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The Grid Connection – Still a Bottleneck for Renewable Electricity Projects in Romania?

The Grid Connection – Still a Bottleneck for Renewable Electricity Projects in Romania?

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On 31 December 2021, Emergency Ordinance no. 143/2021 amending Electricity and Natural Gas Law no. 123/2012 and amending certain regulatory acts (“GEO 143/2021”) was published in the Official Gazette of Romania no. 1259 and entered into force. GEO 143/2021 is intended to transpose into national law Directive (EU) 2019/944 on common rules for the internal market for electricity and amending Directive 2012/27/EU (“Directive 944/2019”).

Although GEO 143/2021 has already been in force since 31 December 2021, mention should be made that, according to Romanian legislative procedures, GEO 143/2021 (like any other Government emergency ordinance) is subject to the approval of the Romanian Parliament. Currently, a draft law has been adopted by the Romanian Senate, which should subsequently be adopted by the Chamber of Deputies.

According to GEO 143/2021, within 6 months from the date of its entry into force, the National Energy Regulatory Authority (“ANRE”) must adapt, where necessary, the secondary legislation in line with the provisions of GEO 143/2021. ANRE has already approved key amendments to secondary legislation aimed at implementing GEO 143/2021.

This article presents the main novelties regarding the connection to power grids of public interest brought under Order no. 17/2022 amending the Regulation on users’ connection to power grids of public interest, approved under Order of ANRE President no. 59/2013 (“Order 17/2022” and “Regulation”). Substantial changes were also made under (i) Order no. 18/2022 approving the Procedure for connecting consumption places belonging to household customers to the low-voltage power grids of public interest (“Order 18/2022”) and (ii) Order no. 19/2022 approving the Procedure for connecting to power grids of public interest the consumption and production places belonging to prosumers (“Order 19/2022”).

General aspects regarding the scope of the Regulation

The Regulation, as amended under Order 17/2022, shall be applicable for the settlement by network operators of connection applications filed by users as from 31 December 2021. The concept of network operators who must ensure the connection of users' installations has also been updated to include (i) the transmission and system operator (“TSO”), (ii) licensed distribution operators (“DO”), (iii) any person who owns an electricity distribution network located on public/private land, as well as (iv) citizens' energy communities operating electricity distribution networks.

The new amendments also regulate, among other things, the relationship between the network operator and prosumers with consumption places having renewable electricity generation installations with an installed capacity of more than 400 kW per consumption place, with regard to the connection, modification of the installation through which connection is ensured and the alteration of the specific technical, energy or administrative elements of the consumption places. On the other hand, the connection of renewable electricity generating installations with an installed capacity of at most 400 kW per consumption place belonging to prosumers is regulated under Order 19/2022.

As regards private and publicly accessible user-owned electric vehicles charging points, the connection to the electricity distribution networks is approved by the DO according to a specific ANRE’s procedure which has not yet been adopted. In contrast, pursuant to the derogation granted under Electricity and Natural Gas Law 123/2012 (“Law 123/2012”), the Regulation does not apply to the connection of electricity storage facilities and electric vehicles charging points owned by the network operator. The integration of such facilities into their own electricity networks is carried out similarly to the integration of any other elements of the distribution network in question.

A simplified and clarified administrative process

With regard to the grid connection application and the related documents, a provision has been introduced allowing for the possibility to electronically submit to the e-mail address/online service provided by the network operator the application and documentation for grid connection or for the updating of the technical grid connection permit (“ATR”) (aviz tehnic de racordare) or of the grid connection certificate (certificat de racordare), subject to the automatic registration of the documents.

Certain changes have been brought to the documents to be attached to (i) the application for the conclusion of the grid connection contract, (ii) the application whereby the user requests the network operator to conclude the contract for the design/execution of works necessary for the connection installation (instalație de racordare) (“Agreement on Grid Connection Design/Execution”) with a certain licensed designer/constructor (“Licensed Economic Operator”) and (iii) the notification whereby the user informs the network operator about the direct conclusion of the Agreement on Grid Connection Design/Execution with a Licensed Economic Operator.

For example, unlike the previous regulation which required the attachment of the trade registry certificate, the new amendments require the attachment of a copy of the trade registry extract issued at most 30 days prior to filing it. Also, if applicable, the power of attorney granted by the user to the Licensed Economic Operator to sign the grid connection contract and represent the user in the contractual relationship with the network operator must be submitted.

