Romania’s Electrica has signed an implementation contract for a new plant in Craiova that is intended to support both district heating and electricity-market flexibility. The project is described as moving beyond a conventional gas-fired CHP model. It combines power generation capability with thermal output to replace part of the city’s coal-based heat supply.
The plant is planned with approximately 82 MW of electrical capacity and about 208 MW of thermal output. The implementation contract covers the delivery of a generation asset designed to respond to short-term power-market conditions. Electrica said the investment was approved at up to €235 million plus VAT, with financing authority of up to €250 million.
Plant design combines fast-start engines and thermal storage
Instead of running as a continuous electricity and heat producer, the project pairs fast-start gas engines with thermal storage. This arrangement allows electricity production and heat delivery to be separated in time. The engines are intended to generate when power prices are attractive, while stored heat supports district-heating demand when required.
Electrica said the units should be able to reach full load in roughly two minutes, with synchronisation in less than 30 seconds. The company positioned these operating characteristics as closer to a balancing role than a conventional baseload thermal station. Thermal storage is presented as an operational buffer that enables optimisation against the electricity market rather than being constrained by immediate heat demand.
Flexibility requirements tied to solar-driven price swings
Romania’s system is facing increasing variability linked to rapid solar development. More generation is expected during daylight hours, while evening prices can rise sharply when photovoltaic output falls. On recent trading days, the difference between midday and evening prices has exceeded €150/MWh.
Electrica said fast-start generation can be used to monetise that volatility through changes in output. When solar production is abundant and prices are weak, the Craiova units can reduce electricity generation. When demand increases and renewable availability declines, they can ramp quickly and sell into higher-price periods.
Black-start capability and hydrogen readiness
The Craiova plant is also expected to provide black-start capability. Black-start assets can restore sections of the grid after a major system outage without relying on external electricity supply. As European systems become more dependent on inverter-based renewable generation, dispatchable restoration capability is described as increasingly important.
The project includes hydrogen readiness as an additional design feature. Electrica said it should not be taken as an indication that hydrogen will immediately replace natural gas in Romanian power generation, noting that commercial renewable hydrogen remains expensive and supply-limited. The company said designing infrastructure for future fuel blends reduces the risk of technological stranding before the end of an asset’s economic life.
Role within a broader regional flexibility stack
The Craiova project reflects a shift in how new thermal capacity is being built in Romania, according to its stated focus on flexibility rather than continuous operation. Electrica described the region as needing assets that can remain idle when renewable electricity is abundant and respond rapidly when system conditions tighten. It cited batteries for fastest balancing functions alongside gas engines for longer-duration support over several hours.
The flexibility stack is also described as including reservoir hydro, demand response and interconnectors. For Electrica, the investment is said to create optionality across multiple revenue pools including district heating, electricity sales, balancing services and system reserves, with potential future capacity mechanisms. In this context, 82 MW of flexible generation is presented as potentially more relevant to system value than larger volumes of inflexible capacity.
