Renewable Sources Energy in Romania - 4. part

4.2 GREEN CERTIFICATES

In order to ensure the promotion of the ERS, the Romanian legislation has established national targets for the percentage of ERS in the total gross quantity of electric energy consumed in Romania, as follows: 33% in the year 2010, 35% in the year 2015 and 38% in the year 2020. Taking into account that, according to Law 220, the above mentioned percentages also include ERS obtained in hydro-electric power plants with a total power exceeding 10 MW (mainly inherited from the communist regime, when they were built and started operating), but which do not benefit from the green certificates promotion scheme, in 2010 Romania covered 35.24% of its gross electric energy consumption from ERS, exceeding the national target by 2.24%. In the total ERS produced in 2010, 74% was produced in hydro-electric power plants, 22% in wind power plants, 4% in biomass power plants and only a very small quantity in solar power plants. The results for 2011 were not yet published by the competent authorities.

In addition to the national targets mentioned above, Law 220 also established compulsory quotas of ERS (calculated upon the total quantity of electric consumed in the relevant year) which are subject to the promotion system based on the issuance of green certificates. The quotas for the 2010 - 2020 period are evidenced in the table below:

Due to the fact that most of the ERS produced in Romania comes from hydro-electric power plants with powers exceeding 10 MW, which are not part of the green certificates system, the compulsory quotas mentioned above are presently still far from being reached and they apply only as maximum levels. According to the market results published by ANRE in 2010, the actual quota of ERS subject to the green certificates promotion system was of 1.566%, while the compulsory quota established by Law 220 was of 8.3%.

Taking into consideration the quotas established by Law 220 and the actual market achievements of the precedent year, ANRE establishes every year (usually early March) the compulsory quota of green certificates to be acquired by energy suppliers, in a way which allows the sale of all the green certificates available to energy suppliers. The compulsory quota for 2011 established by ANRE on February 24, 2012 is of 0.03746 green certificates per 1 MWh of the total electric energy delivered to the final customers.

Producers of ERS need to be qualified by ANRE, as described under Section 2.4 of this Article, in order to participate in the system of promoting the ERS based on the issuance of green certificates.

4.2.1 Obtaining green certificates

The Transport and System Operator (i.e. the National Company Transelectrica S.A.) shall issue green certificates to the producers of ERS on monthly basis, corresponding to the quantity of energy produced and delivered to the final consumers, as follows:

New hydro-electric power plants with a total installed power of maximum 10 MW: 3 green certificates for 1 MWh of produced and delivered energy;

Re-equipped hydro-electric power plants with a total installed power of maximum 10 MW: 2 green certificates for 1 MWh of produced and delivered energy;

1. Hydro-electric power plants which do not comply with the requirements under points (a) and (b) above, with a total installed power of maximum 10 MW: 1 green certificate for 2 MWh of produced and delivered energy;
2. Wind power plants: 2 green certificates (until 2017) and 1 green certificate (starting with 2018) for 1 MWh of produced and delivered energy;
3. Solar power plants: 6 green certificates for 1 MWh of produced and delivered energy;
4. Biomass energy: 2 green certificates for 1 MWh of produced and delivered energy;
5. Waste Gas energy and Waste Waters energy: 1 green certificate for 1 MWh of produced and delivered energy.

The number of green certificates granted to ERS producers as mentioned above is calculated based on the total quantity of produced and delivered ERS minus the electric energy consumed by the ERS production plant for its functioning.

For the testing period of the ERS production plant (which mainly depends on the technical requirements of the ERS production plant and the decision of the ERS production plant operator, but it has never exceeded 6 months according to information received from ANRE) ERS producers shall be granted one green certificate for 1 MWh of produced and delivered energy, irrespective of the ERS technology involved.

Energy distribution operators are obliged to communicate to the Transport and System Operator data regarding the quantities of ERS produced and delivered by the producers connected to the electric energy distribution grid on monthly basis.

The electric energy suppliers (which are defined as the legal persons holding an energy supplier licence and supplying the electric energy to one or several consumers on the basis of an energy supply contract, i.e. the entities buying electric energy from the producers and supplying it to the consumers) are obliged to obtain a certain number of green certificates each year. The number of green certificates which has to be obtained by the energy suppliers each year is established by multiplying the mandatory quota of green certificates established yearly by ANRE with the total number of MWh delivered by the respective energy suppliers to the final consumers in the relevant year.

4.2.1 Overcompensation. Number of green certificates granted to ERS producers subject to the other state subsidies

According to the provisions of Order 42 and in compliance with the requirements of the European Commission decision approving the state aid promotion scheme based on green certificates, the overcompensation mechanism was introduced. By such mechanism ANRE is authorised to reduce the number of green certificates granted to an ERS producer which benefited from other state subsidies as well in accordance with the legal provisions in force, in order to avoid the cumulating of support schemes.

In application of the overcompensation mechanism, ERS power plants which benefited from one or more state subsidies other than the green certificates shall receive a number of green certificates different than the one provided under point 4.2.1 of this Article. Such lower number of green certificates shall be obtained by deducting the value per MW of the received state subsidies (other than green certificates) from the reference investment value per MW of the ERS power plant, while maintaining the reference internal profitability rate taken into account by the European Commission when approving the green certificates support scheme. This very technical calculation of the number of green certificates to be granted to ERS producers subject to overcompensation is provided by ANRE on case by case basis at the moment of qualification for the application of the green certificates promotion system, as detailed under Section 2.4 of this Article.

4.2.2 The Green Certificates Market

The producers of ERS and the energy providers are trading the green certificates on the Centralised Green Certificates Market organised and coordinated by the Operator of the Electric Energy Market – OPCOMS.A., in accordance with the ANRE regulations.

For the period between 2008 and 2025, the green certificates value shall range between a minimum of EUR 27 per certificate and a maximum of EUR 55 per certificate. The value in RON shall be calculated yearly, on the basis of the average exchange rate established by the Romanian National Bank for December of the previous year. Also, the mentioned value shall be modified yearly on the basis of the average inflation index for December of the previous year calculated at the level of the European Union and officially communicated by EUROSTAT. Within 15 days of the official publication by EUROSTAT of the average inflation index, ANRE shall calculate and publish on its website the minimum and maximum value of the green certificates for the respective year.

The value of the green certificates established by ANRE for 2012 shall range between the minimum value of RON 121.89 (i.e. EUR 28.172) and the maximum value of RON 248.30 (i.e. EUR 57.389). From January to April 2012, the average prices of green certificates on the green certificates market ranged between RON 241 (i.e. EUR 55.70) and RON 248 (i.e. EUR 57.31). After the year 2025, the green certificates value shall be established freely on the green certificates market, provided that such value is not lower than the value established for the year 2025.