The following have been excluded from the list of documents to be attached to the application for the conclusion of the grid connection contract: (i) a copy of the technical grid connection permit and (ii) the valid building permit for the facility to be erected at the place of production or consumption in question, or (iii) in the case of existing buildings, the title deed or any other document attesting the right of use.

Instead, insofar as the building permit is concerned, a new provision has been introduced according to which (i) in the case of grid connection contracts concluded for the connection of production places or consumption/production places, (ii) the user must provide proof of having obtained the building permit for the facility in question by the conclusion date of the contract for the construction of the grid connection installation, (iii) but not more than 12 months from the conclusion of the grid connection contract and 18 months from the issuance of the ATR. It is also set forth that if the building permit for the facility is not submitted to the network operator, the ATR ceases to be valid and the connection contract is automatically terminated.

Some changes have also been brought to the documentation attached to the grid connection application. More specifically, it is stipulated that for a new consumption and/or production place, the documentation attached to the grid connection application must include a land book extract for the land where the facility corresponding to the consumption and/or production place is to be located.

Regarding the contract for the development of the solution study (studiu de soluție), the deadline for the submission of the contract proposal by the network operator to the user has been reduced from 10 calendar days to 5 business days, starting from the user’s filing of the complete documentation.

If the solution study is carried out by a designer appointed by the user, the network operator must submit the contract to the user and the designer within a maximum of 10 business days after the receipt of the user's acceptance of the contract proposal.

It is also provided that the user may notify the network operator about the direct conclusion of the Agreement on Grid Connection Design/Execution with a specific Licensed Economic Operator designated by the user. The notification must be signed by the user or by the user's authorized representative, while the notion of user's "legal" authorized representative has been excluded. This specification allows without a doubt the possibility of representation by a conventional representative (attorney-in-fact). The user may also authorize the Licensed Economic Operator (i) to conclude the grid connection contract with the network operator in its name and on its behalf and (ii) to represent it in the contractual relationship with the network operator throughout the contract term.

In this case, (i) the user’s obligation to obtain consent/authorization for the execution of the grid connection installation in its own name has been excluded, this obligation being placed on the network operator and (ii) the network operator’s obligation to provide technical assistance at the request of the user or on its own initiative has also been excluded. Given that the network operator concludes the connection contract with the Licensed Economic Operator designated by the user, (i) the obligation to obtain the agreement/ authorization for the execution of the connection installation is incumbent on the network operator and (ii) the provision of technical assistance by the network operator is no longer necessary.

With regard to the technical grid connection permit / grid connection certificate, it was specified that the technical grid connection permit contains the technical connection solution while the approved consumption and/or discharge power is to be guaranteed for the service life of the user’s internal installation (instalație de utilizare) .

If the user addresses the grid connection application or the application for the updating of the ATR or of the grid connection certificate through an authorized representative (e.g., a specialist designer) or, in the case of household customers, through the electricity supplier, the network operator must submit the ATR to both the user and the applicant. Thus, the situation where the user does not receive the ATR due to the fact that the grid connection applicant is a person other than the user will be avoided.

Where the network operator refuses to grant access to the grid connection, the refusal will have to be based on objective criteria justifying such refusal. These criteria are to be laid down under specific regulations issued by ANRE, in contrast to the previous regulation according to which the criteria were provided in the network operator’s own procedures.

A new obligation of network operators and TSOs is to provide all information about the necessary measures to be taken for the grid strengthening/extension that will allow the user to connect its facilities.

Where the network operator refuses to grant access to the grid connection for lacking sufficient capacity to connect all the electricity generation units for which connection has been applied for, the network operator may apply market-based methods for allocating the existing network capacity, according to regulations approved by ANRE.

The TSO is not entitled to refuse the connection to the grid by invoking additional costs arising from the necessary increase in the capacity of system elements in the immediate perimeter of the connection point (punct de racordare), or to refuse the connection of a new energy generation facility or a new energy storage facility by invoking possible future limitations of available grid capacities, e.g., congestion in remote parts of the transmission system.

However, the TSO may limit the guaranteed connection capacity or offer connection conditions subject to operational constraints in order to ensure the economic efficiency of the new energy generation facilities or new energy storage facilities, provided that these limitations have been approved by ANRE.

