Buzescu Ca - Romanian Energy Laws
ROMANIAN ELECTRICITY TRADING LAWS
The relevant Romanian electricity trading laws and regulations are:
ü Commercial Code of Wholesale Electricity Market of 2004
ü Regulation on the Issuance of the Licenses and Authorisations in the Electricity Sector approved by Order no. 12 of 2015 issued by the Romanian Energy Regulatory Authority (“License Regulation”)
ü Romanian Energy Regulatory Authority Order no. 64 of 2014 approving the Regulation for the Supply of Electricity to Consumers
ü Law no. 231 of 2006 for ratification of the Energy Community Treaty, signed at Athens, on October 25, 2005
ü Order no. 35 of 2006 of the Romanian Energy Regulatory Authority Approving the Methodology Regarding the Monitoring of the Wholesale Electricity Market for the Purpose of Assessment of the Competition on the Market and Preventing the Abuse of Dominant Position
ü Electricity and Natural Gas Law no. 123 of 2012 (“Electricity and Natural Gas Law”)
ü Procedure regarding the Settlement of the Transactions of Day-Ahead Market (“DAM”), issued according to the Order no. 82 of 2014 issued by the Romanian Energy Regulatory Authority
ü Procedure regarding the Registration of the DAM Participants issued according to the Order no. 82 of 2014 issued by the Romanian Energy Regulatory Authority
ü Order of the Romanian Energy Regulatory Authority no. 32 of 2016 regarding the Approval of the Methodology of Preparing the Annual Report by the Electricity License Holders
ü Order no. 60 of 2013 of the Romanian Energy Regulatory Authority Regarding Rules on the Balancing Market
ü Order no. 91 of June 25, 2015 of the Romanian Energy Regulatory Authority regarding the Approval of the Procedure regarding the Acknowledgement of the Participation Right to Romanian Electricity Markets of Foreign Legal Entities Having the Registered Address in a EU Member State
This is a summary of the requirements for access to the Romanian electricity trading market.
I. The electricity trading market
The Romanian electricity trading market is structured as follows:
1. The Wholesale Electricity Market includes the following specific markets:
a. the Centralized Market for Bilateral Contracts (“CMBC”), with the following subdivisions:
(i) the Centralized Market for Bilateral Contracts - Continuous Negotiation Mechanism (“CMBC-CN”)
(ii) the Centralized Market for Bilateral Contracts - Fuel Processing Mechanism (“CMBC-FP”).
(iii) the Centralized Market for Bilateral Contracts - Extended Auctions Mechanism (“CMBC-EA”)
b. the Day-Ahead Market (“DAM”);
c. the Balancing Market (“BM”);
d. the Ancillary Services Market, on which the transmission system operator (“TSO”) and the distribution operators purchase primary and secondary reserves, voltage and reactive power control, other ancillary services regulated by the Grid Code, and electricity for covering the network losses.
e. The Intra-Day Market (“IDM”).
f. Centralized Market of Double Continuous Negotiated electricity Bilateral Contracts (it operates as an “over-the-counter” market).
g. Electricity Market for Large Consumers.
h. Centralized Market for Universal Service.
Pursuant to Art. 23 of the Electricity and Natural Gas Law, electricity transactions must be carried out on the competitive market, in a transparent, public, centralized and non-discriminatory manner. Consequently, as of the effective date of the Electricity and Natural Gas Law, the participants to the wholesale electricity market can no longer conclude negotiated contracts for the sale and purchase of electricity, other than those concluded through the participation to one of the centralized markets organized by OPCOM.
ANRE confirmed that the provisions of the Electricity and Natural Gas Law regarding the conclusion of bilateral contracts only on centralized markets do not apply to electricity transit through Romania.
Given that all electricity trading must be carried out through the platforms operated by OPCOM, ANRE requested OPCOM to create an Over the Counter (“OTC”) trading platform. Such OTC platform, i.e. Centralized Market of Double Continuous Negotiated Electricity Bilateral Contracts, became operational starting with April 2014.
