The focus of the Romanian renewable energy sector has lately been on the outcome of the EU Commission’s authorisation of the support scheme regulated by Law No. 220/2008 on the promotion system for energy generated from renewable sources. The uncertainty surrounding the support scheme has led to a slowdown of investments in renewable energy projects. In view of the process of getting the support scheme authorised by the EU Commission, the Government proposed a draft emergency ordinance to amend Law No. 220/2008. This draft is currently being subjected to public debate.

The amendment to the Romanian renewables support scheme aim to address concerns raised by the EU Commission during informal communication with the Romanian government.  

The main amendments are as follows:

  • The regulator of the Romanian energy market, ANRE, shall monitor the renewable energy producers that benefit from the support scheme and shall prepare annual reports. Should this reveal that the applicable support scheme triggers overcompensation of renewable energy producers, ANRE shall take measures to reduce the granting period of the support scheme and/or to decrease the number of green certificates granted according to the scheme contemplated by Law No. 220/2008. In case of a downward adjustment of the scheme, however, the amended scheme will not apply retroactively, in the sense that it will apply only to those projects that become operational after the entry into force of the amended scheme. “Overcompensation” is defined in the proposed amendments as an internal rate of return 10% higher than the reference internal rate of return for that specific technology that has been considered in the authorisation process.
  • The proposed amendments address an issue that has been intensively discussed, namely the accumulation of subsidies and green certificates. The government proposes to proportionally reduce the number of green certificates granted to a certain technology with the ratio between the amount of the subsidies and the reference investment value, according to a decision that is individually issued by ANRE. The reference investment value shall be based on the calculations provided by the Romanian government to the EU Commission as part of the state aid notification process.
  • The number of green certificates granted for renewable energy produced from biomass is differentiated based on the technology and the fuel used. Only two green certificates (instead of three, as in the current version of Law No. 220/2008) shall be granted for technologies based on biomass, biogas and bioliquids, except for biomass resulting from energetic crops, which will still be incentivised with three green certificates.
  • The draft proposal stipulates an individual obligation applicable to the producers that operate or own renewable energy projects with an installed capacity in excess of 125 MW/plant and that are eligible for the support scheme. The obligation consists in notifying ANRE of the necessary documentation for allowing the EU Commission to analyse the respective project, pursuant to the provisions of the Community Guidelines on state aid for environmental protection 2008/C82/01. It appears that the applicability of this obligation has been requested by the EU Commission (DG Competition), although there are arguments against it.

Other changes are contemplated in the proposed amendments; however, the above will most likely be the main topics of the public debates and criticism that are expected to follow.