Renewable Energy Amendments
I. Pastures in the public or private domain of the State, of communes, towns and municipalities may be used for electricity production and storage, in dual system subject to (i) obtaining the approval of the farmer/association which has already concluded an agreement for the use of the pasture and (ii) only if the agricultural exploitation of the pasture is not impaired.
Note: It remains to be seen if to which extent these provisions are valid, taking into consideration that (i) the Methodological Norms cannot derogate from Government Ordinance 34/2013 and (ii) article 9, paragraph 2 corroborated with article 14, paragraph 1, letter g) from such ordinance may be interpreted in the sense that only farmers may conclude use right agreements over pastures in the public or private domain of the State.
II. Renewable electricity production facilities may be constructed on permanent pasture lands subject to the conditions laid out in Art. 92, paragraph 2, letter j) of Law 18/1991 (i.e., to be constructed on extramuros agricultural land, up to a maximum of 50 ha), and in such a way that it does not impair the proper exploitation of the pasture.
III. New definitions
(i) Dual use of permanent pasture lands: the performance, on the same area of permanent pasture, of grazing and fodder production activities, as well as of activities for the production of electricity from renewable sources, as defined by art. 92, paragraph 2, letter j) of Law 18/1991;
(ii) Proper use of permanent pasture lands in case of dual use: the use of pastures for renewable electricity production facilities, in case of dual use, must not harm the agricultural quality of the pasture land, so that grazing activities can be carried out;
(iii) Total surface of permanent pastures used in dual system: the surface of pasture covered by the equipment of the renewable electricity facilities (i.e. inverters, transformers, electricity storage units, access roads, etc.) must not be greater than 20% of the total surface of the permanent pasture.
IV. The dual use of the permanent pasture may be performed by: (i) a single person for both agricultural activity and renewable electricity production or (ii) two persons, one for the agricultural activity, the other for the activity of renewable electricity production.
V. For the use of pastures in the dual system, the areas occupied by specific investment objectives for the production of electricity from renewable sources shall be partially taken out of the agricultural circuit. Such area may not be greater than 20% of the maximum 50 ha/investment objective.
VI. The beneficiary of the areas of pasture taken out of the agricultural circuit shall be obliged to regenerate an unproductive land with an area equal to the one taken out of the agricultural circuit. On completion of such regeneration, the beneficiary shall be obliged to register in the agricultural circuit the regenerated area with the use category of pasture.
Should you have any questions regarding the above, please do not hesitate to contact us.
ANRE Revised Draft Order
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.
Offshore Law – Promulgated
Please find below the most important provisions of the Offshore Law as promulgated by the President of Romania.
Within 3 months of entry into force, a study will be performed by the Ministry of energy which will establish, among others, the offshore blocks, the potential route/s for the injection of the produced electricity into the grid and provisions regarding a state aid scheme to be further structured and implemented. The offshore blocks will be established by considering their wind energy potential, the future maritime activities to be performed as well as natural security restrictions.
The exploitation of offshore wind power will be based on the conclusion of a concession agreement with the Ministry of Energy in accordance with public tender procedures. The concession agreement may be concluded for a period of maximum 30 years with the possibility of prolonging it, only once, for another 10 years. Also, the exploration permit will be issued by the Ministry of Energy after the conclusion of the concession agreement.
The beneficiary of the concession agreement will have to pay, among others, the following:
i) annual royalty for the exploitation of the offshore wind plant;
ii) tax for the concessioned surface and the connection cables surface;
iii) a financial warranty.
The amounts of the above will be established by the 30th of June 2025.
For the construction and the connection of the offshore wind plant, among others, the following permits are required:
i) set up permit from the National Energy Regulatory Authority (ANRE);
ii) development approval from the Petroleum Offshore Authority (ACROPO).
The development approval covers both offshore and onshore works and is issued on the basis of various documents, such as the connection permit issued by Transelectrica (ATR), technical documents, the final exploration report, administrative acts issued by various authorities, various permits and statements. Provisions regarding the procedure of obtaining the development approval will be published by ACROPO by the 31st of December 2024.
Within 12 months from the issuance of the development approval, the beneficiary is obliged to commence the construction works, which will have to be completed in 5 years from the date of commencement.
For the connection of the offshore wind plant, the beneficiary must obtain an ATR from Transelectrica. In this respect, Transelectrica will perform studies to assess the potential impact of large amounts of offshore wind energy on the national energy grid which will be included in the electricity transmission grid Development Plan starting with the 1st of January 2025. These studies will affect the terms and conditions of the ATR.
The templates of the ATR, the connection agreement and the connection certificate will be published by ANRE until the 31st of December 2024.
After the completion of the works, the beneficiary must obtain a production license from ANRE in accordance with Energy Law 123/2012.
Also, the Offshore Law established, in the favor of the beneficiary, the possibility of obtaining the easement rights necessary for the construction and exploitation of the offshore wind plant on private property lands owned by natural persons, companies or the State. Compensation established through agreement or through a court decision must be paid to the affected in rem rights owners.
For the public lands necessary for the construction and exploitation of the offshore wind plant, the beneficiary may obtain concession rights.
