The Romanian law on energy originating from renewable sources (“REL”)[1] was amended and completed on 23 July 2018 by means of a law (“the Law”)[2]. The important innovations are described below.

New notion: ‘Prosumer’

The law introduces the notion ‘Prosumer’ (rom. prosumator). This is an end consumer who owns small power plants, whose object of activity does not however concern the electricity production. The Prosumer will consume and can store and sell the power from renewable sources generated in his building (including residential blocks).

Prosumers with power plants running on renewable energy sources (e.g. wind and solar) with an installed performance of maximum 27 kW will now enjoy the following preferential treatment:

  • They can sell generated power to suppliers with whom they have signed contracts for the provision of electricity;
  • Electricity suppliers are, at their request, obliged to buy their electricity. The price will be the weighted average price registered on the Day Ahead Market in the previous year;
  • In the electric power invoice for the Prosumer, the electricity supplier will compute the electricity fed into the grid and the one consumed; thus, the electricity supplier does not pay the Prosumer separately for the renewable electricity bought from the latter, but compensates him on each invoice.
  • Additionally, Prosumers that are natural persons and not authorised as freelancers in this field of activity will benefit from the following advantages:   
    • They can trade the electricity without further registration or approval procedures;
    • They are exonerated from the obligation of purchasing annually or quarterly green certificates (GC) for the electricity produced and used for their own personal use;
    • They are exonerated from the payment of any tax for the electricity generated for their own use, as well as for the surplus sold to suppliers;
    • The network operators have the obligation to ensure the connection of the Prosumer to the grid.

Impact of the GC on the invoice of end consumers

In December 2018, the National Authority responsible for the energy sector (ANRE) will establish the estimated mandatory rate for purchasing green certificates for the following year, so that the annual average impact on the invoice of the end consumer will be:    

  • €12.5 / MWh in 2019
  • €13 / MWh in 2020, 2021
  • €14.5 / MWh starting from 2022

 

By 1st March every year, the ANRE will have established the final mandatory rate for purchasing green certificates for the previous year so that the average impact on the end consumer will amount to a maximum of €11.7 /MWh for 2018, €12.5 /MWh in 2019, €13 /MWh in 2020 and 2021, and €14.5 /MWh from 2022. Starting in 2023, the ANRE will be able to reduce the estimated annual average impact of the GC on the invoice of end consumers based on a methodology approved by a government resolution.  

Further changes

The following changes are also worth mentioning:

  • Postponement of the trade with GC for solar power plants: between 1st April 2017 and 31st December 2020 (the law previously stated 2024), the trade of 2 GC for solar plants will be delayed. The postponed GC will be marketed between 1st January 2021 and 31st December 2030;  
  • Directly negotiated contracts for small producers: Producers of electricity originating from renewable energy sources with an installed performance of maximum 3 MW that benefit or benefited from the support system with GC and own GC can directly agree negotiated contracts for selling electricity and/or GC only with suppliers of end consumers.   
  • Joint participation in the electricity market: two or more producers of electricity from renewable energy sources (regardless of the technology used) can enter the electricity market as a “joint entity” (Rom. entitate agregată) for the purposes of improving financial or production performance; the ANRE will publish further application rules within 6 months following the coming into force of the law;
  • An alternative to the support system with GC: the Energy Ministry and ANRE can outline a state aid scheme for supporting the production of electricity from renewable sources and then submit it to the government for approval; this aid scheme refers to a fixed price to be added to the average electricity price resulting from the trade on the centralised electricity market.  

CONCLUSION

The new rules are welcome, since they create a proper legal framework for small producers of electricity from renewable sources. Preferential treatments, as well as the elimination of the authorisation requirement and bureaucracy, should especially encourage the production for own use (especially from photovoltaics). Indeed, this does not apply to the major market actors. However, one hopes that a high number of future ‘Prosumers’ will offer opportunities for electricity plant manufactures, planners and traders.