the US. The knowledge
and experience gained through those investments are expected to mean that there will be strong interest
in structuring and lending to OSW projects in Romania, should the regulatory environment contribute to
the potential project’s bankability. Table 19.2 outlines a selection of bank financed OSW projects worldwide
where lender groups have been publicly disclosed (including banks active in Romania and MFIs in bold).
TABLE 19.2 FINANCING DETAILS OF OSW ENERGY PROJECTS WORLDWIDE
Approximate
amount Financing
Company Deal Note Lenders (€ million) Year
Development
Deepwater of 30 MW
KeyBank NA, OneWest Bank FSB, Societe
Wind Block Block Island 276 2015
Generale
Island OSW project
(US)
Refinancing
Deepwater of operating
CoBank ACB, HSBC, KeyBank, Societe
Wind Block 30 MW Block 259 2018
Generale, Sumitomo Mitsui Financial Group
Island Island OSW
project (US)
Refinance of
BNP Paribas Fortis, DBS Bank (Hong Kong SAR,
Dudgeon operating 402
China), DNB Markets, MUFG Bank, Norinchukin
Offshore MW Dudgeon 822 2018
Bank, SEB, Societe Generale, Sumitomo Mitsui
Wind OSW project
Banking Corp
(UK)
Development
120 MW
ANZ, BNP Paribas, Cathay United Bank Co,
Formosa
Formosa 1 Credit Agricole CIB, DBS, EnTie Commercial
1 Phase 2 554 2018
Wind Power Bank Co, ING, KGI Bank, MUFG Bank, Societe
OSW project
Generale, Taipei Fubon Commercial Bank
(Taiwan,
China)
Acquisition of
Ocean Breeze Bank of China, Goldman Sachs, ING, KB
Ocean Breeze
Energy by Kookmin Bank, Norinchukin Bank, SEB, 853 2019
Energy
Macquarie UniCredit Bank
Group
Refinance of
existing to
development Belfius Bank & Insurance, BNP Paribas Fortis,
Rentel the 309 KBC, KfW IPEX Bank GmbH, Rabobank, 890 2019
MW Rentel Societe Generale
OSW project
(Belgium)
BNP Paribas, Cathay United Bank Co, Credit
Development
Agricole CIB, CTBC Bank Co, DBS, Deutsche
of the 640
Bank, E.Sun Commercial Bank, EnTie
MW Yunlin
Yunneng Commercial Bank Co, ING, Mizuho Bank,
Yunneng 1,661 2019
Wind Power MUFG Bank, Natixis, OCBC, Societe Generale,
OSW project
Standard Chartered Bank, Sumitomo Mitsui
(Taiwan,
Banking Corp, Taipei Fubon Commercial Bank
China)
Co, Taiwan Cooperative Bank
140 Offshore Wind Roadmap for Romania
Approximate
amount Financing
Company Deal Note Lenders (€ million) Year
77 Bank, Akita Bank, Bank of Iwate, Dai-ichi
140 MW Akita Life Holdings Inc, Hokuto Bank, Meiji Yasuda
Akita
and Noshiro Life Insurance, Mizuho Bank, MUFG Bank,
Offshore 820 2020
OSW projects Nippon Life Insurance Co, Shinsei Bank, Societe
Wind Farm
(Japan) Generale, Sumitomo Mitsui Banking Corp,
Sumitomo Mitsui Trust Bank,Yamagata Bank
Bank of China, BayernLB, BNP Paribas, Caisse
d’Epargne de Haute Normandie, CaixaBank,
Construction CM-CIC, Commerzbank, Credit Agricole CIB,
Eoliennes and operation DekaBank, DZ BANK, European Investment
Offshore of 497 MW Bank – EIB, Helaba, KfW, La Banque Postale
2,480 2020
des Hautes Fécamp OSW SA, LBBW, Mizuho Bank, MUFG Bank,
Falaises project farm Rabobank, Santander, SG Corporate &
(France) Investment Banking, Siemens Bank Standard
Chartered Bank, Sumitomo Mitsui Banking
Corp, UniCredit
Refinance
ASN Bank Novib, BayernLB, ING Bank, KfW
Global Tech of 416 MW
IPEX Bank, Kommunalkredit Austria Rabobank,
I Offshore Global Tech I 652 2020
SG Corporate & Investment Banking,
Wind OSW project
Skandinaviska Enskilda Banken
(Germany)
BayernLB, BNP Paribas, CaixaBank, CIBC, CM-
Construction
CIC, Credit Agricole CIB, European Investment
and operation
Eoliennes Bank – EIB, Helaba, KfW IPEX Bank, La Banque
of a 448 MW
Offshore du Postale, Mizuho Bank, Rabobank, SG Corporate 2,380 2021
Calvados
Calvados & Investment Banking, Siemens Bank GmbH,
OSW project
Standard Chartered Bank, Sumitomo Mitsui
(France)
Banking Corp, UniCredit
Development
of 112 MW DBJ, Mizuho Bank, MUFG Bank, Shinsei Bank,
Green Power
Ishikari Bay Societe Generale, Sumitomo Mitsui Banking 337 2022
Ishikari
OSW project Corp, Sumitomo Mitsui Trust Bank
(Japan)
Source: Dealogic.
19.3.2 Tax incentives
The following current incentives are relevant to OSW:
■ Excise Duties. Electricity produced from renewable sources is exempt from excise duties.
■ Accelerated depreciation of fixed assets. For technical equipment, an accelerated depreciation
method can be used for tax purposes. This allows up to 50% of the fixed asset value as
depreciation in the first year of use. In the following years, the depreciation is calculated based on
the remaining value of the fixed asset divided by the remaining useful life.
■ Exemption from corporation tax for reinvested profit. Profits invested in certain technical
equipment are exempt from corporation tax under certain conditions. The corporation tax rate in
Romania currently is 16%.
■ The assets for which this tax incentive is applied must be retained for at least half of their
useful economic life, but no longer than five years. The company cannot apply the accelerated
depreciation on equipment subject to this tax incentive.
Finance 141
■ Simplification of VAT payment methods. In some circumstances, sales of electricity to traders or
other entities that have a consumption versus purchase of energy ratio of less than 1% (assessed
annually, based on quantities) can follow simplification measures.
■ Losses carried forward. Limited losses incurred can be carried forward for a period to reduce
taxable profits.
The Government has the opportunity to explore any potential fiscal instruments relating to the
support of OSW subject to the country’s context and its position as an EU Member State. This may be
at developer level, considering the attractiveness of projects, or at the supply chain level, considering
in-country investment to serve OSW projects.
19.3.3 Multilateral lending
Besides EBRD and IFC, other MFIs active in the market so far are Black Sea Trade & Development Bank
and China Development Bank, which financed a project using Chinese wind turbines.
The ability of private sector developers to secure finance from MFIs can create several benefits in
terms of the overall availability of finance and its cost. For sectors they prioritize, they will typically
offer a source of lower cost finance. Participation is also likely to increase appetite from other
lenders because:
■ They are often willing to take on a larger tranche of financing for early, higher risk projects;
■ Their presence often increases interest among private institutions;
■ Their B-Loan umbrella (sub-participation by commercial banks not located in the country)
offers some protection regarding expatriation of funds in case of transfer restrictions imposed
by the central bank or withholding tax (WHT) benefits (not as subject to WHT) for lenders and
consequently to sponsors;
■ Their environmental and social impact assessment standards such as IFC PS ensure that best
practice in environmental and social impact assessment (ESIA) is applied, making it easier for
other investors to participate – this is very much aided by regulatory requirements ensuring that
ESIAs and permits meet such standards and other Good International Industry Practice (GIIP);
■ Their due diligence processes are often relied on by others, reducing the cost of participation by
private financing parties; and
■ Their participation often comes with other support, either advisory or in terms of credit
enhancement (read more about IFC Upstream).73
While in less developed markets MFIs may be able to offer concessional loans (loans on more favorable
terms than market loans, either lower than standard market interest rates, longer tenures, or a
combination of these terms), Romania as an EU country is not eligible for such funds to be utilized in
projects. The European Investment Bank (EIB), as the investment bank of the European Union, may
however be able to provide more beneficial terms than commercial lenders or other MFIs resulting in
lower credit margin and/or longer tenors. In September 2023, EIB supported one of the world’s largest
wind farms with €610 million in financing,74 As mentioned in the press release, over the past decade,
the EIB has channeled more than €100 billion into the EU energy sector. More recently, in December
2023, EIB approved a €5 billion tailored initiative to support wind energy component manufacturers as
part of the EIB’s contribution to the European Wind Power Package.75
142 Offshore Wind Roadmap for Romania
Where there are areas of priority, MFIs may also participate at the equity level in projects (or provide
convertible debt). This can act as means to ensure there is available finance, in particular for upfront
development costs prior to debt-financing being available.
MFIs played a key role in lending to the sector during the first wave of renewables financing in
Romania in the period 2011 to 2015, pioneering first transactions and involving commercial banks as
participants. In recent financings of brownfield assets since 2021, MFIs have not been involved, which
can be explained by commercial banks getting comfortable to invest in de-risked projects in the sector
and a low additionality, which MFIs usually seek to provide.
19.3.4 Credit enhancement mechanisms
Where private investors are involved in a public private partnership (PPP) scheme for an infrastructure
investment, typically involving a set of contractual obligations of a public counterparty, project
bankability and availability of financing can be significantly improved through the use of investment
guarantees and credit enhancement mechanisms. The latter can be secured from public or private
insurance companies, as well as export credit agencies and development finance institutions (DFIs).
A relevant de-risking solution for OSW financing could be provided by the Multilateral Investment
Guarantee Agency (MIGA), which is a member of the World Bank Group, in the form of investment
guarantees extended to foreign private sector financiers including equity sponsors and lenders. A
key coverage in the context of PPPs is breach of contract, whereby the MIGA backstops contractual
obligations of a sovereign, eligible sub-sovereign or state-owned entity under a project agreement
(e.g. concession agreement, implementation agreement, PPA, etc.) and guarantees the payment of
termination amounts due by the relevant public authority upon completion of a dispute resolution
process. Importantly, as a member of the World Bank Group, MIGA’s added value stems from its ability
to resolve investment disputes between host governments and private investors to the satisfaction of
all parties, preventing potential claim situations from escalating and leading to project termination.
MIGA’s breach of contract coverage can support renewable energy projects (including OSW) under a
typical project finance structure, as well capital market transactions and project bond issuance.
A recent example entails the Scatec Green Bond Project in Egypt76 (May 2022), where MIGA has
supported the refinancing of the existing debt of six operational solar PV power plants developed
as part of Egypt’s landmark solar Feed-in-Tariff Program (FiT Program), aimed at mobilizing private
investments to build one of the world’s largest solar PV projects.
The projects have been refinanced through the issuance of a bond totaling up to €310 million, with joint
support from MIGA (through investment guarantees) and EBRD (through a liquidity support facility).
The complementarity of the two products has driven strong appetite from institutional investors and
the bond issuance secured a rating of BBB+ by Scope, six notches above the sovereign.
Beyond PPPs, MIGA can also support the Romanian government, as well as eligible sub-sovereign
entities and state-owned enterprises (SOEs) to access commercial financing at improved terms
for the development of public sector projects. MIGA’s credit enhancement guarantees are typically
extended to commercial lenders, covering the risk of non-payment by an eligible public authority
under an unconditional and irrevocable financial obligation (e.g. as stipulated under a loan agreement).
The product, which covers up to 95% of the loan principal, interest as well as hedging instruments, is
Basel compliant, providing capital relief to lenders, which in return allows public borrowers to secure
financing at better terms. MIGA-backed commercial financing can represent a complementary solution
Finance 143
to EU or DFI funding in case of existing financing gaps. Such structure can also entail MIGA coverage
for commercial loans secured in order to fund public sector participation into PPP projects, e.g. into the
OSW PPP projects if/where relevant.