2. There are also centralized markets for transfer capacities and green certificates, as follows:
a. the Market for Allocation of the Available Transfer Capacities, for the allocation of available transfer capacities for interconnection with the national grids of the neighbouring countries.
b. the Green Certificates Market (“GCM”).
The wholesale electricity market is regulated by the Commercial Code of Wholesale Electricity Market of 2004 and by a series of other rules, regulations and procedures issued by the national regulatory authority, i.e. Romanian Energy Regulatory Authority (“RERA”), the TSO, i.e. C.N. Transelectrica S.A. (“Transelectrica”), and the market operator. The majority shareholder of Transelectrica is the State.
The market operator is OPERATORUL PIETEI DE ENERGIE ELECTRICA OPCOM S.A. (“OPCOM”), a company owned by Transelectrica.
3. The Retail Electricity Market (delivery to end-users/consumers).
II. Requirements to carry out physical power transactions on the Romanian electricity market
In order to carry out physical power transactions on the Romanian electricity market, the New License Regulation provides the following possibilities:
1. To obtain a license in Romania
According to the License Regulation, RERA may grant two types of electricity licenses covering electricity trading, i.e.:
(i) an electricity supply license, which covers both electricity trading and electricity supply to end consumers, and
(ii) a license for the activity of the electricity trader (“electricity trader license”), which covers only electricity trading.
In this case, the foreign company established in an EU member state may file directly with RERA an application for the granting of an electricity supply license or an electricity trader license, without having to establish a secondary office in Romania. Foreign companies not established in an EU member state must establish a physical presence in Romania in the form of a subsidiary, or a branch in order to obtain an electricity license from RERA. The registration of a representative office of the foreign entity is also an alternative, but it can be less efficient in case of certain trading models, due to certain regulatory requirements re power trading on the Romanian market.
The funds of the applicant for an electricity supply license together with funds available from credit facilities must be of at least EUR 1,000,000. In case of the electricity trader license, the applicant must provide proof of availability of funds of EUR 500,000 at the exchange rate of the National Romanian Bank on the date of the application for the license. Such funds must be maintained for the entire duration of the license.
There is no statutory requirement for having employees with local language capability.
However, given the day-to-day activity, and the fact that not all the operational procedures to be followed for trading on the market are available in English, the officials of the market operator, and of the transmission system operator usually recommend the licensee to have a contact person involved in the trading activity (balancing, interconnection capacities, transit, import, export, trading on the wholesale electricity market platform) with Romanian language capability.
2. To act directly based on the electricity license obtained in an EU member state
Pursuant to RERA Order no. 91 of June 25, 2015 regarding the Approval of the Procedure regarding the Acknowledgement of the Participation Right to Romanian Electricity Markets of Foreign Legal Entities Having the Registered Address in a EU Member State and to the New License Regulation, the electricity supply activity and the electricity trader activity can be carried out in Romania by a legal entity registered in EU without holding a license issued by RERA, if:
a. the legal entity holds a valid license or a similar document for the relevant activity issued by the competent authority of the member state, and
b. the legal entity declares on its own responsibility that it will comply with the technical and commercial regulations applicable in Romania for such activities.
As per the above, foreign entities licensed in EU member states are able to enter into electricity transactions without having to establish or act though a local presence in Romania or without obtaining an electricity license in Romania. However, such entities will have to obtain a Decision from RERA confirming the right to participate to the Romanian electricity markets.
III. Access to the Romanian power grid
1. Agreements to be signed with Transelectrica, i.e. the operator of the national electricity transmission system:
(i) Metering and Aggregation Agreement – to be signed with the branch of Transelectrica which is in charge with the metering of the electricity and aggregation of the metered values.
(ii) Balancing Agreement – to be signed with the branch of Transelectrica which is the operator of the balancing market (if the license owner wants to register as a balancing responsible party).
