The participants in the network connection process encounter legislative barriers, bureaucratic barriers, barriers associated with financing, but also some generated by the insufficient development of electricity transmission and distribution networks, according to a study conducted by the Competition Council and the Romanian Energy Regulatory Authority (RERA)
The activity of connection to public interest electricity networks is a mandatory service, which is carried out under regulated conditions and which the transmission system operator (TSO) and distribution system operators (DSOs) must perform. Connection to the electricity grid involves the completion of several steps, which materialise in distinct activities provided by different operators, the necessary steps and procedures for connecting users to the network being established by RERA regulations.
“We are particularly interested in the process of connecting new renewable generation capacities to the transmission/distribution network, given that several funding schemes have been launched, through the National Plan for Recovery and Resilience, but also through other national and community investment programmes. In this context, the priority is to optimise the national authorisation/reporting procedures in order to reduce project implementation times. At the same time, it is very important to differentiate between strictly necessary regulations, with an essential role in ensuring the quality of services, and those that are not strictly necessary, even potentially harmful to the development of the market"
said Bogdan Chirițoiu, President of the Competition Council.
The study shows that the most common problems faced by companies when entering the market for the production of electricity from renewable sources relate to the administrative authorisation process (bureaucracy, non-transparent processes, long time for issuing technical connection consent – TCC, interpretable and insufficient legislative framework), but other problems have been identified regarding insufficient investments in the development of electricity grids, lack of experience in working with renewable projects of the personnel involved in various stages of the permitting process and the development of speculative investments.
As a result, the competition authority and the energy regulator made a number of proposals and recommendations to remove or mitigate the barriers identified in the study.
The implementation of a one-stop-shop module dedicated to obtaining a license in the field of renewable electricity generation, as a separate part of the Electronic Single Point of Contact for the Industrial Licence, could have multiple benefits in terms of reducing licensing time and, implicitly, grid connection, in terms of transparency and process standardisation.
Thus, economic operators investing in renewable energy production capacities will be able to apply for obtaining licences, authorisations, agreements and approvals necessary for carrying out the activity in a single procedure, through the Electronic Single Point of Contact for the Industrial Licence. In this way, it creates the possibility to have a unique forum in Romania regarding renewable energy projects, bringing together specialists in the field of development of these projects, which would allow faster assessment of the cumulative impact of all projects.
In view of the difficulties generated by the insufficient development of electricity networks, leading to grid congestion in the most important areas for the connection of photovoltaic/wind parks, the Competition Council and ANRE recommend that the Ministry of Energy and the central authorities responsible for regulating certain stages in the development of the transmission network, when developing and implementing strategies in this field, to take into account the objectives assumed by Romania in the field of renewable energy and the need to identify new possibilities to ensure/facilitate the sources of financing of network development works.
Regarding the legislation, it was found that the main barriers are the lack of legislative ”levers” to prevent the development of potentially speculative investments and the lack of a correlated legislative package to prevent the long duration of the connection process. Currently, there are situations in which some economic operators/investors request and obtain TCC, but do not intend to complete the projects and put them into service, in order to enter the market, but rather selling the projects to other investors at the “ready to build” stage.
This behaviour leads to foreclosure of available capacity to connect investments in renewable projects during the lifetime of the TCCs obtained, causing major difficulties for investors requesting grid connection for the purpose of effective market entry. ANRE has developed a regulation in 2021 that facilitates the transfer of useful information to potential investors, through transparency and publication of available capacities in electricity grids and capacity limitations.
However, the competition authority and ANRE consider that further measures should be taken to deter speculative investments to prevent or mitigate bottlenecks, such as, for example, the introduction of an enforcement guarantee or sanctioning prolonged inaction by investors.
Moreover, the process of connecting producers faces difficulties in financing the strengthening of the power grids, in order to be able to take over the electricity produced by new units that should be installed, and the application of a tariff of approximately EUR 100,000/MW for the strengthening of the grid has made the development of large-scale projects prohibitive.
In this context, the Competition Council and ANRE recommend the use of support schemes for the production of electricity from renewable sources. One of them is funded by the NPRRs and is based on a competitive bidding process to support investments in wind and solar power generation, with or without integrated storage facilities. The other technologies for the production of energy from renewable sources are financed from the Modernisation Fund in 2022-2030 in Romania.
In addition, the connection procedures at the level of network operators need to be harmonised and they should publish guidelines with the necessary details and documents. Distribution system operators should also keep up-to-date existing information on electricity generators’ grid connection.
Also, the competition authority and ANRE recommend the organisation of continuous staff training programs, given that another problem faced by investors in the connection process is the lack of experience in working with renewable projects. Although network operators’ staff is better informed and more efficient, lack of experience in working with RES projects tends to delay the entire process.
“The study on the identification of possible legislative barriers to market entry in view of the connection of new renewable electricity generation capacities to National Electric Energy System”
complements the study recently launched by the Competition Council on the possible restriction of market access to renewable energy producers, as part of the authorisation/audience process by public authorities.
The preliminary version of the study can be found on the institution’s website, until 4th of November 2023. Observations can be sent within this timeframe, by e-mail, to [email protected]. The comments will also be sent in non-confidential form, as they will be published with the final version of the study.
October 2023
e-mail: [email protected]
source for text and picture: https://www.consiliulconcurentei.ro/
Andreea ENACHE
Editor at NINE O’CLOCK
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