FAQ

1. What is a green certificate?

A green certificate means the certificate proving that a certain quantity of electricity is generated from renewable sources. Green certificates may be traded in a centralized green certificates market, separately from the electricity amount they account for, as provided by law.

2. How many GCs are awarded to solar PV and what is the value of 1 (one) GC?

As of 1 January 2014, solar PV is awarded with three (3) green certificates for each 1 MWh produced and delivered to the power grid by producers. The price of 1 (one) green certificate may vary within a fixed band from minimum of EUR 27 to maximum EUR 55, subject to yearly indexation.

3. What is the mandatory quota of RES – Electricty benefiting from GC support scheme?

(a) 10% for 2011;
(b) 12% for 2012;
(c) 14% for 2013.

Starting with 2014, the RES-Electricity that will benefit from GCs support will be established on yearly basis.

ANRE will be responsible with the monitoring of the RES-Electricity market and will publish and inform the Government until 30 June of year N on the RES-Electricity that should benefit from GCs support in year N+1.

Further, at the proposal of the Energy Department, the Government will decide within 60 days, as of the moment ANRE made public the data, on the actual RES-Electricity that will benefit from GCs in year N+1.

As an exception, for year 2014, ANRE will publish and inform the Government within three (3) days as of the enactment date of the law to approve EGO 57/2013 on the RES-Electricity that should benefit from GCs support in year 2014. The Government, at the proposal of the Energy Department, will decide until 31 March 2014 on the actual RES-Electricity that will benefit from GCs in year 2014.

It is expected that the adjustment of the RES-Electricity that would benefit from GCs is made so that a balance between the supply and demand of GCs is reached.

4. For how many years the GCs support scheme will apply?

(a) 15 years, for the electricity produced in new generating plants;
(b) 10 years, for the electricity produced in retrofitted hydro-power plants with an installed capacity of at most 10 MW;
(c) 7 years, for the electricity produced in wind plants/generating sets, which have been used for the production of electricity in other countries, provided that they are used in isolated electricity systems or that they were brought into service in Romania before the application of the GCs supports scheme;
(d) 3 years, for the electricity produced in non-retrofitted hydro-power plants/generating sets, with an installed capacity of at most 10 MW.

5. Does RES-Electricity benefit from any guarantees?

RES-Electricity in Romania is awarded with priority dispatching.

Transport and distribution operators must assure the priority dispatching of RES-Electricity and they are allowed to limit or stop the RES-Electricity production only under special conditions. In order to obtain guaranteed access and therefore guaranteed dispatching, RES-Electricity must qualify for the GCs support scheme.

In addition to this requirement RES-Electricity must be contracted and sold on the electricity markets. Consequently, in order for RES-Electricity to have guaranteed access to the grid it needs to fulfill two (2) conditions (i) the producers of RES-Electricity to be accredited in accordance with the legal provisions so that they will benefit from the GCs support scheme and (ii) the quantity of RES-Electricity produced which benefits from GCs support scheme to be contracted and sold.

As regards guarantees for ensuring the selling of RES-Electricity, the legislation does not provide for specific incentives. The producers will have to sell the energy on the energy market at market prices.

6. Are there any fees we have to pay?

Under the provisions of Order 45/2010 as amended by Order 96/2013 of ANRE the following fees apply:

(a) Average fee for the energy transport services – EUR 4.92/MWh, VAT not included;
(b Fee for system service – EUR 3.33/MWh, VAT not included;

This is not an exhaustive list of fees and other fees may apply in accordance with the zone where the energy is introduced into the grid.

7. How can a producer sell its RES-Electricity?

The electric energy, including RES-Electricity, can be traded at market price.

7.1 Trading on the organized frame of the bilateral electric energy contracts can take two (2) forms:

7.1.1 Trading on the organized market of bilateral energy contracts, where the contracts are awarded through public tender. T he form of the bilateral contract is not mandatory, but it is forbidden to include clauses which will allow the parties to modify the bilateral contracts based on a future agreement. In consideration of the term for which such bilateral contracts can be concluded, there is a minimum term of one (1) month, but it is not mentioned a maximum term.

