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Romania authorizes bilateral PPAs, raises size limit for solar under net metering to 400kW

With Emergency Ordinance no. 143/2021, the Romanian government has restored legal certainty for bilateral power purchase agreements and has created more favorable conditions for solar power generators under net metering regime.

Romania’s government has recently introduced a series of amendments to the country’s energy law that create more favorable conditions for both the solar distributed-generation segment and the utility scale section of the market.

“The government Emergency Ordinance no. 143/2021 finally removes the PPA ban from the Energy Law no. 123/2012, after almost 10 years,” Mihaela Nyerges from Romanian law firm Vlăsceanu, Nyerges & Partners told pv magazine. “It also introduced new, more favorable net metering provisions.”

PPAs

As for the power purchase agreements (PPAs), Nyerges explained that, although in mid-2020 the government had inserted an exception from the ban – applicable to new power generation capacities only and in an attempt to stimulate new investments in power generation – during the parliamentary examination of the ordinance the exception was rejected by the first parliamentary chamber and the second parliamentary chamber never examined the ordinance.

“Although the ordinance continued to be in full force, in the absence of a formal rejection by the second parliamentary chamber, it was never relied on by the market participants or by the financing banks,” she further explained. “Since a complete restructuring of the energy law was high on the agenda of the authorities, the entire market has been standing by for the final version thereof.”

“Finally, participants on the wholesale electricity market are again allowed to enter into directly negotiated power purchase agreements. This is great news for the renewables sector and this can unlock the much-needed new investments in new capacities that can help alleviate the current situation on the energy market,” the executive director of the Romanian Photovoltaic Industry Association (RPIA), Mihai Balan, told pv magazine.

According to Nyerges, these new provisions are ensuring legal certainty to make investors more confident in the Romanian energy market. “During the last couple of months we could sense from the market that negotiations on PPAs are becoming more frequent and that banks are getting more open and interested in financing investments in renewables based on such PPAs,” she stated.

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Net metering

As for the new rules for distributed generation, the Romanian government has decided to raise the size limit for power generators under the net metering regime from 100 to 400kW. “More importantly, prosumers of up to 200kW will now benefit from 1:1 quantitative compensation until 2030,” Balan added. “There are no newly introduced additional obligations for them.”

“This measure is intended to stimulate investments by prosumers and increase generation near the point of consumption,” Nyerges commented. “Within the next 60 days, the regulator, ANRE, should issue the secondary legislation for the implementation of the new principles.”

The Romanian government also recently revealed plans to hold the country’s first tender for utility scale renewables projects, in the first half of this year.

Large scale solar projects now under development in Romania include, among others, arrays being built for coal power supplier Complexul Energetic Oltenia (CE Oltenia). It plans to build eight PV plants with a combined capacity of 725MW at several of its coal power facilities. Other PV projects that are now in the works include a 111MW solar park by OMV Petrom, an energy supplier that is majority-owned by Austria’s OMV, as well as a 700MW solar project that will be spread across the municipalities of Grăniceri and Pilu. In addition, CE Oltenia is developing 310MW of solar at one of its coal power facilities.

Romania is also supporting rooftop PV deployment via the Casa Verde Fotovoltaice (green PV home) scheme for residential solar installations, under the national net metering regime. According to the latest statistics from the International Renewable Energy Agency, Romania had 1.39GW of solar installed by the end of 2020.

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Source: pv magazine