The beneficiary of the concession agreement may apply for a state aid scheme awarded by the Ministry of Energy if the offshore wind plant will be put into function in maximum 8 years from the conclusion of the concession agreements.
Although the enactment of the law by the Chamber of Deputies is an important step towards establishing the legal regime required for the development of offshore wind plants, it is not yet complete without various norms, methodologies and regulations to be enacted.
Should you have any questions regarding the above, please do not hesitate to contact us.
Modernisation Fund: Final Guides
Maximum grant: EUR 20 million per group, per investment project. Although the provisions of the guide are unclear, our view is that the group may apply for the funding of multiple projects without exceeding however the threshold of EUR 20 million for all such projects.
Maximum grant per MW:
700,000 EUR/MW – wind projects;
450,000 EUR/MW – solar projects with a maximum capacity of 5 MW;
360,000 EUR/MW – solar projects with a capacity of over 5 MW;
1,805,000 EUR/MW – hydro capacities.
Total Budget*:
EUR 100,000,000 – wind projects;
EUR 120,000,000 – solar projects with a maximum capacity of 5 MW;
EUR 80,000,000 – solar projects with a capacity of over 5 MW;
EUR 100,000,000 – hydro capacities.
*The Ministry of Energy may redistribute the budget from one category of production to another, if there are not sufficient applications to absorb the budget of the redistributed category.
Total annual budget: maximum EUR 150 million
Project implementation period: no later than 31st December 2026
Storage capacities are also a criteria in the evaluation process, in addition to the requested state aid amount, and it is possible to receive a maximum 10 points for them. The storage capacity must be able to store power for at least 12 minutes.
Financed activities: installations, equipment and constructions.
Payment of funds: reimbursement of expenditure incurred and through a pre – financing mechanism
Important requirements:
Contract of land acquisition/superficies etc. or proof of initiation of the procedure for obtaining the right of use (for minimum 5 years following the final payment date under the financing agreement) to be submitted at the submission of the financing request;
ATR and environmental permit are not necessary at the submission of the financing request. These documents are required for the conclusion of the financing agreement.
Feasibility study to be submitted at the submission of the financing request;
The minimum production capacity of the project has to be of minimum 11.4% or 1000 hours/year for solar projects, minimum 24% or 2100 hours/year for wind projects and minimum 27.4% or 2400 hours/year for hydro projects;
No construction activities (including construction related agreements) shall be performed prior to the financing request submission date;
Newly established companies must have a share capital of at least RON 100,000 or approximately EUR 20,000.
Solvency of the applicant must be proved at the date of submission of the financing request. If the applicant does not meet the solvency indicator (i.e. the ratio between Total Liabilities and Equity, which must be positive and less than 7.5 in the last financial year) or is a newly established company, a binding letter of comfort from a banking or non – banking institution authorised by the National Bank of Romania must be submitted along with the financing request.
Contracts for Difference
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:
Senate Draft Offshore Wind Law
Please see below what persisted, what is new or amended and what was excluded.
Persistent Provisions
A study will be performed by the Ministry of Energy which will establish, among other, the offshore blocks, the potential route/s for the injection of the produced electricity into the grid and provisions regarding a state aid scheme to be further structured and implemented. The offshore blocks will be established by considering their wind energy potential, the future maritime activities to be performed as well as national security restrictions.
The exploitation of offshore wind energy will be based on the conclusion of a concession agreement with the Ministry of Energy according to public tender procedures. The concession agreement may be concluded for a maximum of 30 years with the possibility of prolonging it, only once, for another 10 years.
The fees of the concession agreement that will be paid by the beneficiary are as follows:
(i) annual royalty;
(ii) tax for the concessioned surface and the connection cable surface;
(iii) a financial guarantee;
The amounts of the above fees will be established by 30 June 2025.
For the constuction of the offshore wind plant, the following permits are necessary:
(i) Set Up Permit from the national energy regulatory authority (ANRE);
(ii) Development approval from the of petroleum offshore authority (ACROPO);
The development approval is issued on the basis of various documents, such as technical documents, administrative acts of various authorities, permits and statements.
In 12 months from the issuance of the development approval, the Beneficiary is obliged to start the construction works, which have to be finished in 5 years from the issuance date.
For the construction works to be performed on land (for example, connection works), a building permit will have to be obtained from ACROPO.
For the connection of the offshore wind plant, the Beneficiary must obtain a technical connection approval (ATR) from Transelectrica. In this respect, Transelectrica will perform studies to assess the potential impact of large amounts of offshore wind energy on the national energy grid starting with the 1st of January 2025, the results of which will impact the terms and conditions of the ATR.
After the completion of the works, the Beneficiary must obtain a production license from ANRE according to Energy Law 123/2012.
Also, the Draft Offshore Law establishes, in the favour of the Beneficiary, the possibility to obtain, for the construction and exploitation of the wind plant, the necessary easements rights on private property lands owned by natural persons, companies or the State. A compensation established through an agreement or a court decision must be paid for these rights.
