Romania is witnessing a resurgence in solar project development, as indicated by the growing number of photovoltaic (PV) schemes in various stages of progress. Among the first movers in the re-emerging market is Amsterdam-based Photon Energy, which is in the process of commissioning its first batch of solar projects in the country. This comprises eight plants with a combined capacity of 31.5 MWp.
At the recent Solarplaza Summit Romania, we spoke with Photon Energy's chief executive, Georg Hotar, who shed some light on the company's experience in pioneering the Romanian PV market.
Photon Energy entered Romania in 2015, initially providing operations and maintenance (O&M) services, before starting to develop projects in 2019. At present, the company has a team of 25 people in Bucharest and a project development pipeline of more than 240 MWp. When asked about the challenges faced by the company in Romania, Hotar acknowledged that compared to its experience in Hungary and in general “Romania is definitely a lot more complicated in terms of red tape.”
Obstacles due to re-learning
“There are a lot of additional requirements in Romania. One example is the set-up licence that you need before you can start laying cables or do any kind of electrical work, which is something we have not encountered in any other country,” Hotar remarked. He further highlighted the intricacies surrounding the construction tax, emphasising the need for meticulous bookkeeping and for splitting construction- from equipment-related costs because of different rates.
The commissioning process also presents its share of challenges. Photon Energy has dealt with three different distribution system operators (DSOs) “and what we do see is that they have fundamentally different approaches and internal policies.” This, in turn, is contributing to project delays.
Hotar, however, noted that this is not surprising as the market is re-learning and adjusting to new regulations following a period of inactivity.
Small sizes can bring advantages
Despite the obstacles, Photon Energy is committed to advancing the PV sector in Romania and hopes to take advantage of its head start. Through 2024 Photon Energy is breaking ground on its next batch of 38.5 MWp of PV plants in the country. Additionally, Photon Energy is providing O&M services to external customers, wholesaling PV components, and is also open to providing engineering, procurement and construction (EPC) services to customers outside the company.
The developer prefers to stay focused on medium-voltage projects ranging between 3 MWp and 10 MWp, although it has one 45-MWp project in its pipeline.
“In a nutshell, we prefer building 10 times 5 MWp than one 50 MWp,” Hotar said, citing the advantages of speed to market and risk distribution.
Merchant approach
Photon Energy's business model revolves around fully merchant operations, with the power generated from their plants sold directly to the market. Their financing, secured through Raiffeisen Bank International, aligns with that approach.
For instance, the two plants (Aiud & Teius) totalling 9.5 MWp that the company commissioned earlier this month (9 May 2023) are expected to generate EUR 2 million (USD 2.1m) in revenues based on the current forward prices for electricity base load in Romania in the next 12 months. Combined with projects commissioned earlier this year in Siria and Calafat, Photon Energy now has 21.2 MWp of capacity in Romania, which translates into EUR 4.5 million in revenues for the first year of operation of the sites, the company estimates.
Photon Energy's first Romanian PV power plant with a generation capacity of 5.7 MWp near Siria was completed in February 2023.
The facilities use high-efficiency bifacial solar modules and single-axis trackers, in line with efforts to optimise revenues by ensuring higher electricity production during hours when electricity prices are more favourable. The company also plans to start developing hybrid projects, integrating batteries into solar installations, and is looking at standalone storage opportunities.
Energy trading is another avenue Photon Energy aims to expand in Romania.
(EUR 1 = USD 1.071)
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Photon Energy's power plant in Teiuș, Romania was connected to the grid at the beginning of May 2023. Image by Photon Energy.
