1. ROMANIAN ENERGY REGULATORY
AUTHORITY- ANRE
ANRE
Need for stability and predictability in the legislation of energy sector
Niculae Havrilet – ANRE’s president
Renewable energy sources and environment
investments in Romania –
Legal and economical general conditions
April 12, 2013
2. ANRE
Renewable energy support scheme - best practice
Long term legal commitments, announcement of automatic reductions in line
with volume achievements and/or lower technology costs, planned review
periods without threat of interim changes
Commitment to avoid scheme or other changes that alter the return on
investments made and undermine investors' legitimate expectations
Wide and public consultation on scheme design
Financing primarily through energy levies and not taxation (avoids fiscal
impacts, uncertain budgets)
European Commission -2013
3. ANRE
Study case:
ROMANIA – regulatory
environment:
Independence
Transparency
Accountability
Predictability
4. Legal framework
ANRE
Primary legislation
(transposition of the 72/2009/CE and 73/2009/CE Directives)
Electricity and Gas Law no. 123/2012
Law regarding the organisation and operation of ANRE no. 160/2012
5. ANRE
Energy regulators
Regulators sit in position between
public and government:
decisions can have direct and
immediate effect. Showing people
how the decisions are made and
allowing participation, is critical in
gaining support.
Public wants to be shown that
decisions are fair and understand
why they are made; this can be
more important than "favorable"
decision.
6. ANRE
Independence – role and competencies of ANRE
ANRE, is an autonomous administrative authority with legal personality, under
Parliamentary control, entirely self-financed and independent as regards its decision-making
process, organisation and operation, whose mission is to issue, approve and monitor the
implementation of the national-wide binding regulatory framework required for the proper
functioning of the electricity, heat and natural gas sectors and markets in terms of efficiency,
competition, transparency and consumer protection.
ANRE current expenditures and capital are entirely financed through its own
revenues (fees charged for licensing, permits and certifications, from annual contributions paid
by the regulated undertakings in the electricity, heat and natural gas sectors as well as from
funds provided by international organisations).
ANRE - main competencies conferred by primary legislation:
• to grant, modify, suspend and revoke authorizations and licenses;
• to issue trade and technical regulations, regulated access and connection rules to electricity
and gas networks;
• to set up and to approve the pricing methodologies and tariffs;
• to monitor the operation of electricity and gas markets;
• to promote the electricity/heat generation from renewable sources and high efficiency
cogeneration.
7. ANRE
Management of ANRE
ANRE is managed by a president and two vice-presidents
For the approval of the regulations is constituted a Regulatory Committee
composed of president, vice-presidents and 4 regulators, appointed by the
Romanian Parliament. Their mandates may be renewed once
The members of the Regulatory Committee are appointed for a period of 5
years, a mandate that can be renewed only once. Upon the appointment of the
first Regulatory Committee, one Vice-President and two ordinary members will
serve a term of two and a half years that are to be set through Parliamentary
Appointment Decision
8. ANRE
Regulatory Committee of ANRE
The members of the Regulatory Committee act independently of any interest
of the participants in the electricity or natural gas markets, shall not seek
or take direct instructions from any public or private entity when carrying
out the regulatory tasks, shall not perform lucrative businesses in the
electricity, heat and natural gas sectors, with the exception of those for
didactic purposes, shall not hold shares or equity interests and shall not be
board members with undertakings whose object of activity in the
electricity, heat and natural gas sectors or in any other areas under ANRE
powers, according to the law.
9. ANRE
The transparency and accountability of the regulatory process is ensured by :
Publication of the regulations under discussion on the ANRE’s webpage
Permanent consultations with the parties involved by means of public and
bilateral discussions as well as through mediation meetings to
accommodate divergent viewpoints,
The ANRE’s orders and decisions may be appealed in Court within 30
days from the notification of the parties or from the date of their publication
in the Romanian Official Gazette
The publication of the annual reports regarding ANRE’s activity and budget
10. ANRE The predictability of the regulatory process
A successful market that attracts investors requires a predictable regulatory
process.
Independent regulators are predictable if they adhere to the rule of law. The
most important features of the rule of law are respect for precedent and the
principle of stare decisis, particularly in common law jurisdictions.
Respect for precedent - regulators do not reverse policy decisions unless
there is evidence that those decisions have led to significant problems or that
new circumstances warrant a change in the rules.
The principles of stare decisis - the cases with the same underlying facts are
decided in the same way every time. This is of particular relevance in the
resolution of disputes.
Adherence to these principles enhances confidence in and the credibility of the
regulator and reduces regulatory risk.
