ANRE Revised Draft Order - Mihailescu Legal

13 June 2024

Following public consultation with industry players, ANRE published a revised draft order for the approval of the methodology for capacity allocation of production capacities which was previously made public in February 2024 (the “Revised Draft Order”). The Revised Draft Order envisages that capacity allocation for production capacities will be performed based on public tender (the “Tender Methodology”) and amends the ANRE Regulation on the connection of users to electricity networks of public interest from 02.08.2013 (the “Connection Regulation”) and other various ANRE Orders.

The Revised Draft Order is currently under public consultation for the next 30 days.

As previously mentioned, this amendment represents a total market transformation as it is envisaged to allow capacity allocation for production capacities based on public tenders, as opposed to the current first came, first served rule.

As highlights, (i) the process should start as of the 1st of January 2026, previously it was due to start on the 1st of January 2025, (ii) the Tender Methodology is applicable only for production capacities of or above 5 MW, with or without adjoining storage capacities, previously it was applicable for production capacities of or above 1 MW, with or without adjoining storage capacities (iii) the Tender Methodology is not applicable to standalone storage capacities and (iv) the tender awarding criteria will be the highest offered price.

It remains to be seen what will happen to standalone storage capacities and, even more important, what will happen with the ATR requests submitted before the 1st of January 2026.

Please see below more information:

Tender Methodology

(i) Public tenders will be conducted annually for medium and high voltage projects for grid areas established by the TSO based on the ANRE procedure for determining available grid capacity;
(ii) Grid users will have the opportunity to participate in tenders by submitting a request for capacity allocation in the 16 January – 28/29 February timeframe.
(iii) The TSO will develop a platform on which the tenders will be made publicly available.
(iv) The TSO will also conduct a global solution study which will be published on the 15th of June each year and will determine the grid development works required to ensure the capacity related to the grid allocation requests for each electricity system area and for each year of the ten years allocation period.
(v) As a new provision, the global solution study will also take into account all power plants for which valid ATRs have been issued and the general reinforcement works performed or to be performed in accordance with the provisions of the ATRs. In our opinion it is not necessary beneficial considering the high number of valid ATRs which will probably never materialize in finalized projects. It remains to be seen if it will remain in the final form and how it will by applied by the DSOs.
(vi) Besides the global solution study, the TSO will publish, on the same date mentioned above, the following: a) the available grid capacity with and without enforcement works, b) the total capacity requested by the users, c) total value of the enforcement works of a ten years allocation period and d) the starting price of the tender.
(vii) The tender price will be established by taking into account the total estimated value of the grid development works in relation to total available grid capacity generated by such works.
(viii) For capacities of 50 MW or bigger, the requests will be submitted to the TSO, while for capacities of up to 50 MW, the requests will be submitted to the DSO.
(ix) The winners of the public tender will conclude capacity allocation agreements with the TSO/DSO. Drafts of such agreements have also been published along with the Tender Methodology.
(x) The production capacity has to be finalized and put into function in the year the awarded grid capacity becomes available.
(xi) There are no transitory provisions regarding ATRs for which requests have been submitted on the basis of previous legislation.

Other Important Amendments – applicable for all ongoing and future projects

(i) The financial warranty required for the connection of production capacities to the grid will be necessary even when reinforcement works do not need to be performed and will have a value equal to 5% of the value of the connection tariff.
(ii) As a new provision, the terms provided by the Connection Regulation for obtaining the building permit for the construction of the production capacity may be prolonged once, for a maximum of 12 months, with the written approval of the grid operator if: (i) the user provides an additional financial warranty in the amount of 5% of the connection tariff and (ii) the user provides documents that confirm that the reasons for the delay are beyond his control.
(iii) After receival of the ATR, the user may request in writing to the network operator to conclude the connection agreement with at least 30 calendar days before the expiry date of the ATR.
(iv) The use right over the land, premise and/or building on which the production or consumption capacity will be developed shall be valid until at least the end of the year requested for the final commissioning of the utilization installation, i.e. the user’s installation. This is a new provision, not included in the previous draft.
(v) The recalculation of the reinforcement works will also be performed by taking into account the production/consumption capacities which have an ATR issued before the ATR for which a request for trial energizing was submitted.
(vi) The cases in which the warranty terminates or is executed have been amended.
(vii) The ATR drafts have been amended.

If you require more details on the above, do not hesitate to contact us.

Anca Mihăilescu
Managing Partner
Mobile: +40 791 454 988
E-mail: anca.mihailescu@mihailesculegal.ro

Uricariu Mihail
Associate
Mobile: +40 732 141 830
E-mail: mihai.uricariu@mihailesculegal.ro

13 June 2024

The Revised Draft Order is currently under public consultation for the next 30 days.

It remains to be seen what will happen to standalone storage capacities and, even more important, what will happen with the ATR requests submitted before the 1st of January 2026.

Please see below more information:

Tender Methodology

(i) Public tenders will be conducted annually for medium and high voltage projects for grid areas established by the TSO based on the ANRE procedure for determining available grid capacity;

(ii) Grid users will have the opportunity to participate in tenders by submitting a request for capacity allocation in the 16 January – 28/29 February timeframe.

(iii) The TSO will develop a platform on which the tenders will be made publicly available.

(iv) The TSO will also conduct a global solution study which will be published on the 15th of June each year and will determine the grid development works required to ensure the capacity related to the grid allocation requests for each electricity system area and for each year of the ten years allocation period.

(v) As a new provision, the global solution study will also take into account all power plants for which valid ATRs have been issued and the general reinforcement works performed or to be performed in accordance with the provisions of the ATRs. In our opinion it is not necessary beneficial considering the high number of valid ATRs which will probably never materialize in finalized projects. It remains to be seen if it will remain in the final form and how it will by applied by the DSOs.

(vi) Besides the global solution study, the TSO will publish, on the same date mentioned above, the following: a) the available grid capacity with and without enforcement works, b) the total capacity requested by the users, c) total value of the enforcement works of a ten years allocation period and d) the starting price of the tender.

(vii) The tender price will be established by taking into account the total estimated value of the grid development works in relation to total available grid capacity generated by such works.

(viii) For capacities of 50 MW or bigger, the requests will be submitted to the TSO, while for capacities of up to 50 MW, the requests will be submitted to the DSO.

(ix) The winners of the public tender will conclude capacity allocation agreements with the TSO/DSO. Drafts of such agreements have also been published along with the Tender Methodology.

(x) The production capacity has to be finalized and put into function in the year the awarded grid capacity becomes available.

(xi) There are no transitory provisions regarding ATRs for which requests have been submitted on the basis of previous legislation.

Other Important Amendments - applicable for all ongoing and future projects

(ii) As a new provision, the terms provided by the Connection Regulation for obtaining the building permit for the construction of the production capacity may be prolonged once, for a maximum of 12 months, with the written approval of the grid operator if: (i) the user provides an additional financial warranty in the amount of 5% of the connection tariff and (ii) the user provides documents that confirm that the reasons for the delay are beyond his control.

(iii) After receival of the ATR, the user may request in writing to the network operator to conclude the connection agreement with at least 30 calendar days before the expiry date of the ATR.

(iv) The use right over the land, premise and/or building on which the production or consumption capacity will be developed shall be valid until at least the end of the year requested for the final commissioning of the utilization installation, i.e. the user’s installation. This is a new provision, not included in the previous draft.

(v) The recalculation of the reinforcement works will also be performed by taking into account the production/consumption capacities which have an ATR issued before the ATR for which a request for trial energizing was submitted.

(vi) The cases in which the warranty terminates or is executed have been amended.

(vii) The ATR drafts have been amended.