Amended or New Provisions
The beneficiary of the concession agreement may apply for a state aid scheme awarded by the Ministry of Energy if the offshore production capacity will be put into function in maximum 8 years from the conclusion of the concession agreement, formerly the capacity had to be of at least 3 GW.
Until the 31st of December 2024, ANRE will issue ATR templates for offshore wind capacities.
The annual royalty will only have to be paid for the exploitation period of the concession agreement, formerly the exploration had to also be paid.
The definitions of the offshore block and of prohibited areas were amended.
A new tax for the blocks located on the area managed by the National Romanian Waters Administration will have to be paid annually by the beneficiary of the concession agreement.
A new permit will have to be obtained from the Ministry of Defense for the works that require the help of divers.
Excluded Provisions
The Draft Offshore Law does not mention anymore the establishment of a security commission for the safe exploitation of offshore wind.
Various details regarding the envisaged state aid scheme were removed from the Draft Offshore Law, currently existing only the general idea that a state aid scheme will be further developed.
ANRE Methodology Newsletter
As highlights, (i) the process should start as of 1 January 2025, (ii) is applicable only for production capacities adove 1MW, with or without storage capacities, (iii) is not applicable for 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 1 January 2025.
Please see below more information:
Tender Methodology
(i) Public tenders will be conducted annually for medium and high voltage projects;
(ii) TSO will develop a platform on which the tenders will be made publicly available;
(iii) TSO will also conduct a global solution study which will include various enforcement works such as: a) the available capacity of the grid with and without enforcement works, b) total capacity requested by the users, c) total value of the enforcement works for every year of a so called 10 years allocation period and d) the starting price of the tender;
(iv) Grid users will have the opportunity to participate in tenders by submitting a request for capacity allocations in the 16 January – 28/29 February timeframe;
(v) 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;
(vi) The winners of the public tender will conclude agreements with the TSO/DSO;
(vii) The production capacity has to be finalised and put into function in the year the grid capacity become available;
(viii) The are no transitory provisions regarding ATRs for which requests have been submitted on the basis of previous legislation.
Other Important Amendments – appicable 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 don’t need to be performed and will have a fixed percentage of 5% of the value of the connection tariff;
(ii) The financial warranty will have to be provided before the issuance of the ATR and will be released upon the putting into function of the production capacity;
(iii) The cases in which the warranty terminates or is executed have been amended.
Should you have any more questions regarding the above, please do not hesitate to contact us.
Modernisation Fund Newsletter
Draft Offshore Wind Law
A study will be performed by the Ministry of Energy which will establish the offshore blocks which can be exploited for energy production and the potential route/s for the injection of the produced electricity into the grid. The findings of the study will be published through a ministerial order, which will also contain an offshore wind plan, technical information, the prohibited areas of the sea and environmental information. Moreover, a list of the blocks will be published until 30 June 2025.
The exploitation of offshore wind energy will be based on the conclusion of a concession agreement with the Ministry of Energy according to the procedure for public tenders. The concession agreement may be concluded for a maximum of 30 years with the possibility of prolonging it, only once, for another 10 years.
The fees of the concession agreement that will be paid by the beneficiary are as follows:
(i) annual royalty;
(ii) tax for the concessioned surface and the connection cable surface;
(iii) a financial guarantee;
The amounts of the above fees will be established by 30 June 2025.
For the constuction of the offshore wind plant, the following permits are necessary:
(i) Set Up Permit from the national energy regulatory authority (ANRE);
(ii) Development approval from the of petroleum offshore authority (ACROPO);
The development approval is issued on the basis of various documents, such as technical documents, administrative acts of various authorities, permits and statements.
In 12 months from the issuance of the development approval, the Beneficiary in obliged to start the construction works, which have to be finished in 5 years from the issuance date.
For the construction works to be performed on land (for example, connection works), a building permit will have to be obtained from ACROPO.
For the connection of the offshore wind plant, the Beneficiary must obtain a technical connection approval (ATR) from Transelectrica. In this respect, Transelectrica will perform studies to assess the potential impact of large amounts of offshore wind energy on the national energy grid starting with the 1st of January 2025, the results of which will impact the terms and conditions of the ATR.
After the completion of the works, the Beneficiary must obtain a production license from ANRE according to Energy Law 123/2012.
Also, the Draft Law establishes, in the favour of the Beneficiary, the possibility to obtain, for the construction and exploitation of the wind plant, the necessary assements rights on private property lands owned by natural persons, companies or the State. A compensation established through and agreement or a court decision must be paid for these rights.
In addition to the Draft Law, various norms, methodologies and regulations should be enacted detailing the steps set out in the Draft Law.
Should you have any questions regarding the above, please do not hesitate to contact us.
May Newsletter
31 may 2023 Newsletter Anca Mihăilescu Managing Partner +40 791 454 988 anca.mihailescu@mihailesculegal.ro mihailesculegal.ro On 31 May 2023, the President of Romania promulgated the Law no. 166/2023 amending and supplementing Law no.350/2001 (“Law 350”) on territorial development and urban planning and Law no. 50/1991 (“Law 50”) on authorizing the execution of construction works (“Law […]