7.1.2 Trading on the organized market of bilateral energy contracts, where the contracts are awarded through a mixed of tender and negotiation procedure. The form of the contract, as it is provided by the Regulation, is standard and mandatory. Regarding the terms for which the bilateral contracts, traded under this scheme, can be concluded, are standard too (i.e. 1 week, 1 month, 1 quarter and 1 year).

Privately negotiated PPAs do not comply with the centralized principle of trading electricity and, currently, are forbidden as means of trading electricity. This interdiction has generally affected those new investors who, as of the enactment date of the Energy Act (on 19 July 2012), did not have a commercial operation license. PPAs can be concluded by holders of commercial operation licenses, if they register to the OPCOM market for bilateral electricity contracts.

7.2 Trading on the spot market – Intra Day and Day Ahead Market

Trading on the spot market is also supervised by OPCOM. In order to participate to the spots market, the producer must first register with OPCOM. This market is typically used by its participants to supplement the required quantities of energy or to sell the excess of electricity.

7.3 Centralized market for electricity for bilateral agreements with double continuous negotiation (Romanian: Piaţa centralizată cu negociere dublă continuă a Contractelor Bilaterale de energie electrică) – PC – OTC

By virtue of Order no 49/2013, PC – OTC was introduced, which defines standard electricity products characterized by certain elements concerning: (i) delivery options (timing and duration); (ii) the minimum hourly power; (iii) use of contracts pre-agreed among the parties, including EFET agreements. The duration of the delivery is fixed as follows: 1 day or weekend only or 1 week or 1 month or 1 quarter or 1 year.

All the contracts shall be sent to ANRE in real time and, in certain circumstances, ANRE may make them public in accordance with the provisions of Energy Act.

Given the novelty of the market (the draft of the agreement for participation in PC – OTC has been approved by ANRE only on 5 February 2014), for a transitional period of six (6) months from the date of the first transaction traded on PC – OTC, the parties may use agreements which are not based on the EFET standards. During this transitional period of six (6) months, OPCOM shall indicate the type of contract used by the parties (i.e. EFET or non – EFET). Such information should be available on the relevant sections on OPCOM website, which are currently under construction (http://www.opcom.ro/tranzactii_produse/tranzactii_produse.php?lang=ro&id=195 accessed on 7 February 2014).

The PC – OTC is expected to be operational within the first part of 2014.

8. Can/will ANRE reduce the number of GCs during the contract period for existing PV plants?

8.1 Reduction of the GCs in case the producer benefits from state aid funds

As per Law 220/2008 regarding the GCs support scheme and Order 42/2011 as later amended and modified pertaining to the accreditation of the producers for the GCs support scheme, the beneficiary of non-reimbursable state aid financing will face reduction of their GCs. The reduction applied will be performed so that the beneficiary will receive the same IRR that it would have had, had it not benefitted from any such state aid. This reduction will be imposed on existing RES-Electricity production facilities.

8.2 Reduction of GCs caused by overcompensation

In order to mitigate the risk that the GC support scheme would distort competition on the Romanian energy market, IRR rates are provided for each RES-Electricity producing technology.

ANRE will monitor the RES-Electricity producers and will prepare annual reports that will be made public within 90 days after the monitoring period ends. If is determined that a certain technology generates higher IRR than the approved ones, ANRE informs the Government within 30 days after the date the monitoring report has been made public.

Furthermore, within 60 days after ANRE informs the Government, the latter will decide by means of a Government Decision on any reduction of the number of GCs.

The reduction will be imposed upon those RES–Electricity projects that obtain accreditation starting from 1 January of the year following the reduction decision.

