Christian Năsulea,

Department of International Relations and Universal History, Faculty of History,

University of Bucharest,

Bucharest, Romania,

THE EFFECTS OF FISCAL POLICY INSTABILITY ON WIND ENERGY RESOURCE DEVELOPMENT

IN ROMANIA

E-mail: christian@nasulea.ro

ABSTRACT. The instability of the Romanian economic framework and the frequent and sometimes unexpected changes in legislation influence long term development plans in the field of energy production. The recent introduction of property taxes for wind turbines is expected to have a devastating effect on further development plans for large wind farm operators in Romania. Legislative changes related strictly to wind energy are reviewed comprehensively. The paper calculates the net loss to wind energy producers under an optimistic, yet extremely unfavourable scenario. Elements of a potential worst-case scenario are also reviewed for comparison. The real problems come into focus when we begin to look at the logical, inevitable consequences of the latest changes in policy in the field of renewable energy in general and wind energy in particular. It becomes apparent that it is not the way policies change that carries the most significant negative impact but simply that they do change, signaling would be investors that the system in its entirety is unstable.

Received: May, 2014

1st Revision: July, 2014

Accepted: September, 2014

DOI:10.14254/2071-789X.2014/7-3/4

JEL Classification: Q48

Keywords: renewable energy, wind power, fiscal policy, development.