Tuesday, January 18, 2011

Romania says must shut aging power plants- report

BUCHAREST, Jan 18 (Reuters) - Romania will have to shut down outdated power plants generating some 30 percent of its electricity capacity by 2020 and replace them with new units, an economy ministry official was quoted on Tuesday as saying.

The European Union state needs to replace more than half its power plants by 2035, said Alexandru Sandulescu, the head of the ministry's energy policies department.

"Romania must shut down power production units totalling 5,544 megawatts, or 28 percent of overall capacity by 2020," Sandulescu was quoted as saying by news agency Agerpres.

"During this time, energy consumption will rise by more than 2 percent a year, so there will be need of new power production units."

Energy investment has been held back for years as successive governments have stalled reforms, privatisations and public-private partnerships, and almost all of the country's coal, gas, nuclear and large hydropower plants are state-owned.

A government plan to restructure producers into two state-owned energy generators -- widely criticised by analysts, the World Bank and foreign investors -- is on hold pending legal challenges. It was supposed to be completed by the end of last year.

Foreign investment in Romania's energy sector has focused primarily on wind energy parks, where firms do not need to partner the state and avoid associated delays.

Czech power group CEZ (CEZPsp.PR: Quote), Italy's Enel (ENEI.MI:Quote), Energias de Portugal (EDP.LS: Quote) and others are currently developing wind energy projects in Romania, lured by the size of the market, good wind and generous support scheme based on green certificates.

Sandulescu also said Romania might see an excess of green certificates in coming years due to large investor interest and will consider selling the surplus to other countries.

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