19.3.5 Climate finance
Climate finance refers to sources of public finance aimed at supporting developing economies to make
investments that mitigate climate change and adapt to its impacts. The impetus for global climate
finance funds comes from the United Nations Framework Convention on Climate Change (UNFCCC).
The main climate finance mechanisms are the Green Climate Fund (GCF), the Global Environment
Facility (GEF) and the Climate Investment Funds (CIF).
The UNFCCC calls for financial assistance from countries with greater financial resources (Annex
1 countries) to those that require assistance to address climate change (non-Annex 1 countries).
Romania is an Annex 1 country due its advanced economic development catalyzed through its
accession to the EU in 2008. As such, the country is no longer eligible to receive any funds from the
GCF, GEF or CIF.
19.3.6 European Funds
The funds available from the EU for renewable energy are:
1. The Modernisation Fund. 77 This is a dedicated funding program to support 10 lower-income
EU Member States (including Romania) in their transition to climate neutrality by helping to
modernize their energy systems and improve energy efficiency. So far in Romania, there is
certainty only on initial allocations that were already granted to Transelectrica and CE Oltenia.
Several calls are under preparation, including for gas-fired plant, combined heat and power plant,
district heating projects and renewable energy. €110 million is likely to be allocated for grid-
connected technology and €105 million for industrial generators consuming at least 70% of their
own supply.
• Eventually, the Modernisation Fund will have a much higher budget across the 10 member
states than initially assumed (now estimated at €48 billion).
• Funds are a proportion of revenue from the EU Energy trading Scheme (EU-ETS) based on CO2
prices. Funds can be spent by the end of 2030, which means projects need to be operational in
2029.
• Spending is strictly linked to achieving the indicators on installed renewable energy sources
(RES) in a country’s National energy and climate plan (NECP).
• There is a particularly hard (likely non-negotiable) constraint for large projects (like OSW) where
allocations will be conditional on injecting a defined amount of renewable energy into the grid by
a defined date. If the target is not achieved the grant would need will to be repaid.
• The expected targets for RES are unlikely to be reached without OSW. It is ;likely, therefore,
that there would still be several € billion available in the Modernisation Fund that EC could
allocate to OSW in Romania
• This would require the Ministry of Energy to prepare a scheme or a list of well-justified projects
and negotiate financing directly with the EC, also considering the other constraints (permitting
and other delivery risk), a well-substantiated justification for the need for state aid and
assurance that the energy will be injected in the system by the end of 2030.
144 Offshore Wind Roadmap for Romania
We understand that according to discussions with the State Aid Schemes Implementation
Directorate, the Modernisation Fund can be used to support OSW project delivery but cannot
currently be used for technical assistance. We further understand that updates to eligibility are
under discussion, including regarding technical assistance.
2. National Recovery and Resilience Plan (NRRP). There is a total allocation of €460 million for wind
and solar, for capacities which currently need to be put in operation by end-June 2024. There are
negotiations to extend the deadline at least by 6 months, but this is too soon for OSW in Romania.
3. The Operational Program (OP) Sustainable Development 2021-2027. This focuses on sources of
renewable energy not developed under other EU funds, e.g. solar and geothermal for heating. The
OP is meant to be complementary / not overlap with the NRRP and Modernisation Fund. Due to
the scope and timing, it is less relevant than the Modernisation Fund.
19.3.7 Green debt instruments
Green debt instruments are bonds or securities issued to fund projects or assets that have a positive
environmental or climate impact. These bonds can be issued either by public or private actors, and
may bring the following benefits:
■ Enhancements to the issuer’s reputation, as green bonds serve to enhance their commitment to
environmental goals or targets;
■ They require good standards of ESIA to be applied;
■ Investor diversification, as there is a growing pool of capital earmarked for green projects. Thus, the
issuer can access investors who may not have been interested in purchasing a regular bond; and
■ Potential pricing advantages if the wider investor base allows the issuer to get better pricing terms
on a green bond than on a regular bond, though evidence to support the existence of a pricing
advantage is mixed.
The IFC and Amundi Asset Management launched the Green Cornerstone Bond Fund in 2018, the
world’s largest green bond fund targeting emerging markets. The IFC will provide first-loss coverage
through a junior tranche to lower risk and attract private sector investments.78
Green bonds have not (yet) been issued to finance renewable energy projects in Romania but green
bond issuance is expected to grow in line with global trends and may eventually reach the power
generation sector, though there is limited precedent of ‘project bonds’ with no recourse to a corporate
issuer/sponsor in the country yet.
Romanian companies and financial institutions work increasingly with green bonds, although there
is a large space for growth. Romania has issued €1.75 billion green bonds in the period 2012-2179. The
Ministry of Finance intends to launch sovereign green bonds starting in 2024, following the of the
Sovereign Green Bond Framework in December 2023.80 In Romania, green project spend amounts to
€60 billion, both at the government and corporate level. If implemented, the additional impact on the
economic growth could reach up to 5.7 percentage points in the next six years81.
The focus of banks and companies in the sustainable finance area lies in green bonds issuance. For
example, in May 2021, MAS Real Estate issued a green bond to finance projects in Romania. It priced
a €300 million unsecured green 5-year Eurobond maturing on May 16, 2026, carrying a 4.25% fixed
coupon, with an issue price of 98.9%.
Finance 145
For the most part, green bonds in Romania are issued by larger international investors, the most active
of which are international banks. BCR and Raiffeisen Bank, two of the biggest banks in Romania raised
more than RON 3,6 billion (€812 million) with 4 green bond and 2 sustainability bond issuances carried
out in 2021 and 2022:
■ In April 2021, Raiffeisen Bank issued the first green bond worth over RON 400 million (€80 million)
on the Bucharest Stock Exchange82.
■ In July 2021, Raiffeisen Bank listed the second green bond issuance on the Bucharest Stock
Exchange, worth over RON 1.2 billion (€242 million)83.
■ In June 2022, Raiffeisen Bank placed its third green bond, a 5-year green bond issuance and raised
RON 525 million (€106 million) from investors84.
■ In June 2022, BCR raised RON 702 million (€142 million), double the planned amount85.
■ In August 2022, Raiffeisen Bank issued its first sustainable bonds and raised RON 500 million
(€100 million). Bank planned to invest in climate-smart initiatives including renewable energy 86.
■ In November 2022, Raiffeisen Bank is listed its second issue of sustainable bonds on the Bucharest
Stock Exchange to a value of RON 325.5 million (€142 million)87.
MFIs like IFC actively invests in green and sustainability bonds in Romania and thereby help promoting
both climate and social financing, strengthening the financial market.
Romania is developing rapidly in terms of climate financing; however, it can invest more effort to
advance innovative financial instruments (such as sovereign green bonds) at the national level. This
would demonstrate the state’s interest in advancing climate finance and would drive more private
entities to engage in climate finance.
The Romanian green bond market will continue to grow as green bonds are a useful instrument for
issuers and investors, but also climate change and the Paris Agreement commitments require a
continuous effort to support renewable energy and other climate-related projects.
19.3.8 Green equity instruments
Green equity instruments relate to equity issuances by a company where the capital raised is to be
used specifically for projects that have a positive environmental impact.
There are currently two main green equity instruments being used in Romania that are relevant to the
financing of OSW:
■ Private equity/venture capital/unlisted equity funds that are either active through their own
renewable energy platforms or aid project developers to secure a funding stream for their projects.
For example:
• Actis Energy Fund 5, a private equity fund raised and managed by Actis focusing on Energy
Transition opportunities through vestments in power generation and distribution businesses.
Actis has a pipeline of over 2 GW of solar PV and onshore wind projects in Romania.
• Three Seas Initiative Investment Fund, managed by Amber Infrastructure and funded by
development banks of eleven Eastern European states bordering the Baltic Sea, Black Sea and
the Mediterranean Sea. It invested a significant equity stake in the renewable energy platform
Enery, which owns a portfolio of 85 MW of operating solar PV generation assets in Bulgaria,
146 Offshore Wind Roadmap for Romania
Czechia and Slovakia and has a significant development portfolio of over 2 GW in a number of
countries, including Romania.
■ Joint venture partnerships that pool capital, skills and resources for a specific project or platforms.
As an example in the electricity sector, asset manager Allianz Capital Partners (ACP), has
partnered with the German utility E.ON in Romania and acquired a 30% stake in its electricity and
gas distribution network.
19.4 DISCUSSION
There are a number of viable sources of finance for OSW developments, and a track record of
renewable transactions across loan, bond, green bond and equity markets. We anticipate that the
greatest volume of finance will come from MFIs and European lenders, but with local lenders and
potentially some opportunistic international lenders that are attracted by size playing an important
role. A well-informed, competitive debt market supporting experienced project developers that are able
to show their commitment through equity investment is key to minimizing weighted average cost of
capital (WACC) for OSW projects.
■ European lenders are active in the Romanian market mostly through their Romanian subsidiaries
or on an opportunistic basis. Some of these banks have experience with OSW through other
established European OSW markets. While through their subsidiaries they would have access to
Lei-denominated balance sheets, large scale financing is likely to seek loan proceeds to be in Euros,
as currently the case for most renewable energy financing.
■ Romania has an established and active banking market. Local lenders even without belonging to
a European banking group have a growing appetite for renewables, and growing familiarity with
project finance structures. Local banks are well capitalized and ready to lend but lack experience
with OSW.
■ MFIs are active and familiar with the Romanian context. They have a role to play in ‘de-risking’
OSW development in the coming years until there is a greater local track record of successfully
operational OSW projects. Direct lending and credit enhancement appear to be suitable tools to
unlock private sources of debt that are otherwise available in the country.
■ The EU Modernisation Fund provides an opportunity for substantial support, dependent on
projects being installed by the end of 2029.
■ The Romanian green bond market is small but growing and currently focused on financial
institutions as issuers. Given the small pool of investors and need for a minimum credit rating,
raising project bonds without credit enhancement is likely to be challenging in the short term.
Larger corporate developers may be able to secure bond issuance (and green bonds) as part of
corporate bond programs, which in turn could be used to fund OSW.
■ Government has established a series of tax measures that support renewable energy more
generally.
Finance 147
19.5 RECOMMENDATIONS
Based on this analysis, it is recommended that:
■ The Ministry of Energy (MOE) establishes the feasibility and attractiveness of using the
Modernisation Fund to support OSW, including any flexibility regarding timescales due to the time
it takes to develop OSW projects in a new market.
• There may be opportunities to use the fund to support early-stage Government work, site
exploration and eventual construction.
■ The Ministry of Environment, supported by the Ministry of Finance, addresses any shortfalls in
Romanian ESIA requirements compared to EU Regulations, GIIP, and other lender standards.
■ The MOE, with the Ministry of Finance considers financial mechanisms to reduce cost of capital
for OSW projects, including access to climate and other concessional finance and ensures
international market standards for contractual risk allocation and arbitration. Early engagement
with MDBs is encouraged, in order to shape any guaranty scheme, credit enhancement, first loss
support or other arrangement.
■ The MOE explores together with the Ministry of Finance any potential fiscal instruments relating
to the support of OSW subject to the country’s context and its position as an EU Member State.
148 Offshore Wind Roadmap for Romania
20. PUBLIC INSTITUTIONS
20.1 PURPOSE
The purpose of this work package is to define the potential roles and responsibilities of public
institutions in delivering offshore wind (OSW) projects in Romania. It describes the roles typically
required to administer regulatory frameworks, presents examples of public institutions that are
responsible for these roles in other markets and proposes potential public institutions that could have
these roles in Romania.
20.2 METHOD
We listed the roles and responsibilities typically required to administer regulatory frameworks,
recognizing that the roles and responsibilities of public institutions varies between markets depending
on the structure of their OSW frameworks.
We then identified the public institutions in the UK and Poland that are currently responsible for
administrative roles in an established market and an emerging market that is ahead of Romania.