User’s possibility to finance works

With regard to the reinforcement works (lucrări de întărire) required to create the technical conditions for the grid connection of several places of consumption and/or production not included in the network operators’ development plan, if the network operator is unable to carry them out by the date requested for application of power/voltage (punere sub tensiune) to the user's internal installations, the user may now choose to pay the costs to be borne by the other users for the same reinforcement works if the place of production or consumption/production is commissioned first, and subsequently recover such costs from the other users. Normally, the users' participation quota is zero for this category of reinforcement works included in the network operators’ development plans. Even in such a case, if the network operator is unable to carry out this category of works by the date requested by the user for the application of voltage to the user's internal installation, the user may choose to pay all or part of the costs to be borne by the network operator, and subsequently recover them from the network operator. The latter possibility was also set forth in the previous version of the Regulation.

Users benefiting from the same reinforcement works carried out by a first user must reimburse the first user or the users for which the application of power/ voltage has occurred before their own installations, for the costs incurred by such first user(s). The amount and method of payment to the first user, other users respectively, shall be specified in the ATR and in the grid connection contract concluded by the new user with the network operator.

Reimbursement of expenses shall be made through the network operator, as set out in the grid connection contract, prior to the deadline for the application of power/ voltage to the user’s installations for the trial period. The amount to be reimbursed by a user to the first user or to the users mentioned above (i) shall be set by the network operator pro rata with the approved power to be discharged to the power grid for the place of production/consumption and production place belonging to it, (ii) taking into account the full value of the reinforcement works allocated to the sum of the powers approved for discharge to the power grid of the installations to which the application of power/voltage has already occurred, (iii) including the power approved for discharge to the power grid for the production/consumption and production place belonging to that user.

Insofar as the grid connection installations are concerned, a new provision has been added, rather for clarification purposes, according to which the costs for the maintenance of the installations resulting from the construction of the grid connection installation owned by the users, shall be borne by the users themselves. This aspect was also provided in the former version of the Regulation, according to which users must ensure the operation and maintenance of their own installations. This provision has also been retained in the amended version of the Regulation. An exception to the provision according to which the installations resulting from the construction of the connection installation financed by the users become their property, is that the installations resulting from the works financed by non-household customers become the property of the DO as from their commissioning, by operation of law.

Of course, the execution of the works for the user's internal installation is the responsibility and at the expense of the user, in line with the provisions according to which DOs ensure the purchase, installation, sealing, checking, reading and, if necessary, replacement of the electricity metering groups, located in the user's internal installations. However, some clarifications have been introduced concerning the location of the delimitation points between the grid connection installation and the user’s internal installation. In particular, it has been clarified that the delimitation point is usually established at the boundary of the land plots, so that the user’s installation should usually be located on the land owned by the user. The purpose of this amendment was rather for clarification and correlation with other provisions of the Regulation governing the situations when the delimitation point is located upstream the land ownership limit and the internal installation is located on public or third-party property, in which case the user must obtain in advance from the landowners the use / easement right over their properties.

Conclusions

The amendment of the Regulation was intended to transpose in secondary legislation certain provisions of GEO 143/2021, which in its turn transposed some provisions of Directive 944/2019 in the national law. The amendments brought some clarifications to the grid connection procedure and also some solutions to speed up the grid connection process. However, the concerns about large energy infrastructure projects at country level have so far remained unsolved. These include, for example, the need to increase the interconnectivity level of the electricity transmission networks, the modernization and construction of new sections for the electricity transmission and distribution networks, etc. However, these problems could be partly solved by means of the Modernization Fund. The Modernization Fund is a dedicated funding program to support 10 lower-income EU Member States (including Romania) in their transition to climate neutrality by helping to modernize their energy systems and improve energy efficiency, including, as priority investments, the modernization of the energy infrastructure. According to press information, funding has been approved for a number of projects targeting the electricity transmission and distribution networks, including an investment of around €100,000,000 for the extension and modernization of the electricity distribution network, an investment of around €18,251,593 for the digitization of the electricity transmission network in Romania and also an investment of approximately €10,475,032 for the optimization of the 400 kV overhead power line operation, used for interconnection and for the discharge of electricity from the Cernavodă nuclear power plant and the renewable energy plants in Dobrogea.

By Monica Iancu, Partner, and Vasile Soltan, Associate, Bondoc si Asociatii

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