Emerging Solar & Energy Markets in Central and Eastern Europe: Resurgence, Financing, and Expansion - Edition as of May 15

Welcome to our latest newsletter, where we spotlight the dynamic growth and transformative developments in the energy sector across Central and Eastern Europe (CEE).

Romania's Solar Sector Emerges from Stagnation: Favi Stelian, CEO of Nofar Energy's Romanian subsidiary, shares his optimism about the rebound of Romania's solar power industry. Despite previous legislative and infrastructure challenges, Stelian expects a vibrant future for the solar sector, largely independent of government subsidies.

Green Energy Financing Opportunities in Romania: According to McKinsey & Company Romania, the country's green energy market could exceed €30 billion ($32.9 billion) by 2040, including a €20 billion financing gap that banks can address. This prediction creates a robust opportunity for financial institutions to aid in the green energy transition.

Romania's Position as Net Electricity Exporter in Q1 2023: Romania has become a net exporter of electricity in Q1 2023, thanks to increased production from renewable sources and a decrease in consumption. This shift towards renewable energy has positioned Romania positively in the European energy market.

Ameresco and Sunel Group Collaboration: Renewable energy developer Ameresco and EPC contractor Sunel Group have partnered to bid on 1.5GWp of solar and energy storage projects across Europe, including in Romania. This partnership is expected to expedite utility-scale renewable generation.

Romania's First-Ever Secondary Regulations for Energy Storage Deployment: The Romanian government has released secondary regulations to facilitate energy storage deployment. This will significantly boost renewable energy production, and encourage further investments in energy storage systems.

Varta's Growth in Energy Storage Systems: Despite global crises, Varta AG has seen robust growth in its Energy Storage Systems segment. This growth demonstrates the resilience and potential of the energy storage market in challenging times.

Solar MD's Expansion into Bulgaria: South African battery manufacturer Solar MD has opened a new LiFePO4 Energy Storage Manufacturing Facility in Ruse, Bulgaria. This expansion is a significant step for Solar MD, demonstrating the potential for cross-regional collaboration and growth in the energy storage sector.

For a more detailed account of these developments, subscribe to our newsletter and stay updated on the evolving landscape of solar and energy markets in Central and Eastern Europe.

Save the date: This year's CISOLAR 2023 and IBES 2023 conferences and trade show, the two most important business events for the emerging CEE markets of solar and energy storage, will be held on October 30-31 in Bucharest, Romania. Add these key dates to your calendar, and join us in shaping the future of renewable energy in the region!

From Stagnation to Resurgence: The Transformation of Romania's Solar Sector

In an interview, Favi Stelian, CEO of Israeli renewable energy firm Nofar Energy's Romanian subsidiary, shared his optimism about the resurgence of Romania's solar power industry. The once-stagnated market due to a reduction in incentives is now seen as a prime investment opportunity. Despite legislative and infrastructure challenges, Stelian believes Romania's solar sector has evolved into a viable business independent of government subsidies. He also expects increased competition as the industry matures, with the entry of more prominent energy multinationals.

• Nofar Energy, an Israeli renewable energy company, is betting on Romania's underdeveloped solar market with a portfolio of over 600 megawatts.
• Stelian considers the incomplete solar legislation and limited grid infrastructure as challenges, but believes they can be overcome by being an early developer in the market.
• The CEO is confident about the sector's longevity, emphasizing that the market dynamics have changed significantly from a decade ago, and the industry's survival no longer relies on government subsidies.
• Despite potential hurdles such as rising interest rates or land restrictions, Stelian sees these as part of the business landscape and anticipates that they will not hinder long-term progress.
• Stelian expects increased competition in the Romanian solar sector as larger companies enter the market, but believes there is enough space for serious developers who can deliver on their promises.

Source: https://www.fdiintelligence.com/content/news/romanian-solar-is-now-a-business-82485

McKinsey Forecasts €20 Billion in Bank Financing Opportunities for Green Energy in Romania

According to management consultancy McKinsey & Company Romania, the country's green energy market, including solar panels, heat pumps, and insulation solutions, could potentially exceed €30 billion ($32.9 billion) by 2040. This includes a €20 billion financing deficit that banks can cover. At present, the Romanian state primarily supports solar panel acquisition and installation through a €300 million subsidy via its Green House program, and is considering additional financing options up to €250 million under the EU’s RePowerEU program.

The average cost for photovoltaic (PV) panel installation in Romania varies from €1,200 to €1,400 per kW, and can go up to €15,000 for larger projects. The Green House state program allows prosumers to recoup their investments in about three years, or six years without state support.

McKinsey suggests banks can bridge the financing gap via tailored loans since the current offers—high-interest consumer loans with up to 5-year maturities—do not meet the personalized needs associated with the green energy transition. The firm also identifies a lack of successful companies capable of overseeing the entire energy transition process for clients.

These predictions for Romania's green energy market by 2040 are based on an estimated 1.1 to 1.7 million households that could each invest an average of €7,000 to €10,000 in green energy solutions. This financing opportunity aligns with the EU's goal to achieve net-zero greenhouse gas emissions by 2050.