Based upon the administrative roles required in Romania and the responsible public organizations in
other European markets, we proposed potential public organizations that could have these roles in
Romania.
We then provided recommendations around capacity building for each of the proposed public
organizations that will enable them to effectively manage and administer the regulatory frameworks
required to deliver OSW projects in Romania.
20.3 RESULTS
20.3.1 Roles and responsibilities
The key roles typically required to manage and administer regulatory frameworks in OSW markets are:
■ Multi-sector marine spatial planning;
■ OSW marine spatial planning;
■ Lease competition administration (exploration license in Romania);
■ Lease contract award (exploration license in Romania);
■ Permitting assessment;
■ Permitting award;
■ Revenue support competition administration(also lease in Romania);
■ Revenue support contract award (also lease in Romania);
Public institutions 149
■ Grid connection contract award;
■ Health and safety oversight; and
■ Technical certification.
Key needs for organizations
As discussed in the Key Factors report, organizations playing these roles each need to:
■ Be well resourced, so that they can provide a timely service;
■ Deliver secure, robust, and fair processes, supported by relevant legislation and legal advice;
■ Provide relevant information, including principles as well as practical guidance;
■ Engage early with stakeholders about possible changes and listen to their views; and
■ Have the trust of the project development and finance communities.9
Multi-sector marine spatial planning
It is important to consider environmental, social and technical constraints with territorial waters and
the Exclusive Economic Zone (EEZ) to identify broad potential areas for OSW deployment. This requires
an organization to:
■ Define the plan area (typically the national EEZ).
■ Engage with stakeholders in relevant sectors to ensure all marine users are accounted for in the
planning process.
■ Build an evidence base through existing spatial data, future plans and stakeholder consultation to
understand current and future environmental, social and technical constraints.
■ Carry out a spatial modelling exercise to define where marine users operate.
■ Conduct a consultation process to ensure the proposed plan is likely to be adopted by marine users.
■ Monitor, review and adapt the plan at regular intervals to ensure the plan remains relevant.
OSW marine spatial planning
It is important to identify the least constrained, most technically attractive areas for OSW deployment
within the broad potential areas defined within the multi-sector marine spatial plan. This requires
an organization to follow similar steps to above to designate broad areas or specific sites for each
licensing round.
As well as the factors considered above, levelized cost of energy (LCOE) analysis and technical
parameters such as water depth and ground conditions will be relevant.
Lease competition administration (exploration license in Romania)
The organization responsible for administering the lease competition (exploration license competition
in Romania)) does not need to be the same organization responsible for awarding the contract. The
competition administration organization needs to:
150 Offshore Wind Roadmap for Romania
■ Provide relevant information, including clarity regarding objectives, processes, rules, selection
criteria and timings;
■ Engage early with key stakeholders to brief them and listen to their views;
■ Administer any prequalification process to ensure the project developer has the capability to
deliver the project;
■ Ensure that bidders have had a chance to ask questions about the process and understand the
answers;
■ Ensure that bidders have had time to understand risks and opportunities sufficiently to put in
positive bids;
■ Manage a secure, robust, and fair assessment process;
■ Administer the results process and follow-up activities with successful companies;
■ Administer any appeals process; and
■ Provide long-term visibility of future competitions and ensure they are aligned with government
targets.
Lease contract award (exploration license in Romania)
The organization responsible for awarding the lease, or the exploration license needs to:
■ Have the authority to award (sign) such contracts;
■ Define the lease or license terms to encourage developers to progress with development by
defining clear milestones that must be achieved;
■ Define the period over which the lease or license will be active; and
■ Work with developers and the administrative organization following the award of the lease or
license to ensure the terms and conditions are being met (in the case of Romania, this will involve
ensuring the data collection requirements are being met).
Permitting assessment
A single organization responsible for managing a one-stop shop for assessing permits needs to:
■ Provide relevant information, including clarity regarding objectives, processes, assessment criteria
and timings;
■ Engage early with developers considering applying for permits to ensure they are aware of key
considerations;
■ Keep wider organizations and stakeholders informed of the upcoming workload*;
■ Assess documentation from a developer and make early requests for clarifications;
■ Manage assessment and responses from stakeholders, ensuring that they are provided with the
latest information*;
■ Manage additional information requests to the developer;
■ Keep the ultimate permitting award body informed about the status of permitting;
Public institutions 151
■ Make a final recommendation to the permitting award body, including any conditions required to
protect the environment and affected communities; and
■ Administer any appeals process.
If there is no such one-stop shop arrangement, then each organization responsible for a permit (or
providing assessment contributing to a permit) will need to provide a subset of the above (excluding
activities marked*).
Permitting award
The organization responsible for awarding permits need to:
■ Hold legal authority to award the permit;
■ Define the permit assessment requirements including the need for site surveys, stakeholder
engagement and an environmental and social impact assessment;
■ Define the period over which the permit will be active; and
■ Work with developers and the administrative organization following the award of the permit to
ensure the terms are met.
Revenue support competition administration (also lease in Romania)
The organization responsible for administering the revenue support competition needs to undertake
the same activities as defined for the organization responsible for administering the lease competition.
It will also need to:
■ Ensure any requirements that are aimed at benefitting the wider industry are well understood by
project developers and there is a robust process in place to monitor commitments following award; and
■ Define any bid price limits that bidders will need to bid within.
Revenue contract award (also lease award in Romania)
The organization responsible for awarding the revenue support contract needs to:
■ Design an offtake mechanism that is bankable and provides investors with the certainty they
need;
■ Hold legal authority to award such contracts; and
■ Have financial resources to honor the contract over its full term.
Grid connection contract award
The transmission network operator (TNO) responsible for awarding grid connection contracts needs to:
■ Define and administer the process developers must follow to apply for a grid connection;
■ Review applications and make decisions about the priority and timing of grid connections; and
■ Finalize contract terms with developer, including liabilities for late delivery, then build and operate
transmission network up to location of grid connection.
152 Offshore Wind Roadmap for Romania
Health and safety oversight
The OSW industry needs effective health and safety practices and a culture that protects people
and the environment. This requires project developers to adhere to Environmental, Health and Safety
(EHS) guidelines and standards set out by international organizations, such as the WBG, and national
regulators. The national EHS regulator needs to:
■ Ensure existence of a national EHS regulatory framework that is fit for purpose in OSW;
■ Keep the national EHS regulatory framework aligned with accepted good practices set out by
international OSW EHS guidelines;
■ Provide relevant permits; and
■ Implement inspection and monitoring program that ensure projects are meeting EHS standards,
building a strong EHS culture throughout the industry.
Technical certification
OSW component design, manufacture, installation and operations follow technical standards to reduce
project risk. Sufficient international standards are in place to provide assurance of good practice,
should inspections be carried out to ensure compliance. If additional national standards apply, then a
national standards body needs to:
■ Harmonize between relevant international and national standards, where possible; and
■ Enforce compliance with remaining national standards.
20.3.2 Responsible organizations
Table 20.1 summarizes the organizations that are currently responsible for the roles outline above in
England and Poland. It also provides suggestions of potential organizations that could be responsible
for administering the processes and awarding contracts for each regulatory framework in Romania.
The two example markets are chosen to reflect an established and an emerging European market that
has shown good practice.
TABLE 20.1 RESPONSIBLE ORGANIZATIONS IN ENGLAND AND POLAND AND PROPOSED
RESPONSIBLE ORGANIZATIONS IN ROMANIA
Role England Poland Romania
Multisector marine Marine Management Ministry of Infrastructure Ministry of Economy
spatial plan Organization
OSW spatial planning The Crown Estate Director of Maritime Ministry of Economy
Office and the Minister of
Infrastructure
Lease competition The Crown Estate Energy Regulatory Office Ministry of Energy (MOE)
administration (ERO)
(exploration license in
Romania)
Lease contract award The Crown Estate ERO Romanian Energy
(exploration license in Regulatory Authority
Romania) (ANRE)
Public institutions 153
Role England Poland Romania
Permitting assessment Planning Inspectorate Ministry of Marine Existing bodies
Economy and Inland responsible for awarding
Navigation (sea bed different permits for
and sea-bed cable related sectors.
location permit); New one-stop shop
Regional Directorate for authority only needed in
Environmental Protection high growth scenario
(EIA); ERO (project
construction, energy
generation and energy
use permit)
Permitting award Department for Energy Ministry of Marine Existing bodies
Security and Net Zero Economy and Inland responsible for awarding
Navigation (sea bed different permits for
and sea-bed cable related sectors.
location permit);
Regional Directorate for
Environmental Protection
(EIA); ERO (project
construction, energy
generation and energy
use permit)
Revenue support Department for Energy ERO MOE
competition Security and Net Zero
administration (also lease and National Grid ESO
in Romania)
Revenue support contract The Low Carbon ERO OpCom
award (also lease in Contracts Company
Romania)
Grid connection contract National Grid ESO Państwowe Sieci Transelectrica
award Elektroenergetyczne
(PSE)
Health and safety Health and Safety Central Institute for Labor ACROPO
oversight Executive Protection
Technical certification British Standards Polish Committee for ACROPO
Institute Standardization
20.4 DISCUSSION
In any OSW market, there needs to be clarity on responsible organizations and their roles. Many of
these organizations will exist already to fulfill other roles. Each market is different in this respect, and
it needs leadership to establish which organization should play which role.
20.5 RECOMMENDATIONS
Based on this analysis, it is recommended that:
■ The MOE leads in establishing which organization should play which role regarding the different
frameworks needed for OSW.
154 Offshore Wind Roadmap for Romania
21. STAKEHOLDERS
One of the goals of the project is to establish a strong network of industry stakeholders whose
views and collaboration will aid development and socialization of the offshore wind (OSW) roadmap
for Romania. The engagement carried out in the inception mission and consultation mission of this
roadmap aimed to start the process of establishing such a network, and key stakeholders identified
during the missions are listed below.
Early and constructive stakeholder engagement is essential for a number of reasons including:
■ Working together with industry to address recommendations in this roadmap and other
considerations
■ Input into policy and frameworks
■ Identifying priority biodiversity receptors, verifying data and ensuring they are considered
appropriately and proportionately in planning for OSW development.
Stakeholder engagement should be an integral and important part of future processes, including
marine spatial planning and project-specific environmental and social impact assessment.
A list of key stakeholders has been identified and is provided in Table 21.1 under seven headings:
■ Government. Government departments, regulators, and institutions at national and regional level.
This list includes Government Owned or Controlled Corporations (GOCCs) and private corporations
with congressional franchises performing relevant governmental functions.
■ Offtakers and power companies. Electricity companies that may be involved distributing energy
from OSW.
■ Project developers. OSW project developers known to have expressed interest in OSW in Romania.
■ OSW supply chain. Supply chain businesses known to be active in OSW in Romania.
■ Non-governmental organizations (NGOs). National and international non-governmental organizations
with relevance or declared interest in OSW in Romania.
■ Academic organizations. Romania Academic organizations with relevance or declared interest in
OSW in Romania.
By nature, this list is dynamic and as interest in the market continues to increase, it will be outdated
soon after publication.
Stakeholders 155
TABLE 21.1 KEY STAKEHOLDERS
Name Role
Government
Autoritatea Competentă de Reglementare a Authority responsible for ensuring the safety of offshore oil
Operaţiunilor Petroliere Offshore la Marea Neagră and gas operation in the Black Sea.
(ACROPO), Authority for the Regulation of Operates under the Romanian Government and in
Offshore Oil Operations in the Black Sea Coordination of the Chancery of the Prime Minister.
(https://acropo.gov.ro/)
Autoritatea Nationala de Reglementare in Authority responsible for the regulation of the heating,
Domeniul Energie (ANRE), Romanian Energy electricity and gas markets in Romania.
Regulatory Authority (https://www.anre.ro/) Operates under the Romanian Government and in
Coordination of the Chancery of the Prime Minister.
