The Ministry of Energy has published a draft bill that brings major amendments to the renewable law no 220/2008, including new price limits and transaction changes for green certificates, which represent one of the main revenue generation channels for renewable energy producers in Romania.
The amendments are included in a draft government ordinance that is currently under debate. Thus, the government proposes the enforcement of an annual obligation for the acquisition of a constant number of green certificates for 15 years starting 2017. This option was selected by an inter-institutional group comprising representatives of the Ministry of Energy, the Ministry of Finance, energy regulator ANRE, the energy stock exchange OPCOM, the Competition Council and grid operator Transelectrica.
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There was also a second scenario that included the acquisition of a fixed quota, respectively 90 percent of the total number of green certificates that are issued and reinserted yearly.
The two scenarios were based on a report made by London-based Economic Consulting Associates that was presented to the Ministry of Energy and the European Bank for Reconstruction and Development.
The authorities commented that the scenario that was selected “fulfils the conditions for providing the optimum solutions for continuing to support the renewable energy sector, with a bearable impact on the bills of final consumers, on the backdrop of economic development.”
The 12-month expiry date for green certificates could be removed
According to the draft bill, the green certificates will be valid from the date they are issued to December 31 2031. Under the current legal provisions, the certificates are valid for one year.
“Through the proposed change, there will be a number of green certificates that remain untraded, with the option for the surplus of green certificates to be sold during the period in which the support scheme is working at a lower estimated price,” said the government.
In addition, the government proposes the extension of the delay period, up to December 31 2017, for wind and small-hydro technologies and the extension of the delay period, up to December 31 2024 for solar technologies.
“The delay regarding the transaction of the green certificates is required to ensure a better sale rate of green certificates to market participants. For technologies based on solar energy, the delay up to 2024 is required because if we look at the Internal Return Rate, we can see a major discrepancy between the IRR of renewable producers,” according to the bill.
Meanwhile, the reinsertion period for green certificates of wind and hydro producers will be of 8 years, starting January 1 2018 up to 2025.
For solar producers, the reinsertion period will extend for 6 years from January 1 2025 to December 31 2030.
Furthermore, the green certificates will gain value on the moment of the transaction and not of the issuance.
New regulated price limits for green certificates
The price limits for the sale of green certificates will also be changed with a floor price of EUR 25 per certificate and a ceiling price of EUR 55 per certificate. The new regulated limits from 2017 to December 31 2031 will be of EUR 25 to EUR 35.
As of August 2016, Romania had 2.9 GW of wind capacities and 1.3 GW of solar installations enrolled in the support scheme, according to Transelectrica. The biomass capacities accounted for around 100 MW, while small hydro had 317 MW.