(iii) Agreement for Allocation of Available Transfer Capacities and Transit – to be concluded with Transelectrica; it allows participation in the auctions for cross border capacity on the interconnection lines.
(iv) Transmission Agreement – to be concluded with Transelectrica; it concerns the services to be rendered by Transelectrica which will allow the licensee to buy electricity directly from the producers and sell this electricity directly to the end users in Romania.
(v) Transit Agreement – to be concluded with Transelectrica; it concerns the services to be rendered by Transelectrica which will allow the licensee to transit electricity through Romania.
2. Agreements to be signed with OPCOM:
(i) Participation Agreement to DAM – is the agreement for the participation on the DAM.
(ii) Mandate Agreement for Direct Debit - is an agreement to be signed between the participant to the DAM and its bank (from a list of the Romanian banks agreed by OPCOM) regarding the direct debit scheme concerning the payments to be ordered from the account of the participant to DAM which submits electricity purchase offers on the DAM.
(iii) Participation Agreements to the various segments of CMBC –the agreements to be concluded between the participant and OPCOM re participation to the segments of the wholesale market.
(iv) Gratuitous Use Agreements re connecting devices for the relevant platforms of OPCOM.
(v) Participation Agreement to the Intra-Day Market - is the agreement to be concluded between the participant and OPCOM re participation re this segment of the wholesale market.
(vi) Participation Agreement to the Centralized Market of Double Continuous Negotiated electricity Bilateral Contracts (OTC mechanism)
IV. Reporting requirements in Romania
1. Transaction reporting to RERA
There are transaction reporting requirements to the Romanian regulator, i.e. RERA. Some of the transaction reporting requirements are also included in the License Conditions attached to the electricity licenses. Other transaction reporting requirements are provided by different rules and regulations.
The transaction reporting requirements are regulated by the Methodology Regarding the Monitoring of the Wholesale Electricity Market for the Purpose of Assessment of the Competition on the Market and Preventing the Abuse of the Dominant Position which was approved by Order no. 35 of 2006 issued by RERA.
Such transaction reports must be sent to RERA, in a template format, until the 25th day of the month following the month which is subject to reporting.
2. Other obligations of reporting to RERA
The License Conditions further provide for other reporting requirements such like:
(i) the annual report, which must provide technical data and information with respect to the activity performed in the electricity sector as well as financial and accounting information regarding the carried out transactions;
(ii) the financial statements at June 30;
(v) transfer of shares and/or assets of the license owner;
(vi) changes regarding the share capital of the license owner.
Also, there are special procedures issued by RERA regarding the execution and submission of the annual report.
RERA issued over 500 electricity trading licenses according to the information provided on RERA’s website. That shows that the Romanian electricity trading market is indeed the key regional market in the Balkans area.
V. Guarantee requested to the participants in view of the registration with the Romanian balancing market
The steps to be carried out in view of the registration as Balancing Responsible Party (“BRP”) with the balancing market operator (“OPE”), i.e. a branch of Transelectrica, are the following:
1. Obtaining the electricity trading license.
2. Allocation of the ENTSO (“European Networks of Transmission System Operators”) Identification Code (“EIC Code”).
If the applicant already has an EIC code, or uses an EIC Code of another entity from the same group of companies, such code can be also used in order to register as BRP in Romania. This EIC Code will have to be mentioned in all documents when requested during the procedures re the registration with OPE, and with the Metering Operator (“OMEPA”).
3. Filling in the application for the registration.
4. Submitting the above mentioned application with OPE, together with the following documentation attached:
(i) Copies of the licenses for all the parties for which the BRP will undertake the balancing responsibility.
(ii) The delegation of balancing responsibility for all the market participants for which the BRP undertakes the balancing responsibility, if the case.
(iii) Signature samples of the representatives of the BRP. It is not necessary that all the representatives submit signature samples, but only those effectively involved in the electricity trading activity, e.g. in relation with the electricity market authorities, for signing the balancing agreements, for signing the invoices, etc.
