Strike for the “smart guys” in energy. The government wants to change the rules for grid access for electricity production projects

The government wants to change the rules regarding the access to the Transelectrica network of energy producers, so as to prevent speculation with the technical approvals for connection. These are fictitious projects for which approvals are obtained and which are then sold to investors who need approval quickly. Basically, money is obtained from the sale of access to the Transelectrica network.

The National Energy Regulatory Authority (ANRE) intends to increase the financial guarantees for connection to the electricity network from 5% to 20% of the connection tariff, so as to reduce the number of projects that block capacity in the network, without being realized.

The government, dissatisfied with ANRE's proposal

“This increase, although necessary, is not enough to solve the problem. Currently, only a small part of the approved projects actually end up being built, which indicates the existence of a significant speculative phenomenon. In this context, the Chancellery of the Prime Minister proposes firmer and more effective measures,” a Government statement reads.

In a point of view submitted to ANRE, the Government proposes two other options:

• a fixed guarantee of EUR 30 for each kW installed – a simple and transparent formula that directly links the amount of the guarantee to the size of the project;
• a mixed formula, which combines 50% of the connection tariff with 20 EUR/kW installed, so that both the size of the project and the actual costs in the network are taken into account.

In addition, the guarantee will have to be submitted with the application for connection, and the enforcement of the guarantee will be done when the project is abandoned without any justification. Also, the guarantee will be refunded gradually as the project progresses.

Bolojan: “90% of projects are speculative”

“The goal is that speculative projects, which occupy capacities in the network without being implemented, lose their authorizations, and projects that have financing can be carried out in the shortest possible time, thus contributing to the increase of energy production”, wrote Ilie Bolojan, in a post on Facebook.

The prime minister claims that speculative projects slow down the entry of energy production into the grid, which translates into higher costs for economic agents as well as the population.

“Currently, access to the networks is blocked by a very large number of technical approvals for connection that do not materialize. We have approved projects almost 10 times more than the real need, but more than 90% of them are speculative and are not realized. They block serious investors, who are either forced to buy projects or bear additional costs for connection”, explained the prime minister.

An older problem

Ilie Bolojan referred to this situation several times, saying that the elimination of this phenomenon is one of the ways at hand to determine a cheaper electricity in Romania.

“Most of these technical approvals for connection were issued in the last three years (…). We find that less than 10% of them have advanced. This means that 90% of these projects are of a speculative nature. Those who obtained these projects do not intend to develop them, but aim to sell them. They would not be viable anyway, because, exceeding our consumption many times, you have no one to sell this hypothetical energy to, maybe we could also supply Europe Central, but it effectively blocks the access of serious investors, who have financing and cannot connect”, said Ilie Bolojan on April 8.

He also said that Spain also faced a similar phenomenon in 2019-2020, but the increase in guarantees for electricity production projects eliminated frivolous investors who were trying to get money just by selling access to the grid.