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Companies denounce maintaining the mandatory quota of green electricity to 12.15%

7 January 2016
Biomass
energynomics

In a press release signed by associations representing investors in renewable energy in Romania – RWEA, PATRES, RPIA, ARmHE – companies in the sector protest against the decision took by the Government to maintain for the third year in a row the mandatory quota of electricity produced from renewable energy sources at the level of 12.15%. Associations believe that this quota is unsustainable for existing investments, placed well below the 17% originally envisaged in the Law 220/2008, the piece of legislation under which all investments were made in the sector.

Associations representing renewable energy producers operating plants with an installed capacity of 5,000 MW and investments of about 8 billion euro make an appeal to force majeure, to save from collapse, urgently, a sector considered of utmost importance for Romanian economy.

The press release can be read below.

Late last year, during COP21, 186 countries reached an historic agreement, namely to fight against CO2 emissions and focus their efforts to support energy produced from renewable sources. Meanwhile, Romania continues to promote a policy whereby the state seeks to bankrupt the renewable energy producers which today provides about 20% of electricity consumption nationwide. On ANRE proposal, the Government decided to retain for the third year in a row the mandatory quota of electricity produced from renewable energy at an extremely low level, not sustainable for the current investments, i.e. 12.15%, compared to 17% originally provided for in Law 220/2008, the law under which all investments were made in the sector.

In this context, associations representing investors in renewable energy in Romania – RWEA, PATRES, RPIA, ArmHE, strongly condemns ANRE proposal and protests against the decision took by the Government. This decision is deeply wrong, based on outdated calculations, and it will throw into chaos the renewable energy industry. Although the studies presented repeatedly to ANRE and the Government and validated unofficially (or in Working Groups framework) by representatives of the authorities show a loss of over 2.1 billion RON in a single year (2014), revealing the dramatic situation of the producers of renewable energy, these institutions continue to show indifference, even ill will towards the one area that has generated significant investments in the production of electricity throughout the crisis period.

We ask the authorities: has Romania the luxury of letting the producers of energy from renewable sources to bankrupt collectively?

The situation is critical; the quota approved for 2016 is covering about 50% of green certificates destined to be in the market. According to ANRE Order no. 183 of 31 December 2015, the mandatory quota of green certificates estimated for the year 2016 was fixed at 0.317 green certificates/MWh not excepted. According to this value, 12,116,662 green certificates will be needed in 2016 ,compared to 18,909,036 green certificates to be issued according to ANRE judgment, thus resulting in 2016 a surplus of 6,792,374 green certificates, which adds up to the 4,045,324 items already existing in the market (according OPCOM on 17.12.2015).

It also stated that under this huge surplus, according to current regulations, green certificates are taxed at the time of grant and not at the actual time of sale, which makes producers to give credit permanently to the State despite being de-facto in insolvency through the failure of selling the green certificates.

Basically, the decisions made by the authorities knowingly push investors in the renewable sector towards bankruptcy, generating a boomerang phenomenon will affect the industry in the future, exports and eventually the entire population. With all the care for the end user, the end result will be to increase electricity prices, which fell significantly also due to the contribution of renewable energy. In addition, the government policy, begun in 2013 by changing the framework to support renewable energy, endangers the energy security of Romania in the medium and long term by failing to grant an honest treatment for the investments in new electricity production capacity.

In this climate of unpredictability and lack of fairness for existing investors who feel cheated by the Romanian state, we ask: “Who will have the confidence to invest in future in Romania’s energy sector?”

The associations representing energy producers from renewable sources active in Romania, with an installed capacity of 5,000 MW and investments of about 8 billion euros, make a call to force majeure, to save from collapse, urgently, a sector of the utmost importance for Romanian economy by creating a stable regulatory framework, predictable and fair to maintain existing investments and ensure further development of the electricity sector by attracting new investment.

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