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 […]
November Newsletter
14 November 2022 Newsletter Anca Mihăilescu Managing Partner +40 791 454 988 anca.mihailescu@mihailesculegal.ro mihailesculegal.ro Friday, 11 November 2022, Emergency Government Ordinance 153/2022 (“EGO 153”) was published in the Official Gazette. This is the last of a series of seven normative acts issued in less that one year to address the negative effects of the existing […]
October Newsletter
24 October 2022 Newsletter Anca Mihăilescu Managing Partner +40 791 454 988 anca.mihailescu@mihailesculegal.ro mihailesculegal.ro Thursday, 19 October 2022, Emergency Government Ordinance 140/2022 regarding the single industrial licence (“EGO 140”) was published in the Official Gazette. This ordinance implements the provisions National Plan for Reconstruction and Resilience on the reform of the industrial and manufacturing licenses in Romania. This […]
September Newsletter
02 September 2022 Newsletter Anca Mihăilescu Managing Partner +40 791 454 988 anca.mihailescu@mihailesculegal.ro mihailesculegal.ro Yesterday, 1 September 2022, the Romanian Government enacted a new government emergency ordinance regulating for the energy market. This is the last of a series of sixth normative acts issued in less than one year to address the negative effects of […]