The Romanian energy sector has been a hot topic in recent years due to market developments as well as to the legal framework which continued to adapt to governmental policies and the market’s needs. 2024 was no exception to this trend, with several milestones reached, and 2025 is expected to bring further changes and evolutions on the market.
One of the key milestones achieved in 2024 was the successful completion of Romania’s first 1,500 megawatts contract for difference (CfD) auction. In 2025, the second CfD auction is anticipated, with a total capacity of 3,472 megawatts, comprising: (i) 2,000 megawatts for onshore wind projects and (ii) 1,472 megawatts for photovoltaic projects. Additionally, at the end of 2024, the Ministry of Energy announced the collaboration with the European Bank for Reconstruction and Development for implementing a CfD Scheme for power storage capacities in Romania.
The interest in standalone battery energy storage systems (BESS) reflects a market shift from storage capacities as part of hybrid renewable projects, fueled by the need for grid balancing and greater flexibility. Consequently, at least one new call for state-aid schemes supporting standalone BESS projects from the Modernization Fund is expected to be launched in 2025.
A significant legislative improvement in 2024 related to BESS projects was the clarification that such projects are exempted from certain tariffs generally applied to consumers. Specifically, the Energy and Natural Gas Law no. 123/2012 was amended to exempt storage facility operators from paying: (a) the tariff for the transmission service (the component for extracting electricity from the grid), the distribution service, and the tariff for purchasing system services; (b) the green certificates contribution; and (c) the cogeneration contribution. However, the tariff system for storage projects may be further amended in 2025, pending ongoing analysis by grid operators and subsequent revision by the Romanian Energy Regulatory Authority (ANRE).
Further to regulatory changes made in 2024, the grid connection rules are also set to change in 2026. Based on the new rules, the reservation of power in the grid will be made via capacity auctions. Annual auctions will be organized to allocate available capacity in specific areas related to the transmission and distribution grids, applicable to projects with a capacity equal to or exceeding 5 megawatts.
The allocation periods are set for 10 years starting with the second year after the year in which the auction is conducted. For the successful implementation of these new rules, several preparatory steps must be ensured by the transmission system operator, including setting up the platform on which the auctions will be organized. By July 1, 2025, the transmission and system operator is expected to provide updates on the status of implementation steps.
Lastly, the EU Directive 2023/2413 of the European Parliament and of the Council of 18 October 2023 (RED III) is expected to be transposed into national law in 2025, following a consultation procedure to which various stakeholders have submitted observations. One of the main amendments expected to result from the transposing legislation relates to the legal framework for guarantees of origin (GOs). In previous years, the outdated legal framework for GOs was a significant obstacle to concluding Power Purchase Agreements (PPAs) in Romania, a topic of considerable interest to many stakeholders.
The enactment of such an act would be a first step toward reforming the legal regime for GOs, establishing deadlines for ANRE to approve the new legal regime, expected in 2026. A much-anticipated change is the possibility of ANRE entering into agreements with other issuing bodies or representative associations of issuing bodies, including the Association of Issuing Bodies. This proposal is expected to enhance the integration and efficiency of the GOs system, promoting greater transparency and cross-border cooperation.
In conclusion, the Romanian energy sector continues to be a dynamic one, with significant progress made in 2024 and promising developments anticipated for 2025. As Romania continues to refine its legal and regulatory landscape, the energy sector is set to further develop, with the aim of attracting substantial investments and driving sustainable growth.
By Alina Stancu Birsan, Partner, and Lavinia Cazacu, Senior Associate, Filip & Company
This article was originally published in Issue 12.3 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.
