Quota System

Updated: 18.01.2019

Author: Cristina Blajin

The Electricity Law establishes the legal framework for the introduction of a quota system to promote electricity from renewable sources and stipulates the rights and obligations of the persons involved. Law No. 220/2008 complements this framework and obliges electricity suppliers and producers to present a certain number of green certificates on an annual basis, which is calculated by multiplying the mandatory quaota of GC for that year (GC/MWh) with the total electricity supplied to final consumers (art. 8 par. 2 Law No. 220/2008 as referred to in Art. I par. 9 Law No. 23/2014). The failure to satisfy this obligation carries a penalty (art. 12 par. 2 Law No. 220/2008 as referred to in art. 1 par. 21,20 Emergency Ordinance No. 24/2017 and in art. 6 par. 7 Law No. 122/2015). Furthermore, Law No. 220/2008 sets out the conditions under which the operators of renewable energy plants may receive green certificates (art. 6 par. 1 Law No. 220/2008 as referred to in art. 1 par. 9 Emergency Ordinance No. 24/2017) and trade them (art. 10, 11 Law No. 220/2008 as referred to in art. 1 par. 12 Emergency Ordinance No. 88/2011 and art. 1 par. 17, 18, 19 Emergency Ordinance No. 24/2017). The issuance of a share of the initial number of green certificates has been suspended for some technologies in the time from 1 July 2013 to 31 March 2017, and further to 31 December 2020 for solar energy specifically. Thus, the number of green certificates issued during this time period has been reduced by 1 certificate for hydro power and wind energy and by 2 certificates for PV-installations. The suspended certificates will be issued starting with 1 January 2021 (art. 1 par. 9 Law No. 184/2018) . This postponement of issuing a share of Green Certificates applies only to RES-E installations approved by the energy regulator ANRE until 31 December 2013 (art. 6 par. 21 and 22 Law No. 220/2008 as referred to in art. I par. 3, art. I par. 5 Law No. 23/2014 and art. 1, par. 9 Law No. 184/2018). Electricity generators may sell electricity on the wholesale market (art. 14 par. 1 Law No. 220/2008 as referred to in art. 1 par. 16 Emergency Ordinance No. 88/2011). 

Eligible technologies

Basically, all technologies are eligible (Art 3 par. 1 Law No. 220/2008 as referred to in art. 1 par. 2 Emergency Ordinance No. 88/2011 and in art. 1 par. 4 Law No. 134/2012). For power plants put into operation before Law No. 220/2008 came into effect, the reduction will be equal to the period of time during which they received green certificates. For power plants put into operation between 01.11.2011 and coming into effect of Law No. 220/2008 the reduction of the eligible time period will be reduced according to the number of certificates already received (art. 3 par. 8 Law No. 220/2008 as referred to in art. 1 par. 2 Law No. 134/2012). 

Wind energy

Eligible (art. 3 par. 1 letter b, Law No. 220/2008). 

In general, eligibility ends after 15 years (art. 3 par. 2 letter a, Law No. 220/2008). Wind power stations that have already been used for electricity generation within the territory of another state or were in operation on Romanian territory before the Law came into effect become ineligible after 7 years (art. 3 par. 2 letter c Law No. 220/2008 as referred to in art. 1 par. 3 Emergency Ordinance No. 88/2011).

Solar energy

Eligible (art. 3 par. 1 letter c, Law No. 220/2008).

Plants put into operation after 01.01.2004 cease to be eligible after 15 years (art. 3 par. 2 letter a, Law No. 220/2008). PV-installations situated on land that on 31 December 2013 had the status of agricultural area are not eligible for the Green Certificate Scheme (art. 3 par. 6 letter e) Law No. 220/2008 as referred to in art. I par. 2 Law No. 23/2014).

Geothermal energy

Eligible (art. 3 par. 1 letter d, Law No. 220/2008).

Plants put into operation after 01.01.2004 cease to be eligible after 15 years (art. 3 par. 2 letter a, Law No. 220/2008).

