RED III: POWER PURCHASE AGREEMENTS

1. WHAT ARE PPA CONTRACTS AND WHY ARE THEY IMPORTANT?

A renewable power purchase agreement (PPA) is an agreement whereby an entity purchases green power directly from a producer without going through the centralized market.

These contracts are essential for:

Price stability - provides financial predictability for consumers and renewable energy producers
Developing new renewable capacity - enabling long-term investment in green energy infrastructure
Aligning with sustainability goals - many companies and institutions want to reduce their carbon footprint by directly using clean energy.

2. KEY CHANGES TO PPA CONTRACTS

Clear definition in the legislation - Art. 2 of GEO 163/2022 introduces a precise definition of PPA contracts, including contracts for electricity and heating and cooling from renewable sources.
Removing administrative obstacles - The Ministry of Energy, in cooperation with ANRE, is obliged to:

✔ Assess the legislative and administrative barriers that prevent the conclusion of PPA contracts and remove unjustified obstacles in their way;

✔ Promote the use of PPA contracts, including by exploring ways to reduce financial risks, possibly through the use of loan guarantees;

✔ Ensure fair treatment - PPA contracts must not be subject to discriminatory procedures or fees and must include the possibility of transfer of guarantees of origin to the buyer.

Integration with guarantees of origin (GO) - According to Art. 19 para. (41), the guarantees of origin relating to the quantities of renewable electricity delivered under a PPA contract may be transferred directly from the producer to the buyer at the latter's request.

Monitoring contracts

ANRE will monitor and report the amount of energy traded through PPAs;
The Ministry of Energy will include data on these contracts in the PNIESC (National Integrated Energy and Climate Change Integrated Plan) and in regular reports to the European Commission.

Reducing financial risks - The government is exploring credit guarantee mechanisms for PPP contracts to reduce financial risks and encourage private investment.

WARNING:

It is important to emphasize that the proposed amendments have not yet been formally adopted - February 2025. Pending publication in the Official Journal, the provisions under consideration remain at the stage of a legislative proposal and do not produce legal effects.

Stay informed! We'll be back with updates as the legislative process moves forward.

SOURSE

Draft emergency ordinance for amending and supplementing the Government Emergency Ordinance no. 163/2022 for completing the legal framework for promoting the use of energy from renewable sources, as well as for amending and supplementing some normative acts. https://energie.gov.ro/proiectul-de-act-normativ-forma-actualizata-a-documentului-postat-in-data-de-18-10-2024-ca-a-urmare-a-preluarii-observatiilor-din-cadrul-procedurii-de-transparenta-decizionala-derulata-de-ministeru/