The Romanian energy market is a competitive market and energy is traded on a wholesale or retail basis, as follows:

• the wholesale market – any market in the European Union on which wholesale energy products are traded; and
• the retail market – an organised framework where end-customers purchase electricity or natural gas for their own consumption purposes.

The responsibility for preparation of the main power policies and legislation lies with the Ministry of Energy and the Romanian Energy Regulatory Authority (“ANRE”).

The power industry in Romania is mainly governed by Law No 123/2012 on electricity and natural gas (the “Energy Law”). The Energy Law is complemented by numerous secondary acts (including acts issued by ANRE), specific to each segment of the power industry. The Energy Law and other power-related laws transpose the relevant EU directives into national law, which applies alongside the directly applicable EU regulations.

In regard to ownership rights over energy capacities, the specific legislation in the energy field is supplemented by the general legislation on public and private ownership, including the Romanian Constitution and the Civil Code. Prior to 1990, the Romanian power industry was operated through a state-owned or -controlled monopoly under the supervision of the Ministry of Industry, which in the following years gradually undertook a massive restructuring and was progressively unbundled. Nowadays, the players acting in the power market are a mix of state-owned and private investor-owned facilities.

The Romanian power industry’s main activities (generation, transmission, distribution, trading and supply) are heavily regulated and are subject to mandatory unbundling rules per the relevant EU legislation.

Generation

The largest Romanian electricity generation facilities are owned through a majority shareholding by the Romanian state through the Ministry of Energy. These include Hidroelectrica SA (approximately 80% state-owned and listed on the Bucharest Stock Exchange), the largest hydro-energy producer and system services provider in Romania, and Nuclearelectrica SA (approximately 82% state-owned and listed on the Bucharest Stock Exchange), the owner and operator of nuclear power reactors. The generation of electricity is also ensured by state-owned generators using so-called “conventional sources” (ie, coal), such as CE Hunedoara (100% state-owned and currently insolvent) and CE Oltenia (approximately 87% state-owned), and various other privately owned companies.

In recent years, large state-owned conventional energy producers have started to invest in the renewable industry in order to diversify their portfolios and achieve Romania’s climate targets.

Transmission

Electricity transmission services are exclusively provided by the National Energy Transport Company, Transelectrica SA, which is approximatively 59% state-owned and listed on the Bucharest Stock Exchange.

Distribution

With respect to distribution system operators (DSOs), there are currently six electricity distribution companies (Distribuție Energie Oltenia SA, Delgaz Grid SA, Distribuție Energie Electrică Romania SA (DEER), Rețele Electrice Banat SA, Rețele Electrice Dobrogea SA, and Rețele Electrice Muntenia SA) operating in eight network areas in Romania (three of which are operated by DEER), which have been granted distribution service concession agreements in this respect.

Supply

One of the largest electricity suppliers in Romania is Electrica Furnizare SA, a company that is partially state-owned through the Ministry of Energy (approximately 49%) and listed on the Bucharest Stock Exchange. Hidroelectrica SA (the largest power producer, which is approximatively 80% state-owned and also listed on the Bucharest Stock Exchange) registered significant growth in the electricity supply segment. Otherwise, the supply side of the market is rather granular, with numerous suppliers active on the market. All of them are involved in the supply of electricity to end-customers and competition is fierce, particularly since the full liberalisation of the market, starting on 1 January 2021. However, they have been affected by the subsidy schemes implemented with a view to helping consumers cope with the energy crisis through 2021 and 2022.

On 18 April 2022, Government Emergency Ordinance No 46/2022 on implementing measures of Regulation (EU) 2019/452 of the European Parliament and of the Council of 19 March 2019 establishing a framework for the screening of foreign direct investments into the Union and for amending and supplementing the Competition Law (the “GEO No 46/2022”) came into force. GEO No 46/2022 changes the foreign direct investments (FDIs) approval regime in Romania and regulates a new authority – ie, the Foreign Direct Investments Examination Committee – with prerogatives in this respect.

In terms of restrictions/protections that apply to the Romanian power industry, operations to take control of undertakings or assets that qualify as foreign direct investments or new investments, as defined by the applicable legislation, are typically subject to assessment by the Foreign Direct Investment Examination Committee. If a certain operation is considered a risk for national security following such assessment, the Romanian government, advised by the Foreign Direct Investment Examination Committee, will issue a decision prohibiting it, subject to the European Commission’s competence in this area.