Biogas

Eligible (art. 3 par. 1 letters g-i, Law No. 220/2008). There are several types of biogas:

 

  • biogas (art. 3 par. 1 letter g, Law No. 20/2008),
  • gas produced from anaerobic digestion of waste (art. 3 par. 1 letter h Law No. 20/2008 as referred to in art. 1 par. 2 Emergency Ordinance No. 88/2011) and
  • gas produced from anaerobic digestion of sewage sludge (art. 3 par. 1 letter i, Law No. 20/2008).

Plants put into operation after 01.01.2004 cease to be eligible after 15 years (art. 3 par. 2 letter a, Law No. 220/2008). The operators of biogas plants are eligible for green certificates as set out in Law No. 220/2008 only if they present certificates of origin for the biogas used (art. 1 par. 9 Law No. 220/2008).

 

 

Hydro-power

Only plants whose installed capacity does not exceed 10 MW are eligible (art. 3 par. 1 letter a, Law No. 220/2008). The law refers to traditional hydro-power. The eligibility of new hydro-power stations ends after 15 years (art. 3 par. 2 letter a Law No. 220/2008), modernised hydro-power stations cease to be eligible after 10 years (art. 3 par. 2 letter b Law No. 220/2008).

Biomass

Eligible (art. 3 par. 1 letter e, Law No. 220/2008). There are several types of biomass:

 

  • biomass (art. 3 par. 1 letter e, Law No. 220/2008),
  • liquid biofuels for energy generation that were produced from biomass and are not used in the transport sector (art. 1 par. 1 letter c, art. 3 par. 1 letter f, Law No. 220/2008).

Plants put into operation after 01.01.2004 cease to be eligible after 15 years (art. 3 par. 2 letter a, Law No. 220/2008). The operators of biomass plants are eligible for green certificates as set out in Law No. 220/2008 only if they present certificates of origin for the biomass used (art. par. 9 Law No. 220/2008 as referred to it in art. 1 part 7 Emergency Ordinance No. 88/2011).

Amount

Amount of quota and period of application

Amount of quota per year:

The yearly quota is established by ANRE in December for the following year. The quota is calculated taking into consideration the estimated final energy consumtion for the upcoming year and the medium impact on cosumers that should not exceed 12.5 EUR/MWh in 2019, 13 EUR/MWh in 2020 and 2021 and 14.5 EUR/MWh from year 2022. A new methodology for defining the obligatory annual quota aquisition of Green Certificates was developed by ANRE (following the provision of the art. 4 par. 7 and par. 91 - 94 Law. No. 220/2008) and approved by the Decree No. 157/2018, according to which the methodology entered intor force on 1 August 2018.

Adjustment of quotas

The yearly quota for mandatory acquisition for electricity suppliers (expressed in GC/MWh) is established by ANRE in Decempber for the upcoming year, taking into consideration the estimated energy consumtion for the coming year and the medium impact on cosumers that should not exceed the price stipulated in the art. 4 par. 91 Law No. 220/2008 (amendment introduced by the art. 1 par. 8 Law No. 184/2018). Additionally, starting from 2018, ANRE will calculate by 1 of March the mandatory acquisition quota for the previous year, the amount of electricity produced from renewable sources and the medium impact on cosumers that should not exceed 11.7 EUR/MWh in 2018, 12.5 EUR/MWh in 2019, 13 EUR/MWh in 2020 and 2021 and 14.5 EUR/MWh from year 2022, (art. 4 par. 9 Law No. 220/2008 as referred to it in art. 1 par.8 Emergency Ordinance No. 88/2011).

