From Pilot to Progress: Romania’s Second CfD Auction
May 2025
Introductory considerations
After a successful pilot completed at the beginning of this year, Romania launched the second CfD auction in May 2025, marking another important milestone in the country’s renewable energy transition. Building upon the experiences from the first CfD round, the new auction introduces refined mechanisms aimed at enhancing investor confidence and aligning with EU climate and energy targets.
Auction Scope and Structure
The first CfD auction awarded 1.5 GW in total capacity (i.e. 1 GW onshore wind and 0.5 GW solar PV), marking a cautious yet strategic debut.
The ongoing second round introduces a significantly expanded volume, awarding almost 3.5 GW capacity split into 2 GW for onshore wind and 1.472 GW for solar PV. As opposed to the first round, the maximum strike price ceilings have been lowered (although many expect that offered strike prices to be higher than the ones in the first round).
The Ministry of Energy has set the strike price ceilings at €80/MWh for wind and €73/MWh for solar, aiming to balance cost discipline with bankability within the current market context.
The calendar is structured to ensure transparency and predictability:
• Bidding deadline: 11 July 2025;
• Technical offers opening: 14 July 2025;
• Financial offers opening: 13 August 2025;
• Winners’ announcement: 14 August 2025;
• Contract signature (by developers): 9 September 2025;
• Contract signature (by CfD counterparty): 16 September 2025;
• Performance guarantee deadline: 7 October 2025.
Regulatory and Technical Eligibility
Developers must be legally established entities with proven experience in renewable project development, construction, or operation. Only projects over 5 MW are eligible.
Similar to the first round, projects without a grid connection permit (ATR) issued may still participate, but they have to secure the ATR within six months as of CfD contract signature (otherwise they loose their good-performance guarantee of Eur/MW 75,000). This approach expands the competitive pool and benefits projects at advanced pre-construction stages.
Auction Mechanism Enhancements
• Removal of the 25% Cap: For the first round (with capacities tendered substantially lower), the Ministry of energy had set a maximum cap of 25% of the capacity tendered per bidder in order to avoid exhausting of the available capacity by a very limited number of bidders (e.g. Econergy won the largest PV quota CfD with 125 MW bid – out of a 300 MW project). Unlike the first auction, now there is no cap anymore so bidders can apply for any capacity.
• Marginal Bid Cap: To reduce the risk of a large-capacity marginal bid being rejected, there is a marginal bid cap set at 120% (i.e. the last wining offer may exceed by no more than 20% the available capacity per technology).
• Environmental Compliance: All projects must adhere to the "Do No Significant Harm" (DNSH) principle as per EU Regulation 2020/852. This involves submitting a declaration of DNSH compliance and a detailed self-assessment questionnaire based on the European Commission’s technical guidance.
Price Indexation
Once the contract signed, the strike price will be adjusted every three years based on Eurozone inflation, provided the Consumer Price Index (CPI) exceeds 10% since contract signature or as of the last indexation. Such indexation mechanism enhances long-term revenue predictability and aims to offer protection against macroeconomic volatility.
Remaining Challenges
Despite all the improvements, a number of elements require clarification (at the time of preparing this material). As such, uncertainty remains regarding hybrid configurations and BESS co-location: can such a hybrid project participate in the auction. It is also unclear if it is allowed to submit multiple bids (with different strike prices) for different parts of a single project. It is to be clarified also if projects submitted for the August 2024 Modernization Fund support scheme may be subject to CfD considering that no results were published yet for said Modernization Fund applications. However, we will address these questions to the Ministry of Energy and hopefully will have a clear reply until the bidding deadline.
Moreover, while the DNSH framework strengthens environmental integrity, it introduces new compliance complexity that may disproportionately affect smaller developers or those unfamiliar with EU-level ESG protocols.
Final considerations
Romania's second CfD auction reflects a matured approach to renewable energy procurement, incorporating lessons from the initial pilot and aligning with EU directions. As Romania refines its CfD framework, its ability to attract large-scale, bankable RES investments will increasingly hinge on regulatory clarity, streamlined permitting and grid integration capacity.
Similar to the first round, it is expected to have good participation from both established international players and emerging regional developers. It remains to see what strike prices will be offered, but country risk (like to one of the recent presidential elections which miraculously ended well for the country’s economy) will likely be factored in.
