Renewable Sources Energy in Romania - 1. part

More specifically, this Article describes the general legal framework applicable to the ERS sector, the main rules governing the set up of an ERS power plant, the measures taken by the Romanian state in order to support and encourage the production of ERS and the general rules applicable to the trade of ERS.

1.GENERAL LEGAL FRAMEWORK

1. Law No. 13/2007 on electric energy, as further amended and completed (hereinafter referred to as the "Energy Law");
2. Law No. 220/2008 establishing the system for promoting the energy production from renewable energy sources, as further amended and completed,among others, by Government Emergency Ordinance No. 88/2001 (hereinafter referred to as "Law 220");
3. Government Ordinance No. 22/2008 on energy efficiency and promotion of the use of energy from renewable sources towards the finalconsumers, asfurther amended and completed;
4. Government Decision No. 409/2009 approving the Methodological Norms for the application of Government Ordinance No. 22/2008, as further amendedand completed;
5. Government Decision No. 90/2008 approving the Regulation for the user’s connection to the electric energy grid of public interest;
6. Government Decision No. 1232/2011 approving the Regulation for issuance and following of the guarantees of origin for the electric energy producedfrom renewable sources;
7. Government Decision No. 540/2004 aproving the Regulation for issuing licences and authorisations in the electric energy sector, as further amendedand completed;
8. Order of the Romanian Energy Regulatory Authority (hereinafter referred to as "ANRE") No. 48/2008 approving the Methodology for issuingplacementpermits by the grid operators;
9. Order of ANRE No. 42/2011 approving the Regulation for certification of ERS producers for application of the green certificates promotion system,asfurther amended and completed (hereinafter referred to as "Order 42");
10. Order of ANRE No. 43/2011 approving the Regulation for the issuance of green certificates;
11. Order of ANRE No. 44/2011 approving the Regulation for the organisation and functioning of the green certificates market;
12. Order of ANRE No. 45/2011 approving the Methodology for establishing the yearly quotas for purchase of green certificates.

2. SET UP OF A RENEWABLE ENERGY PRODUCTION PLANT

For the set up of ERS production plants, the general building permits regime needs to be observed for the construction of the ERS production plant, as described under Section 2.1 of this Article. Moreover the set up of new power plants and the re-equipment of existing power plants having an installed power of over 1 MW can only be performed on the basis of authorisations issued by the competent authority, i.e. ANRE, while the production, transport, distribution and delivery of electric energy are carried out on the basis of licences issued by ANRE.

In addition to the building permits needed for the construction of the ERS production plant and the authorisations and licences issued by ANRE, a specific administrative procedure needs to be followed for the purpose of connecting the ERS production plant to the electric energy grid, as mentioned under Section 2.3 of the next Article another administrative procedure needs to be carried out in front of ANRE for obtaining the qualification for the application of the green certificates promotion system, as presented under Section 2.4 of the next Article.

Also, the operators of ERS production plants need to register with the competent authorities, i.e. the Operator of the Electric Energy Market in Romania OPCOM S.A. and the Transport and System Operator Transelectrica S.A., in order to be able to trade the produced energy on the electric energy market, to obtain green certificates for the produced ERS and to trade the green certificates obtained according to the legislation in force on the Centralised Market for Green Certificates. However, in case the ERS production plant operator chooses to sell the produced ERS directly to a third party, without trading it on the regulated markets and without benefiting from the green certificates support scheme, the registration with OPCOMS.A. and TranselectricaS.A. is not compulsory.

On case by case basis, depending on the exact area where the ERS production plant is located, other authorisations and/or approvals might be required.

2.1 BUILDING PERMITS ISSUED BY THE LOCAL PUBLIC AUTHORITIES

For the construction of an ERS production plant, building permits need to be obtained from the public authorities having local competence over the area where the ERS production plant will be erected. For such purposes, specific documentation is required, on case by case basis, depending on the location of the land plot where the ERS production plant will be erected, including but not limited to:

• the urbanism certificate - an information document issued by the local public authorities, which provides, among others, the following:

