Question: How is the renewable energy industry in Romania, at the moment? I would like to buy a project in this area and I need a legal opinion.
Answer: The renewable energy industry significantly rebalanced the overall economic situation in Romania. Strongly encouraged by a highly promising investment support scheme, the green energy area gradually expanded to outstanding capacities, outlining at the end of 2012 an unexpectedly positive report.
For the first time since these technologies were introduced in Romania, the renewable support scheme was effective for the entire year in the revised format accepted by the European Commission. The program advocating for increase of investments in this field covers quite a large spectrum, ranging from national encouraging measures, to European supporting schemes.
Entities involved in this domain may receive financial incentives, EU funds for building new power and heating production capacities using renewable resources, fiscal incentives and tradable green certificates. The financial support system actually convinced the majority of business entrepreneurs to aggressively exploit these options, but creating in this manner a completely innovative perimeter allowing continuous investments and revealing an overwhelming strategy for delivering profits.
Question: I am interested in the wind power sector of the Romanian renewable energy industry. Could you give me some information, from a legal point of view, please?
Answer: The Romanian territory genuinely provides resources for implementing a large variety of renewable energy projects, offering fertile ground for capitalizing the green potential in wind, solar, biomass and geothermal department.
As improvements in this area persistently educated the market, Romania revealed itself as the highest wind potential region in South Eastern Europe. There are certain geographical areas that provide incredibly optimistic perspectives for building wind farms. The Dobrogea area, focusing on Constanta and Tulcea counties, proves to be the second best location in Europe to start such a business.
In recent years, the Romanian territory was strictly evaluated, intending to provide a highly accurate basis for future investments. These studies recommended this region as equally profitable for practical set-up of both small independent units for rural areas, and large off-shore areas. Wind energy sector rapidly developed especially when the green certificates scheme started to prove profitable. From 12MW in 2009, it managed to reach a 1,440MW level in September 2012.
Following, we would like to present to you other renewable energy industries in Romania, that offer a great return on investment for your business:
According to reports concerning development of green energy in Romania, the solar power department recorded an equally spectacular growth, from an installed capacity of 0.30MWp, in 2007, to an average of 5 MW, at the end of 2012.
Technically speaking, the Romanian territory reveals exceptional advantages in this area, as it provides a good solar potential attribute, with 210 sunny days per year. The Black Sea coast, Dobrogea and Oltenia seem to be the most prominent regions proving significantly profitable for this domain.
In Romania, the production of solar/ PV energy is consistently encouraged through the green certificate scheme, which provides 6 GC for each MWh produced and injected into the grid. After the wind energy projects, the solar parks appear to be the second most assertive means of capitalizing the Romanian renewable energy resources.
Biomass represents one of the most important resources, when referring to the department of green energy in Romania and it stands for 88.33 TWh per year.
As compared to all departments related to green energy in Romania, this one is probably the less explored and it is generally limited to domestic use. Industrial exploitation restrains to only 5% of the entire used potential.
Firewood and the wood waste come from Carpathians and Sub-Carpathians regions and it reaches a level of 66% of the entire capacity; agricultural waste is provided by regions such as South Plain, West Plain and Moldova, which cover an average of 58% of the entire capacity.
With such a potential, this domain of Romanian renewable energy resources proves an impressively stable investment approach. In addition to this, the green certificate scheme reveals another great advantage of investing in this area, delivering a unique opportunity of exploring a highly lucrative sector, but also an interesting way of applying political ecology.
The hydropower energy represents another alternative for investors. Romania is actually one of the regions with the greatest unexplored potential for this resource, together with Austria, Italy, Poland and France.
Main benefits of such an approach refer to the long lifespan of the project, to the maintenance costs which are generally low, and to the high efficiency of energy delivery. At this level, it was proved that only biomass can equal hydro energy when referring to efficiency attributes.
Question: How are Green Certificates obtained in Romania?
Answer: The basic algorithm which sustains investments in Romanian renewable energy field concerns the green certificate scheme. This system was actually adopted in 2004 and it functioned as a tool to encourage investments in this area.
Energy producers are able to receive a number of GC (green certificates), directly related to the amount of electricity provided from sources of green energy in Romania. The amounts of money, obtained by selling the GCs, are to be considered just as additional revenue for eligible renewable producers, on top of electricity sales on the market.
Each type of renewable energy is eligible for a different number of green certificates in Romania, according to Law No. 220/2008 (between 0.5 and 3 GC/ Mw for hydroelectric power, varying on the capacity of the plant; 2 GC/Mwh for wind power, until 31 December 2017, 1 GC/Mwh for wind power, starting with 1 January 2018; 6 GC/Mwh for solar power).
The green certificates scheme proved to be the most approachable in Europe and obviously the most bounteous. According to Law 220/2008 and Order 43/2011, concerning the green energy in Romania, the green certificates can be traded either on the centralized green certificates market, or on the green certificates bilateral contracts market. OPCOM monitors the activity of both trading platforms.
Question: Does your law firm offer technical due diligence for Romanian renewable energy projects?
Answer: Taking in account the overwhelming legal formalities that are imposed when choosing to invest in renewable energy projects, it becomes mandatory to ask for an expert advice.
Our lawyers can provide all legal details connected to this topic and also perform the technical due diligence audit for these types of projects. We can evaluate the legal and socio-environmental risks before you start your business, also identifying technical uncertainties that might compromise the project.
Our professional lawyers can offer the guarantee of the technical feasibility of the investment, ensuring that all requirements involved in the development process were precisely fulfilled. Darie & Manea is able to accurately assess any project in this department carefully analyzing each particular characteristic always suggesting approachable alternatives and guaranteeing a safe investment. For a free case consultation, please call us now!