Prosumer’s legal regime
Daniel Vlasceanu – Partner, Vlasceanu & Partners
Within the context of the vivid European discussions on the prosumer’s legal regime, Romania made a first step and included several high-level provisions in the amendment adopted on 20 July 2018 to the Law no 220/2008 regulating the green energy support system (‘Law no 220/2008’). Further on, in late November 2018, National Energy Regulatory Authority (ANRE) released for public consultation two draft orders which are intended to lay the foundations for the actual integration of the power delivered by such small producers into the network and its financial set off. At the time of writing this material, said orders (which undoubtedly bring essential clarifying elements) are supposed to enter into force as of 1 January 2019; however, certain aspects included under said orders still require adaptation.
What does it take be certified as a prosumer?
A prosumer is a client owning (or using) a renewable energy generating installation whose primary activity is not energy generation and that can consume, store and sale renewable energy (as per the definition under Law no 220/2018). Prosumers can be both natural as well as legal persons (including public authorities).
Art 1 para 2 of the draft Order1 (released by ANRE for public consultation) regarding the sale of energy generated by prosumers (the ‘Draft Order’) spells out which conditions2 must be met in order to obtain a prosumer certificate:
I. prosumers must not have power generation as their main activity;
II. the maximum power of the installation must not exceed 27 kW per place of consumption;
III. the generated power is used for own consumption and only the surplus is delivered into the network;
IV. measurement of generated power must be made using smart meters/ long distance readable meters.
Facilities and main aspects of the prosumer’s regime
In an attempt to remove formalities, the last amendment of Law no 220/2008 explicitly enables the natural person prosumers to develop the power sale activity without any registration (however, a certification is required in order to conclude the sale contract – as detailed below).
Prosumers are exempted from the obligation to acquire green certificates for the energy they produce for their own consumption. The natural person prosumers are also exempted from any fiscal obligation related to the energy they generate for their own consumption or sale (Art 14 paras 66 and 67 under Law no 220/2018).
Also, the Draft Order sets forth that (under certain circumstances) the cost of installing smart meter(s) by the natural person prosumers will be borne by the Environment Fund.
Sale contract and financial set off
The prosumer may conclude a sale contract, as per the template attached to the draft ANRE Order3 specifically meant to approve (and released for public consultation on 22 November 2018), for the generated energy with his existing contractual supplier (Art 14 para 6 under Law no 220/2018). Such supplier has a legal obligation to acquire the energy generated by the prosumer against the weighted average Next Day Price of the previous year as published by OPCOM (a debate can be made as to the commercial reasonability of such limited price…).
The distribution operators certify the qualification as ‘prosumer’ (Art 2 under the Draft Order) and are competent to issue a certificate specifying the consumption and production place. The energy sale contract can be concluded only on the basis of such certificate (Art 3 para 1 of the Draft Order).
The suppliers must specify under each invoice the set off between the produced and the consumed energy. If the value of the energy delivered into the grid is higher than the value of the energy taken from the grid (i.e. the prosumer must receive the difference amount), the value is reported to the next invoice. Such mechanism can be applied for maximum 12 months (at the end of such 12 months, the prosumer receives his amount, if the case).
Reporting values to the following invoice cannot be made in case of natural person prosumers if the reported amount exceeds 100 RON; in such cases, the difference is paid by the supplier without being reported to the next invoice.
Prosumerism is part of smart living - a complex revolutionary concept still in its early stages. Express recognition of the prosumer’s existence (within the legal framework) was a substantial step forward for the Romanian legislator. Yet, considering the sheer novelty of the topic as well as the intrinsic unpredictability of the prosumers’ behaviour4, putting in place the necessary secondary legislation to complete the prosumer’s legal regime is a challenge for ANRE. Also, applying said regulations might subsequently prove to be a challenge for the suppliers and distributors.
Given (i) the incentives granted in particular to private natural persons to install residential green energy systems combined with (ii) the massive cost reduction of the necessary technology witnessed in the last years, we believe that prosumers will soon become an important stakeholder in the realm of the renewable energy market and, as such, putting in place from the beginning the right legal framework is of paramount importance.
1Available at: https://www.anre.ro/ro/energie-electrica/legislatie/documente-de-discutie-ee/ – as accessed on 15
2It would not harm to add that the client is not entitled to take power from the network and resale it.
3Available at: https://www.anre.ro/ro/energie-electrica/legislatie/documente-de-discutie-ee/ – as accessed on 15 December 2018
4The draft contract template released by ANRE for public consultation includes an annex with the estimated power quantities to be delivered in the following 12 months, but relying on such estimation may be quite doubtful.