15 march 2024

Newsletter

On March 14, 2024, the Ministry of Energy published for public consultation: (i) the draft Government decision approving the general framework for the implementation and operation of the support mechanism through Contracts for Difference (CfD) for low-carbon technologies, including the provisions applicable to the first CfD support scheme for 3 billion euro approved by the European Commision for the production of electricity from onshore wind and photovoltaic solar energy sources (“Wind & Solar Scheme”) as well as (ii) the draft of the CfD agreement.

Deadline for public consultation: 25 March 2024.

We are waiting for the most important document, i.e. the Ministry of Energy order for the initiation of such the Wind & Solar Scheme (the “Initiation Order”). This order will establish the start date and parameters of a CfD auction within a CfD scheme, including but not limited to: eligibility criteria, capacity limitations, maximum strike price, value of bonds, bidding procedure rules.

We remind you that the Wind & Solar Scheme is comprised of two auction rounds: (i) 2024 auction of 2 GW, consisting of 1 GW solar and 1 GW wind, and (ii) 2025 auction for the remaining 3 GW, consisting of 1.5 GW wind and 1.5 GW solar.

The majority of the general provisions circulated last year remain applicable. In particular, no payments shall be made in case of negative reference prices and the manner in which the CfD contract can be amended should there be important legislative amendments is further detailed.

There are however some important amendments from which we mention the following:

     as per the draft CfD agreement, there seems to be no ATR requirement. However, the ATR will need to be obtained in a certain period of time and we estimate for this to be no longer than 6 months. It remains to be seen if the Initiation Order will provide any other important provisions or limitations.

     electricity can be sold only on the centralised market. Moreover, all quantities of electricity delivered by the electricity production capacity (except for internal consumption needs) will be under the CfD scheme.

     the mechanism for calculting the amounts to be paid by the CfD beneficiary in case of electricity sold on the billateral agreement segment of the centralised market are provided.

     the strike price shall be indexed once every three years (as opposed to once every year, as provided in previous drafts).

     it is possible to assign certain rights of the CfD beneficiary to bank/financial institution financing the project.

We note that the draft CfD agreement provides for the possibity to transfer the agreement with the prior approval of the Ministry. It is unclear how such agreement can be transferred by the CfD beneficiary.

For any questions or assistance on the draft CfD documentation, you may contact us at:

Anca Mihăilescu
Managing Partner
Mobile: +40 791 454 988
E-mail: anca.mihailescu@mihailesculegal.ro
Georgiana Evi
Partner
Mobile: +40 732 141 830
E-mail: georgiana.evi@mihailesculegal.ro
15 march 2024

Newsletter

On March 14, 2024, the Ministry of Energy published for public consultation: (i) the draft Government decision approving the general framework for the implementation and operation of the support mechanism through Contracts for Difference (CfD) for low-carbon technologies, including the provisions applicable to the first CfD support scheme for 3 billion euro approved by the European Commision for the production of electricity from onshore wind and photovoltaic solar energy sources (“Wind & Solar Scheme”) as well as (ii) the draft of the CfD agreement.

Deadline for public consultation: 25 March 2024.

We are waiting for the most important document, i.e. the Ministry of Energy order for the initiation of such the Wind & Solar Scheme (the “Initiation Order”). This order will establish the start date and parameters of a CfD auction within a CfD scheme, including but not limited to: eligibility criteria, capacity limitations, maximum strike price, value of bonds, bidding procedure rules.

We remind you that the Wind & Solar Scheme is comprised of two auction rounds: (i) 2024 auction of 2 GW, consisting of 1 GW solar and 1 GW wind, and (ii) 2025 auction for the remaining 3 GW, consisting of 1.5 GW wind and 1.5 GW solar.

The majority of the general provisions circulated last year remain applicable. In particular, no payments shall be made in case of negative reference prices and the manner in which the CfD contract can be amended should there be important legislative amendments is further detailed.