(iv) Declaration regarding the initiation of the procedures for the conclusion of the Metering/Aggregation Agreement with the metering operator, i.e. OMEPA, a branch of Transelectrica.
(v) Contact and availability details of the representatives of the BRP.
For the license holders which carry out only electricity trading activities, some of the data
mentioned in the standard application for registration as BRP will not be requested.
OPE always requests that the contemplated date on which the applicant may be effectively registered as a BRP must be the first day of the month.
Usually, OPE also requests that the application for the registration as BRP, together with the supporting documentation, is filed with OPE with at least 1 week prior to the contemplated date mentioned above.
5. Filing of the Financial Guarantee for registration as BRP
The filing of such guarantee was initially provided in the draft of the Balancing Agreement, but was not requested in practice until 2009. Eventually, Transelectrica, in its capacity as TSO, finalized the Operational Procedure for the filing of such financial guarantees by the BRPs.
The procedure was approved by RERA, i.e. the regulatory authority.
The procedure was initially effective in respect of the new participants which wanted to register with the balancing market. OPE requested the new license owners which want to register as BRP to provide the above-mentioned financial guarantee.
The amount of the financial guarantee to be filed in view of registration as BRP is of Lei 50,000.
As per the request of OPE, the bank letter of guarantee must be granted by a Romanian bank. OPE does have, however, several preferred Romanian banks for the issuance of the said bank letter of guarantee.
The amount of the guarantee for the already registered BRPs will be calculated by OPE according to the provisions of the Operational Procedure, and will be communicated to the respective BRPs.
The guarantee must be renewed each year.
6. Signing and sending to Transelectrica two copies of the Balancing Agreement, together with the addendums and annexes thereof.
1. In view of the registration as BRP, the conclusion of the Metering/Aggregation Agreement with OMEPA is also requested.
There is a standard metering and aggregation agreement, which must be signed and returned to OMEPA, together with its Annexes. For the electricity supply activity which does not concern the supply to end users household consumers, the Annexes will mainly include contact details of the license owner.
The documentation regarding the registration with OMEPA must be filed with at least 15 working days in advance of the contemplated date for the entering into effect of the metering and aggregation agreement.
2. In addition to the above, in order to obtain the full access to the grid and carry out electricity trading, the following contracts have to be signed with the operator of the national transmission system, i.e. Transelectrica, depending on the electricity trading activities which will be carried out by the respective participant to the market:
(i) agreement for the allocation of available transfer capacity (cross-border) and transit;
(ii) agreement regarding the transmission services;
3. An owner of an electricity trading license which intends to carry out power export operations must also conclude with Transelectrica the Framework Agreement between the Administrator of the Support Scheme and the Contribution Payer for the collection of the contribution for high efficiency cogeneration.
Buzescu Ca - Romanian Renewable Energy Laws
ROMANIAN RENEWABLE ENERGY LAWS
Updated October 2016
The main Romanian renewable energy laws and regulations in the sector of wind and photovoltaic power are:
ü Law no. 50 of 1991 Regarding the Authorization of Execution of Construction Works (the “Construction Law”)
ü Emergency Government Ordinance no. 54 of 2006 Regarding the Legal Regime of the Concession Agreements of Public Assets (“EGO no. 54”)
ü Electricity and Natural Gas Law no. 123 of 2012 (“Electricity and Natural Gas Law”)
ü Law no. 220 of 2008 Regarding the Establishing of the Promotion System of the Production of Energy from Renewable Energy Sources, as further amended (“Law no. 220”)
ü Regulation on the Issuance of the Licenses and Authorisations in the Electricity Sector approved by Order no. 12 of 2015 issued by the Romanian Energy Regulatory Authority (“License Regulation”)
ü RERA Order no. 59 of 2013 for the Approval of the Regulation Regarding the Connection of Users to Electricity Grids of Local Interest
ü Government Decision no. 1232 of 2011 Regarding the Approval of the Regulation for the Issuance and Follow-Up of the Guarantee of the Origin of Electricity Produced from Renewable Energy Sources
ü Order no. 4 of 2015 for the Approval of the Regulation for the Issuance of the Green Certificates (“Order no. 4”)
ü Order no. 60 of 2015 Regarding the Approval of the Regulation Regarding the Organization and Operation of the Green Certificates Market (“Order no. 60”)
ü Order no. 48 of 2014 Regarding the Approval of the Regulation of Accreditation of the Electricity Producers from Renewable Energy Sources for the Application of the Promotion System by Green Certificates
I. Access to land
Concession/Lease/Acquisition of the Land
The land on which a wind or photovoltaic farm can be developed can be procured by concluding agreements for concession, joint-venture agreements, or sale and purchase agreements with local authorities, i.e. Local Councils, or County Councils, or with private entities, i.e. individuals or legal persons.