Source: https://seenews.com/news/green-energy-opens-20-bln-euro-bank-financing-opportunities-in-romania-mckinsey-822720

Renewable Energy Boosts Romania's Position as Net Electricity Exporter in Q1 2023

In Q1 2023, Romania became a net exporter of electricity due to decreased consumption and increased production from renewable sources such as hydroelectric power stations and wind turbines. This compensated for the reduced output from coal plants. According to data from Transelectrica, Romania's total electricity production surpassed 10 TWh in January and February, with net consumption near 8.9 TWh. The country sustained a positive export-import balance of almost 1.2 TWh. Petrom, the only significant energy producer to publish Q1 2023 data, reported a 10% decrease in national electricity consumption and a 4% increase in national production, compared to Q1 2022. The shift towards renewable energy, especially wind power, was a key factor in this change.

Source: https://www.economica.net/romania-continua-sa-fie-exportator-net-de-energie-electrica-dupa-primul-trimestru-din-2023-tendintele-si-datele-oficiale_666505.html

Ameresco and Sunel Group Collaborate to Bid on 1.5GWp of European Solar and Energy Storage Projects

Renewable energy developer Ameresco and EPC contractor Sunel Group have partnered to bid on 1.5GWp of solar and energy storage projects across Europe, including the UK, Greece, Italy, Spain, and Romania, under the newly formed Ameresco Sunel Energy. The collaboration aims to expedite utility-scale renewable generation, with the projects anticipated to exceed $500 million in contract value. The companies previously worked together on a 100MW solar PV project in Greece, set to be operational by Q3 2023. Sunel has implemented over 500 projects worldwide with over 1GW of installed capacity and is currently constructing projects with over 400MW of capacity.

Source: https://www.pv-tech.org/ameresco-sunel-to-bid-on-1-5gwp-of-solar-pv-and-bess-epc-projects-across-europe/

Romania Issues First-Ever Secondary Regulations to Boost Energy Storage Deployment

The Romanian government has released secondary regulations for energy storage deployment, the first of its kind in the country. These regulations supplement the primary legislation from 2012-13.

Prior to this, no technical parameters existed for storage installations in Romania, hindering the implementation of storage systems for large wind or PV projects.

• The new regulations specify four project categories based on capacity: between 800 kW and 1 MW, between 1 MW and 5 MW, between 5 MW and 20 MW, and above 20 MW.
• Clarification was given that any added storage capacity wouldn't count against the capacity permitted under the technical connection permit (ATR), allowing storage installations to be added to an already approved project without altering the permitted capacity.
• Installations smaller than 800 kW will receive unspecified exemptions.
• These storage regulations are part of a series of legislative changes aimed at boosting the share of renewables in Romania's electricity mix, including reduced VAT on residential solar, expedited permitting for PV plants on agricultural land, and simplified grid-connection processes for renewable projects below 10.8 kW.

Alongside CISOLAR, the 2nd Energy Storage Conference & Show of Central & Eastern Europe, IBES 2023, will be held in Romania on October 30-31.

IBES 2023 will provide a platform for showcasing the latest advancements in battery storage technologies, exploring innovative solutions for grid integration, and highlighting investment opportunities in the rapidly growing energy storage market.

Varta Q1 2023 Report: Revenue Declines Amid Global Crises, but Energy Storage Systems Segment Shows Robust Growth

• Varta AG, a leading provider of battery technology, continued its operations in a challenging market environment due to global crises and reduced customer orders. This resulted in a year-on-year revenue decrease from €185.3 million in Q1 2022 to €164.2 million in Q1 2023, and a drop in adjusted EBITDA from €38.1 million to €-2.0 million.
• Despite these challenges, the Energy Storage Systems segment saw revenue increase by a factor of 2.7, making it the second-largest segment. The high order backlog until the fourth quarter of 2023 indicates a high predictability for Energy Storage Systems' sales potential for the year.
• Varta's forecast for the financial year 2023 remains unchanged, with expected revenue between €820 - 870 million and adjusted EBITDA expected to be at least at the level of the previous year.
• The company believes that its restructuring program, along with the fall in energy and raw material prices and high demand for energy storage systems, will lead to profitability and margin improvement.
• Challenges persist due to the consequences of global crises, including stock purchases by private households and lower demand from key customer groups. The Lithium-Ion CoinPower segment also experienced a significant decrease in demand from a single major customer.
• Dr. Markus Hackstein, Speaker of the Executive Board of Varta AG, emphasized that 2023 is a year of change for the company, requiring strict cost-saving measures including personnel cuts.

Solar MD Opens New LiFePO4 Energy Storage Manufacturing Facility in Bulgaria, Plans to Create 70 Full-Time Jobs

South African battery manufacturer Solar MD has inaugurated a lithium-iron-phosphate (LFP) battery manufacturing facility in Ruse, Bulgaria. The new plant, which marks the first overseas expansion from the firm's base in Cape Town, is aimed at serving clients in Bulgaria, Romania, Turkey, and the Middle East. In the initial phase, the factory will employ 15 people, but the goal is to eventually create 70 full-time jobs. The annual output is targeted at 60 MWh, with plans for further expansion. Solar MD sources its battery cells from China's CATL and is the largest manufacturer of energy storage systems in Africa. The company is also a co-founder of the Association for Production, Storage and Trading of Electricity in Bulgaria.

Source: https://balkangreenenergynews.com/battery-factory-launches-operations-in-rousse-in-bulgaria/

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