Romania will receive 254 million euros to upgrade the capital’s antiquated heating system_ the largest in the EU_ after the European Commission approved plans submitted by the government.
The aid, funded under EU State rules from structural funds, “will help Romania achieve its energy-efficiency targets and will contribute to the reduction of greenhouse gas and other pollutants emissions, without unduly distorting competition,” said executive vice-president Margrethe Vestager, who’s in charge of competition policy.
Romania notified the Commission of its plans to publicly finance the rehabilitation of the creaky system, particularly repairing hot water pipelines to the main distribution points in the capital of over 2 million of which more than half are connected to the centralized heating system.
The funds will come in the form of a direct grant financed by EU Structural Funds managed by Romania, the Commission said in a statement Tuesday.
The Bucharest district heating system is the largest in the EU and the second largest in the world, serving 1.2 million residents and covering around 940 km of thermic pipes, and 2,800 km pipes for the distribution system.
The rehabilitation focuses on replacing about 10% of the pipelines to cut heat loss, water refill losses, network maintenance costs.
Almost three-fourths of the pipes that provide heating and hot water to the capital of more than 2 million are almost 40 years old. It’s estimated that 2,600 tons of hot waters lost every hour during the cold season, G4Media reported last year.
The work will contribute to energy savings and reduce greenhouse gas emissions and other pollutants emissions.
Even though costs will be reduced by 10%, the overall operation of the heating system won’t generate sufficient revenues to cover the investment costs, making public funds necessary to cover the gap.
Bucharest mayor Nicusor Dan signed a 1.6 billion lei (330 million euros) contract with the government in November 2020 to repair more than 200 kilometers of the city’s antiquated heat conductors.
EU State aid rules allow member states to support district heating generation installations and distribution networks, subject to certain conditions set out in Commission’s 2014 Guidelines on State aid for environmental protection and energy.
Projects must fulfil certain condition such as “efficient district heating” set out in the Energy Efficiency Directive in order to be eligible for funding.
The Commission agreed that about 80% of the system’s input comes from “cogeneration” sources, meeting the definition of efficient district heating and cooling system set out in the directive.