The land owned by a local authority, e.g. commune, city, or county authorities, may be part of the public domain, or part of the private domain of the said authority.
A. Land of public domain
In the case of the land of public domain, the local authority is entitled to decide whether it will award a concession, or will conclude a lease contract based on the provisions of the EGO no. 54.
The land which is part to the public domain cannot be sold.
1. Concession Agreement
The Concession Agreement of Public Assets ("Concession Agreement") is the contract concluded in written form whereby a public authority, referred to as provider of the concession, acting on its own risk and responsibility, assigns for a determined period of time, to a person, hereinafter referred to as a concessionaire, the right and obligation of exploitation of a public asset in exchange for a royalty.
The Concession Agreement is concluded according to the Romanian law, for a duration which shall not exceed 49 years, starting from its signing date.
The Concession Agreement can be awarded by:
(i) a tender; or
(ii) direct negotiation – a procedure whereby the local authority negotiates the contractual provisions, including the royalty, with one or several parties interested in the procedure for the award of the Concession Agreement.
The bidder has the obligation to prepare the offer according to the provisions of the tender documentation.
The local authority has the obligation to award the Concession Agreement by a tender procedure attended by at least three bidders. If two successive tender rounds are attended by less than three bidders, the local authority has the right to initiate direct negotiations with the interested party or parties.
The Concession Agreement must be approved by a decision of the relevant local authority.
2. Joint-Venture Agreement
There are no express tender requirements regarding the Joint-Venture Agreements. Therefore, the local authority may enter into direct negotiation with the interested party regarding such agreement.
The Joint-Venture Agreement must be approved by a Decision of the relevant local authority.
B. Land of the private domain
The land which is part of the private domain of the local authority can be leased, or sold based on the decision of the respective local authority.
C. Land owned by private entities
Rights over land owned by private entities can be acquired as follows:
(i) by signing a sale-purchase agreement before a Romanian notary;
(ii) by concluding a lease contract;
(iii) by concluding a joint–venture agreement; or
(iv) by concluding any other forms of cooperation.
The number of permits and authorizations necessary to be obtained varies subject to the location of the land where the wind farm or photovoltaic park will be developed.
A. Authorization of the incorporation, i.e. the registration of a special purpose vehicle (“SPV”)
The criteria and the documentation necessary in order to obtain the authorization of registration of the SPV are regulated by the License Regulation.
The competent authority in respect of the issuance of the authorizations in the electricity sector is RERA.
The applicant must file a set of documents in respect of the issuance of the authorization of registration of the SPV unit with RERA which reviews the documentation and may request further information, or clarifications.
RERA will issue a decision in respect of granting or the refusal of granting of the authorization within 30 days from the payment of the specific tariff, and submission of the above-mentioned documentation.
The granting or the refusal to grant the authorization may be appealed before RERA within 15 days from notification in respect thereof, and further on before the Court of Appeals of Bucharest – the Administrative Litigation Section within 30 days from the receipt of the decision of RERA, or the publication of the respective decision on RERA’s website.
