Largest Financial Support from the EU Accessed by Transelectrica

Prime Minister of Romania Nicolae-Ionel Ciuca attended the signing of the first nine agreements for funding from the Modernization Fund, in order to implement investment objectives of particular importance for development of the national energy infrastructure.

The agreements were signed between the Ministry of Energy, as national authority of implementation and management of the funds allocated to Romania from the Modernization Fund, and the National Power Grid Company Transelectrica S.A., as Transmission and System Operator of the National Power System (NPS).

The event was attended by Energy Minister Virgil Popescu, Secretary General of the Government Marian Neacsu, Transelectrica Executive Board President Gabriel Andronache.

The non-reimbursable value of the nine investment projects to be implemented by CNTEE Transelectrica S.A., from the funds allocated to Romania from the Modernization Fund, is EUR 424,404,842.98.

“We signed today the first grant agreements for the Modernization Fund, opening the most important line from European funds intended to develop the Romanian energy sector. With a total value of over EUR 13 billion, through this funding we will substantially transform the national energy infrastructure, a decisive factor in reaching Romania’s energy independence. The solutions to protect citizens and the economy from the effects of rising prices are completed by investments in strengthening energy infrastructure and increasing production capacities. The Government, through the Ministry of Energy and the responsible institutions, remains committed in its efforts to ensure affordable energy for Romanians and national economy,” said PM Nicolae-Ionel Ciuca.

“We continue to invest in the development of the national energy infrastructure. I would like to thank the colleagues from the ministry for their efforts to operationalize the Modernization Fund. And today, by signing the nine grant agreements, we take concrete steps in this respect. I wish Transelectrica a lot of success in finalizing these very important investment objectives, which will ensure our energy security and independence,” said Virgil Popescu.

“Today we mark an important moment: the amount of over EUR 424 million represents the largest financial support from the EU obtained over time by Transelectrica, in the context where the total value of the PTG Development Plan is approximately EUR 2 billion. The complexity of the projects that will be funded proves the commitment of Transelectrica, a company of national and strategic interest, under the authority of the Secretariat General of the Government, for modernization. We made this accomplishment through an excellent collaboration with the Ministry of Energy, which has promoted Transelectrica’s projects, understanding the importance of developing Romania’s power transmission infrastructure, especially in the current international context. At the same time, I congratulate the colleagues from Transelectrica for attracting these funds,” said Marian Neacsu, Secretary General of the Government.

“The processes of implementation of the nine investments with funding from the Modernization Fund place Transelectrica at a different performance level, contributing to the development of Company’s status in a national and regional context. The fact that we have obtained 30% of the funding approved for Romania is a concentrated effort of expertise, experience, and involvement of Transelectrica specialists. This set of large, complex projects demonstrates the Company’s long-term commitment to meeting European energy security objectives. We made this accomplishment with the support of the Romanian Government, through an excellent collaboration with the Ministry of Energy, which has promoted Transelectrica’s projects at the highest level, understanding the importance of developing Romania’s power transmission infrastructure, especially in the current international context,” said Transelectrica’s Executive Board President Gabriel Andronache.

The nine projects that obtained funding from the Modernization Fund are:

1. Building a new overhead power line of 400 Kv (double circuit) Constanta Nord – Medgidia Sud equipped with a single circuit – with a value of approximately EUR 23 million.
2. Building a new overhead power line of 400 Kv in simple circuit Gadalin – Suceava, including its interconnection to the National Power Transmission Grid – with a value of more than EUR 101 million.
3. Interior power line between Resita and Timisoara/Sacalaz (PCI 3.22.3.), consisting of a new 400 kV OHL Resita-Timisoara/Sacalaz and of the refurbishment at 400 kV of the substation 110/2020 kV Timisoara – with a value of approximately EUR 64 million.
4. Building the 400 kV OHL Timisoara/Sacalaz/Arad – with a value of over EUR 57 million.
5. Switching the OHL Brazi Vest-Teleajen to 400 Kv – with a value of approximately EUR 51 million.
6. Pilot project – the refurbishment of the 220/110/20 kV Alba Iulia – in a digital station concept – with a value of approximately EUR 47 million.
7. Installation of two modern reactive power compensation devices in the 400/220/110/20 kV Sibiu Sud and 400/220/110/20 kV Bradu substations – with a value of over EUR 52 million.
8. Optimizing the operation of the existing 400 kV OHL used for interconnection and for power evacuation from Cernavoda nuclear power plant and from the power plants from renewable sources in Dobrogea, by adding online monitoring systems (Smart Grid type) –with a value of over EUR 10 million.
9. Digitization of the Power Transmission Grid in Romania by installing two online systems, to measure and manage the measuring data of the energy on the wholesale market and to monitor the quality of electricity – with a value of over EUR 18 million.

The investment objectives, whose applications for funding have been approved by Decisions of the European Commission, will lead to the modernization of power transmission capacities and the improvement of energy efficiency, through the construction of new overhead power lines and their interconnection to the NPS, the construction or retrofitting of some new power stations, optimizing the operation of some overhead power lines, including through the installation of Smart Grid-type online monitoring systems and the digitization of the Power Transmission Grid.

At the same time, the projects financed through the Modernization Fund will contribute to increasing the interconnection capacity with the European energy system, as well as to the development of Romania’s power transmission grid, respectively to the security, flexibility, and adequacy of the National Energy System, providing the premises for the commissioning of new renewable energy production capacities.

Specifically, the major benefits of making these investments will materialize the relevant indicators such as: the increase in the transmission capacity of the power transmission grid by approximately 1700 MW, building almost 480 km of new OHL, the extension of five 400kV substations, the refurbishment into a digital concept – a premiere in Romania – of Alba Iulia Substation, the increase in interconnection capacity with 600 MW (cumulative at borders with Hungary and Serbia), the implementation of the monitoring systems for electricity quality in 15 substations and the optimization and monitoring of the overhead lines through digital systems.

The modernization fund is a financing instrument made up of the revenues obtained by auctioning on the market 2% of the total greenhouse gas emissions allowances, based on the provisions of the EU-ETS Directive and has, as an implementation period, the 2021-2030 timeframe.

Romania has allocated 11.98% of the total of 2% of the total quantity of allowances for the period 2021-2030, which represents over EUR 15 billion, an amount that it can use to finance investments.