Thursday, March 17, 2011

FT: Winds of fortune blow through Romania

By Chris Bryant in Fantanele, Romania

Published: March 16 2011

A chill breeze whistles through the tiny village of Fantanele in south-east Romania. But far from begrudging the winter gusts, its residents are grateful.

The reason is evident on the horizon, where scores of towering turbines turn in the wind – part of the first stage of a 600 megawatt wind park, the largest land-based project in Europe.

In wealthier parts of Europe, wind turbines are often an unwelcome blight. But the people of Fantanele will fight to have them built.

In addition to producing 2.5MW of clean electricity, each of the 120 turbines installed so far at Fantanele by CEZ, a Czech energy group, generates an annual windfall of €3,000 ($4,175) for the owner of the soil on which it stands. For local people, many of whom subsist on an income of little more than €100 a month, these are winds of fortune.

Fantanele is at the vanguard of a wind energy boom sweeping Romania that could deliver substantial benefits for a recession-hit economy that was forced to seek a €20bn bail-out by the International Monetary Fund in 2009.

“People were sceptical at the start because of the disturbance during building and worries that their crops would be damaged,” says Gheorghe Popescu, Fantanele’s mayor. “But now they are very pleased, and many come and ask if they will make the wind park bigger so a turbine will also fall on their land.”

European energy companies, among them Spain’s Iberdrola , EDP Renov├íveis of Portugal and Austria’s OMV/Petrom, are rushing to develop wind projects in Romania, attracted by the favourable winds, large areas of unpopulated land and a generous system of government incentives.

“[Romania] is one of the last places in Europe where you can find all these attractive conditions together,” said Dana Duica, executive director of the Romanian Wind Energy Association.

Romania, which joined the European Union in 2007, initially lagged behind other members in developing wind energy. But from a base of only 14MW in 2009, it last year added 450MW of turbine capacity and will build an estimated 700MW in 2011.

However, an incident in the nearby village of Cogealac has underscored the intense competition for prime wind sites, as well as the determination of competing local, regional and national interests to gain a slice of the riches.

Last summer security staff guarding the construction site for the next phase of CEZ’s wind farm fired rubber bullets when protesters, some carrying clubs, tried to invade it. Cogealac’s mayor, who organised the protest, said CEZ did not have permission to build. It emerged he had instead issued building permits to a project owned by Iberdrola, the Spanish utility. CEZ, meanwhile, had obtained its permits from the county council.

After unsavoury headlines, CEZ and Iberdrola calmed the tension, signing a pact that should eventually allow both companies to begin construction. “It doesn’t make sense for two large companies to fight about locations in any village in Romania,” says Ondrej Safar, CEZ project chief. “The area is big enough for both companies.”

The government estimates Romania’s wind-generated potential at as much as 14,000MW – the most in south-east Europe. But the electricity grid can accommodate only 4,000MW of new capacity, so much will depend on upgrading the network.

Only then will more villages such as Fantanele enjoy the windfall.

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