1. Background

In the context of the blockage on the green certificates (“GCs”) market, the Ministry of Energy proposed a draft government emergency ordinance amending Law no. 220/2008 on GCs (“Draft GEO”). The Draft GEO implements the following measures to facilitate the GC support mechanism granted to renewable projects.

2. Extension of the validity term

All GCs issued after 1 January 2017 shall be valid until 31 December 2031.

3. Extension of the deferral period

Wind farms and micro-hydro power plants must have one GC deferred from trading until 31 December 2017 and solar power plants must have two GCs deferred from trading until 31 December 2024. The deferred certificates for wind farms and micro-hydro power plants will re-enter the market in eight years starting from 1 January 2018 and seven years starting from 1 January 2015 for solar power plants.

4. Static number of GCs and acquisition quota

The Draft GEO introduces the annual static number of GCs, defined as the total estimated number of GCs to be issued between 2017 and 2031, plus all the GCs that have been or must be deferred from trading between 2013 and 2024 divided by the number of years remaining until the expiry of the GC support mechanism. The National Energy Regulatory Authority (“ANRE”) shall establish this number and revise it every two years, depending on the actual number of GCs issued during the previous two years.
Starting from 2017, each December, ANRE will also set the annual estimated mandatory quota of acquisition of GCs for the next year, based on three elements: 1) the static number of GCs; 2) the estimated electricity consumption for the next year; and 3) the impact on the invoice to the end-consumers. By 1 March, ANRE will set the exact mandatory quota for acquisition of GCs for the previous year on the basis of the above mentioned elements, provided however that the impact on the invoice to the end-consumer will not be higher than EUR 11.1 /MWh.

5. Minimum and maximum prices

According to the Draft GEO, the minimum price of a GC will be EUR 25 and the maximum EUR 35, calculated in RON at the average exchange rate established by the National Bank of Romania for the previous year.

6. Guaranteed access to the grid

In general, energy generated from renewable sources and sold on the centralised market will be guaranteed access to the grid. ANRE shall draft secondary legislation implementing guaranteed access to the grid within six months from the Draft GEO’s entry into force.

7. Reform of the centralized market for electricity and GCs

GCs will only be traded on the centralized markets operated by OPCOM, which shall be reformed by ANRE by 1 April 2017 and shall become operational as of 1 July 2017. Interestingly, the participants in the transactions will be anonymous. In addition, the centralised electricity market will be reformed, in order to ensure the separation of the prices of electricity and GCs.

8. GCs must be the subject matter of a single transaction

In order to avoid speculative trading, the Draft GEO prohibits the repeated trading of GCs. However, generators of electricity from renewable sources that have entered into forward contracts with suppliers for the sale of GCs are allowed to buy them from the competitive market, but only to the extent necessary to fulfil their contractual obligations.

9. Lower penalty in case of failure to fulfil the mandatory quota

Suppliers (and generators, to the extent they have an obligation to acquire GCs) that fail to meet the annual GC acquisition quota will have to pay a penalty of EUR 70 per certificate that has not been acquired (reduced from EUR 110).