With Government Decision 994/2013, the number of GCs has been reduced for new hydro power plants with installed power under 10 MW, wind and solar plants, as follows:

- 2.3 GCs for each MWh produced and delivered, if the hydro power plants are new and have an installed power capacity under 10 MW or 2 GCs for each MWh produced and delivered, if the hydro plants are refurbished and have an installed capacity power under 10 MW;
- 1.5 GCs until year 2017 and 0.75 GCs starting with year 2018 for each MWh produced and delivered by wind farms; and
- 3 GC for each MWh produced and delivered by solar PV farms.

The reduction will apply to those RES–Electricity projects that obtain accreditation starting with 1 January 2014.

9. What is the purpose of approved IRRs?

The IRR, as they are established for each RES-Electricity producing technology which may qualify for the GC support scheme, were submitted by Romania to the EU for approval. Such step was necessary because the provisions of GC support scheme are considered state aid and as consequence such measures must be first approved by the EU. The EU decision approving the GC support scheme and the IRR rates is C (2011) 4938 dated July 13, 2011.
For the avoidance of a support scheme which could distort the energy market, IRR rates are provided for each technology of producing RES-Electricity. If ANRE determines that a certain technology generates higher IRR then the approved ones, it may initiate procedures to rebalance the factors that generated higher IRRs. The most probable measure to be taken is the reduction of the GCs for the technology which generates IRRs higher then approved quotations.

10. When does the producer get the money for its GCs?

The seller should receive the money for the sold GCs at the agreed terms in case of trading with Bilateral GC contract market or in five (5) days after the invoice has been received by the buyer in case of trading on the Centralized GC market.

11. Is the trade of GCs completely electronically or also physical?

Irrespectively of the modality the producer chooses to sell its GCs (i.e. Bilateral GC contract market or Centralized GC market) trading of the GC is completely electronically.

After OPCOM receives the confirmation from the seller that the payment has been done by the buyer, it will credit the buyer’s account with the correspondent number of purchased GCs.

12. What is the validity of a GC? What will happen if the producer cannot sell its GCs?

In accordance with the legal provisions, the validity term of the GC is of twelve (12) months starting from its issuance by the TSO. If during this time the GC is not sold it will be cancelled.

At the moment the relevant legislation does not give a solution for the oversupply of GC. It is generally viewed as a commercial risk which the producers of RES-Electricity must take into consideration.

13. Is there any risk that a producer is denied the registration to the trading platform? How long does it take to register?

OPCOM must register any participant which meets the criteria for registration. Hence, OPCOM may not refuse the registration of a participant which is in accordance with the legal requirement of the relevant legislation.

Registration process is not time consuming and is considered completed once the applicant signs with OPCOM the agreement for participation to GC market.

14. How does the trade of GCs work? When will the producer get the money?

During the certification process, ANRE is not allowed to assess the opportunity of another RES-Electricity producer which seeks the certification in order to qualify for the GC support scheme. The energy market is free and any producer of RES-Electricity can obtain the certification if the provisions of relevant legislation are observed. Hence, if the RES-Electricity producer will submit all the required documentation, ANRE must issue the certification.

15. Is there any fee per green certificate which the producer has to pay to the transport system operator (“TSO”) in order to get the green certificates?

Currently TSO does not impose a certain fee in order to register and receive the green certificates. Moreover, OPCOM, which is the organizer of the centralized GC market, does not impose fees for registration or for the trading of the GCs. Nevertheless, it is possible that the situation will change in the future as the procedures are being presently updated to include the amendments brought to the legislation pertaining to GC trading.

16. What is the time frame for obtaining the certification from ANRE in order to get the GCs? What is the relevant deadline to be observed by a developer of RES-Electricity facilities in order to qualify for the GC support scheme?

In accordance with Order 42/2011, as later amended and modified, of ANRE, any producer which intends to benefit from GCs support scheme must first obtain the certification from ANRE.

Relevant documentation must be submitted to ANRE before the applicant will start producing and delivering electric energy into the National Electric System (“SEN”).

After the request has been submitted, ANRE shall analyze such and, if necessary, asks the applicant to supplement within ten (10) days the information or documentation provided.