Agenția Națională pentru Protecția Mediului Agency responsible for enforcing environmental regulations
(ANPM) National Agency for Environmental in Romania, including monitoring and assessing
Protection (http://apmdj.anpm.ro/ro/ environmental quality, implementing and enforcing
responsabil-pentru-relatia-cu-mass-media) environmental laws and regulations, and promoting
sustainable development.
Operates under the Ministry of Environment, Water and
Forests.
Consiliul Concurenței, Romanian Competition Organization responsible for promoting competition,
Authority encouraging market development, ensuring customer
(https://www.consiliulconcurentei.ro/en/) choice, and penalizing abuse of market power in the
electricity industry.
Operates under the Romanian Parliament
Administratia Porturilor Maritime, Constanța Organization responsible for port planning, development,
Maritime Port Administration operations, and regulation.
(https://www.portofconstantza.com/pn/ro/home) Part of Ministry of Transport and Infrastructure.
Ministerul Anterprenoriatului SI Turismului, Responsible for the development of large investment
Foreign Investment General Directorate projects because it is the point of contact for foreign
(http://www.imm.gov.ro/ro/mmaca/ investments in Romania.
investitii-straine/) Its main objective is to attract foreign investment.
Directia Hidrografica Maritima, Maritime Responsible for creating, managing and keeping up to
Hydrographic Directorate date the national maritime hydrographic data system,
(https://www.dhmfn.ro/index.shtml) developing, managing, and updating the information on
cartography, marine geodesy and maritime navigation and
performing bathymetric surveying.
MARSPLAN, Maritime Space Planning Consists of competent authorities which represent
Committee the organizations responsible for the development and
(https://marsplan.ro/en/) monitoring of the implementation of the maritime space
development plan.
Ministerului Agriculturii şi Dezvoltării Rurale, Government department responsible for the promotion of
Ministry of Agriculture and Rural Development agricultural development and growth.
(https://www.madr.ro/en/) It develops and applies strategies to do with agriculture
and food production, rural development, sustainable
management of soils, plant, animal and genetic resources.
Ministerul Culturii, Ministry of Culture Government department responsible for managing
(http://www.cultura.ro/) archeological resources and historical properties and sites.
Elaborates and ensures the application of the strategy and
policies in the field of culture, national cultural heritage, as
well as intangible heritage.
156 Offshore Wind Roadmap for Romania
Name Role
Ministerul Dezvoltării, Lucrărilor Publice și Government department responsible for assisting in general
Administrației, Ministry of Development, Public supervision over local governments.
Works and Administration Provides the secretariat of the Maritime Space Planning
(https://www.mdlpa.ro/) Committee.
It is the authority for maritime space planning. It carries
out government policies in spatial planning.
Ministerul Economiei, Ministry of Economy Government department responsible for the regulation,
(http://www.economie.gov.ro/) management, and growth of industry and trade.
Ministerul Educaţiei, Ministry of Education Government department responsible for managing and
(https://edu.ro/) supervising Romania’s technical education and skills
development.
Ministerul Energiei, Ministry of Energy Government department that prepares, integrates,
(http://energie.gov.ro/) coordinates, supervises, and controls all energy-related
plans, programs, projects, and activities, covering both
traditional and renewable sources.
Ministerul Antreprenoriatului și Turismului , Government department is responsible for overseeing and
Ministry of Entrepreneurship and Tourism promoting the tourism industry in Romania, as well as
(http://imm.gov.ro/) implementing the Government Program in fields such as
entrepreneurship, small and medium-sized enterprises,
foreign investments, business environment, and foreign
trade, in addition to tourism.
Ministerul Mediului, Apelor și Pădurilor, Ministry Government department responsible for the conservation,
of Environment, Water and Forests management, development, and appropriate use of the
(http://www.mmediu.gov.ro/) environment and natural resources within the country.
Ministerul Finanţelor, Ministry of Finance Government department responsible for the formulation,
(https://mfinante.gov.ro/ro/web/site/) institutionalization, and administration of fiscal policies.
Ministerul Afacerilor Externe Ministry of Foreign Government department responsible for implementing the
Affairs foreign policy of Romania, in accordance with the legislation
(http://www.mae.ro/) in force and with the Government’s Program.
Ministerul Afacerilor Interne, Ministry of Internal Government department responsible for implementing
Affairs Romania’s internal policy in accordance with current
(https://www.mai.gov.ro/) legislation and the Government’s Program.
Ministerul Apărării Naţionale, Ministry of National Government department responsible for guarding against
Defence external and internal threats to peace and security.
(https://www.mapn.ro/) It establishes limits of the safety zones of military ships
and the perimeters and regimes of military ports.
Ministerul Cercetării, Inovării şi Digitalizării Government department responsible for establishing
Ministry of Research, Innovation and and updating Romania’s strategic objectives in the field
Digitalization of scientific research, technological development and
(https://www.research.gov.ro/) innovation.
Ministerul Muncii Si Solidaritatii Sociale Government department responsible for managing policies
Ministry of Labour and Social Solidarity related to labor, social protection, and social inclusion in
(http://mmuncii.ro/j33/index.php/ro/) Romania.
Also responsible for promoting employment and job
creation, ensuring safe working conditions, managing social
assistance programs, and overseeing pension and health
insurance systems.
Ministerul Transporturilor și Infrastructurii, Government department responsible for the promotion,
Ministry of Transport and Infrastructure development, and regulation of transportation systems and
(https://www.mt.ro/web14/) transportation services.
Also responsible for the development of the maritime
industry of Romania and development and regulation of
shipping enterprises.
Stakeholders 157
Name Role
Agenția Națională pentru Resurse Minerale, Agency responsible for issuing licenses for mineral
The National Agency for Mineral Resources exploration and mining, regulating and overseeing mining
(NAMR) activities, conducting geological surveys, managing the
(https://www.namr.ro/home-page/) country’s mineral resources database, and promoting
investment in the mining sector.
Operates under the Ministry of Economy.
Administrația Națională Apele Române, (NARW) Agency managing surface and ground water resources in
National Administration of Romanian Waters Romania, allocating use rights, ensuring flood protection,
(https://rowater.ro/) and administering the Water Management National
System.
Operates under the Ministry of Environment, Water and
Forests.
Agenţia Naţională, pentru Pescuit ş,i Acvacultură, Agency responsible for the promotion of fisheries
National Agency for Fishing and Aquaculture development and growth.
(http://anpa.ro) Operates under the Ministry of Agriculture and Rural
Development in the development of the maritime space.
Agenția Națională pentru Arii Naturale Protejate, Government department responsible for the development,
(ANANP) National Agency for Protected Natural improvement, management, and conservation of the
Areas country’s fisheries and aquatic resources.
(http://ananp.gov.ro/) Operates under the Ministry of Environment, Water and
Forests.
Politia de frontiera, Romanian Border Police A law enforcement agency responsible for protecting and
(https://www.politiadefrontiera.ro/en/main/ guarding the Romanian border.
home.html)
CERONAV, Romanian Center for the Training and A self-financed public national institution providing marine
Improvement of Naval Transport Personnel training.
(https://www.ceronav.ro/index.html) Linked to the Ministry of Transport and Infrastructure.
Autoritatea Națională de Reglementare în Authority responsible for the regulation of the heating,
domeniul Energiei, Romanian Energy Regulatory electricity and gas markets in Romania.
Authority Role is to issue, approve and monitor the implementation
(https://www.anre.ro/en/) of regulatory framework for the electricity, heat and
natural gas sectors and markets in terms of efficiency,
competition, transparency and consumer protection.
Autoritatea Navală Română, Romanian Naval Authority responsible for enforcing maritime laws,
Authority conducting maritime security operations, safeguarding life
(https://portal.rna.ro/english) and property at sea, and protecting marine environment
and resources,
Operates under the Ministry of Transport and
Infrastructure.
Offtakers and power companies
Electrica Power distribution companies
E.ON
ČEZ Group
Public Power Corporation (PPC), of Greece
Transelectrica Publicly traded (mainly state owned) company responsible
for operating, maintaining, and developing the country’s
state-owned transmission network.
Offshore wind project developers known to have
expressed interest in offshore wind in Romania
Copenhagen Offshore Partners Developer with expressed interest in Romania
European Energy Developer with expressed interest in Romania
158 Offshore Wind Roadmap for Romania
Name Role
Hidroelectrica Developer with expressed interest in Romania
Skyborn renewables (wpd) Developer with expressed interest in Romania
TotalEnergies Developer with expressed interest in Romania
Supply chain businesses known to be active in OSW in Romania.
Damen Operates Mangalia Shipyard
Jan De Nul Globally active installation / EPC contractor with office in
Romania.
Port of Constanța Constanța port has the role of port authority for the
Romanian Ports – Constanța, Midia and Mangalia (and
Tomis Marina).
Prysmian Manufacturer of transmission cable
STX Europe Has two shipyards in Romania
Vard Has ship building facilities on the Danube.
Non-government organizations with relevance or declared interest in offshore wind
Arcadia Focuses on international cooperation and development
Romanian Association for International by providing a neutral space for analysis of development
Cooperation and Development issues and engaging with international partners.
(https://arcadianetwork.org/)
HENRO Energy sector association comprising Hidroelectrica,
(https://henro.ro/) Electrocentrale București, Nuclearelectrica, Romgaz and
Complexul Energetic Oltenia to provide a common voice to
authorities.
Mai Bine Aims to create an inclusive local community that promotes
(https://www.traieste.maibine.org/) environmental protection, social entrepreneurship, fair
trade, civic involvement, and the circular economy through
various activities, events, initiatives, and projects.
Mare Nostrum Focuses on education for sustainable development, marine
(https://www.marenostrum.ro/) and coastal biodiversity conservation and natural resources
management.
REPER 21 Promotes societal responsibility and sustainable
(https://reper21.ro/) development by creating a space for dialogue, creation, and
action.
Romania Wind Energy Association National wind energy association (covering onshore and
(https://rwea.ro/en/) OSW).
WWF Romania WWF Romania is the local chapter of WWF that aims to
(https://wwf.ro/) conserve nature and reduce threats to the diversity of life
on Earth through partnerships.
Academic organizations with relevance or declared interest in offshore wind
Dunărea de Jos University of Galați Currently conducting Project DREAM (Dynamics of the
REsources and technological Advance in harvesting Marine
renewable energy) which involves evaluating the wind
parameters of different European coastal environments
and assessing the expected performances of recent
technologies for harvesting marine renewable energy, as
well as analyzing the synergy of wind with wave and solar
energy and assessing the impact of marine energy farms on
the shoreline dynamics.
Stakeholders 159
Name Role
Danube Delta National Research and Conducts research on wetland ecosystems, biodiversity
Development Institute – INCDDD monitoring, and sustainable use of natural resources. Also
provides feasibility studies and technical input for fisheries
and environmental reconstruction works.
National Research and Development Institute for Focuses on basic research and applied technology related
Marine Research “Grigore Antipa” Constanța to coastal and marine environment management.
Responsible for proposing environmental regulations and
representing Romania in marine science with international
organizations.
Conducts oceanographic surveys and research on marine
aquaculture, marine radioactivity, and the protection and
conservation of marine resources.
National Research-Development Institute for Experience in research in marine geophysical mapping,
Marine Geology and Geoecology - GeoEcoMar ecosystem understanding and natural hazard monitoring.
Bucharest Provides services such as impact studies and environmental
assessments.
Politehnica Bucharest University Managed the Aqua-RET2 project to identify the labor
market needs of the marine renewable sector and develop
innovative training programs to meet those needs.
Plan to help transfer skills to the marine renewables sector
and ensure that training is responsive to labor market
needs.
