AEI: Subsidies, CO2 certificates, and deferred investments have made lignite energy much more expensive than the market price

Power produced from lignite in Romania was more expensive than it appeared, because a significant share of the costs was transferred to the state budget, taxpayers and consumers, according to an analysis by the Intelligent Energy Association (AEI), authored by Dumitru Chisăliță.

According to the document, the real bill included subsidies, debts owed to the state, company losses, public investment, environmental obligations, and costs related to mine closures and land restoration. After 2013, the cost of coal-fired power reportedly exceeded the average wholesale price consistently, with the gap widening after 2018.

CO2 certificates sharply increased costs, from approximately 95 lei/MWh in 2018 to around 500 lei/MWh in 2022. For 2024–2026, AEI estimates a cost of 330–350 lei/MWh. Even without these certificates, coal-fired power would remain approximately 130 lei/MWh above the market average in 2026.

In 2022, when the average electricity price reached approximately 1,131 lei/MWh, the full cost of coal-fired production was estimated at around 1,320 lei/MWh without aid. AEI argues that keeping certain power plants operational may be temporarily justified for system security, but warns that Romania has delayed investments in gas, storage, grids and hydropower. The analysis concludes that lignite is no longer competitive for permanent generation and could have only a reserve role.