Number of certificates according to technology

The number of green certificates issued depends on the technology used. For some technologies a suspension of the issuance of a share the initially granted Green Certificates applies. The suspension is in force from 1 July 2013 until 31 March 2017 for the following technologies:

  • 1 certificate for new hydro-electric plants with a capacity lower than 10 MW
  • 1 certificate for wind energy plants
  • 2 certificates for solar plants

Furthemore, for the solar energy installations, the issuance of 2 Green Certificates per 1 MWh was further suspended from 1 April 2017 until 31 December 2020 (art. 6 par. 25 Law No. 220/2018 as referred to it in art. 6 par. 9 Law No. 184/2018). These provisions apply only to installations which have been accredited by ANRE until 31 December 2013 (art. 6 par. 21 and par. 25 Law No. 220/2008 as referred to in art. 6 par.5 Law. No 23/2013 and art. I par. 9 Law No. 184/2018 respectivelly).

The issuance of the suspended Green Certificates will start from 1 January 2018 for hydro power and wind energy in equal montly instalments until 31 December 2025 (art. 6 part 22 Law No. 220/2008 as referred to it in art. 6 par. 10 Emergency Ordinance No. 24/2017). For solar enerhy installations, the issuance of the suspended Green Certificates will start from 1 January 2021 until 31 December 2030 (art. 6 part 26 Law No. 220/2008 as referred to it inart. 1 par. 9 Law No. 184/2018).

The number of certificates for different technologies presents as follows:

  • New hydro-electric plants with a capacity lower than 10 MW accredited before 31 December 2013:3 certificates per MWh of electricity generated (art. 6 par. 2 letter a Law No. 220/2008 as referred to in art. 1 par. 9 Emergency Ordinance No. 88/2011), from which 1 certificate is suspended until 31 March 2017 (art. 6 par. 21 letter a) Law No. 220/2008 as referred to in art. I par. 3 Emergency Ordinance No. 57/2013).
  • New hydro-electric plants with a capacity lower than 10 MW accredited after 01 January 2014: 3 certificates perMWh of electricity generated (art. 6 par. 2 letter a Law No. 220/2008 as referred to in art. 1 par. 9 Emergency Ordinance No. 88/2011 in conjunction with art. 1 letter a) Decision No. 994/2013)
  • Modernised hydro-electric plants with a capacity lower than 10 MW :2 certificates per MWh of electricity generated (art. 6 par. 2 letter a Law No. 220/2008 as referred to in art. 1 par. 9 Emergency Ordinance No. 88/2011).
  • Other hydro-electric plantswith a capacity lower than 10 MW (neither new nor modernised): 1 certificate per 2 MWh of electricity generated (art. 6 par. 2 letter b Law No. 220/2008 as referred to in art. 1 par. 9 Emergency Ordinance No. 88/2011).
  • Wind energy plants accredited before 31 December 2013: until 2017: 2 certificates, from 2018: 1 certificate per MWh of electricity generated (art. 6 par. 2 letter c Law No. 220/2008 as referred to in art. 1 par. 9 Emergency Ordinance No. 88/2011), from which 1 certificate is suspended until 31 March 2017 (art. 6 par. 2/1 letter b) Law No. 220/2008 as referred to in art. I par. 3 Emergency Ordinance No. 57/2013).
  • Wind energy plants accredited after 01 January 2014: until 2017: 1.5 certificates, from 2018: 0.75 certificates perMWh of electricity generated (art. 6 par. 2 letter a Law No. 220/2008 as referred to in art. 1 par. 9 Emergency Ordinance No. 88/2011 in conjunction with art. 1 letter b) Decision No. 994/2013)
  • Geothermal energy, biogas, biomass, liquid biofuels for energy generation:2 certificates per MWh of electricity generated (art. 6 par. 2 letter d Law No. 220/2008 as referred to in art. 1 par. 9 Emergency Ordinance No. 88/2011). Highly efficient CHP plants based on the above-mentioned renewable energy sources receive one additional certificate (art. 6 par. 4 Law No. 220/2008 as referred to in art. 1 par. 9 Emergency Ordinance No. 88/2011). Plants based on the above-mentioned energy sources that use biomass from energy crops are also eligible for one additional certificate per MWh of electricity generated and delivered (art. 6 par. 5 Law No. 220/2008 as referred to in art. 1 par. 9 Emergency Ordinance No. 88/2011 and as referred to in art. I par. 6 Law No. 23/2014).
  • Gas produced from anaerobic digestion of waste and sewage sludge:1 certificate per MWh of electricity generated (art. 6 par. 2 letter e Law No. 220/2008 as referred to in art. 1 par. 9 Emergency Ordinance No. 88/2011). Highly efficient CHP plants based on anaerobic digestion receive one additional certificate (art. 6 par. 4 Law No. 220/2008 as referred to in art. 1 par. 9 Emergency Ordinance No. 88/2011). Plants based on anaerobic digestion that use biomass from energy crops or deadwood are also eligible for one additional certificate per MWh of electricity generated (art. 6 par. 5 Law No. 220/2008 as referred to in art. 1 par. 4 Law No. 134/2012).
  • Solar energy installations accredited before 31 December 2013:6 certificates per MWh of electricity generated (art. 6 par. 2 letter f Law No. 220/2008 as referred to in art. 1 par. 9 Emergency Ordinance No. 88/2011), from which 2 certificate are suspended until 31 March 2017 (art. 6 par. 21 letter c) Law No. 220/2008 as referred to in art. I par. 5 Law No. 23/2014) and 2 certificate suspended between 1 April 2017 and 31 December 2020 for solar energy (art. 6 par. 25 Law No. 220/2008 as referred to in art. I par. 9 Law No. 184/2018).
  • Solar energy installations accredited after 01 January 2014: 3 certificates perMWh of electricity generated (art. 6 par. 2 letter f) Law No. 220/2008 as referred to in art. 1 par. 9 Emergency Ordinance No. 88/2011 in conjunction with art. 1 letter c) Decision No. 994/2013)

