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Introduction |
Renewable energy sources (E-RES) increase the diversity of energy
supplies and will most likely replace the world’s diminishing supply of
fossil fuels (coal, natural gas and petroleum). The use of E-RES
resources instead of fossil fuels can substantially reduce greenhouse
gases, mostly CO2 and other pollutants. The use of renewable energy also
increases the economic independence of users that develop such energy
sources. Energy dependence on politically unreliable sources can be
vexing. For example, the EU is dependent upon Russian gas and Russia
uses that dependence for political leverage to prevent the EU from
taking stronger positions against Russian hegemonic activities in places
such as Georgia and Moldova.
The EU’s first act to reduce greenhouse gas emissions was Directive
2001/77/EC of the European Parliament and Council on the promotion of
electricity produced from renewable energy sources in the internal
electricity market. Romania first implemented in its own legislation
similar to Directive 2001/77/EC with GD no. 443/2003 with modification
of GD no.958 / 2005. Romania’s goal is to produce by 2010 the equivalent
of 33% of its gross national electricity consumption requirements soley
by renewable energy sources.
Romania has been developing a number of E-RES projects based upon wind
energy in particular. For example, Ramia Eol intends to create a
windmill park in Marisel, Cluj district, while in Dobrogea, CEZ and
Eolica Dobrogea intend to develop their own wind energy businesses.
Investors targeting wind technology assert that the income from a
windmill park is higher than that of a classic real estate investment as
the operational costs are less.
The general legal framework for energy production in Romania is set
forth in Law 13/2007 – the electricity law (the “Electricity Law”) which
also refers to and enumerates renewable energy sources such as wind
power, solar energy, tidal and wave energy, geo-thermal energy,
hydroelectric energy, biomass energy, etc. |
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Creating an E-RES Facility |
To create a new E-RES facility in Romania, interested firms must fulfill
certain requirements and obtain a number of documents and authorizations
from the institutions and the local authorities authorized to provide
them. Investors must secure from local administration authorities a city
planning certificate (which includes a list of required documentation)
and a construction authorization. These two documents apply to all
constructions, not just E-RES facilities.
In accordance with Article 13 of Law 13/2007, building new energetic
facilities (i.e., facilities for the production of electricity), as well
as updating existing technological facilities, is accomplished on the
basis of an incorporation authorization. The incorporation authorization
is the technical legal document issued by the National Authority for
Energy Regulation (“NAER”), by which a natural or legal person, Romanian
or foreign, is given the permission to build or to update existing
technological facilities for electricity production. The incorporation
authorization is necessary only for power units with installed power
higher than 1MW. The NAER establishes the duration for which the
authorization is granted, correlated with the duration of the
construction and functioning of the facility and the terms taken from
the applicant’s documentation.
According to Article 15 of the Energy Law, NAER issues incorporation
authorizations for the establishment of E-RES and licenses for
activities such as commercial exploitation of energy production
facilities, transport, the provision and distribution of energy, etc.
The production, transport, service system, distribution and supply of
electricity, as well as the activities of administration for the
centralized markets of electricity are accomplished on the basis of
licenses granted by NAER by which a natural or legal person, Romanian or
foreign, is given permission to commercially exploit energy facilities.
The term for which the license is granted is for 25 years for the
commercial exploitation of electricity production facilities. |
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Conditions |
 The
Energy Law provides that no authorization will be granted to companies
that are undergoing judicial reorganization, insolvency or bankruptcy,
or to those that have been sanctioned by a competent authority with
regard to the withdrawal of their authorizations or licenses for a
period of 5 years prior to the registration date of the new request.
Authorizations and licenses are granted on the basis of specific fees,
approved by order of the President of the NAER. The holder pays an
annual fee to the competent authority during the license duration,
including during any time while it is suspended. |
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Applicants |
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Authorizations and licenses can be requested by both Romanian or foreign
legal entities. A foreign legal entity may request an
authorization/license necessary for its activities only if it has
established, in accordance with the law, a secondary headquarters in
Romania for the duration of the authorization/license. |
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Procedure |
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To obtain the authorization, the law provides that the applicant must
submit a request to the competent authority, that has appended to it all
of the deeds and documentation that prove the applicant’s fulfillment of
all of the economic, financial, technical and professional conditions
established for energy facilities and activities in the field. NAER
issues its decision to grant or deny the authorization/license within a
maximum of 30 days from the date when it has determined that the
documentation submitted by the applicant is complete according to the
law and the applicant has paid all the taxes and presented proof of
payment. |
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Document Analysis |
Upon the submission of the application with the requisite documentation,
the competent authority must analyze the documents appended to the
written request for authorization/ license and, where appropriate,
respond in writing, no later than 15 days after receipt of the request,
informing the applicant about the need to resolve any deficiency in the
documentation, correcting it or supplementing it.
Where appropriate, considering the quality and complexity of the data
provided by the applicant, the competent authority may decide to convene
a meeting with the applicant’s authorized representatives to clarify
certain aspects of the submission that are not clearly described in the
documents provided. They may also decide to hold an on-site verification
of the accuracy of the data presented by the applicant. The conclusions
of the verification are written down in minutes to be signed by both the
applicant and the representatives of NAER.
In the event that within 60 working days from the date of the submission
of the written request for the authorization/license, the applicant
fails to provide to the competent authority the appropriate
documentation requested (i.e., the data that was previously missing),
the competent authority has the right to reject the applicant’s
documentation and remove the request for registration from its work
schedule.