Falling under the scope of the screening procedure of FDIs are, among others, investments in energy infrastructure, energy storage technologies or energy supply with a value higher than the EUR2 million threshold, regardless of whether these are foreign direct investments made by a foreign investor, EU investments made by an EU investor or new investments. FDIs that do not meet the above-mentioned threshold value may also be subject to the screening procedure if they could have a significant impact on, or pose a significant risk to, public security.

Other indirect restrictions on foreign investment that could also be relevant to the power industry can be found in the public procurement-related legal framework which establishes equal treatment to that offered to economic operators in the European Union only for entities from the signatory countries to the WTO Agreement on Government Procurement or other international agreements which impose free access to the market in public procurement.

Generally, foreign investors in Romania benefit from the same incentives and protection measures as those offered to Romanian investors, as provided under the Energy Charter Treaty, as well as in other international treaties and instruments to which Romania is a party.

Except for some specific rules applicable to distribution assets, or the rules applicable to the sale of state-owned assets, or the rules concerning various notification procedures towards ANRE, there is no particular legislation in Romania with respect to the sale of energy assets or mergers between energy operators. Consequently, the general legal framework applies, such as the Civil Code, Competition Law, Romanian Company Law No 31/1990, as well as the general national and EU competition rules.

Basically, with minor exceptions, any entity conducting its business activity in the power sector must pass through ANRE’s licensing procedure which, depending on the market segment, includes consideration of certain financial and technical requirements. There are no specific prohibitions for transfer of energy assets, except for rules concerning prior and/or post-transfer procedures, notification of ANRE and the submission of the required documents in this respect. For example, ANRE orders regulating the general conditions associated with licences for carrying out certain activities in the energy field (generation, supply) require:

• ex-ante notification of mergers, spin-offs, transformations, and any sale or transfer of assets, or other transactions whereby tangible assets intended for the licensed activity are transferred; and
• ex-post notification of the shareholding structure’s change.

ANRE has recently introduced, for public consultation, a new draft regulation on licensing in the electricity sector aiming, among other things, to provide clearer guidelines on the transfer of energy capacities, whether through contracts, mergers, or spin-offs (eg, specific rules on granting a temporary licence where the acquirer does not hold the same type of licence as the licence holder from whom it has taken over the energy capacity, or amendment of the existing licence, etc).

A transmission and system operator (TSO) may not transfer the rights and obligations provided under its licence to third parties.

On a specific note, ANRE Order No 205/2020 for the approval of the methodology for the purchase of energy distribution capacities provides that only the distribution concession holders are allowed to purchase the following capacities:

• if the connection of new users or modification of the users’ initial characteristics result in a change to distribution facilities, with new expenses incumbent upon the customers; or
• if the distribution network owner intends to sell the public interest network or if it becomes unable to perform the distribution service or to provide the required power surplus.

In the second scenario, as a limitation to the freedom of supply, the owner is obliged to make an offer to sell to the concession holder, at a justified value which cannot exceed the net book value of the component assets. If the sale value cannot be proven by accounting documents, the network owner may request an independent authorised expert to certify such value, taking into consideration the technical condition of the network.

The energy sector in Romania is overseen by the Ministry of Energy, which is responsible for the implementation of the government programme with respect to energy-related objectives. The Ministry of Energy also represents Romania and the Romanian government in its relations with foreign authorities and with respect to strategic documents, and it initiates sector-specific legislative changes.

The energy sector is further regulated and supervised by ANRE, which was established as an autonomous administrative authority under Government Emergency Ordinance No 33/2007, and which has, among others, the following responsibilities:

• to ensure the efficient, competitive and rational functioning of the electricity market through the development, adoption and application of specific regulatory acts;
• to supervise observance by all the participants in the electricity market of the regulations and obligations provided under the law and to apply sanctions in the case of non-compliance;
• to grant specific authorisations and licences to companies operating in the energy sector and to establish the corresponding conditions by which their holders must abide;
• to develop and approve methodologies for calculating regulated tariffs and prices in the energy sector;
• to establish, in accordance with the law, the framework contracts for the transmission and distribution of electricity; and
• to monitor the functioning of the electricity market in order to assess its level of efficiency, transparency and competition, and the continuity of supply.

During recent years, significant amendments have been made to Romanian power industry legislation, including the following.