The following principles apply irrespective of which technology is used:

During the trial period, a plant will (irrespective of the technology employed) be eligible for one certificate perMWh of electricity (art. 6 par. 7 letter a Law No. 220/2008 as referred to in art I. par. 4 Emergency Ordinance No. 57/2013).

If a plant is supported under another government-funded programme, the number of certificates to be issued is set by the regulatory authority (ANRE) on a case-to-case basis. The number of certificates will be lower than the number usually awarded to a plant of the same technology (see the list of technologies above) (art. 6 par. 7 letter b Law No. 220/2008 as referred to in art. I par. 4 Emergency Ordinance No. 57/2013).

Minimum price per certificate

Amount of subsidy: The amount of subsidy corresponds to the price per certificate achieved in the market. In pursuance of art. 13 par. 1 Emergency Odinance No. 24/2017, during the period 31 March 2017- 31 March 2032 the transaction value of one green certificate will be at least € 29.4 and at maximum € 35. 

Fees and penalty charges

If a supplier (or a producer) fails to meet the quota prescribed by ANRE until 15th April for the previous year, he will be obliged to purchase the missing certificates at € 110 per certificate. The penalty goes to the Administration of the Environmental Fund (art. 12 par. 2 Law No. 220/2008 as referred to in art. 1 par. 15 Emergency Ordinance No. 88/2011). 

Addressees

Entitled party: There is no entitled party.

Obligated party: The persons obliged to satisfy an obligation are the electricity suppliers and producers (art. 8 par. 2 Law No. 220/2008 as referred to in art. 1 par. 7 Law No. 134/2012 and as referred to in art. I par. 9 and 10 Law No. 23/2014). An electricity supplier is a legal entity that holds a supply permit and supplies electricity to one or several clients under a supply contract (art. 2 letter r) Law No. 220/2008).

However, since beginning December 2014 some final energy consumers may be exempted up to 85% from their obligation of buying green certificates and thus using renewable energy sources depending on their energy intensity (Art. 2, par. 3 and par. 4 Governmental Decision No. 495/2014 and its modification 1104/2014). This exemption is valid for a period of up to 10 years (Art. 6 Governmental Decision No. 495/2014 and its modification 1104/2014). Furthermore, it can be awarded to a maximum of 300 beneficiaries at a time and is limited to a total budget of RON 750 million (approx. € 166,6 million (Art. 6, par. 3 Governmental Decision No. 495/2014 and its modifications 1104/2014 and 113/2016).