160 Offshore Wind Roadmap for Romania
APPENDIX A: GLOSSARY
Abbreviation Definition
AEP Annual energy production
ATR Grid connection permit
BP Building permit
CAPEX Capital expenditure
CCS Carbon capture and storage
CfD Contract for difference
CTV Crew transfer vessel
DFI Development finance institution
DSO Distribution system operators
EEZ Exclusive economic zone
ESF Environmental and Social Framework
ESIA Environmental and social impact assessment
ESS Environmental and social standards
FEED Front end engineering and design
FID Final investment decision
FTE Full-time equivalent
GCA Grid Connection Agreement
GEBCO General Bathymetric Chart of the Oceans
GIIP Good international industry practice
GIS Geographical information system
GVA Gross value added
GWA Global wind atlas
GW and GWh Gigawatt and Gigawatt hour
HVDC High voltage direct current
H&S Health and safety
KBA Key Biodiversity Areas
LCOE Levelized cost of energy
LCOH Levelized cost of hydrogen
MDB Multilateral development bank
MFI Multilateral Financing Institution
MSP Marine spatial plan
MW and MWh Megawatt and Megawatt hour
NDC Nationally Determined Contribution
NECP National Energy and Climate Plan
NGO Non-governmental organization
NRRP National Resilience and Recovery Plan
Glossary 161
OMS Operations, maintenance and service
OPEX Operational expenditure
OSS Offshore substations
OSW Offshore wind
PEM Proton Exchange Membrane
PPAs Power purchase agreements
PPPs Public private partnership
RD&D Research, design and development
RE Renewable Energy
SDG Sustainable Development Goal
SEA Strategic environmental assessment
SOE State-owned enterprise
SOLAS Safety of life at sea regulations
SOV Service operation vessel
SPMT Self-propelled modular transport
SVC Static var compensator
TDP Transmission Development Plan
UC Urbanism certificate
WACC Weighted average cost of capital
WCD Works completion date
WDPA World database on protected areas
162 Offshore Wind Roadmap for Romania
APPENDIX B: ORGANIZATION
ABBREVIATIONS
Abbreviation Definition
ACROPO Authority for the Regulation of Offshore Oil Operations in the Black Sea
ANRE The National Energy Regulatory Authority
BVGA BVG Associates
CIF Climate Investment Funds
DTU Danish Technical University
EBRD European Bank for Reconstruction and Development
EIB European Investment Bank
ESMAP Energy Sector Management Assistance Program
EU European Union
GCF the Green Climate Fund
GEF the Global Environment Facility
GWEC Global Wind Energy Council
GWNET Global Women’s Network for the Energy Transition
GWO Global Wind Organization
IFC International Finance Corporation
IRENA International Renewable Energy Agency
ISPE Institute for Power and Engineering
MIGA Multilateral Investment Guarantee Agency
MOE Ministry of Energy
NAMR National Agency for Mineral Resources
NATO North Atlantic Treaty Organization
NBR National Bank of Romania
UNFCCC the United Nations Framework Convention on Climate Change
WBG World Bank Group
Glossary 163
APPENDIX C: CONCEPT STUDY
FOR AN EARLY OFFSHORE WIND
PROJECT IN ROMANIA
1. PURPOSE
This study is intended to complement the content within the Offshore Wind Roadmap for Romania
(referred to throughout as the ‘Roadmap’). The Roadmap provides a high-level strategic assessment of
the potential for offshore wind (OSW) in Romania. This study, however, focuses on a hypothetical OSW
project which is intended to be representative of one of Romania’s early OSW projects. The intention
of this study is to provide the Ministry of Energy (MOE) and other stakeholders with context on the
delivery of an early OSW project in Romania and how these private sector development activities
relate to the public sector recommendations made in the Roadmap.
For the hypothetical OSW project considered in this study, we have assumed a project size of about
300 megawatts (MW), balancing the higher levelized cost of energy (LCOE) cost of a smaller project
with the lower risk. Many projects in other markets are larger to reduce LCOE through economies of
scale and make efficient use of the limits of current electrical equipment. We have chosen an indicative
location, as shown by the star in Roadmap Figure 6.2. The assumptions made in this appendix are
broadly representative of likely sites in Romania.
2. METHOD
To develop the project concept and delivery strategy we carried out:
■ Project plan definition, including description of activities in the development stage.
■ Site initial design based on assumptions and considerations for an early project
■ Balance of plant initial design
■ Installation initial design
■ Operational strategy initial design
■ Levelized cost of energy initial estimation.
This appendix is structured following these six topics, starting with a list of key recommendations that
need to be progressed to enable timely development of early projects.
Further information on OSW project components is available in Guide to an Offshore Wind Farm88.
164 Offshore Wind Roadmap for Romania
3. PREREQUISITES FOR COMMERCIAL DEVELOPMENT
OF AN EARLY PROJECT
When developing OSW projects for the first time in any new market, investors will need sufficient
certainty in the market to encourage them to invest. Early OSW projects, such as described here, will
only progress if various prerequisites to support OSW completed in time. The key prerequisites for
Romania are provided in the following list (these items are the priority recommendations provided in
Roadmap Section 5).
1. The Ministry of Energy (MOE) establishes how OSW fits within Romania’s broader energy strategy,
including through a least cost generation analysis, considering temporal patterns for generation
by onshore wind, solar and OSW.
2. The MOE progresses a proportionate OSW spatial plan, incorporating Strategic Environmental
Assessment in line with Good International Industry Practice (GIIP), involving:
• Sensitivity mapping of environmental and social attributes
• Consideration of avian migration routes to/from the wetlands of the Danube Delta
• Better understanding of the distribution and abundance of cetaceans, and
• The cumulative impact of multiple projects.
This should include focus on engagement with key stakeholders and will result in early designation
of offshore wind energy areas.
3. The MOE and Ministry of Economy include OSW in the next revision of the National Maritime Plan,
formalizing the proportionate OSW spatial plan described above.
4. The MOE introduces a new, clear and investor-friendly OSW law and associated regulation relating
to OSW frameworks, involving other public stakeholders, as required.
5. The Government General Secretariat establishes a one-stop-shop permitting entity in order to
simplify the decision-making process and interface for project developers and enables the use of
digital services for submitting applications and similar.
6. The new permitting entity develops an OSW specific process based on the current permitting
process, also ensuring that it meets GIIP to help de-risk projects and facilitate access to
international finance.
7. Transelectrica develops a 2050 vision for a nationwide electricity transmission network for a
decarbonized energy system, with milestone plans for 2030 and 2040 and consideration of
finance. This is a topic much wider than OSW, considering all electricity, transport and heat,
and should include viability of subsea interconnection between Ukraine, Romania, Bulgaria and
Türkiye and also with Azerbaijan, providing balancing between the relevant states. Transelectrica
incorporates MOE’s OSW development vision into its next ten-year plan, published in 2024, and
considers offshore hubs and the potential impact of international interconnects.
8. Transelectrica undertakes power systems studies to understand the potential impacts of
large volumes OSW on the future transmission network and Environmental and social impact
assessments (ESIAs) in line with GIIP and lender requirements to understand the environmental
and social implications of transmission network upgrades, feeding these into MSP activities.
Concept study for an early offshore wind project in Romania 165
9. Transelectrica, MOE, distribution system operators (DSOs) and other relevant balancing parties
agree a softening of the network management rules to better reflect the probabilistic nature of
variable output renewables, including OSW, whilst remaining with EU regulations.
10. The National Energy Regulatory Authority (ANRE) amends the template grid connection
agreement (and any auxiliary regulations) to incorporate compensation terms in the grid
connection agreement to apply if transmission network reinforcement is delayed and this impacts
export of energy.
The presence of these prerequisites will enable early projects to progress, but further actions, as
described in Roadmap Section 5 are needed to establish a longer-term pipeline of projects.
4. PROJECT PLAN DEFINITION
4.1 Overview of project development and delivery
The development and construction of an OSW project is typically a long and expensive process,
especially when compared with other renewable energy projects like onshore wind and solar PV. In
established OSW markets, it usually takes five to ten years to develop a commercial-scale project
from initial concept to financial close, and a further two to three years to construct it. During the
development phase for this scale of project, a developer is likely to incur between €40 and 70 million of
development expenditure (DevEx).
We have assumed that the example, early OSW project in Romania, described in the following
sections, could be delivered within nine years from the start of the early development activities. If the
Government starts the early development activities in 2023, the project could be operational before
2032. This assumes the Government follows the recommendations in Roadmap Section 5 and that
project development and construction activities follow good industry practices and proceed at a pace
typically witnessed in other markets.
There are expected to be three phases in the development of an OSW project in Romania:
■ Early-stage development (under exploration license)
■ Power purchase competition, and
■ Late-stage development (including construction).
Figure C4.1 shows the major development activities required to deliver this example, early OSW project,
and the timeline for these activities, along with the phases of development. Four milestones are
shown; site exploration license award; award of revenue competition; financial investment decision;
and commercial operations date (COD). For development to progress efficiently, numerous activities
need to be undertaken in parallel – delays in any activity will usually have a subsequent impact on
the progress of another. The typical duration for each of the activities shown in Figure C4.1 is based
on industry norms and good practice. These activities and their purpose are discussed in Appendix C
Sections 4.3 to 4.5.
166 Offshore Wind Roadmap for Romania
FIGURE C4.1 TIMELINE FOR EXAMPLE EARLY OFFSHORE WIND PROJECT xxxiii
A. Early B. Site
Government exploration C. Early stage D. Revenue E. Late-stage development
activity competition development auction /construction
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9
Engineering Wind/metocean survey
Pre-FEED
Technical site surveys
FEED
Geotechnical surveys
Grid System impact study Grid connection agreement
Connection
Strategic environmental Environmental and
assessment social surveys
Permitting ESIA
(incl. ESIA) Application and award of permits
OSW spatial plan OSW added to MSP Final permits
Supply chain planning
Procurement Procurement
and
Construction
Construction
Commercial operation date
Site exploration competition Revenue competition
Site exploration Award
Project license award
Management Bankability discussion with investors
and financing
Financing agreement
Final investment decision
Table C4.1 provides a breakdown of the estimated development and capital costs associated with
the delivery of this example, early OSW project. These estimates are based on typical costs from
other emerging OSW markets and can be highly variable depending on site conditions, environmental
survey requirements, and delays. In this example, around €15million is likely to be spent in the
exploration phase before offtake competition, and about €45 million is likely to be spent in total on all
development activities prior to reaching financial close and commencing construction. There are many
risks related to this expenditure and investors need to reduce and manage those risks through the
development process to provide sufficient certainty to invest more.
The total capital expenditure (CAPEX) for this example 300 MW OSW farm is around €1billion. This is
equivalent to around €3.5 million per MW and is the industry’s typical forecast cost for the latter part
of this decade. The project CAPEX could vary significantly however, due to numerous factors over the
eight year period, but particularly site conditions, program delays, and equipment price fluctuations.
The estimated spend profile for the project throughout its development and construction is
summarized in Figure C4.2.
xxxiii. Note: ESIA = Environmental and social impact assessment; FEED = front-end engineering and design
Concept study for an early offshore wind project in Romania 167
TABLE C4.1 ESTIMATED COSTS TO DEVELOP AND CONSTRUCT AN EXAMPLE 300 MW
OFFSHORE WIND PROJECT
Project spend, rounded (€m) 2025 2026 2027 2028 2029 2030 2031 2032
Power
Early-stage
Stage purchase Late-stage development
development competition
Design 0.5 0.5 0.5 3 0.5
Wind / metocean survey 0.7 0.7 0.7
Technical site surveys 1 2 1 8 8
Environmental and social 1.5 1.5
surveys
Project management /
development team / other 1 2 2 4 4 5 6 7
subcontract
Construction 160 480 280
"Annual development, 5 7 4 15 13 5 6 7
exc. construction"
"Cumulative development, 5 11 16 31 43 48 54 61
exc. construction"
Cumulative, construction only 0 0 0 0 0 160 640 920
Cumulative, total 5 11 16 31 43 208 694 981
FIGURE C4.2 ESTIMATED SPEND PROFILE FOR THE DEVELOPMENT AND DELIVERY
OF AN EXAMPLE EARLY OFFSHORE WIND PROJECT
70 1,000
Cumulative development spend (€m)
60
800
cumulative spend (€m)
Construction and total
50
40 600
30 400
20
200
10
0 0
2025 2026 2027 2028 2029 2030 2031 2032
Development Construction (right scale) Total (right scale)
4.2 Project development team
The size of the core development team is likely to grow from less than 10 at the start of the
development, to around 15 people at the revenue competition stage, and finally 20-30 by the time the
project gets to the construction stage. During the construction stage the size of the team will depend
on the contracting structure chosen but could be as high as 40 people. These numbers only refer to
the dedicated project team and do not include the thousands of third-party staff required at different
times for development, fabrication, and installation activities.
