Renewable electricity generation is an imperative, not only now, but for the next decade and in the future, too, so that by 2050, 100% of electricity will be from renewable sources. The reasons for this are environmental protection, reduction of greenhouse gas emissions, increased energy independence, diversification of supply sources, economic and social reasons.
The EU policies background
The European Green Pact, a cornerstone of EU policy, commits the European Union to achieving climate neutrality by 2050. This ambitious goal requires a profound transformation of member states’ energy sectors. Romania is also aligning itself with the EU directives and regulations in the ‘Clean Energy for All Europeans’ legislative package.
In response to the challenges and disruptions in the global energy market caused by Russia’s invasion of Ukraine, the European Commission launched the REPowerEU Plan in May 2022, aimed at ensuring Europe’s independence from Russian fossil fuels well before 2030.
To accelerate the energy transition, taking into account the Fit for 55 package of proposals and complementing actions on energy security of supply and energy storage, the REPowerEU plan proposes an additional set of actions for energy saving, clean energy production and resource diversification to accelerate Europe’s clean energy transition through rapid fossil fuel substitution and smart use of reforms to support investment.
As regards the deployment of renewables, the Commission proposes to increase the 2030 target for the share of renewables in total EU energy consumption from 40% to 45% as part of the “Fit for 55” package.
In view of future rising European targets, i.e. an increase in the Union’s target for the share of renewable energy in gross final energy consumption in 2030 to at least 42.5%, it obliges Member States to also set new indicative targets for renewable energy.
The context of national PV policies
Romania’s energy ambitions are closely linked to the general objectives of the EU energy and climate policy. Thus, Romania has set a target of 30.7% for the share of renewable energy sources in gross final energy consumption for the 2030 time horizon through the National Integrated Energy and Climate Change Plan 2021-2030 – NECP, approved by GD no 1076/2021, with the proposal to amend it to 36.2% through the Draft National Integrated Energy and Climate Change Plan 2021-2030, currently in the process of public consultation on the Ministry of Energy website. This shows the need to increase the installed renewable generation capacity well above the values considered in the current NECP (i.e. an increase of about 7,000 MW, of which about 3,700 MW from photovoltaic sources, 2,300 MW from wind sources and about 1,000 MW from hydro sources).
The value for the share of energy from renewable energy sources (RES-E) in gross final energy consumption achieved for 2022 was 23.9%, slightly below the target value for Romania for 2020 of 24%, according to official European data published by Eurostat.
EU renewable energy policies have helped reduce the cost of photovoltaics by 82% over the past decade, making it one of the most competitive sources of electricity in the EU.
Thus, by 2023, in terms of investments in new renewable generation capacity through photovoltaic projects, the prosumer area has become one of the most dynamic areas in the energy sector in Romania, due to the unprecedented increase in electricity prices and the need to transition to a cleaner and more sustainable energy system.
The number of prosumers reached 110,355 at the end of 2023, an increase of about 70,000 prosumers compared to the end of 2022, and a level for installed capacity of 1,443 MW, an increase of about 1,000 MW compared to the end of 2022. The monthly evolution of the number of prosumers connected to the distribution networks of the distribution operators and their installed capacity as of 31.12.2023 is shown in the graphs below.
Current legislative steps on prosumers and transposition by ANRE into secondary legislation
In accordance with the provisions of GEO No 163/2022, prosumers, including those who own renewable electricity generation plants with an installed electrical capacity of more than 400 kW/site of consumption/production, as well as those who sell electricity produced and delivered to the electricity grid through negotiated bilateral contracts, will be able to benefit, upon request, from the mechanism for the settlement of electricity produced by prosumers and delivered to the electricity grid with the electricity they consume from the electricity grid to supply other consumption or production and consumption sites. The condition is that all the places of production and consumption or places of consumption of the prosumer in question are connected to the electricity grid of the same distribution system operator and that electricity is supplied to these places by the same electricity supplier.
ANRE intends to amend and supplement the Methodology by ANRE Order no. 15/2022, as subsequently amended and supplemented, in order to introduce the necessary rules for the implementation of the settlement mechanism through financial compensation between the invoices issued by the electricity supplier/prosumer, for each of the production and consumption sites and the consumption sites owned by the prosumer and nominated by him for this purpose and which are included in this settlement during the billing period.
With regard to the issuing of electricity bills, for the purpose of offsetting bills issued for the legally established quantitative compensation mechanism, electricity suppliers are obliged under the Methodology to issue bills for electricity produced and delivered to the electricity grid and to prosumers, in their own name or in the name and on behalf of certain categories of prosumers.
As of 01.01.2024, the provisions of GEO no. 120/2021, approved by Law no. 296/2023, are also applicable, i.e. the obligation of the issuer of the invoice to send it to the recipient legal entity using the national electronic invoice system RO e-invoice, in compliance with the provisions of Article 4 para. (1) of GEO no. 120/2021, as amended.
Improved regulatory framework for better grid connection
In order to accelerate the implementation of electricity generation projects, including those from renewable sources, ANRE has continuously improved the regulatory framework applicable to the connection of generators to the public electricity grids, both from the perspective of facilitating the connection process, by reducing its duration and bureaucracy, and in order to adapt to certain situations that have arisen in practice, thus seeking to unblock the process of connecting generation capacities.