11. ANRE
Renewable energy sources –
support scheme
12. E-RES
ANRE
Renewable energy sources – legal framework (1)
PRIMARY LEGISLATION:
oThe Law 220/2008 for the promotion of electricity produced from renewable
energy sources - the mandatory quota system combined with the trading of
green certificates (GC) - authorized by EC Decision no 4938/2011;
o Government Emergency Decision 88/12.10.2011 - the Law 220/2008 was
modified to fulfil the EC Authorization Decision requirements;
o Law no. 134/2012 for the approval of the Government’s Emergency Decision
no. 88/2011
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13. E-RES
ANRE
Renewable energy sources – legal framework (2)
SECONDARY LEGISLATION ( ANRE regulations):
Order 42/2011 – Regulation regarding certifying E-RES producers for the
support scheme
Order 43/2011 – Regulation for issuing GC
Order 44/2011 – Regulation regarding organization and operation of the GC
market
Order 45/2011 - Methodology for establishing the annual quota of GC
Order 6/2012 - Methodology for monitoring of the support scheme
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14. E-RES
ANRE
E-RES Promotion Scheme(1)
Mandatory quotas and green certificates trading system
Penalities for noncompliance with mandatory
quota
Electricity Market
Market price for electricity
Price
E-RES
Green Certificates Market
Market price for green certificates
15. E-RES
ANRE E-RES Promotion Scheme (2)
* Approved by Decision EC 4938/2011
RES Type of power plant/group Number of Lifetime
GC/MWh (years)
1. HYDRAULIC New (Commissioned as of January 1, 2004) 3 GC 15
ENERGY – used in
power plants with Upgraded/refurbished 2 GC 10
installed power ≤10
commissioned prior to January 1, 2004 and 0.5 GC 3
MW
not upgraded
2. WIND energy (new) 2 GC until 2017 15
1 GC as of 2018
3. - Biomass (new) 1 - 3 GC* 15
- Biogass
- Bio-liquid
High efficiency cogeneration 1 GC 15
- Geothermal
(1 additional GC)
- Landfill gas
4. SOLAR Energy (new) 6 GC 15
• 1 GC for landfill gas and sewage treatment plant gas; 2 GC for all types of biomass – residues; 3 GC for biomass from energy
crops.
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16. E-RES
ANRE
National targets pursuant to Directive 2008/29/EC
E-RES percentage in the final gross consumption (%)
18. E-RES
ANRE The perspectives of E-RES investments in Romania
TOTAL
Connection Connection
N.R.E.A.P.
Permit Contracts
TOTAL 2020
RES [MW] [MW] [MW] [MW]
Wind 7739 13215 20954 4000
Hydro under 10 MW 423 2018 2440 729
Biomass 84 52 136 600
Solar 2113 762 2874 260
TOTAL [MW] 10359 16045 26404 5589
Source: C.N. TRANSELECTRICA S.A., March 2013
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19. E-RES
ANRE
STATISTICS REGARDING E-RES PROMOTION SYSTEM
31.12.2012
In operation* benefitting
from the support scheme Setting-up authorisation
Under ANRE
RES Licensed Test period Issued analysis TOTAL
[MW] [MW] [MW] [MW] [MW] YEAR
Wind 1534 260 1339 796 3669 2017 +
Hydro 427 0 108 31 566 2013 +
Biomass 29 0 39 2 70 2011 -
Solar 39 12 253 220 511 2020 ++
TOTAL [MW] 2029 272 1738 1049 4816
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20. E-RES
ANRE
Monitoring of the application of the promotion scheme
In compliance with legal provisions, the analysis for overcompensation is accomplished on an annual basis on the
period in which this activity is promoted by the green certificates support scheme, upon the following indices:
•average level of investment;
•average level of specific variable costs;
•average level of specific costs;
•average level of the capacity factor.
On the validity period of the support scheme, the mechanism for reviewing the number of green certificates as a
result of the overcompensation analysis is based upon annual recalculation, of the number of green
certificates/MWh so that the Internal Rate of Return (IRR) for each technology, for new entries, at aggregated
level, to be equal to the reference IRR value resulted from the cost benefit analysis established when
authorizing the promotion scheme.
If a growth tendency is emphasized of the internal rate of return with more than 10% from the reference level, the
Government shall reduce the number of green certificate for the specific technology.
E-RES/technology Current Results of the
overcompensation analysis
(no. GC/MWh) (no. GC/MWh)
New wind power plants 2 1,5
Refurbished wind power plants 2 1,3
New hydro power plants, Pi<=10 MW 3 2,3
Solar 6 3
21. E-RES
Conclusions
ANRE
The changes in the energy sector at European level by promoting with
high priority the renewable energy sources for electricity and heat
production is based on:
Meeting the national targets
Providing the regulatory framework for promoting new investments, and
ensuring its predictability
Monitoring the results of the application of the support scheme and
providing sustainable development
Constant evaluation of the impact upon the final customer
