Renewable energy sources in Romania

Green certificate system in Romania

Contents
1. Background information for Romania 2. The Romanian Energy Potential and Targets
Solar energy Solar irradiation

3. Romanian energy market: risks and opportunities 4. Green certificates system

Legal framework Actors

5. Conclusion

Background information
Romania is situated in the south-east of Central Europe. It is member of the European Union since 2. The country covers 238,391 square kilometers and is the continents 13th largest country in area.
The major features of relief units are: 31% mountains, 36% Sub-Carpathians, hills and plateau 33% plains, meadows and Danube Delta.

The climate is intermediate between temperate and continental types, with lower oceanic influences from the west, Mediterranean ones from southwest and stronger continental-excessive ones from the north-east.

The Romanian Energy Potential and Targets

The targets presented in the Romanian National Plan of Action for Renewable Energy (PNAER) for the percentage of electricity produced from renewable energy sources are the following: 35% for the year 2015 and 38% for 2020.

Solar energy
Solar energy shows a moderate potential throughout the entire territory of the country, but the most abundant solar resources are located in the southern part of the country and Dobrogea. Considering solely the solar electricity potential, its potential is approximately 1.2 TWh.

Solar irradiation
The solar irradiation in Romania is one of the best in Europe. Its central and southeast parts have highest indicators of solar irradiation up to 1650 Kwh/m2(1450 1750 kWh / m2) . It has underdeveloped rural territories and uncultivated aeries which can be used for developing PV plants. The performance of solar PV technology has become increasingly efficient after 2009.

Romanian energy market: risks and opportunities

1. STRENGHTS competitive advantages
Long tradition in the energy industry Moderate potential for exploiting the renewable resources Total liberalization of electricity markets facilities are partly obsolete having an outdated technology Lack of financial measures to support projects and programs concerning the growth of the energy efficiency and to the use of renewable energy Organization of the electricity generation sector on singletechnological pathways

2. WEAKNESSES system deficiencies

Romanian energy market: risks and opportunities

3. OPPORTUNITIES
Attractive investment climate for both foreign and domestic investors Increased investment opportunities in the field of energy efficiency and unused renewable energy resources to the EU structural funds projects in the field of energy efficiency Lack of effective fiscal instruments for supporting investment programs in energy efficiency Possible negative effects on the competition in the European energy sector A high growth rate in energy demand in the context of economic recovery

4. THREATS - Risks and vulnerabilities

Green certificate system

Green certificate system

Electricity suppliers have the obligation to purchase a certain quota of renewable electricity set by Romanian Energy Regulatory Authority (ANRE) proportionally to the amount of electricity sold yearly to their final consumers. Completion rates are proved by holding a corresponding number of green certificates acquired under the law.

The annual minimum and maximum values for Green Certificates trading is 27 and 55 euro/certificate, respectively, calculated at the exchange rate established by the Romanian National Bank for the last working day of the December of the previous year.

Green certificates system

Renewable Energy Source TGCs per MWh Energy produced TGCs per MWh Energy Energy SourceRenewable Energy SourceProduced Wind Small Hydro Plants (<10MW Solar PV Biomass & other Biofuels Geothermal Hydrothermal Wave energy 2 till 2017 1 from 2018 6 3 3 3 3

Source: - Romanian Energy Laws 220/2008 & 139/2010

EU Regulatory Framework for Renewable Energy and Quotas

LAW 220/2008
Sets new shares of electricity produced from RES in the gross final national consumption of electricity in perspective of 2010 and 2020 to 35%, respectively 38% Extension of green certificate system beyond 2012 with a mandatory quota of green certificates of 16.8% for 2020 and other intermediate quotas for the period 2008 2020

EU Regulatory Framework for Renewable Energy and Quotas Law 139/2010

Enter into force 9.07.2010 Supplementing Law 220/2008 Focused more on wind energy Two years extension of the term when wind energy is granted two green certificates instead of one Inflation adjusted price of certificates and the opportunity for individuals to develop projects with capacity of up to 100 KW Disadvantage: does not provide for a solution in case the number of green certificates would be higher than the demand

EU Regulatory Framework for Renewable Energy and Quotas

Emergency Ordinance 88/2011
Defining terms which have been subject of public debate Clarifying the green certificates system (issuance, trade and price adjustment, beneficiaries, number of GCs granted, possible accumulation with other subsidies, validity ) Expanding the producers rights and obligations Indicating the procedural rules regarding cooperation by joint agreement Reaffirming ANREs major role Differentiating the access to the grid

National target quota

Renewable energy production remains at less than 33% of the National Target Quota It is predicted that TGC pricing will remain in a band of EUR 48-55 As Renewable Energy production above 65% of the National Target Quota becomes closer to the Mandatory quota targets, the TGC market will gradually soften until 85% of quota when prices may fall to the lower end of the TGC price range (EUR 27).

Main actors
1. ANRE (Romanian Energy Regulatory Authority)
Approves electricity producers which use eligible renewable energy sources (RES), to participate on the Green certificate market. It controls the mandatory quota fulfillment by the suppliers and applies penalties for quota non-fulfillment.

Main actors
2. Transelectrica (The transportation and system operator)
Receives monthly notifications concerning the quantities of electricity from RES delivered into network from the producers and the Network operators where the producers are connected Collects the penalties for non fulfilment* Transelectrica is a joint stock 100% state - owned company
* penalties are allocated early by ANRE, based on objective criteria, for investments meant to facilitate the access to the transport/distribution networks

Main actors
3. OPCOM (Romanian electricity market operator)
The mission of OPCOM consists of providing an organized framework for electricity commercial trades. It is the legal person which assures Green certificates trading and determines the prices on the Centralized Green certificates market, performing the functions established by the Regulation for organizing and functioning of the Green Certificates Market.

Conclusion
Romania provides more attractive energy market comparing to those in Bulgaria. The risk for investment however is much higher. There is a strong possibility that a new energy law will be introduced within the next year by the Romanian parliament, which should be more precised and accurate, in order to set a stable framework for the future development of the energy market and assure considerable investment flow.