B. License for the commercial operation of electricity capacities
Further to obtaining the authorization of incorporation of the new unit, the SPV must apply with RERA for obtaining the license for the commercial operation of the electricity resources. Such license is obtained by submitting to RERA the documentation mentioned by License Regulation.
Moreover, in order to be licensed as a producer of renewable energy, the applicant must submit to RERA the information regarding the production capacity, as well as the source of energy.
The conditions associated with the license will be provided in the Report issued by RERA regarding the respective license.
RERA will issue a decision in respect of the granting, or refusal to grant the license within 60 days from the payment of the specific tariff and annual contribution, and submission of the specific documentation.
C. Grid Access
This is a process that should be initiated at an early stage of the project by contacting RERA and the transmission company to which the wind farm, or photovoltaic park will be connected.
The capacities of production of electricity from renewable energy sources are connected to the transmission/distribution electricity grid, to the extent in which the safety of the National Energy System is not affected.
According to RERA regulations, in addition to the Construction Authorization, and the License, the wind farm, or the photovoltaic park operator:
1. must obtain the following permits:
(i) Location Authorization (Aviz de amplasament) from the transmission system operator, i.e. Transelectrica – issued according to the Methodology Regarding the Issuance of Location Authorizations approved by the RERA Order no. 25 of 2016; and
(ii) Technical Connection Authorization (Aviz tehnic de racordare)– issued according to the Regulation Regarding the Connection of Users to Electricity Grids of Local Interest, approved by the Government Decision no. 59 of 2013;
2. must obtain from RERA:
A Qualification re the Electricity Priority Production;
3. must register with Transelectrica as a balancing responsible party, or to delegate the balancing responsibility to another balancing responsible party;
4. must register with Transelectrica in order to obtain green certificates;
5. must register with OPCOM in order to sell renewable energy on the day-ahead market;
6. must register with the operator of the green certificates market, i.e. OPCOM, in order to sell green certificates.
D. Construction Authorization
According to the provisions of the Construction Law, the procedure regarding the issuance of a valid Construction Authorization consists of the following steps:
(i) issuance of the Urbanism (zoning) Certificate;
(ii) issuance of the opinion of the competent environment protection authority regarding the investments which are not subject to the evaluation procedures regarding the impact on the environment;
(iii) notification of maintaining the application for a construction authorization, in case of a project for which the competent environment protection authority requires the evaluation regarding the impact on the environment;
(iv) issuance of the permits, authorizations, and of the decision of the competent environment protection authority regarding the investments whose impact on the environment was subject to review;
(v) drafting the technical documentation required for the authorization of the construction works;
(vi) filing the application together with the necessary documentation;
(vii) issuance of the Construction Authorization.
According to the provisions of the Construction Law, the construction of the wind farm, or the photovoltaic park can proceed only after the issuance of a Construction Authorization, issued by the competent Municipality on the basis of the following documents:a) certificatul de urbanism;
(i) Urbanism Certificate which is issued by the Municipality and covers such issues as zoning, degree of occupancy of the land, height regime, etc, and lists of the permits that must be appended to the application for the issuance of the Construction Authorization, e.g. environment, water, fire, sanitary, etc.;
(ii) the certified copy of the proof of title over land and/or construction and, where applicable, the up to date survey plan excerpt and the up to date Property Registry excerpt, unless the law provides otherwise;
(iii) related technical documentation;
(iv) permits and authorizations, as provided by the Urbanism Certificate, the opinion of the environment protection competent authority and, where applicable, the related administrative decision; and
(v) proof of payment of the fees for the issuance of Urbanism Certificate and of the Construction Authorization.
The Municipality must issue the Construction Authorization within 30 days from the filing of the application and related documentation.
E. Environmental Permits
1. Project stage
The following permits must be obtained at the project drafting stage:
(i) Environmental Permit - in case such permit is expressly requested according to the Urbanism Certificate;
(ii) Environmental Approval for the construction of the wind farm, or photovoltaic park.
