The European Commission has initiated a formal investigation into the Romanian government’s proposed financial backing for the refurbishment of Unit 1 at the Cernavodă nuclear power plant. This scrutiny arises from concerns regarding compliance with EU competition rules, highlighting the complexities surrounding state aid in energy projects.
Romanian authorities have announced plans to extend the operational lifespan of Unit 1 by an additional 30 years, pushing its expected shutdown date beyond 2027. Since its commissioning in 1996, this unit has been a significant contributor to Romania’s energy supply, accounting for approximately 10% of the country’s electricity generation and playing a vital role in maintaining a low-emission energy portfolio.
The refurbishment project, estimated to cost around 3.2 billion euros, is spearheaded by Nuclearelectrica. The financing strategy includes a direct grant of 600 million euros, state-backed loan guarantees, and a long-term two-way contract for difference (CfD), along with safeguards against potential regulatory shifts.
While acknowledging the project’s potential to bolster economic activity and support energy security and climate objectives, the Commission has expressed concerns regarding the scale and structure of the proposed aid. Officials are particularly focused on whether these financial measures could impose disproportionate risks on the state’s finances or disrupt competitive dynamics within Romania’s electricity market.
A critical element under review is the CfD mechanism itself. Regulators are tasked with evaluating its alignment with EU market regulations and determining if it might confer undue advantages to Nuclearelectrica or lead to adverse effects for consumers.
This investigation opens a channel for feedback from Romanian authorities and other stakeholders involved in the process. The Commission has clarified that this inquiry is part of standard procedural practices and does not imply any preconceptions about its final decision.