As regards the national development of electricity generation projects, on 27.02.2024, according to information published on the ANRE website, the installed capacity of electricity generation capacities is 18.3 GW. The installed capacities in the main renewable technologies are about 3 GW in wind sources, representing a share in the total installed capacity of 16.39%, and about 1.6 GW in photovoltaic sources, with a share of 8.88% of the total installed capacity.
With regard to technical connection permits issued by grid operators for the connection of new renewable electricity generation capacity (wind and photovoltaic) to the transmission and distribution grids, there is a significant increase in the number of such permits in 2023 compared to 2022.
Grid operators issued 52 technical connection permits with an approved capacity of about 4.28 GW for the connection of new wind power generation capacities above 1 MW in 2023, while they issued 5 technical connection permits with an approved capacity of about 0.9 GW in 2022.
Grid operators issued 404 technical connection notices for PV projects over 1 MW in 2023 with an approved capacity of about 4.82 GW, compared to 7 technical connection notices in 2022 with an approved capacity of about 0.1 GW.
Grid operators are sending out more and more technical connection notices to connect renewable energy generation capacities to the electricity grids. This is because ANRE is always making the regulatory framework better, especially by adapting it to real-life situations that come up during the connection process.
Methodology for the allocation of electricity network capacity
Therefore, in order to implement the provisions of Art. 25 para. (2^2) of the Law on Electricity and Natural Gas no. 123/2012, as amended, ANRE has prepared and published on 01.02.2024, for public consultation, a new draft order for the approval of the Methodology for the allocation of electricity network capacity for the connection of electricity generation sites, as well as for the amendment and completion of some orders of the President of the National Energy Regulatory Authority on the connection of users to the public interest electricity network.
It is the goal of developing the methodology to set the rules for auctioning off available capacities so that new generation, consumption, and production sites can connect to power plants with installed capacities of at least 1 MW.
The development and administration of the auction platform and the organisation of this activity will be carried out by the transmission system operator and the deadline proposed in the draft order for the application of the auction mechanism for the allocation of available capacities is 01.01.2025.
The draft order calls for a new way to allocate electricity network capacity based on a tender instead of the current system where those who want to connect to the grid have to take part in general network strengthening works upstream of the connection point. Network operators use the funds raised through auctions for additional electricity network development projects required to meet applicants’ requests for capacity allocation under this mechanism for the development of electricity networks.
The new methodology aims to allocate the available capacity of the electricity grid through market-based methods and promotes a mechanism that ensures a competitive environment that provides better predictability for the development of energy sources in the power system. By adding this mechanism to the rules, those who want to build power plants with installed capacities of 1 MW or more can get the capacities they need to connect to the grid. This will make the national energy system more reliable.
From the analysis of the data presented above, which shows the increasing trend in recent years of connections to the electricity distribution grid of photovoltaic renewable energy generation capacities, most of which are owned by prosumers, it appears that the primary legislation and regulations issued by ANRE, harmonised whenever necessary with the legislative provisions and with those of the guidelines for accessing funding programmes for the installation of power plants for the production of electricity from renewable sources, and also adapted in order to clarify certain aspects and situations raised by interested parties, have facilitated the connection of prosumers to the public electricity networks. This has had a positive impact on the energy market as a whole, given the increase in the amount of renewable electricity produced, delivered and sold on the energy market.
The future of photovoltaic energy
As a result of changes in the legislative and regulatory framework through the adoption of facilities for prosumers, as well as the possibility for natural and legal persons to access various financing programmes for the installation of power plants for the production of electricity from renewable sources, the number of persons applying to distribution operators for certification as prosumers and applications for their connections has increased considerably in the last 2-3 years.
We believe that the implementation of support programmes for the production of electricity from renewable sources, which implicitly include prosumers, should take into account objectives such as:
- boosting electricity storage capacities,
- ensuring the collection of information on the operation of generation equipment from prosumers at the level of grid operators, by generalising smart-metering at the level of the distribution grid,
- the acquisition of software to process data collected from consumers
- promoting programmes to make electricity grid operation more flexible.
Thus, among the concerns we anticipate regarding the development of utility-scale PV projects in the immediate future, in the context of the large number of investment funding programs for new renewable energy power generation capacity, it is imperative to access and implement grid management programs to increase renewable energy absorption capacity, including:
- Network investments from non-reimbursable funds
- Accurate determination of available capacity for connection at network node level
- Network flexibility
- Assessing the effects of increased capacity from renewable sources on electricity grids:
- Assessment of the change in electricity flows through the grids at all voltage levels
- Identification of storage capacity needs in electricity grids at all voltage levels
- Assessment of the impact on the electricity market
- Stimulating the establishment and commissioning of energy communities and renewable energy communities
Given the above, the digital revolution in this sector will change the way we produce and consume energy, but in order to be successfully implemented, investments are needed to integrate a large number of small consumers and more renewable energy sources into the low voltage electricity distribution subsystem, especially in the context of dispatchable consumption, i.e. smart meters and smart grids throughout Romania’s energy system.
In order to facilitate market access for renewable electricity generators, ANRE keeps a close eye on market developments and the requirements for the development of renewable electricity generation capacity projects. When necessary, it intervenes quickly by changing the regulatory framework and proposing amendments to primary legislation.