Procedure

Process flow

  • Accreditation by ANRE: The Energy Regulatory Authority ANRE accredits the plants to take part in the quota system (art. 6 par. 6 Law No. 220/2008 as referred to in art. 1 par. 9 Emergency Ordinance No. 88/2011).
  • Submission of green certificates. In order to provide evidence for the fulfilment of the quota, electricity suppliers and producers shall submit green certificates (art. 8 par. 2 Law No. 220/2008 as referred to in art. 1 par. 7 Law No. 134/2012).
  • Issue of green certificates. Green certificates are issued by the transmission grid operator for all electricity generated from renewable sources minus the electricity used to power the plant (art. 6 par. 1 Law No. 220/2008 as referred to in art.1 par. 9 Emergency Ordinance No. 88/2011). For this reason, every month the producers of electricity from renewable energy shall report to the transmission grid operators on the amount of renewable electricity exported to the grid (art. 7 par. 1 Law No. 220/2008 as referred to in art. 1 par. 10 Emergency Ordinance No. 88/2011). The electricity to be reported on includes electricity transmitted to the distribution grid operators and electricity directly supplied to end users (art. 7 par. 1 Law No. 220/2008 as referred to in art. 1 par. 10 Emergency Ordinance No. 88/2011). Green certificates may be either acquired by generating renewable electricity or purchased from other producers on the market for green certificates (art. 10 par. 1 Law No. 220/2008).
  • Fulfilment of the quota obligation. Every year by 15 April, the Energy Regulatory Authority ANRE checks whether the electricity suppliers and producers met their renewable certificate quotas in the last obligation period (art. 12 par.1 Law No. 220/2008 as referred to in art. 1 par. 15 Emergency Ordinance No. 88/2011). Every year by 1 March, ANRE may adjust the renewable electricity quotas applicable in the year before to the total capacity of renewable energy plants actually installed and to the electricity consumed. However, the adjusted quotas shall not exceed the maximum quotas set until 2020. This adjustment may be made by order of the President of ANRE (art. 4 par. 9 Law No. 220/2008 as referred to in art. 1 par. 8 Emergency Ordinance No. 88/2011). The energy suppliers are obliged to report by the end of each trimester the fulfilment of their quota obligation of green certificates to ANRE (art. 8 par. 3 Law No. 220/2008 as referred to in art. I par. 10 Law No. 23/2014).

Competent authority

The Energy Regulatory Authority ANRE accredits the plants to take part in the quota system (art. 6 par. 6 Law No. 220/2008 as referred to in art. 1 par. 9 Emergency Regulation No. 88/2011). ANRE is also responsible for monitoring compliance with the quota obligations (art. 12 par. 1 Law No. 220/2008 as referred to in art. 1 par. 15 Emergency Ordinance No. 88/2011). The electricity market operator OPCOM maintains and monitors trade flows on the green certificate market according to the regulations provided by ANRE (art. 10 par. 2 Law No. 220/2008 as reffered to in art. 1 par.17 Emergency Ordinance No. 24/2017).

Flexibility mechanism

Romania may participate in joint projects for renewable electricity generation with other member states of the European Union to reach its renewable energy targets. Further, Romania may participate in statistical transfers and may consider to partially or entirely harmonise its support schemes for renewable energy sources with other member states of the European Union (art. 15 par. 1 Law No. 220/2008 as referred to in art. 1. par. 10 Law No. 134/2012).

International applicability

International certificate trade

Certificates may be traded on the international market only if the applicable national quota for green certificates has been met (art. 10 par. 3 Law No. 220/2008 as referred to in art. 1 par. 12 Emergency Ordinance No. 88/2011).

Distribution of costs

Consumers

The costs of the quota system are borne by the consumers through the electricity price.

Distribution mechanism

According to ISPE, the costs arising from the purchase of green certificates are passed on to the consumers.