168 Offshore Wind Roadmap for Romania
During the project’s operations phase, the core team would typically comprise about 8 office-based
staff plus 8-10 15 professional service staff plus 20 practical technicians, working double shifts on a
24/7 basis.
4.3 Early-stage development
Early Government activity
In this stage the Government undertakes the necessary early activities to enable a site exploration
competition, including a strategic environmental assessment (SEA) and establishing visions and
targets for OSW and how it fits in with the broader energy strategy.
Activities in this stage includes:
■ Retaining an Independent Engineer and Transaction Advisor to support activities.
■ Establishing potential OSW energy areas based on:
• A SEA using available environmental and social data, and
• An economic analysis based on a basic technical review confirming wind speeds and
geotechnical conditions.
■ Designating either OSW sites or wind energy areas for the site exploration competition.
■ Progressing the OSW law, setting installed capacity targets for OSW in 2030 and 2035, and an
OSW capacity vision to 2035 and beyond.
■ Establishing how OSW fits within the broader energy strategy, including a least cost generation
analysis considering temporal patterns for generation by onshore wind, solar and OSW.
■ Running a site exploration license competition as outlined in Roadmap Section 13.
Early stage development
In this stage the developer(s) awarded the site exploration license carries out a number of early stage
development activities, including carrying out a range of technical, environmental and social surveys,
obtaining a grid connection agreement, applying for and obtaining permits, as well as project design work.
Activities in this stage (see Figure C4.1) include:
■ A preliminary front-end engineering and design (pre-FEED) study.
• Pre-FEED studies are used to develop an outline concept of the project for the purposes of
defining the consent envelope and to inform environmental and social impact assessment.xxxiv
• A pre-FEED study includes development of the project concept including outline definition of
the wind farm design, turbine dimension envelope, foundation options, electrical export system
design, export cable routing, OSS design, grid connection and onshore substation, construction
ports and operational facilities. It goes into greater detail than the conceptual assumptions and
options considered within this high-level report.
xxxiv. The use of a consent envelope, (the principle named the Rochdale Envelope in the UK), provides the ability to permit a project without fixing every detail. This
is important as offshore wind technology continues to progress rapidly compared to project development timelines. The envelope encompasses ranges of technical
characteristics, such as the number of turbines, variations of rotor diameters and blade tip heights, and different foundation types. This means that developers have the
flexibility to make those decisions later on in the project development, but still get the permits needed early on.
Concept study for an early offshore wind project in Romania 169
■ As the project’s development progresses and more data is gathered through technical surveys, the
depth and detail of the design progresses. The pre-FEED study is developed into a full FEED study
which contains far more analysis than the outline, conceptual design in the pre-FEED work. This
FEED study will be continually refined through the development process and then will be deepened
even further in the post-PPA award development phase, as the final design is completed.
■ Technical surveys including wind resource, metocean, geological and hydrographical data
collection campaigns.
• Wind resource and metocean assessment is carried out to provide atmospheric and
oceanographic datasets to inform the engineering design of a wind farm, potential future energy
production, and to fully define the operating conditions at the proposed wind farm location.
• OSW resource data collection campaigns will typically utilize vertical profiling wind lidars
(Light Detection and Ranging). Lidars are remote sensing devices that use lasers to measure
wind speed and direction up to 250m above sea level. Lidars can be installed on floating
buoys or on fixed platforms. Good International Industry Practice (GIIP) is to collect at least
two years of wind resource data for the purposes of establishing a robust understanding
of the site wind resource to inform subsequent project finance evaluation and engineering
design activities.
• Typically, a measure-correlate-predict (MCP) process is used to predict long-term wind
resource. This combines on-site measurement over a small number of years with long-term
datasets from nearby. Some developers may choose to continue data collection until on-site
construction starts. Actual developer choices will depend on confidence of investors in the
certainty of wind resource. For each site, there becomes a point where the cost of further
investment in resource measurement outweighs the benefits due to reduction in uncertainty.
For early projects in Romania, this point may be later than in established OSW markets
which often have long-term datasets to correlate with.
• Metocean surveys are used to measure the wave and tidal conditions at the project location. The
data is used to inform foundation design and operational vessel selection. Metocean sensors
include wave, sea level and current sensors (for example acoustic Doppler current profiler). These
can sometimes be sea bed-positioned or located on floating buoys, including integration with
floating Lidars. These will record the full wave data spectrum including velocity, direction and
period. Multiple sensors are used to provide spatial coverage and redundancy.
• Geological seabed surveys analyze the seabed of the proposed wind farm site and export cable
route to assess its geological condition and engineering characteristics. The data collected is
utilized in a wide range of engineering and environmental studies. They consist of geophysical
and geotechnical surveys.
• Geophysical surveys establish sea floor bathymetry, seabed features, water depth and
soil stratigraphy, as well as identifying hazardous areas on the seafloor and risks such as
unexploded ordnance (UXO). Geophysical surveys are non-intrusive and include remote sensing
techniques such as seismic methods, echo sounding and magnetometry. The techniques used
consist of bathymetry (water depth) mapping with conventional single or multibeam echo
soundings or swathe bathymetry, sea floor mapping with side scan sonar, magnetometer for
UXO, acoustic seismic profiling methods and high-resolution digital surveys. Surveys run along
transects across zones within the proposed wind farm site and cable routes.
• Hydrographic surveys examine the impact of the wind farm development on local sedimentation
and coastal processes, such as erosion. They are often part of geophysical surveys. Such
170 Offshore Wind Roadmap for Romania
surveys are also repeated by the project developer as part of the post construction monitoring
during the operations phase.
■ Financing strategy development, including discussions with lenders to ensure bankability and on
high-level, indicative terms (needed to inform the bid price for the revenue auction). It is possible to
reduce the cost of finance though reducing risk at all stages of activity.
• Environmental, social, and technical studies (both onshore and offshore) including; baseline
bird, habitat and marine mammal surveys; social studies including, socioeconomics, fishing,
archaeology, cultural heritage, and visual impact assessment; and technical studies including
marine navigation.
• Environmental studies are undertaken by specialists with expertise in local habitats and
species. Survey vessels and aircraft are used to collect the data. Surveys look at the
distribution, density, diversity and number of different species.
• GIIP is to collect two years of data covering consecutive species breeding and migration
seasons. This data will be required for input into the pre-FEED and environmental and social
impact assessment (ESIA).
• Social studies assess the impact that a proposed wind farm may have on the community living
in and around the coastal area near the wind farm. These studies should particularly investigate
the potential for adverse impacts on livelihoods, cultural heritage, tourism, recreation, and
vulnerable communities.
• Marine navigation studies are undertaken by specialist contractors. Baseline data on existing
marine traffic in and around the proposed wind farm are compiled from existing records, usually
obtained from automatic identification systems installed on most medium and large sea going
vessels. The potential impact of the wind farm on marine traffic is assessed and restricted
areas identified.
• Socio-economic studies assess the impacts of a wind farm or coastal infrastructure, for
example a port, such as changes in employment, transportation or recreation, or changes in the
aesthetic value of a landscape. It estimates the impacts on the local society, not only of these
socio-economic changes, but also of the composite of biological, geological, and physical effects
caused by the proposed change on the local area. Socio-economic studies include a mix of
objective and subjective data. Objective data can include statistics on age, income distribution,
ethnicity, mortality, housing type and occupancy, and education. Subjective data can be
derived from surveys and observations. These are used to provide systematic estimates of the
ways in which various groups perceive their socio-economic environment and thus the impact of
the proposed change. Studies also consider the onshore cable route and substation.
• Fishing studies consider the impact of the proposed wind farm on artisanal and commercial
fishing areas. They involve consultation with local fishing stakeholders and identify areas of
restriction and mitigation measures.
• Archaeology studies are carried out by specialist contractors who identify areas of
archaeological sensitivity that might be impacted by the onshore and OSW farm infrastructure.
Areas of restriction and mitigation measures are identified.
• Visual assessments comprise of photomontages from specific viewpoints of what the proposed
wind farm and associated infrastructure will look like. These are used to inform consultation
exercises with relevant stakeholders including covering defense, environmental, fisheries, local
communities, tourism and transport considerations.
Concept study for an early offshore wind project in Romania 171
■ An ESIA, which will be used to secure the permits prior to the revenue auction.
• The preliminary ESIA will assess the potential impact of the proposed development on
the physical, biological and human environment during the construction, operation and
decommissioning of the example early OSW project.
• After assessing the potential impacts, mitigation measures are defined and applied to
determine the residual effects associated with the development. A core part of the ESIA is the
cumulative impact assessment (CIA) where the impacts of the example early OSW project are
combined with those impacts from other OSW projects are assessed.
• Consultation with statutory consultees, special interest groups and the local community is
performed throughout the ESIA process and allows the consenting authority as well as other
stakeholders and the public to voice their opinion.
4.4 Power purchase competition
In this stage the Government makes the data collected in the previous stage available and runs a
revenue auction. Activities in this stage includes:
■ Opening a data room of all the data from the early stage development work.
■ Running an auction among pre-qualified companies and selects winners for each site.
■ This requires bidders to carry out project planning and costing, based on a sourcing strategy,
which includes consideration of:
• How products and services are purchased, with the most common broad strategies being via:
• Wide engineer, procure, construct and install (EPCI) contracts, where a few, large contracts
are placed, each for an end-to-end scope of supply, or
• Multi-contracting, where the project developer takes a more involved role managing different
contracts for supply and installation of different itemsxxxv.
• What forms of relationship are established, typically then linking to what forms of contract are
used, with a range of combinations available, covering:
• Long-term relationships, with incentives to reduce cost / add value, and potentially share
benefits of successful delivery, through to
• Single-project relationships driven by short-term least cost / best value, with only penalties
for late/poor delivery.
• Health and safety (H&S) requirements for the project, as Romania does not currently have any
H&S regulation in place specifically for the OSW industry. There requirements should be in line
with international regulations, standards, and guidelines, as well as national standards and
regulations where applicable.
■ The winner(s) compensates the site exploration consortia where applicable.
■ If any of the sites do not proceed beyond this point, then the Government compensates site
exploration consortium.
xxxv. For more information about contracting strategies, see https://guidetoanoffshorewindfarm.com/procurement-structures#.
172 Offshore Wind Roadmap for Romania
4.5 Late-stage development
Development and commercial stage
The aim of this stage of activity is for the developer to finalize the detailed design of the example
early OSW project, to secure all remaining permits, reach a final investment decision (FID), finalize
procurement, and construct the project.
Activities in this phase of work include:
■ Completion of the environmental and technical surveys, including detailed site specific
geotechnical surveys, to inform detailed design activities
• Geotechnical site investigations are conducted to determine soil/rock strata boundaries and
engineering properties or specific sea floor features. Geotechnical studies are predominantly
intrusive and include such methods as boreholes with soil/rock sampling, and cone penetration
testing (CPT).
• Geotechnical surveys require specialized equipment and skilled personnel. The scope of
the investigation depends on the type of foundation being considered and the variability in
the seabed characteristics. Boreholes and CPTs to depths of up to 70m are carried out to
investigate the physical characteristics of the seabed. Surface push CPTs are also used as a
rapid method to gather sea bed soil stratigraphy.
