New law on the production of energy from renewable resources
New changes for promoting energy production from renewable sources
On the 18th of July, 2018, the Romanian Parliament adopted Law No. 184/2018 for the approval of Government Emergency Ordinance No. 24/2017 regarding the amendment and completion of Law no. 220/2008 for establishing a system to promote energy production from renewable energy sources and for the amendment of other legal enactments.
The changes aim to help achieve the national target of producing 24% of the gross national energy consumption, from renewable energy sources by the year 2020. This target is in accordance to the allotment made to EU member states, as per Annex no. 1 to directive 2009/28/EC of the European Parliament and the Council on the promotion of the use of energy from renewable sources. The changes aim to avoid the annulment of green certificates, which may lead to the closure of renewable energy producing facilities.
Some of the most relevant aspects regulated under said law are:
- the notion of “prosumer” is introduced, as the final customer who owns electricity generating installations, including co-generation. The activity is not focused on the production of electricity, but rather the personal consumption, storage and sale of electricity from renewable sources that are produced on their premises. Such premises may be a block of flats, a residential area, shared service facilities, commercial or industrial establishments, which are within the same closed distribution system (in the case of non-household). Autonomous energy consumers from renewable sources can store and sell electricity as long as such activities do not constitute their primary commercial or professional activity;
- Approval on new rules for obtaining and selling green certificates
(i) The Romanian Energy Regulatory Agency (“ANRE”) establishes every December, the mandatory annual green certificate quota for the following year, which is based on the final estimated consumption of electricity for the following year. The estimated annual average impact on the final consumer bill shall be Euro 12.5 /MWh in 2019, Euro 13 euro/MWh in 2020 and 2021 and Euro 14,5 euro/MWh as of 2022;
(ii) ANRE establishes by the 1st of March of each year, the mandatory annual green certificate quota for the previous year. This is based on the final electricity consumption of the previous year, so that the average impact on the final consumer is no more than Euro 11.7 /MWh in 2018, Euro 12.5 /MWh in 2019, Euro 13 /MWh in 2020 and 2021 and Euro 14.5/MWh as of 2022;
(iii) in order to correlate the supply and demand of green certificates on the market, ANRE may reduce the impact of the estimated average annual green certificate on the final consumer’s bill starting with 2023. This shall be based on ANRE’s methodology, to be published on its website;
(iv) the amendment guarantees the takeover of all green certificates estimated to be issued between April 1st, 2017 and December 31st, 2031, including green certificates postponed from trading, if the annual final consumption of electricity does not fall below the average value recorded between 2017 and 2022;
(v) from April 1st, 2017 until December 31st, 2020, the trading of two green certificates for solar power stations, for each 1 MWh produced and delivered by renewable electricity producers, accredited by ANRE by December 31, 2013 will be temporarily postponed. The postponed green certificates will be recovered from January 1st, 2021 in equal monthly instalments until December 31, 2030;
- authorities producing electricity from renewable sources, which are partially or fully financed from structural funds, benefit from the financial regulated service between energy delivered and energy consumed in the network, from suppliers they have an agreement with.
- the sale of green certificates is exclusively allowed for producers of renewable energy; only one certificate may be sold within a single transaction between the producer and supplier.
- the following benefits are being established for prosumers:
(i) prosumers can sell energy from production capacities of up to 27 kW to electricity suppliers with which they have concluded agreements
(ii) electricity suppliers are obliged, at the prosumers request, to purchase the electricity produced at a price equal to the weighted average price recorded in the Next Day Market of the previous year;
(iii) prosumers, natural persons, may carry out the activity of trading electricity produced in units of their electric power production, without registration and authorization of their operation;
(iv) in the electricity bill, prosumers who have units for renewable electricity production with an output of no more than 27 kW on the spot of consumption, benefit from the electricity suppliers with which they have concluded agreements for the electricity supply of the regulated service between the value of the delivered electricity and the value of the electricity consumed by the network;
(v) prosumers, natural persons, are exempted from acquiring the annual and quarterly green certificates for electricity produced and used for their own final consumption; however, in regards to the technological power consumption of their power station, such certificates must be acquired;
(vi) the Romanian Tax Code and Tax Procedure Code, exempts prosumers, natural persons, from the payment of all tax liabilities related to the amount of electricity produced for self-consumption and the surplus sold to suppliers.
Law No. 184/2018 was published in the Romanian Official Gazette no. 635 dated July 20th, 2018, and entered into force on July 23, 2018..
Stratulat Albulescu Attorneys at Law is a young and dynamic Romanian law firm, providing legal advice in all business sectors and in all areas of Business Law and Dispute Resolution in Romania. Our team is comprised of lawyers who are leaders in their disciplines.
The firm works in close co-operation with highly-respected law firms throughout Europe and elsewhere and has significant experience in cross-border transactions, with its lawyers providing legal advice in the English, German, French, Italian, Romanian and Spanish.