EU launches state-aid probe into Romania’s Cernavodă Unit 1 refurbishment plan

The European Commission has intensified scrutiny of Romania’s plans to refurbish Cernavodă Unit 1 by launching a formal investigation into the state backing proposed for the project. The move matters for investors and market participants because it tests whether public support for a major energy asset can be structured in line with EU competition rules—without shifting excessive risk onto the government or altering competitive dynamics in power markets.

Romanian authorities previously notified plans to extend the reactor’s operating life by 30 years, pushing beyond its scheduled shutdown in 2027. Since it began operating in 1996, Unit 1 has supplied around 10% of Romania’s electricity, positioning it as an important element of the country’s low-emission generation mix.

3.2 billion euro refurbishment and proposed financing package

The refurbishment is valued at approximately 3.2 billion euros and is led by Nuclearelectrica. Under the notified structure, the financing would include a 600 million euro direct grant, state-backed loan guarantees, a long-term two-way contract for difference (CfD), and additional protections intended to guard against regulatory changes.

Brussels weighs economic benefits against aid design and risk allocation

While the Commission acknowledges that the project supports an important economic activity and could contribute to energy security and climate objectives, it has raised concerns about both the scale and design of the aid. Officials are assessing whether the measures could place disproportionate financial risk on the state or distort competition within Romania’s electricity market.

A central part of the review is the CfD mechanism. Regulators are examining whether this instrument is compatible with EU market rules, including whether it could provide undue advantages to the operator or create unintended consequences for consumers.

Standard procedural step; outcome not prejudged

The investigation formally opens a process for input from Romanian authorities and other stakeholders. The Commission stressed that launching such a probe is a standard procedural step and does not prejudge how it will ultimately decide on the compatibility of the proposed support with EU rules.