After examining the applicant’s documentation, the NAER creates a report
that includes a decision to issue or to refuse the issuance of the
authorization/license setting forth the grounds, and a statement as to
when issuance is deemed feasible and providing the period during which
the authorization/license is valid. The report is presented to the
Regulatory Committee of the competent deciding authority in a public
session for approval. The place and date of the public meeting must be
noticed at least five days in advance in the Public Meeting Schedule on
the competent authority’s web page and by letters addressed to the
applicant and to other interested parties.
NAER must also make available to the applicant or any other interested
party the report to be submitted for approval to the Regulatory
Committee. This report should also include the same information that
will be mentioned in the authorization/license.
If the competent authority proposes in its report to issue the
authorization/license, it prepares the accompanying conditions that will
constitute an integral part of the document. The accompanying conditions
are supplied to the Regulatory Committee which decides upon any
amendments. The accompanying conditions have to abide by the relevant
legislation. They contain obligations for the applicant, the description
of the energy facilities for which it is granted, the territorial
delimitation where the applicant has a right to develop its activity,
the period for which the license will be valid, the rights of the
applicant, interdictions, restrictions and duties of the applicant,
conditions for the amendment, suspension or withdrawal of the
authorization/license, and conditions under which the competent
authority may sanction the applicant. |
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The Grant or Refusal of the
Authorization/License |
 The
report on the authorization/license application and any added terms are
presented at the public meeting of the Regulatory Committee, whose
proceedings are recorded on a CD to be archived and kept for at least 5
years. The decision on the issuance of the authorization/license is
given upon a majority vote. The decision of the President of NAER is
then forwarded to the applicant no later than 5 business days after the
vote and is registered with the competent authority on the President’s
decisions list, which is available on their web page.
The refusal of the competent authority to grant a license or an
authorization, the lack of a response within the proper term and any
other resolution of the competent authority that is considered by the
applicant to be illegal or damaging, may be challenged at the Bucharest
Court of Appeal, in the Administrative Litigation Department. In case
the circumstances and conditions existing at the date of the issuance of
the licenses and authorizations change, they are to be amended, in
accordance with Article 22 of the Electricity Law. |
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Obligations of Incorporation Authorizations
and Licenses |
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The holder of the incorporation authorization has the obligation to
establish and apply measures that will protect persons, goods and the
environment, as well as the obligation to obtain all the necessary
approvals, accords and permissions required by law to accomplish the
authorized energy-related activities. During the period of the license,
its holders are obligated to maintain all of the conditions under which
the license was granted, retain separate accounting records for each
activity that is the object of the license, prepare and preserve
financial warranties that permit the development of the activity and the
assurance of the continuity of the service, and supply to the competent
authority all of the necessary information for the development in good
condition of the approved activity. The holders of incorporating
authorizations and licenses have the obligation to abide by all the
provisions and requirements that are established by the NAER in the
licenses and authorizations and through any other specific provisions. |
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The Suspension and Withdrawal of The
Authorization and License |
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If the holder of an incorporation authorization or a license, does not
fulfill the obligations imposed on it in the respective
authorization/license, the NAER may grant an additional term during
which the applicant can fulfill his obligations, if the situation can be
remedied, withdraw the authorization/license, if the situation can not
be remedied or suspend the authorization/license for a period of time.
The competent authority may also suspend the incorporation
authorization/license if a general bankruptcy procedure is begun
involving the holder. It also has the right to withdraw the
incorporation authorization/license if the concession or rental of the
energy facility ends or is cancelled or if it is sold by its owner. |
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The Obligations of Energy Producers |
Energy producers have the following main obligations provided in the
Electricity Law:
- to ensure the delivery of electricity under the terms imposed by
the licenses, contractual provisions and in force legal provisions;
- to offer without discrimination all the electrical power
available, and electricity and system technology services; and
- to fulfill from an operational point of view all of the
requirements of the system and transport operator.
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The Rights of the Energy Producers |
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Energy producers who comply with the provisions of the Electricity Law
have the right to access electricity networks, and obtain and install
their own cable infrastructure. They can establish their own prices for
the services provided and adjust them according to the offer and request
and they can also establish and maintain their own system of
telecommunications with their production facilities, with the clients or
with management. |
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Conclusion |
 Accession
to the European Union forced Romania to adopt an energy scheme that
obligates utilities to purchase annually from the producers of renewable
energy a mandatory amount of energy to be sold to end users.
Furthermore, since rural areas in Romania are still somewhat underpriced
in comparison with land in other parts of Europe and investors can
benefit from the European legislation in the field of E-RES -- which
encourages and offers support to the production of this type of
alternative energy -- Romania has seen a massive influx of investments
in this area. These investments will support and strengthen Romania’s
position as a net electricity exporter in a global environment where
most countries are electricity importers. |
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Editors Note: It is our policy not to mention our clients by name in
The Romanian Digest™ or discuss their business unless it is a matter of
public record and our clients approve. The information herein is correct
to the best of our knowledge and belief at press time. Specific advice
should be sought from us, however, before investment or other decisions
are made.
Copyright 2008 Rubin Meyer Doru & Trandafir, societate civila de avocati.
All rights reserved. No part of The Romanian Digest™ may be reproduced,
reused or redistributed in any form without prior written permission
from the publisher.
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RUBIN MEYER DORU & TRANDAFIR
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