Laws&Regulations - Amendments to Law No. 220/2008 Establishing a System for the Promotion of Electricity Generation from Renewable Sources (“Law 220”)

At the beginning of June, 2011, Romanian authorities officially notified the European Commission of the support scheme provided in Law 220. Romanian authorities also submitted the proposed amendments to Law 220 for its harmonisation with EU provisions of state aid and to eliminate any possibility of overcompensation.

Main amendments proposed to Law 220 are:

(a) The introduction of new terms, such as overcompensation (which appears for an internal rate of return 10% higher than the value envisaged for the respective technology during the authorisation of the support scheme and which will be published on ANRE's website), cost-benefit analysis and internal rate of return. Romanian authorities must monitor the support scheme and reduce the number of granted green certificates in case of overcompensation.

(b) Reduction of terms for which the support scheme in Law 220 is applicable to renewable energy producers who benefited from green certificates prior to the application of this system with the periods for which they have already benefited from green certificates.

(c) As a novelty, producers of electricity from renewable sources such as biomass, bioliquids and biogas can benefit from the promotion system established by Law 220 provided they own certificates attesting the origin of these sources.

(d) Reduction of number of green certificates, with one green certificate in the case of technologies based on biomass, biogas and bioliquids, with the exception of biomass resulting from energetic crops and with 2 green certificates in the case of technologies based on the waste fermentation and sludge from wastewater.

(e) Irrespective of the renewable sources used, the electricity producers benefit from:
• one green certificate for each 1 MWh of power produced and delivered from power plants during commissioning;
• a number of green certificates established by ANRE by reducing the provided number of green certificates, diminishing the investment reference value per MW by the value of the received aid per MW and maintaining the value of the internal rates of return considered in the calculations provided to the European Commission during the authorisation process for the promotion system, if the power plants benefit additionally from one or more state aids.

(f) Investors in renewable power plants with installed capacities of more than 125 MW who fulfill the conditions for applying the promotion system set forth by Law 220, must prepare and submit the documentation necessary for the assessment of the support measure by the European Commission.

(g) The transport and system operator has the right to limit or interrupt the production of electricity from renewable sources based on commercial rules only, set forth by ANRE, or in exceptional circumstances, if such action is absolutely necessary for maintaining the stability and for fulfilling the SEN safety criteria.

We kindly ask you to take into consideration that the amendments presented above are based on the document for discussion purposes, as published on ANRE's official website. These amendments may suffer other changes until the moment of their adoption.

Cristina Daianu, Managing Counsel                Diana Poputoaia, Associate   

This text is intended for informational purposes only. It is not intended to be used as legal advice nor is it an exhaustive presentation of the issues reviewed herein, as Salans company is not to be held liable in any way for the failure to implement or implementation of the above. For specific legal issues, we hereby recommend a case-by-case consultation.