A New Support Scheme Based on the Contracts for Difference (CfDs) Mechanism

The Romanian government recently enacted Government Decision 318/2024 establishing the general framework for implementing and operating the Contract for Difference (CfD) support mechanism for low-carbon strategies, with the first tender expected by the end of this year. This aid will be provided either (i) under state aid schemes; or (ii) on the basis of ad hoc state aid for power generation projects where a competitive selection process is not feasible due to the technology’s specificity. The Ministry of Energy will develop CfD state aid schemes or grant ad hoc CfD state aid for eligible generation technologies such as onshore wind, offshore wind, solar photovoltaic, hydro, nuclear, hydrogen, and energy storage. The operating aid under the CfD mechanism will be granted through difference payments for the power (pursuant to the CfD contract) produced, measured and delivered into the national energy system, by the CfD counterparty (ie, the Romanian Electricity and Gas Market Operator, “OPCOM”) to the CfD beneficiary in cases where the reference price is lower than the auctioned strike price, or by the CfD beneficiary to the CfD counterparty in cases where the reference price is higher than the strike price.

Additionally, the European Commission has approved a EUR3 billion state aid scheme for the CfD mechanism to support onshore wind and solar projects, aiming for 5,000 MW of new renewable electricity capacity. This initiative will be funded through a CfD liquidity fund, primarily financed by the Modernisation Fund.

Government Decision 318/2024 only sets forth the CfD general framework with the competent authorities to adopt the necessary implementing acts (eg, ANRE has recently published, for public consultation, the draft CfD contract and the draft methodology for determining and collecting the CfD contribution).

A New Dedicated Framework for Offshore Renewables

The Romanian parliament recently enacted Law 121/2024 on offshore wind energy, which regulates the general framework for the implementation of offshore wind energy projects in Romania. In this context, the Law aims to ensure the transparency of the whole implementation process of offshore wind projects under conditions of fair competition, non-discrimination and observance of the principle of integrated pollution prevention and control using the best available techniques for activities with significant environmental impact.

The Law 121/2024 regulates, among other things:

• the powers of the competent authorities and institutions;
• the establishment of perimeters subject to concession;
• certain conditions for the concessioning of perimeters;
• aspects concerning the exploration, construction and exploitation of offshore wind power plants (OWEPs);
• conditions for obtaining the necessary authorisations, approvals and licences;
• aspects concerning connection to the electricity transmission grid;
• aspects concerning decommissioning of OWEPs;
• the security of offshore wind energy exploitation;
• general aspects regarding applicable royalties and fees; and
• contraventions and penalties.

Nevertheless, multiple regulations still need to be issued for the purpose of meeting the law’s objectives.

Electricity Market Liberalisation

In theory, the Romanian electricity market was fully liberalised at the end of December 2017. However, pursuant to amendments to the Energy Law enacted in the period 2018–2020, until 31 December 2020 the supply of electricity to household consumers was carried out in line with the regulated conditions approved by ANRE, which resulted in what has generally been seen as a setback in the liberalisation process.

This led to the Romanian electricity market being fully liberalised (again) starting from 1 January 2021. Electricity is now supplied on a competitive basis, including to household consumers. As a result of this change, each household consumer may choose an electricity supplier according to their specific needs and based on the offers made on the market by electricity suppliers.

This change was aimed at implementing EU Regulation No 2019/943 and EU Directive No 2019/944. During the energy crisis, the government capped the price for electricity consumers with the aim of helping them cope with soaring energy prices. While the relevant measures are still in force, and are designed to remain in force until March 2025, they may be repealed earlier as the effects of the energy crisis disappear. Generally, the effects of such measures on the market have been seen as a partial return to a regulated market.

Significant Amendments Brought to the Energy Law

Additionally, on 30 July 2020, Law No 155/2020 came into force, amending the Energy Law and other regulatory acts. Law 155/2020 was partly aimed at implementing the regulatory framework necessary for the development of an integrated EU energy market through common energy market rules and a cross-border infrastructure, pursuant to the Clean energy for all Europeans package.

Specifically, the developments brought by Law 155/2020 refer to independent aggregators, energy storage, new trading products on the electricity wholesale market, closed distribution systems, additional provisions favouring “prosumers” (ie, end-consumers that produce electricity from renewable energy sources for their own consumption, whose specific activity is not electricity generation and who may store and sell electricity to their electricity suppliers and other consumers), a partially amended sanctioning regime, etc.

