Some developers of renewable energy projects apply for and receive permits to connect to the grid, but do not intend to complete the capacity and put it into operation, but sell it to others. Thus, according to a study conducted by the Competition Council and NARE, access to the grid for those who really want to generate green electricity is blocked. Both institutions propose to require performance guarantees or introduce sanctions for those who delay projects.

Participants in the process of connecting to the grid face legislative barriers, bureaucratic barriers, barriers related to financing, as well as certain factors caused by insufficient development of electricity transmission and distribution networks, the study says.

“We are particularly interested in the process of connecting new generation capacity from renewable sources to the transmission/distribution network, given that several funding schemes have been launched through the National Recovery and Resilience Program and other national and public investment programs. . In this context, the priority is to optimize the national authorization/approval procedures in order to reduce the project implementation time. At the same time, it is very important to distinguish strictly necessary rules, which play an important role in ensuring the quality of services, and those that are not strictly necessary, even potentially harmful to the development of the market,” said Bohdan Chiritsoyu, the head of the Competition Council.

The study shows that the most frequent problems faced by companies when entering the market of electricity production from renewable sources are related to the administrative permit process (bureaucracy, non-transparent processes, long term for issuing the technical permit for connection (ATR), the legal framework is interpreted and insufficient), but other problems were also identified regarding insufficient investments in the development of electrical networks, lack of experience in working with renewable energy projects among the personnel involved in various stages of the authorization process, and the development of speculative investments.

As a result, the antimonopoly authority and the energy regulator formulated a number of proposals and recommendations to eliminate or mitigate the obstacles identified in the study.

“One-stop shop” for renewable energy sources

The implementation of a single window module for obtaining a license in the field of electricity from renewable sources as a separate part of the electronic single point of contact for an industrial license can have numerous advantages in terms of reducing licensing time and, implicitly, grid connection , in terms of transparency, standardization and uniformity of the process.

Thus, business entities that invest in renewable energy production capacity will be able to apply for licenses, permits, agreements and approvals necessary for the implementation of activities in a single procedure through a single electronic point of contact for an industrial license.

Thus, an opportunity is created to hold a unique forum on renewable energy projects in Romania, which will bring together specialists in the field of development of these projects, which will allow a faster assessment of the cumulative impact of all projects.

Speculate on green projects

The Competition Council and ANRE recommend to the Ministry of Energy and the central authorities responsible for regulating certain stages of the development of the transport network that, when developing and implementing strategies in this area, they take into account the goals set by Romania in this field of renewable energy sources and the need to identify some new opportunities to provide/facilitate funding sources for network development work.

From the point of view of legislation, it was found that the main barriers are the lack of legislative levers to prevent the development of investments of a potentially speculative nature and the lack of an appropriate legislative package that would prevent the connection process from taking a long time.

Currently, there are situations where some business entities/investors request and receive ATRs, but do not intend to complete the projects and put them into operation with a view to entering the market, but sell the projects to other investors “off-the-shelf”. “construction stage”.

This behavior leads to the blocking of available capacity for connection to investment in renewable energy projects for the duration of the ATRs received, creating significant difficulties for investors requesting grid connection in order to enter the market effectively.

In 2021, NARE developed a provision that facilitates the transfer of useful information to potential investors by making transparent and publicizing the available capacities in the power grids and capacity restrictions.

However, the antimonopoly body and NARE believe that in order to prevent speculative investments, it is necessary to take additional measures that would prevent or mitigate deadlock situations, for example, the introduction of a performance guarantee or the application of sanctions for long-term inactivity of investors.

In addition, the process of connecting producers faces difficulties in financing network strengthening works to be able to accept the electricity produced by the new plants to be installed, and the practice of a tariff of approximately €100,000/MW for network strengthening works have made the development of large-scale projects are exorbitant.

In this context, the Competition Council and NARE recommend the use of support schemes for electricity production from renewable sources.

One of them is financed by the PNRR and is based on a competitive bidding procedure to support investments in wind and solar energy production with or without integrated storage. Other technologies for the production of energy from renewable sources are financed from the Modernization Fund in the period 2022-2030 in Romania.

In addition, it is necessary to harmonize connection procedures at the level of network operators, as well as publish detailed instructions and necessary documents. Also, distribution operators must constantly update available information about the connection of electricity producers to the network.

Also, the antimonopoly authority and NARE recommend organizing continuous staff training programs, taking into account that another problem faced by investors in the connection process is the lack of experience in working with RES projects.

Even though grid operator personnel are more knowledgeable and efficient, lack of experience with energy projects delays the entire process.