In case the applicant fails to submit the requested information or documentation, ANRE will dismiss the request as incomplete and returns the documentation to the applicant.

After all documentation for the certification is complete, ANRE must issue the certification decision in thirty (30) days. Such certification will qualify the producer to participate to the GC support scheme. Further, ANRE shall inform the applicant of its decision. After the applicant has been informed of ANRE’s decision it must transmit such to the Grid Operator where the electric units are connected, to the Transport and System Operator – Transelectrica SA (“TSO”) in order to issue the GCs and to OPCOM in order to register to the GCs market.

In order to qualify for the GC support scheme, as provided by Law 220/2008 and by Order 42/2011, the production units must be put into operation or refurbished by the end of year 2016.

17. How does the trade of GCs work?

The participants to the GCs market may trade GCs on two (2) different trading platforms: (i) the centralized green certificates market (the “GC Centralized Market”); and (ii) the green certificates market for bilateral contracts (the “GC Bilateral Contracts Market”). Both trading platforms, which function in parallel with the electricity market, are regulated, centralized and supervised by OPCOM.

The GCs Centralized Market and the GC Bilateral Contracts Market are centralized markets administrated by OPCOM.

As a consequence, trading of GCs may no longer be performed based upon GCs sale – purchase agreements concluded outside the centralized GCs market administrated by OPCOM.

The amendments brought to Law 220/2008 and by Order 57/2013, as secondary legislation, are meant to create a centralized, standardized trading platform in order to develop the GCs market as a competitive, transparent and non-discriminatory trading environment.

As opposed to the GC Bilateral Contracts Market where the price of a GC is freely negotiated by the parties (within the mandatory trading value range), on the GC Centralized Market the certificates are traded at the closing price of the GC Centralized Market (pretul de inchidere al pietei centralizate de certificate verzi) determined on the basis of the respective offers to buy and to sell submitted on the GC Centralized Market in that respective month.

In accordance with Order 57/2013, a GC can be subject to successive trading and shall be registered in the account of the economic agent to which the GC is transferred and, finally, to the account of the economic agent which will use the GC in order to prove the fulfilment of the GCs purchase mandatory quota. Transfer of GCs from the account of the seller to the account of the buyer will be performed by OPCOM, only after payment confirmation, and will be effective after the registration in the GC register.

18. When does the producer obtain the GCs?

TSO shall issue the GCs within four (4) working days as from the date the RES-Electricity producer informs the TSO of the produced RES-Electricity. The producer must submit each month to the TSO the quantity of RES-Electricity which benefits from the GC support scheme.

19. Is there any risk that a producer will not get the qualification as RES-Electricity producer from the ANRE?

During the certification process, ANRE is not allowed to assess the opportunity of another RES-Electricity producer which seeks the certification in order to qualify for the GC support scheme. The energy market is free and any producer of RES-Electricity can obtain the certification if the provisions of relevant legislation are observed. Hence, if the RES-Electricity producer will submit all the required documentation, ANRE must issue the certification.

20. Suspension of GCs?

Envisaged RES–Electricity Technologies

In the period 1 July 2013 – 31 March 2017 the allocation of a certain number of GCs will be temporarily suspended, as follows:

- one (1) GC for new hydro plants, with installed power under 10 MW;
- one (1) GC for wind farms; and
- two (2) GCs for photovoltaic plants.

Suspended GCs shall be released for trading on a monthly basis, as follows:

- starting from 1 April 2017, for new hydro-power plants with an installed power of maximum 10 MW and for solar power plants, in proportion to the average number of GCs suspended during the period 1 July 2013-31 March 2017, subject to observing the total number of GCs suspended for this period;

- starting from 1 January 2018, for wind power plants, in proportion to the average number of GCs suspended during the period 1 July 2013 – 31 March 2017, subject to observing the total number of GCs suspended for this period.

All GCs shall be released for trading according to the above procedure by 31 December 2020, at the latest.

No other technology qualifying for the GCs support scheme is currently subject to such GC suspension.