Patres: The new draft on bilateral contracts (PPAs) is a limitative one

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Bogdan Tudorache

The new draft launched for public debate by the regulatory body ANRE regarding the approval of the Regulation on power purchase agreements (PPAs) has some limitations, according to Patres officials, an organization that brings together small investors mainly with Romanian capital in renewables with an aggregate investment of over 2 billion euros. Patres proposes initiating procedures to change the Law 123 and set up working groups with all the actors involved.

“In the above-mentioned ANRE project, subject to public debate, our organization considers that there are limitations for both banks/ investment funds and investors/ energy producers, which will not result in new investments, for the following reasons: Failure to negotiate freely between parties for signing a contract with duration, volume, price, agreed profile; total transparency of the contract; signing a long-term contract without knowing the partner, given the volume of investments and company profile; the impossibility of generating aggregators in view of the production profile of some technologies. Given the anonymity of the market, “on-site” or “near-site” contracts will not be signed even if their realization will decrease or eliminate certain network costs,” Patres officials say.

“Patres has its reserves that, in the current form of the project, the investors will even be able to invest in energy units.”

The representatives of the association claim that two EU Directives are not taken into account. Thus, Directive 2018/2001 of the European Parliament and of the Council of Europe of 11 December 2018 on the promotion of the use of energy from renewable sources shows that:

“Article 15 (8) Member States shall assess the regulatory and administrative barriers to long-term renewables power purchase agreements, and shall remove unjustified barriers to, and facilitate the uptake of, such agreements. Member States shall ensure that those agreements are not subject to disproportionate or discriminatory procedures or charges. Member States shall describe policies and measures facilitating the uptake of renewables power purchase agreements in their integrated national energy and climate plans and progress reports pursuant to Regulation (EU) 2018/1999”, and respectively

“Article 36- 1. Member States shall bring into force the laws, regulations and administrative provisions necessary to comply with Articles 2 to 13, 15 to 31 and 37 of this Directive and Annexes II, III and V to IX of this Directive by 30 June 2021. They shall forthwith communicate to the Commission the text of those provisions. When Member States adopt those provisions, they shall contain a reference to this Directive or be accompanied by such a reference on the occasion of their official publication. They shall also contain a statement stating that the references in the laws, regulations and administrative provisions in force to the Directive …. Member States shall determine how this reference is to be made and the wording of that statement.”

Therefore, “with respect to the two articles mentioned above, these barriers that exist in the draft order will have to be eliminated by June 30, 2021,” says Patres, who proposes “to begin the process of changing the energy law 123/2012, so so that barriers to PPAs are fully and quickly removed in line with the new directive.”

The organization proposes to set up a working group consisting of all the actors involved, respectively Ministry of Energy – A.N.R.E. – OPCOM – Funding Banks – Producers / Investors.

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