Romania proposes auction-based grid connections for plants above 1 MW

Romania’s Ministry of Energy has published a draft order outlining a move to an auction-based grid-connection process for solar projects above 1 MW in size. The change, which is currently subject to public consultation, could be implemented from January 2025.

February 15, 2024 Patrick Jowett

The Romanian Energy Regulatory Authority (ANRE) has shared a draft order of amendments to the rules for connecting new power generation capacity to the national grid.

A key change involves the grid-connection process applicable to projects of at least 1 MW in size, by allocating the capacity based on auctions. It could be implemented from January 2025. 

“This change positively responds to market requests of a mechanism that would limit the artificial blockage of the grid by new grid connection permits issued for unfeasible projects or projects lacking financing sources,” Mihaela Nyerges, a representative of law firm Nyerges & Partners, told pv magazine.

The auctions would be held on a yearly basis, for 10-year allocation periods. The process would see Romania’s transmission system operator (TSO) determine and publish the available capacity for each zone of the grid by Jan. 15 of each year.

From July 1 of each year, the TSO would organize daily auction sessions. The starting price would be determined by dividing the total estimated value of the reinforcement works, plus the solution study value by the total megawatt capacity requested by investors. 

One-fifth of the price would have to be paid within 30 days from the signing date, while the rest would have to be paid no later than four months from the signing date. Daily delay penalties of 0.01% of the price would be due by the grid operator for delays in performing reinforcement work and by investors for delays in commissioning projects.

ANRE’s draft order also sets out new rules for financial guarantee, extending its applicability to all projects and proposing it as a condition for a grid connection permit (ATR). It says the guarantee should be equal to 5% of the value of the connection tariff and would be required irrespective of whether or not reinforcement work is necessary.

“Establishing the guarantee at a time when the project feasibility is still uncertain, combined with the enforcement thereof if the connection agreement is not signed or the project is not finalized, irrespective of the reason, may increase the investment risk,” said Diana Dulamă from Nyerges & Partners’s Energy Practice Group.

ANRE is also proposing that in cases in which grid connections would have voltages above 110 kV, new connection substations and lines would be considered part of the transmission grid and qualify as reinforcement works.

“As a result of such qualification, although not expressly mentioned, we estimate that the investors will no longer have the option to conclude directly the agreement for the design/execution of the respective connection installations, but will only have the right to designate the contractor to the TSO,” said Dulamă.

A consultation on the draft order opened on Feb. 1 and is open for comments until March 2. The amendments are expected to go live from Jan. 1, 2025. 

Romania simplified its grid-connection process for distributed solar below 10.8 kW in size in December 2022.

The Romanian Photovoltaic Industry Association said it expects the nation to add at least 3 GW of renewables by 2026, with solar accounting for around 2 GW of the total. Statistics from the International Renewable Energy Agency show that Romania had 1,414 MW of solar installed by the end of 2022.

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