July 2023 – The Romanian Competition Council ("RCC") published today, 19 July 2023, a preliminary report following its study on the potential market barriers to producers accessing the local energy market from renewable energy sources ("RES"), given the applicable permitting process.
Romanian Competition Council report on the permitting of new RES capacities
In brief, the RCC concluded that the process of obtaining all permits and authorisations needed for the commissioning of new RES capacities is cumbersome and time-consuming, in spite of some simplification steps already taken, and may be discouraging to investors.
Some of the main RCC findings and recommendations included the following:
- The RCC addresses the Ministry of Agriculture's interpretation of the law (contrary to the industry's reading of the relevant legal provisions), which limits the development of RES capacities on extra muros agricultural lands of over 50 hectares with a 3rd, 4th or 5th quality classification. The RCC highlights the very restrictive nature of such interpretation and how it impedes larger projects from being developed. On the same matter, the report also notes a draft law previously considered by the Government that would have included an exemption from such restriction for projects carried out by public actors, further declared of national interest. On this, the RCC highlights that such a measure would have established discriminatory treatment between public and private investments, impeding effective competition on the market. In conclusion, the RCC recommends the Ministry of Agriculture to implement the necessary measures to allow the construction of photovoltaic and wind capacities on extra muros agricultural lands, regardless of the land surface used.
- Moreover, the RCC recommends the Ministry of Agriculture to initiate the necessary steps in view of also allowing construction of RES capacities on extra muros agricultural lands with a 1st and 2nd quality classification (i.e., the most fertile land), while the dual use of such lands is ensured.
- There is no uniform interpretation of the permitting rules and conditions at the local level (from one town hall to another), leading to a differentiated treatment as regards the conditions to be met by developers. In this respect, the RCC recommends that the Ministry of Development, Public Works and Administration adopt secondary legislation making it clear for public authorities what are the necessary formalities and documents for construction permitting.
- Not least, the process of removing RES project lands from the agricultural circuit currently involves a complex and time-consuming process involving multiple structures within the Ministry of Agriculture. The RCC suggests that the Ministry of Agriculture simplify this and ensure that the process is addressed at the county level (through the County Agricultural Division) through a single documentation process.
The RCC further notes the forthcoming entry into force in January 2025 of the sole industrial license-related rules, whereby all permits and licenses required for RES capacities (including building permit) will be obtained through a single online procedure.
We note that the RCC is also currently performing a separate study on potential barriers to the deployment of RES capacities by network operators within the process of issuing the grid connection permit (ATR) and is expected to publish its preliminary conclusions in the near future.
The RCC's analysis and recommendations are a welcome step forward driving the relevant stakeholders to make progress in addressing the bottlenecks that the industry has been dealing with.
A swift approach from the authorities in further understanding the issues that are now also noted by the RCC and correctly addressing them should ensure that Romania remains competitive in the region in terms of attracting RES investment.
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