There are however some important amendments from which we mention the following:

    as per the draft CfD agreement, there seems to be no ATR requirement. However, the ATR will need to be obtained in a certain period of time and we estimate for this to be no longer than 6 months. It remains to be seen if the Initiation Order will provide any other important provisions or limitations.

    electricity can be sold only on the centralised market. Moreover, all quantities of electricity delivered by the electricity production capacity (except for internal consumption needs) will be under the CfD scheme.

    the mechanism for calculting the amounts to be paid by the CfD beneficiary in case of electricity sold on the billateral agreement segment of the centralised market are provided.

    the strike price shall be indexed once every three years (as opposed to once every year, as provided in previous drafts).

    it is possible to assign certain rights of the CfD beneficiary to bank/financial institution financing the project.

We note that the draft CfD agreement provides for the possibity to transfer the agreement with the prior approval of the Ministry. It is unclear how such agreement can be transferred by the CfD beneficiary.

For any questions or assistance on the draft CfD documentation, you may contact us at:

Anca Mihăilescu
Managing Partner
Mobile: +40 791 454 988
E-mail: anca.mihailescu@mihailesculegal.ro
Georgiana Evi
Partner
Mobile: +40 732 141 830
E-mail: georgiana.evi@mihailesculegal.ro
15 march 2024

Newsletter

On March 14, 2024, the Ministry of Energy published for public consultation: (i) the draft Government decision approving the general framework for the implementation and operation of the support mechanism through Contracts for Difference (CfD) for low-carbon technologies, including the provisions applicable to the first CfD support scheme for 3 billion euro approved by the European Commision for the production of electricity from onshore wind and photovoltaic solar energy sources (“Wind & Solar Scheme”) as well as (ii) the draft of the CfD agreement.

Deadline for public consultation: 25 March 2024.

We are waiting for the most important document, i.e. the Ministry of Energy order for the initiation of such the Wind & Solar Scheme (the “Initiation Order”). This order will establish the start date and parameters of a CfD auction within a CfD scheme, including but not limited to: eligibility criteria, capacity limitations, maximum strike price, value of bonds, bidding procedure rules.

We remind you that the Wind & Solar Scheme is comprised of two auction rounds: (i) 2024 auction of 2 GW, consisting of 1 GW solar and 1 GW wind, and (ii) 2025 auction for the remaining 3 GW, consisting of 1.5 GW wind and 1.5 GW solar.

The majority of the general provisions circulated last year remain applicable. In particular, no payments shall be made in case of negative reference prices and the manner in which the CfD contract can be amended should there be important legislative amendments is further detailed.

There are however some important amendments from which we mention the following:

    as per the draft CfD agreement, there seems to be no ATR requirement. However, the ATR will need to be obtained in a certain period of time and we estimate for this to be no longer than 6 months. It remains to be seen if the Initiation Order will provide any other important provisions or limitations.

    electricity can be sold only on the centralised market. Moreover, all quantities of electricity delivered by the electricity production capacity (except for internal consumption needs) will be under the CfD scheme.

    the mechanism for calculting the amounts to be paid by the CfD beneficiary in case of electricity sold on the billateral agreement segment of the centralised market are provided.

    the strike price shall be indexed once every three years (as opposed to once every year, as provided in previous drafts).

    it is possible to assign certain rights of the CfD beneficiary to bank/financial institution financing the project.

We note that the draft CfD agreement provides for the possibity to transfer the agreement with the prior approval of the Ministry. It is unclear how such agreement can be transferred by the CfD beneficiary.

For any questions or assistance on the draft CfD documentation, you may contact us at:

Anca Mihăilescu
Managing Partner
Mobile: +40 791 454 988
E-mail: anca.mihailescu@mihailesculegal.ro
Georgiana Evi
Partner
Mobile: +40 732 141 830
E-mail: georgiana.evi@mihailesculegal.ro