Imminent amendments to Law no. 220/2008 regarding green certificate support scheme /Energy

The Clamber of Deputies, in its quality as decision chamber of the Parliament, approved on 26 June 2018 a draft law (the “Draft Law”) PL- x no. 198/2017 to amend Law no. 220/2008 regarding RES-E green certificate support scheme (“Law 220/2008”).

More specifically, this Draft Law shall directly approve with amendments the Government Emergency Ordinance no. 24/2017, which entered into force last year and brought certain amendments to Law 220/2008 (see here

The Draft Law has been in the legislative process since 8 May 2017, when it was submitted to the Senate, being actively followed by all participants in the RES-E field. Although the Draft Law still has to undergo several steps until its entry into force, we hope for a smooth finalization of the legislative process, so that the provisions of the Draft Law shall enter into effect in the following months.

The amendments introduced by the Draft Law are widely considered to be positive and supportive of those RES-E producers affected in the past years by successive legislation amendments to Law 220/2008.

The main amendments that were implemented by the Draft Law are:

1. Prosumer. The introduction of the prosumer, meaning a household consumer that produces its electricity for its own consumption and may offer any excess to the system. A prosumer is defined as a final client (natural or legal person) that owns an electricity production unit, including cogeneration, whose main activity does not consist in electricity production. A prosumer may use, store or sell RES-E electricity produced within its premises (a building, apartment building, residential area or a commercial or industrial space or within the same closed distribution system). This definition is in line with other similar cases implemented throughout the European Union. Prosumers are exempted from the payment of fiscal obligations related to the quantities of electricity produced for own consumption or sold to suppliers.

2. Centralized anonymous green certificate market. An amendment of the definition of the centralized anonymous green certificate market refers to the fact that the criteria for allocating sale and purchase offers shall be pro rata and not by time stamp (Romanian marca de timp).

3. Acquisition quota. The threshold for the average impact in the invoice of the final consumer is progressively increased until 2022, so as to ensure a takeover of all green certificates. The thresholds are: (i) EUR 11.7/MWh for 2018 (ii) EUR 12.5/MWh for 2019 (iii) EUR 13/MWh for 2020 and EUR 14.5/MWh for 2022.

These thresholds shall be maintained provided that the average final annual electricity consumption is also maintained during 2019-2011. The Draft Law expressly guarantees that all green certificates to be issued between 1 April 2017 – 31 December 2031 shall be traded, including those suspended from trading.

4. Dispatchable units shall receive green certificates for their entire production. The article stating that the electricity quantities exceeding those notified to the system operator are precluded from the support scheme has been repealed, so as to stop a discrimination between dispatchable and non-dispatchable units.

5. Feed-in tariff. As an alternative to the green certificate support scheme set out by Law 220/2008, the Ministry of Energy, together with ANRE, may draft and submit for approval to the Government another support scheme for RES-E producers, in the form of a feed-in tariff, to be added to the average price of electricity resulted from transactions on the centralized electricity market. There is no timeline provided for the introduction of such support scheme, as the Draft Law only states that the proposal shall be notified to the European Commission within 60 days from its finalization and further approved by a Government Ordinance within 60 days from authorization by the European Commission.

An accredited producer may elect between the current support scheme and this future one.

6. Trans-border transactions. The sale of electricity produced in Romania by suppliers to consumers / suppliers outside Romania, through bilateral trading, within states with which Romania has bilateral agreements to this effect, causes an obligation to that respective supplier for the acquisition of green certificates.

7. Suspended green certificates for solar production units. The trading of two (2) green certificates is suspended starting from 1 April 2017 to 31 December 2020 for solar parks accredited by ANRE until 31 December 2013. The recovery thereof shall start on 1 January 2021, in equal instalments until 31 December 2030.

8. Co-participation of producers. In order to improve financial and production performance, two (2) or more producers of renewable energy, irrespective of the technology used, can participate in the energy markets together as a single aggregated entity, in compliance with the provisions of the Competition Law no. 21/1996. Secondary legislation shall be enacted by ANRE within six (6) months from the entry into force of the Draft Law, to provide the framework for such co-participation.

Publishing date: 28.06.2018

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