From Pilot to Progress: Romania’s Second CfD Auction
May 2025
Introductory considerations
After a successful pilot completed at the beginning of this year, Romania launched the second CfD auction in May 2025, marking another important milestone in the country’s renewable energy transition. Building upon the experiences from the first CfD round, the new auction introduces refined mechanisms aimed at enhancing investor confidence and aligning with EU climate and energy targets.
Auction Scope and Structure
The first CfD auction awarded 1.5 GW in total capacity (i.e. 1 GW onshore wind and 0.5 GW solar PV), marking a cautious yet strategic debut.
The ongoing second round introduces a significantly expanded volume, awarding almost 3.5 GW capacity split into 2 GW for onshore wind and 1.472 GW for solar PV. As opposed to the first round, the maximum strike price ceilings have been lowered (although many expect that offered strike prices to be higher than the ones in the first round).
The Ministry of Energy has set the strike price ceilings at €80/MWh for wind and €73/MWh for solar, aiming to balance cost discipline with bankability within the current market context.
The calendar is structured to ensure transparency and predictability:
• Bidding deadline: 11 July 2025;
• Technical offers opening: 14 July 2025;
• Financial offers opening: 13 August 2025;
• Winners’ announcement: 14 August 2025;
• Contract signature (by developers): 9 September 2025;
• Contract signature (by CfD counterparty): 16 September 2025;
• Performance guarantee deadline: 7 October 2025.
Regulatory and Technical Eligibility
Developers must be legally established entities with proven experience in renewable project development, construction, or operation. Only projects over 5 MW are eligible.
Similar to the first round, projects without a grid connection permit (ATR) issued may still participate, but they have to secure the ATR within six months as of CfD contract signature (otherwise they loose their good-performance guarantee of Eur/MW 75,000). This approach expands the competitive pool and benefits projects at advanced pre-construction stages.
Auction Mechanism Enhancements
• Removal of the 25% Cap: For the first round (with capacities tendered substantially lower), the Ministry of energy had set a maximum cap of 25% of the capacity tendered per bidder in order to avoid exhausting of the available capacity by a very limited number of bidders (e.g. Econergy won the largest PV quota CfD with 125 MW bid – out of a 300 MW project). Unlike the first auction, now there is no cap anymore so bidders can apply for any capacity.
• Marginal Bid Cap: To reduce the risk of a large-capacity marginal bid being rejected, there is a marginal bid cap set at 120% (i.e. the last wining offer may exceed by no more than 20% the available capacity per technology).
• Environmental Compliance: All projects must adhere to the "Do No Significant Harm" (DNSH) principle as per EU Regulation 2020/852. This involves submitting a declaration of DNSH compliance and a detailed self-assessment questionnaire based on the European Commission’s technical guidance.
Price Indexation
Once the contract signed, the strike price will be adjusted every three years based on Eurozone inflation, provided the Consumer Price Index (CPI) exceeds 10% since contract signature or as of the last indexation. Such indexation mechanism enhances long-term revenue predictability and aims to offer protection against macroeconomic volatility.
Remaining Challenges
Despite all the improvements, a number of elements require clarification (at the time of preparing this material). As such, uncertainty remains regarding hybrid configurations and BESS co-location: can such a hybrid project participate in the auction. It is also unclear if it is allowed to submit multiple bids (with different strike prices) for different parts of a single project. It is to be clarified also if projects submitted for the August 2024 Modernization Fund support scheme may be subject to CfD considering that no results were published yet for said Modernization Fund applications. However, we will address these questions to the Ministry of Energy and hopefully will have a clear reply until the bidding deadline.
Moreover, while the DNSH framework strengthens environmental integrity, it introduces new compliance complexity that may disproportionately affect smaller developers or those unfamiliar with EU-level ESG protocols.
Final considerations
Romania's second CfD auction reflects a matured approach to renewable energy procurement, incorporating lessons from the initial pilot and aligning with EU directions. As Romania refines its CfD framework, its ability to attract large-scale, bankable RES investments will increasingly hinge on regulatory clarity, streamlined permitting and grid integration capacity.
Similar to the first round, it is expected to have good participation from both established international players and emerging regional developers. It remains to see what strike prices will be offered, but country risk (like to one of the recent presidential elections which miraculously ended well for the country’s economy) will likely be factored in.