Small capacity renewable energy gets a breath of fresh air with the adoption of Law 122
The purpose of this law is to revitalize the renewable energy market and support the companies owning projects from renewable energy sources with capacities smaller than 3 MW by enabling them the possibility to sign bilateral agreements. Another important measure through which it is wanted the continuous flow of the Green Certificates market is by introducing the obligation to purchase green certificates quarterly.
Electricity suppliers and manufacturers are obliged to purchase quarterly a number of green certificates equal to the product of the annual mandatory quota of green certificates set out for the year, and the amount of electricity expressed in MW/h, invoiced quarterly to final consumers. Electricity suppliers and manufacturers who are required to purchase green certificates and reach the annual mandatory quota of green certificates for the previous quarter in an amount less than 90% of the mandatory annual quota is punishable with a fine equal to the product of the maximum value of green certificates set annually by ANRE according to the law and the number of green certificates not acquired to the difference between 90% of compulsory annual quota share achieved in each quarter, leaving the annual mandatory quota obligation fulfillment, in which case the fine shall be at previously provided.
Another important change relates to the fact that the producers of electricity from renewable energy benefiting from the promotion scheme, with installed capacity of no more than 1 MW per producer and no more than 2 MW for high efficiency cogeneration from biomass may conclude bilateral agreements for electricity and green certificates negotiated directly with suppliers to final consumers, notwithstanding the art. 23 of the Electricity Law and Gas no. 123/2012. Producers of electricity from renewable energy who have an installed capacity ranging from 1 MW to 3 MW per unit or from 2 MW to 3 MW for high efficiency cogeneration produced from biomass, benefiting from the promotion system and falling in the category of small and medium companies according to Law no. 346/2004 regarding the establishment and development of small and medium enterprises, may enter into directly negotiated bilateral contracts of sale / purchase electricity, notwithstanding art. 23 of Law no. 123/2012.
ANRE concluded that the deviations from the quota published in December 2014 are in the range of 0.5 to 3.7 percent; as a result, the estimated mandatory green certificates acquisition quota for the year 2015 shall be kept at the level of 0.274 GC/MWh, as determined in December 2014.
The Law introduces an exemption from centralized trading of electricity available for renewable energy producers holding plants with an installed power between 1 and 3 MW per producer (or 2 and 3 MW, in case of high efficiency cogeneration from biomass) and qualifying as small or medium enterprises, as defined by Law 346/2004.
This exemption comes in addition to the existing exemption from centralized trading of electricity and green certificates applicable since March 2014 according to Law 23/2014 to producers holding plants of up to 1 MW installed (or 2 MW, in case of high efficiency cogeneration from biomass).
It should be noted that the newly added exemption does not apply to trading of green certificates.
Within 3 days from completing the transaction, producers will have to submit to ANRE information regarding the price and quantity of electricity sold according to the bilateral contracts for electricity. Failure to observe this obligation triggers fines and, for producers with installed powers exceeding 100 kW, also suspension of the generation license for a period of 3 months.
In order to incentivize incumbent buyers of green certificates, the Law introduces a system of quarterly fulfilment of the mandatory GC acquisition quota. Thus, suppliers will have to report to ANRE both annually and quarterly.Within 45 days from the completion of each quarter, ANRE determines for the respective quarter the degree of fulfilment of the mandatory acquisition quota, on the basis of the number of acquired GC and the electricity invoiced to end consumers or self-supplied.
Failure to achieve at least 90% of the annual mandatory quota is sanctioned with fines amounting to the product of the maximum legal value of GC and the number of GC not acquired, which corresponds to the difference between 90% of annual mandatory quota and the quota achieved for the respective quarter.
By way of exception, until 31 December 2015, for the suppliers to large industrial consumers which have applied for exemption from payment of GC on the basis of Government Decision 495/2014, for the electricity contracted or self-supplied to such consumers, the mandatory GC acquisition quota will only be considered annually, until the respective applications are solved.
Until now, GC were invoiced to end consumers at a value representing the product between the annual GC mandatory quota estimated by ANRE, the invoiced electricity and the price of GC acquired by the supplier of the centralized markets.
The amendment brought by the Law refers to the price of the GC considered in the formula, that will be the weighted average price of transactions from the centralized market in the month preceding the invoicing month or the last available monthly weighted average.
Electricity generated from biomass acquired from import becomes eligible for the GC support scheme.
The support scheme will not apply to the renewable electricity sold for negative prices. ANRE is expected to develop on this concept in the implementing regulations to be issued within 90 days.
The GC support scheme shall be open to renewable energy producers located in other EU Member States, ie renewable electricity generated in other EU Member States will be granted green certificates in Romania. Relevant regulation will be approved by way of Government decision and then ANRE will adapt the legal framework, in order to implement the mechanism, on the basis of bilateral agreements entered into with each EU Member State.
Large renewable producers – with installed capacities in excess of 125 MW – which, for reasons which are not imputable on them, failed to be issued the individual authorization decision by the European Commission within 24 months from accreditation - may apply for a new temporary accreditation for the electricity generated between the temporary accreditation date and the date of issuing the individual decision.
Producers with installed capacities between 125 and 250 MW, which did not benefit from the GC support scheme, may be accredited by ANRE without the individual decision of the European Commission being necessary.
In accordance with the applicable EU guidelines on state aid, the threshold for application to the European Commission in order to be accredited for the GC support scheme has been raised to 250 MW.
Before the entry into force of the Law, failure by the obliged GC acquirers to timely or duly present the required information to ANRE was sanctioned with fines ranging from 1,000 to 10,000 RON and from 10,000 to 100,000 RON, for natural persons and legal persons, respectively.
The Law repeals the distinction between natural and legal persons, and subjects all failures to fines ranging from 10,000 to 100,000 RON and up to 5% of the turnover, in case of at least 2 breaches during a calendar year.
Regulations approving the feed-in tariffs granted to renewable energy plants with an installed capacity less than 500 kW per plant will be prepared by the Energy Ministry together with ANRE within 90 days and will be further submitted to the Government's approval. The Government should approve such regulation within 30 days from receipt thereof.
Note: Part of the legal content was provided by law firm Schoenherr&Asociatii
