Policy Uncertainty and Investment Dynamics in the Renewable Energy Sector: A Post-Pandemic Perspective from Romania

This article investigates the influence of policy uncertainty on investment decisions in Romania’s renewable energy sector during the post-COVID-19 period. The analysis uses real data from 2018–2024 to explore the interplay between investment flows, regulatory instability, electricity market volatility, and alignment with EU-level green objectives. Econometric modelling of quarterly data reveals that unpredictable policy shifts—such as abrupt changes in support schemes or emergency price regulations—significantly dampened renewable energy investments in the short run. The results indicate that delayed support mechanisms and frequent legislative changes contributed to investor hesitation, capital relocation, and project delays in Romania’s renewable energy industry. Meanwhile, EU initiatives like the Green Deal and the Recovery and Resilience Facility appear to have moderated some negative impacts by underpinning investor confidence in the long-term decarbonisation trajectory. Based on these empirical findings, the article proposes policy recommendations to foster regulatory coherence and restore investment momentum in line with Romania’s 2030 decarbonisation objectives.