■ Finalization of design activities
■ Securing final permits and grid connection agreement
■ Completion of turbine and balance of plant procurement
■ Securing financing agreement and reaching FID, and
■ Project construction.
5. SITE INITIAL DESIGN
5.1 Preliminary project concept
To establish key parameters for this early example project, we considered likely typical conditions in
Romania, as discussed in Roadmap Section 6, technology likely to be available in the market at the
time of procurement, and international good practice. In practice, a developer would establish these
parameters in the site exploration phase.
The key parameters of the early example project are listed in Table C5.1. A large-scale project is chosen
in order to provide economies of scale and reduce levelized cost of energy (LCOE) to levels competitive
with other forms of generation.
Concept study for an early offshore wind project in Romania 173
TABLE C5.1 KEY PARAMETERS OF THE EARLY PROJECT BASED ON SITE ASSUMPTIONS
Parameter Units Value Notes
This capacity likely covers an area of approximately 70 km2
and incorporates 19 turbines with a capacity of 16 MW each.
Project capacity MW About 300
Electrical connections are based on the use of a standard HV
transformer on a single offshore substation.
Commercial
operation date 2032
(COD) Fastest anticipated timing.
Final investment
2029
decision (FID)
Expected largest turbine available in the market when turbine
Turbine rating MW 16 needs to be selected, as discussed in Roadmap Section 7.
Typically, the largest turbines available offer the lowest LCOE.
Anticipated rotor size for 16 MW turbine, as used in the
modelling in Roadmap Section 7 and typical of products
Rotor diameter m 256
anticipated being available in the market, without matching
any particular product announced to date.
Mean wind speed Typical for anticipated Romanian sites and consistent with
m/s 7.6
(100m height) starred location in Roadmap Figure 6.2.
Typical for anticipated Romanian sites and consistent with
Mean water depth m 50
starred location in Roadmap Figure 6.2.
Geology/seabed
Sand/mud assumed suitable for use of monopiles.
characteristic
Offshore export Typical for anticipated Romanian sites and consistent with
km 80
distance starred location in Roadmap Figure 6.2.
Onshore cable
km 20 Arbitrary choice, as no specific connection point assessed.
distance
Transmission
HVAC Single small OSS is required.
technology
Distance from Typical for anticipated Romanian sites and consistent with
km 80
construction port starred location in Roadmap Figure 6.2.
Distance from Typical for anticipated Romanian sites and consistent with
km 80
operations port starred location in Roadmap Figure 6.2.
5.2 Layout
With the prevailing wind direction for Romania being from the north east, the turbines are assumed to
generally face in a north easterly direction. Based on typical industry ‘rules of thumb’, two preliminary
layouts are shown in Figure C5.1.xxxvi The turbine locations are shown in black, array cables and
offshore substation (OSS) in red and prevailing wind direction in blue. A multi-row, radial string
topology for array cables is the most appropriate and is similar to that adopted for many operational
wind farms worldwide. There are numerous alternative array topologies that could be investigated
and selected at the FEED stage, based on the site constraints for which algorithms can be applied to
optimize LCOE.
xxxvi. The spacing will depend on detailed modelling of aerodynamic wake effects and techno-economic optimisation of lifetime cost and energy production. From
assessment of operating projects, typical turbine spacing is nine rotor diameters (downwind of the prevailing wind direction, assuming that there is one) and six rotor
diameters (across-wind), as stated in Roadmap Section 10.
174 Offshore Wind Roadmap for Romania
FIGURE C5.1 PRELIMINARY LAYOUT OF EXAMPLES FOR EARLY PROJECT
AT A GENERIC LOCATION
5.3 Turbine selection
The selection of the turbine size and technology is a critical decision for any proposed OSW project and
will not only be based on LCOE, but also a variety of other factors including:xxxvii
■ The availability and track record of specific wind turbine models available to Romania
■ The wind turbine supplier capability
■ The suitability of the turbine for the prevailing conditions
■ The track record of the supplier
■ The general reliability of the machines
■ The SCADA system capabilities for the wind turbine
■ The progress with certification for new models, and
■ The operational phase support arrangements potentially offered by the suppliers.
Generally, the larger the capacity of the wind turbine, the lower the LCOE due to lower per MW costs
for many elements and higher energy production due to higher turbine hub height.
Site mean wind speed
The site mean wind speed is lower than for typical sites in established OSW markets, meaning the
energy production (and hence capacity factor) is lower, as shown in Roadmap Table 7.3.
Typically, projects at lower-wind sites will use a turbine with a lower specific rating (ratio of rated power
to rotor swept area, W/m2). In other words, for a turbine of given rating, with a larger rotor diameter to
capture more energy during the time when the turbine is operating at below its rated power.
xxxvii. For more information about turbines, see https://guidetoanoffshorewindfarm.com/guide#T.
Concept study for an early offshore wind project in Romania 175
In onshore wind, turbine suppliers offer a range of turbines of similar scale with a range of specific
ratings to suit a wide range of sites. These are described according to international standard IEC-
61400. IEC wind Class I turbines are designed for the highest wind sites and Class IV for the lowest.
In OSW, as the global market size currently is smaller, and the range of mean wind speeds on viable
sites is smaller, turbine suppliers have yet to offer such a range. Currently, almost all OSW turbine
suppliers offer products to IEC wind Class I. Towards the end of the 2020s or into the 2030s, more
wind turbine suppliers are likely to offer offshore turbines more suited to lower wind sites such as those
in Romania. If this does not happen, then it may be that smaller turbines (of scale 5 to 7 MW) designed
for onshore lower-wind sites may offer a lower LCOE solution than the use of larger turbines optimized
for higher wind sites.
6. BALANCE OF PLANT INITIAL DESIGN
6.1 Turbine foundations
The mean water depth for the example early project site is 50 m. project developers expect to use
monopiles for such depths with the chosen scale of turbines, with jacket foundations sometimes
being preferred.
The choice of foundations depends on a number of factors other than water depth, such as the
geological conditions, environmental considerations, the local manufacturing and installation supply
chain, equipment and experience in the region. An early task undertaken in the site exploration phase,
therefore, would be a foundation option assessment.
Assuming the loading characteristics for a typical 16 MW wind turbine, a 90 to 100 m long monopile
with a diameter of 11-12 m is estimated for the example early project. With an average steel thickness
of 110 to 120 mm, this equates to a mass of about 2,700 tonnes of steel per foundation, including the
transition piece connection to the wind turbine. The actual embedment length, diameter and thickness
of the monopile will depend upon the hydrodynamic loading and soil conditions at each turbine location
and will be calculated at a later stage of project design once more site data is gathered.
6.2 Array cables
The example OSW farm comprises 19 turbines, each of 16 MW capacity. It is normal practice to
connect several turbines into cable ‘strings’, with up to five turbines in each ‘string’ when considering
turbines of this size and the standard array system rating of 66kV alternating current (AC).
For the example early project, an 800 mm2 copper cablexxxviii is assumed as it is commonly available
and widely used under most environmental and installation conditions. At a depth of 2 m below
seabed, this cable has a current rating of 815 A and comfortably accommodates about 80 MW
capacity at 66 kV, when considering a worst-case scenario of 0.95 pu voltage and 0.95 power factor.
For this higher voltage, less array cable is needed to transmit the power to the offshore substation.
Based on an 800 mm2 copper array cable, five 16 MW wind turbines will be included in each string and
there will be 4 strings required to achieve 300 MW. Cable sizing will vary along the strings, reducing in
steps from 800 mm2.
xxxviii. Note, cables contain three conductor cores. The total cross section area of these three cores is 800mm2.
176 Offshore Wind Roadmap for Romania
The cable construction for the wind farm is assumed to be a wet-type design, though other designs
exist.xxxix The three conductor cores can be made from either copper or aluminum. Cable suppliers
provide designs based on specifications.
It should be noted that further optimization would be required based on power systems studies into
the voltage drop and considering distance to connection, amperage, and capacity to determine the
most suitable array cable arrangement.
6.3 Offshore substation and export cable
The OSS collects power from the wind farm via the array cables from the wind turbines and
transforms it to a higher voltage for transmission to the onshore substation via subsea export cables.
The export at higher voltage reduces losses in the export system and is therefore more important the
further offshore the wind farm is located. For most OSW farms, an AC connection offers the most
reliable and cost-effective option for transmission and this is therefore assumed for the early example
site. Only at distances to the point of grid connection of 60 km and above might direct current (DC)
solutions be more cost effective.
The choice of OSS transformer is a question of a trade-off between cost and redundancy and as
such benefits from a cost benefit analysis at a later stage in the project development process.
Generally, power transformers are naturally cooled, ester oil filled units, which removes fire suppression
equipment requirements. For a 300 MW project, a single 450 MVA transformers may be used.
An OSS typically is purpose-designed for each project. Typical OSS platforms are multi-deck
structures which provide redundancy in electrical systems and also offer control rooms and facilities
for the wider wind farm, although simple facilities are possible to reduce initial costs.
Both monopiles and jackets can be used for OSS foundations, depending on the seabed conditions. For
the early example project it is assumed a locally manufactured jacket foundation would be used.
Subsea export cables
Export subsea cable is generally three-core copper cable and analysis is typically based on one thermally
isolated cable circuit with a seabed/ground temperature of 20oC and laying at a depth of 2 m into a
soil with a thermal resistivity of 0.8 km/W. For a 300 MW project, the maximum current at 230 kV AC
equates to circa 835 A considering a scenario of 0.95 Vpu and 0.95 pu power factor. At this rating, a
1600mm2 (per core) cable will be sufficient. Designs are finalized at a later stage of project design.
Onshore export cables and onshore substation
The onshore export cable is typically single core and will need to be incorporated between the landfall
and the onshore substation. The maximum currents for the onshore cables are the same as the
offshore cables.
It is expected to operate the export system within the range of ±0.95 power factor, possibly through
actively contributing to voltage control within this range. There are many reactive compensation
methods, but generally fixed compensation reactors will be provided to compensate for the cable
xxxix. For more information about cables, see https://guidetoanoffshorewindfarm.com/guide#B_1.
Concept study for an early offshore wind project in Romania 177
capacitance and a static synchronous compensator (statcom) or similar device will be utilized to
provide the full reactive range at the onshore substation. This reactive compensator can also be
located offshore if there is a benefit to do so. A detailed study needs to be undertaken, but for a wind
farm of 300 MW capacity a reactive compensator circa 150-200 MVAr can be anticipated.
The harmonic performance requirement will also need to be studied. If required, the harmonic
mitigation measure is usually in the form of an AC harmonic filter, which can be located within either
the offshore or onshore substation.
Onshore grid connection
The factors that need to be considered with onshore grid connections, and their potential impact on
the project are shown in Table C6.1.
TABLE C6.1 ONSHORE SUBSTATION CONSIDERATIONS
Issue Consideration Impact
Fault levels Fault level at substation may not allow for Busbar and equipment uprating may be
connection. required leading to additional costs.
Available Number of required spare bays may not be May require additional land purchase
bays available within the building or there may not if available for substation extension to
be sufficient space for busbar extension for accommodate the infeed bays and additional
transformers. equipment.
Harmonic filters and reactive compensation
may also be required which might require
further bays and space considerations
Network Aside from local constraints (such as site fault Reactive compensation such mechanically
constraints levels), power systems studies may reveal switched capacitors (MSCs) and shunt
wider network constraints such as voltage reactors may be required on site; static
or thermal issues which could require further var compensators (SVCs) or synchronous
network upgrades compensation may be required for voltage
issues.
Additional circuits or quadrature boosters may
be required to address thermal issues.
Cable Cable routing consideration at the landfall Cable routes determined by geotechnical
Landfall site will need to be assessed with respect to considerations – such as the requirement
the geotechnical, environmental and social for horizontal drilling – will have to balance
constraints. cost (drilling vs longer routes) and potential
environmental and social impacts.