1. data regarding the legal, economical and technical regime of the land plot(s) and building(s) (as the case may be) for which such urbanism certificatewas requested, in accordance with the local area plans in place;
2. establishes the requirements to be fulfilled in accordance with the location specifity;
3. establishes a list of authorisations and consents to be obtained from several authorities and entities for the purpose of the construction authorisation issuance; and
4. informs the investor about its obligations to obtain environment protection authorisations, further to the analysis by the environment protection authorities on the project’s impact upon the environment;

• the construction authorization - a document issued by the local public authorities permitting the construction works which may be carried out at therelevant location and the related construction site organisation works

2.2 AUTHORISATIONS AND LICENCES ISSUED BY ANRE

The authorisations and licence for the set up and operation of ERS production plants can be requested by the operators, i.e. Romanian or foreign legal persons, by following an authorisation procedure in front of ANRE. However, foreign legal persons can only request such authorisations/licences if they have legally and validly established a Romanian subsidiary.

Authorisations cannot be issued to entities under insolvency procedure and for entities which were subject to an authorisation withdrawal in the last 5 years proceding the date when the authorisation request is filed.

ERS production plants having a total installed power of less than 1 MW are exempted from the obligation to obtain the ANRE authorisation described in Section 2.2.1 of this Memorandum. However, they remain subject to ANRE licences, as presented under Section 2.2.2 of this Memorandum.

2.1.1 Authorisation for set up of an ERS production plant issued by ANRE

1. The authorisation for set up of an ERS production plant is a technical and legal act issued by ANRE upon request from the interested economic operator, allowing the set up of an ERS production plant. Authorisations are issued on the basis of an authorisation fee and of specific documentation submitted to ANRE, such as:
2. special-form request addressed to ANRE for the authorisation issuance;
3. the constitutive deed of the applicant;
4. ascertaining certificate issued by the Trade Registry in relation to the applicant;
5. fiscal certificate in relation to the applicant;
6. environment protection approval in relation to the construction of the ERS production plant;
7. financial statements of the applicant for the year preceding the application year;
8. documents attesting the rights of the applicant over the land plot where the ERS production plant will be placed;
9. documents evidencing the financing sources for the set up of the ERS production plant;
10. technical network connection approval (which shall specify, among others, the total approved power, the number of energy generators, the worksneeded for realising the network connection, the measuring point, the limits of the property);
11. chart with the employees and/or contractors dedicated by the applicant to the set up of the ERS production plant etc.

The authorisation fee perceived by ANRE for 2011 is of RON 117 (approx. EUR 30) per 1 installed MW. However, other fees may be applicable as well, on case by case basis, throughout the authorisation process.

2.1.2 Licence for the commercial exploitation of the ERS production plant issued by ANRE

Licences are the technical and legal acts issued by ANRE upon request of the interested economic operators by which the right of commercial exploitation of the ERS production plant is granted to the applicant, on the basis of a contribution corresponding to the commercial activities carried out in the energy sector.

Licences are issued by ANRE for determined periods of time (depending, among others, of the expected utilisation period of the ERS production unit), upon submission of several documents such as:

1. the constitutive deed of applicant;
2. ascertaining certificate issued by the Trade Registry in relation to the applicant;
3. fiscal certificate in relation to the applicant;
4. environment protection approval in relation to the ERS production plant;
5. financial statements of the applicant for the year preceding the application year;
6. documents attesting the right of ownership/use over the land plot where the ERS production plant is located;
7. location authorisation in relation to the ERS production plant;
8. Authorisation for Technical Connection to the Electric Energy Grid;
9. presentation of the ERS production capacities;
10. internal organisation chart of the applicant, indicating the department in charge with the activities for which the licence is granted;
11. structure of the applicant’s personnel, evidencing the specialisation of the employees dedicated to the activities for which the licence is granted;
12. a business plan for the validity period of the licence and the following 2 (two) years.

ANRE licences are subject to the payment of a licence issuance fee and to a yearly contribution. The amounts of such licence issuance fee and yearly contribution are established every year by ANRE’s decision. For 2011, the licence issuance fee amounts to RON 24 per 1 MW of installed power, while the yearly contribution is of 0.076% of the turnover realised in the preceding year from the activities subject to the ANRE licence, but not less than a minimum value of RON 1,890.

Next part of this Article will be about Connection to the electric energy grid and Qualification for the application of the green certificates promotion system. The Article will focus on ANRE regulations and in the second part on conditions for the application of the green certificates promotion system.