The Romanian state is preparing a state aid scheme worth hundreds of millions of euros for geothermal energy production and transport projects for centralized heating or cooling, using funds from the EU Modernization Fund, fueled by revenues from the sale of greenhouse gas emission certificates (CO2) allocated to the poorest member states of the Union.
The state aid aims to „support investments in the production and transport of thermal energy based on renewable geothermal energy, with the purpose of improving energy efficiency at the level of Romania, by establishing and/or modernizing capacities for thermal energy production and transport to supply heat in a centralized system up to the connection point with the thermal energy distribution network,” according to the draft scheme analyzed by Profit.ro.
The proposed budget amounts to 300 million euros, divided equally (50 million euros each) over the 6 years during which the state aid scheme is expected to be implemented, in the period 2025-2030 inclusive. The state aid value will represent 100% of the net additional cost of a project, representing the funding gap.
"To determine the funding gap (...), the funding applicant must present in the funding application a quantification, for the factual scenario and a credible counterfactual scenario, of all main costs and revenues, the estimated weighted average cost of capital (WACC) of the beneficiaries for updating future cash flows, as well as the net present value (NPV) for the factual and counterfactual scenarios over the project's lifetime. The typical net additional cost is determined as the difference between the net present value (NPV) for the factual scenario and for the counterfactual scenario over the project's lifetime," as outlined in the draft, according to Profit.ro.
The estimated number of beneficiaries of state aid under the scheme is 9, which would mean approximately 33.3 million euros/company/project. Beneficiaries can be thermal energy producers, administrative-territorial units (ATUs), or subdivisions thereof.
"State aid to support the development of the thermal energy supply system using renewable geothermal resources for thermal energy production cannot be allocated through a competitive bidding procedure because, based on evidence obtained following the public consultation procedure carried out by the Ministry of Energy in 2025, it emerged that the number of projects submitted, sufficiently mature, is limited and insufficient to ensure effective competition, and the budget allocated under this aid scheme covers the potential supply," the source mentioned.