Clear sky for solar power plants

A new legislative draft with a highly beneficial impact for development of photovoltaic (PV) power plants was recently filed with the Romanian Senate.

The draft envisages to amend Land Law no. 18/1991 (Land Law) in the sense of allowing the development of PV power plants on extra murros land, thus eliminating the need to move the land from extra murros into intra-murros based on a zonal urbanism plan (PUZ). Such change would highly simplify and speed-up the permitting process. In addition, the high fees due for moving the land to intra-murros would be replaced with fees for transforming the land from agricultural into buildable, which would be paid only at a later stage, upon the building permit issuance, when the uncertainties regarding the success of the project are much diminished.

1. Existing legislation

According to the current legal framework, construction works may be carried out only on lands qualifying as intra-murros, with only few categories of construction works being allowed on extra-murros lands. Hence, a first stage in the development process of a PV plant consists in moving the land from extra-murros into intra-murros by means of a zonal urbanism plan. The PUZ approval is a lengthy and costly process: it may take up to 9 months (depending on land specificities) and a specific fee should be paid for each sqm of land moved from extra-murros into intra-murros (ranging from RON 2.052/sqm to RON 3.078/sqm depending on land class).

After the PUZ approval, the developer may initiate a new permitting process for obtaining the building permit. Upon the issuance of such building permit, the land is automatically transformed from agricultural land into buildable land (no special fee being due for this specific change of land use category).

2. Proposed amendments

The Draft brings the following important changes to the existing legal regime:

(i)               the PV plants are added among the exceptions of constructions which may be erected on extra-murros land having the class III, IV, or V, to the extent such are developed on lands covering more than 10 ha of land;

(ii)             if the land is agricultural, only part of the land must be changed into buildable land, namely that affected by the PV plant, the transformer station or energy storage units, being expressly allowed for the rest of the land to remain agricultural;

(iii)           the changing of the land from agricultural into buildable is done upon obtaining the building permit.

3. Estimated impact

By eliminating the need to move the land from intra-murros to extra-murros, the permitting process for PV power plants development is simplified and fastened. Nevertheless, it remains to be clarified if PUZ is still required for regulating the urbanism parameters on the relevant land since the current proposed language and the existing provisions regulating the legal regime of construction works could give rise to different interpretations.

In addition, the costs entailed by the process are diminished. Thus, although the same unitary fee due for moving the land from extra-murros into intra-murros is due for changing the land status from agricultural into buildable, since only part of the land needs to be changed (namely the part that will be affected by the PV plant, transformer station and energy storage), the total fee would be much decreased.

Also, since the fee is paid only upon issuing the building permit, the payment thereof would be delayed until close to the relevant project reaching ready to build stage, when it is certain that the permitting process would be successful (including that project may be connected to the power grid). This would eliminate one of the problems currently faced by developers.

If approved, this change would come only several months after the elimination of the PUZ requirement from the grid connection process, speeding-up even more the permitting process.