The above-mentioned permit and approval are to be issued by the Territorial Environmental Protection Agency following the review of the documentation submitted by the applicant, including the technical specifications.
Depending on the activity carried out and on the number of installed turbines, and also, in case the area where the wind farm will be located is a protected natural area, the Territorial Environment Agency may request the conduct of a survey regarding the impact of such activity upon the environment.
2. Operational stage
After the issuance of the environmental permit, in order for the wind farm, or photovoltaic park to become operational, the investor must obtain an Environmental Authorization which is issued by the Territorial Environmental Protection Agency.
F. The Registry of the Guarantees of Origin (the “GO Registry”)
After obtaining the license for the commercial exploitation of electricity capacities, the producer of renewable energy must register with the GO Registry in order to obtain an account. This is a condition precedent to the obtaining of the Certificates of Guarantees of Origin (the “GO Certificates”) necessary for the exploitation of electricity resulting from renewable sources.
The GO Certificate is an electronic document which provides an end consumer with the proof that a given electricity quantity was produced from renewable sources.
The electronic application for the issuance of the GO Certificate for the electricity generated from renewable energy sources is mandatory. The producer must apply for the issuance of the GO Certificate within 30 days after the end of the period for which the GO Certificate is requested.
(i) the date of issuance, the issuing authority, and the country of origin thereof, as well as a identification number;
(ii) the electricity source out of which the electricity was produced and the initial and the final date of the producing thereof;
(iii) the identity, location, type and capacity of the installation where the electricity was produced;
(iv) if, and the extent to which the installation benefitted of investments support;
(v) if, and the extent to which the electricity company benefitted in any other way of a national support scheme and the type of support scheme;
(vi) the date when the installation was put into operation.
Only one guarantee of origin can be issued for each electricity unit.
The GO Certificate is issued within 10 working days from the date of the filing of the complete documentation with the competent authority, and is valid for one (1) year from the date of production of electricity referred to.
III. Green Certificates Market
According to the provisions of Law no. 220, the Green Certificates are documents which certify the production of a certain quantity of energy from renewable sources.
Green Certificates are issued by the transmission system operator, according to the procedure approved by RERA through Order no. 4. All producers of electricity from Renewable Energy Sources (“RES”) receive a certain number of green certificates according to the quantity and source (e.g. wind, solar) of electricity they provide.
The RES electricity producers may sell the Green Certificates on the GCM, which is currently regulated by Order no. 60.
The Regulation for the Organization and Operation of the GCM approved by Order no. 60 establishes:
(i) the manner of organization and operation of the GCM;
(ii) the parties involved and their responsibilities in the organization and operation of the GCM;
(iii) the manner of registration and management of the information regarding the trading of the Green Certificates;
(iv) the information necessary for the monitoring of the operation of the GCM.
The GCM is a competitive market, separated from the electricity market, in which Green Certificates related to electricity from renewable electricity sources are traded.
GCM has two components:
(i) the Centralized Green Certificates Market;
(ii) the Bilateral Contracts Green Certificates Market.
The following are involved in the trading system of the Green Certificates:
(i) the market participants trading Green Certificates: the electricity producers from electricity renewable sources and the electricity suppliers;
(ii) the green certificates operator, as administrator of GCM: OPCOM.
The trading of the Green Certificates is not conditioned by the trading of the electricity related thereof.
During its validity period the Green Certificate may be the object of several successive transactions, and will be registered in the account of the purchaser which will use it in the end, in order to prove the fulfilment of the obligation regarding the acquisition quota of Green Certificates. The above-mentioned quota is determined each year, by March 1, by RERA. It refers to the quota of green certificates which must be acquired during a year by (1) the electricity suppliers in relation to the electricity provided to end consumers, or used by themselves, and (2) by the electricity producers in relation to the electricity produced and delivered directly to end consumers.