The emergency ordinance amending Law 220/2008, which establishes the system to promote energy generated from renewable sources, was published on the Official Gazette on Wednesday.
This law has never produced effects in the absence of the approval of the European Commission, which came this summer and brought significant changes to the old version of the law, all of which were introduced in the emergency ordinance.
This is the most important legislative act for green energy investors because it sets the way in which their projects will be rewarded by the government.
“The secondary legislation will be passed this week and later published in the Official Journal. We had expected the publication of the emergency ordinance,” said Dan Plaveti, chairman of the Romanian Energy Regulatory Authority (ANRE). “We can begin enforcing the law next week. It will be 100% enforceable as of next week.”
If producers meet all the requirements of the authorities, they will be able to benefit from the new support scheme as of this month.
The stake of this law is the number of green certificates, the tool used to support renewable energy investments. Such investments are currently rewarded based on a government decision issued in 2004 (HG 1892/2004). This decision states that each megawatt/hour of power gets one green certificate, regardless of whether it is about wind, solar or hydropower.
Once the new legislation enters force, the number will depend on the resource used.
The green certificates are the means the Romanian government chose to support investments in renewable energy. The country in its position as a European Union member undertook a series of goals about the share of green energy in the total consumption of electricity by the end of 2020 upon accession.
As such projects are costlier, it had to come up with a plan to support renewable energy to attract investors. Therefore it came up with the green certificate system, where producers get one certificate per megawatt/hour generated. The price of certificate ranges from EUR27 to EUR55.
The green certificate is then sold to electricity suppliers such as Electrica, which are bound by the law to meet a specific green energy quota in the electricity basket they supply to consumers. Green certificates therefore stand proof of compliance with this requirement.
They are costly, however, for the supply companies so that costs will be passed on to households and companies, which will make electricity more expensive. Beyond this green certificate system, companies can sell their electricity on the free market.
The new support scheme will increase the number of green certificates quite a lot, so that wind power producers will get two certificates and solar power producers will get six for each megawatt/hour.
The energy watchdog calculated this scheme at EUR10.5 billion until 2020, which will be paid by households and companies via higher electricity bills. Electricity price will rise by 2.5% in 2012. By 2017, the price should be 30% higher. On the other hand, investors promise to invest billions in new projects once the law starts being applied.
“Energy is a key field for the Romanian economy and the wind power sector has the potential to attract over EUR5 billion in investments by 2013, for a total of 3,000 MW installed, which will create over 6,000 jobs,” said Dana Duica, Romanian Wind Energy Association executive manager. The association was established in 2008 and currently includes over 100 companies, both producers and developers of wind power projects, as well as consultants, law firms and banks.
(English version by Loredana Fratila-Cristescu)