7. INSTALLATION INITIAL DESIGN
Transportation and installation plans are required for the wind turbine, foundations, OSS, and cables.xl
The following initial design solutions are for monopile turbine foundations and jacket OSS foundation.
It is anticipated that the installation sequence will be all foundations and substations, then cabling and
finally turbines, using ports as follows:
■ Use of a single construction port, where all components are pre-assembled ready for installation.
xl. For more information on installation, see https://guidetoanoffshorewindfarm.com/guide#I.
178 Offshore Wind Roadmap for Romania
■ Tower manufacture in another port, with towers transported to the construction port for loading
with other imported turbine components such as blades and nacelles.
■ OSS topside fabricated and assembled in another port and transported to site from there.
7.1 Turbine monopile installation
Monopiles are assumed to be installed using a dynamically positioned floating vessel (that is kept in
position and stabilized by water thrusters during the lift), but a jack-up vessel (with legs placed on
the seabed to stabilize the vessel) can also be used. Once the vessel is in position, the monopile will be
moved into position using the main crane and upending tool and held in position by a gripper tool. It
will then be driven into the seabed using a hammer and anvil system, potentially using a relevant noise
suppression system to reduce environmental impact, before mounting a transition piece onto the top
of each monopile.
Transition pieces are assumed to be carried and installed by the same vessel, although a two-vessel
strategy in which transition pieces are installed by a separate vessel can be used. This focuses the
utilization of the monopile installation vessel, which is likely to have higher day rate costs than a vessel
used to install the transition pieces. A disadvantage of this approach is the additional cost of mobilizing
and demobilizing two vessels, rather than using a single vessel for both activities.
Feeder strategies have also been used for monopiles, particularly when main crane vessels have little
deck space for transporting components. In this case, the monopiles are floated to site using tugs or
transported using platform supply vessels.
The approximate timetable for the installation of each monopile foundation once at the wind farm site is:
■ Transport and positioning of installation vessel: 2 hours
■ Preparations: 1 hour
■ Lifting and pile positioning: 1 hour
■ Pile driving: 6 hours, and
■ Transition piece fitting: 2 hours.
The full cycle time is likely to be about 2 days per monopile; a figure that considers mobilization
and demobilization, loading and waiting on weather. The wave and wind conditions at the site will
dictate the construction activities that can be undertaken. If wave heights or wind speeds are too
high, construction work cannot proceed, and the installation teams need to wait for the conditions to
improve before they can continue.
Under some ground conditions with a rocky seabed, monopiles are grouted into a pre-drilled rock
socket. Where a seabed features sand and boulders, a combination of drilling and pile driving is often
required. An example of a jack-up monopile installation vessel is shown in Figure C7.1.
Concept study for an early offshore wind project in Romania 179
FIGURE C7.1 EXAMPLE MONOPILE FOUNDATION INSTALLATION VESSEL
Source: Courtesy of Jan de Nul.
7.2 Offshore substation installation
The OSS foundation is installed prior to the topside structure.
OSS installation is a heavy lift operation (about 1,500 tonnes). Vessels with the necessary lift capacity
typically do not have the deck space to accommodate a substation platform. The substation is
therefore floated out of the substation fabrication port on a barge, usually directly to the wind farm
site. Figure C7.2 shows a single vessel solution.
Alternatively, a “float over” technique can be used. The topside is fully constructed at port, transferred to
a barge, floated out to site where the jacket foundation has been pre-installed, then lowered into place.
FIGURE C7.2 EXAMPLE SUBSTATION INSTALLATION VESSEL
Source: Courtesy of ScottishPower Renewables.
180 Offshore Wind Roadmap for Romania
7.3 Cable installation
In most offshore markets, cables are installed using specialist cable lay vessels (CLVs), as shown in
Figure C7.3.
FIGURE C7.3 EXAMPLE CABLE-LAYING VESSEL
Source: Courtesy of DeepOcean.
Array cable installation is completed in the following stages:
■ Deployment of pull-in, termination and testing equipment on the turbines and OSS
■ Pre-lay inspection for each cable run
■ Between each pair of end points (turbine to turbine, turbine to OSS, or OSS to shore), 1st end
pull-in, cable lay and 2nd end pull-in, followed by termination and testing
■ As-built survey, and
■ Recovery of pull-in, termination and testing equipment.
The process for cable lay will depend on geotechnical survey results and will involve:
■ Trenching, via:
■ Pre-lay trenching, then cable lay into the trench, with post-lay backfill
■ Simultaneous lay and burial, or
■ Post-lay trenching, where cable is placed on the seabed before trenching and burial.
■ Or surface lay with post-lay artificial covering, via a combination of rock/rubble dump, concrete
mattresses, metal framing, or a cable protection system.
Based on initial work, we expect that the seabed conditions at the early example site will allow for
simultaneous lay and burial. An example cable plough, used to simultaneously lay and bury a cable, is
shown in Figure C7.4.
Export cables are laid by the export cable lay contractor, moving away from the landing point, leaving
sufficient cable on the landing point for another contractor (or a sub-contractor to the export cable lay
Concept study for an early offshore wind project in Romania 181
contractor) to bury it in an open cut trench up to the joint chamber onshore. In cases where the landing
point has rocky terrain or cliff, or to avoid specific environmental or social sensitivities, the horizontal
direction drilling (HDD) method may be adopted.
FIGURE C7.4 EXAMPLE CABLE PLOUGH
Source: Courtesy of Royal IHC.
7.4 Wind turbine installation
Offshore turbine installation is undertaken by purpose-built OSW jack-up vessels due to the need
for a stable platform to perform offshore lifting operations and mating of components at height.
Installation methods vary depending on the turbine supplier and the relative size of turbine and vessel.
Installation methodologies aim to reduce, as far as practical, offshore operations. An example turbine
installation vessel is shown in Figure C7.5.
The installation of a turbine from positioning the vessel at a given foundation to departure takes about
24 hours, depending on location and weather conditions. The cycle time is between 1.5 and 4 days,
depending on the project (factoring in mobilization, demobilization, loading and waiting on weather).
A constraint during transportation and installation is the acceleration limit defined by the turbine
supplier to avoid damaging the turbines and invalidating warranties. This is typically about 0.5 g
(approximately 4.9 m/s2).
Blade installation is constrained not only by the operating range of the vessel but also the wind speeds,
and the limit has been gradually increased with innovations in blade lifting equipment. The current
maximum is normally 13m/s at hub height and any increases beyond this may be limited by health and
safety risks.
It is expected that tower sections are preassembled onshore with any internal components and the
completed structure is transported vertically to site for installation, where it is lifted and secured in position.
The most common remaining process is to lift and place the nacelle plus hub on the tower then lift
individual blades to mate with the hub, turning the rotor each time to repeat the same lift three times.
See Roadmap Section 17 for discussion of access to the Black Sea for OSW jack-up vessels.
182 Offshore Wind Roadmap for Romania
FIGURE C7.5 EXAMPLE TURBINE INSTALLATION VESSEL
Source: Courtesy of Seajacks.
8. OPERATIONAL STRATEGY INITIAL DESIGN
8.1 Operations, maintenance and service contracting strategy
For an early project in a new market, we assume an approach to lower developer risk through a
medium-term warranty and service agreement with the wind turbine supplier for the turbines, and
a similar approach to the operations, maintenance and service (OMS) for the balance of plant (BoP),
including the foundations, array cables and export cables.xli
xli. For more information on OMS, see https://guidetoanoffshorewindfarm.com/guide#O.
Concept study for an early offshore wind project in Romania 183
Crucial to the long-term strategy for OSW in Romania will be the transference of skills and increase in
local industry-specific expertise in these areas.
8.2 Operations base and logistics
It is most likely that the operational base will be in the same area as the construction base. The
requirements for an operations base are much less than those required for manufacturing and
installation. Aspects to consider for the operations base include:
■ Land lease costs
■ Indoor facilities (200-400 m2 required)
■ Indoor warehouse facilities (300-800 m2 required)
■ Outdoor storage space (800-1500 m2 required)
■ Parking space (500-1000 m2 required)
■ Vessel birthing space
Vessel strategy is strongly influenced by the choice of port. The final decision on this will require
detailed modelling of weather risk and port upgrade costs to find the optimal solution. Initial analysis
suggests the use of a service operation vessel (SOV), though these are normally used on larger
projects. An SOV only needs to visit port every two weeks, so distance of the port to the project is less
important than if crew transfer vessels (CTVs) were being used, as these return to port each day.
SOVs are typically 10 to 20 times the cost (€/vessel/day) of CTVs , but they support larger numbers
of technicians and can facilitate 24-hour working using shift patterns. An example SOV is shown in
Figure C8.1.
FIGURE C8.1 EXAMPLE SERVICE OPERATION VESSEL
Source: Courtesy of Esvagt.
184 Offshore Wind Roadmap for Romania
9. LEVELIZED COST OF ENERGY INITIAL ESTIMATE
Based on the information presented in Roadmap Section 7, adjusted for smaller project size, the
estimated breakdown of costs for the early example project are as shown in Table C9.1. These figures
are based on expectations of typical future industry prices and engineering judgement rather than
site-specific designs and industry quotations. These estimates, therefore, should be considered as
having a high degree of uncertainty and will only become more accurate once site-specific information
is available and engineering analysis is undertaken.
Assuming a 30 year life and contingency, insurance and decommissioning impact as discussed in
Roadmap Table 7.4xlii, the estimated LCOE is €97 /MWh, in 2023 terms. See Roadmap Section 7 for a
discussion of the sensitivity to key parameters and the potential impact on LCOE.
TABLE C9.1 SUMMARY OF EXAMPLE EARLY OFFSHORE WIND PROJECT COST ESTIMATES
Type Element Value Unit
Development (DEVEX) Development 61 € million
Turbines 484 € million
Foundations 168 € million
Array cables 16 € million
Installation of generating assets 70 € million
Capital expenditure (CAPEX)
Offshore substation 94 € million
Export cables 118 € million
Installation of transmission assets 33 € million
Total CAPEX 8 € million
Operation and planned maintenance 9 € million/year
Operational expenditure (OPEX)
Unplanned service 61 € million/year
Financing Cost Weighted average cost of capital (WACC) 6.0xliii %
Net annual energy productionxliv 1,051 GWh/year
Capacity factor Net capacity factorxlv 40 %
xlii. The construction contingency budget will depend on the site characteristics, the installation methods chosen, supplier experience, contractual terms with key suppliers,
insurance terms and approach to risk. We have assumed that only part of that contingency budget is actually spent. We have assumed that €70 million is spent on
construction insurance and from the contingency budget (about 7% of CAPEX). Decommissioning is assumed to cost about 60% of installation cost, but this is highly
dependent on how the market progresses up to, and beyond 2050. It excludes any residual value from materials removed from the wind farm, due to uncertainty in future
recycling / reuse value.
xliii. See under Roadmap Table 7.3 for derivation of this WACC. It is considered as an optimistic scenario, assuming substantial risk reduction measures are implemented by
different government departments, lower-cost international finance is used and blended with concessional finance sources to further reduce the cost of capital. The typical
WACC for an early project in an emerging offshore wind market could be 8% or higher without these measures to reduce the WACC. A higher WACC would result in a higher
LCOE.
xliv. Net annual energy production includes losses due to:
• Aerodynamic array losses
• Wind farm blockage effect
• Electrical array losses
• Losses due to unavailability of the wind turbines, foundations and array cables
• Losses from cut-in/cut-out hysteresis, power curve degradation, and power performance loss.
xlv. Note that this capacity factor is lower than typically seen in established OSW markets, due to lower wind resource, but higher than in Roadmap Table 7.3 due to reduced
wake effects for a smaller project.
Concept study for an early offshore wind project in Romania 185
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