In addition, on 31 December 2021, Government Emergency Ordinance No 143/2021 for the amendment of the Energy Law, as well as for the amendment of other regulatory acts (“GEO No 143/2021”), was published in the Official Gazette of Romania and came into force on the same date. It was further approved by Law 248/2022.

GEO No 143/2021 was mainly intended to transpose EU Directive No 2019/944 into national law and, as such, to close the infringement procedure initiated by the European Commission (EC) against Romania in relation to the transposition of Directive No 2019/944. However, the most-anticipated amendment and the main novelty brought by GEO No 143/2021 is the exclusion of the obligation to trade electricity exclusively on centralised markets. This put an end to the ten-year ban on the conclusion of directly negotiated bilateral power purchase agreements (PPAs), an amendment strongly requested by market players, which resulted in partial success in 2020 when PPAs were only allowed for production capacities commissioned after 1 June 2020.

More generally, GEO No 143/2021 implemented a massive legislative reshuffle by amending the Energy Law in line with EU electricity market principles: competitiveness, customer-orientation, flexibility and non-discrimination. The amendments brought to the Energy Law under GEO No 143/2021 are numerous and substantial and refer, inter alia, to: the electricity supply price, new electricity market participants, prosumers, dynamic electricity price contracts, universal service, vulnerable consumers, flexibility service, aggregation activity and contraventions.

Amendments Brought to the Renewables Framework

On 6 December 2022, Emergency Ordinance No 163/2022 for supplementing the legal framework on the promotion of the use of energy from renewable sources (GEO No 163/2022) came into force, which is further subject to parliament’s approval, like any other government emergency ordinance. GEO No 163/2022 aims primarily to regulate the needs of both citizens and the private sector by aligning national policies with European policies and accessing European funds for future investments in the renewable energy production field. In this respect, the amendments and additions brought under GEO No 163/2022 are substantial and refer, among other things, to: potential new support schemes in the renewable energy field, the simplification/urgency of authorisation procedures for “green” energy generation and storage, prosumers, peer-to-peer trading and guarantees of origin.

New Centralised Electricity Purchase Mechanism (“MACEE”)

In the context of the measures implemented to cope with the energy crisis, in November 2022, a new centralised electricity purchase mechanism (“MACEE”) was implemented excluding the possibility for electricity producers with a total installed capacity of 10 MW or more to freely conclude PPAs. However, this new mechanism does not concern:

• renewable energy producers;
• power-generating capacities commissioned after 1 April 2022; and
• producers with combined heat and power capacities delivering heat to the Centralised Heat Supply System (“SACET”).

Recently, the duration of MACEE has been reduced to 31 December 2024 (as opposed to 31 December 2025 under the previous legislation). After this date, participation in MACEE will be voluntary.

Energy Price-Capping Measures

In addition, considering the situation caused by the price increases on the international electricity and gas markets and the effects of these increases on end-consumers, the Romanian state enacted temporary measures at the end of March 2022 capping the electricity and natural gas supply prices invoiced to end-consumers. Such measures have been subject to various amendments, including with respect to the price cap values and the beneficiaries of the support measures. Although initially foreseen for a one-year period only, the applicability of the price-capping scheme has been extended by the government until the end of March 2025.

The Romanian Energy Strategy

On 14 June 2024, the Ministry of Energy published the draft Romanian Energy Strategy 2025–2035, with an outlook to 2050 (the “Draft Strategy”), in respect of which it organised, on 3 July 2024, a public debate during which stakeholders expressed their views and discussed key aspects of the Draft Strategy. The public consultation procedure was completed on 13 July 2024. Later on, after the stakeholders’ proposals have been analysed and, where appropriate, incorporated by the Ministry of Energy team, an endorsement procedure will be initiated in respect of the Draft Strategy, such endorsement being necessary for the approval of the Romanian Energy Strategy by government decision.

With this strategy, the Romanian government should be able to prioritise investments and projects and maintain a clear line on how the energy transition will be carried out in the next decade. The Draft Strategy sets out the following general objectives for Romania in relation to the energy sector:

• energy security – for example, developing new primary resource deposits to maintain a low level of energy dependency, maintaining a diversified energy mix and energy sector adequacy, protecting critical energy infrastructure, and investing in the development of cross-border interconnections;
• low-carbon energy – for example, increasing the share of renewable energy sources in the energy mix through new renewable generation capacities, replacing coal-fired power generation facilities with new natural gas-fired power generation facilities ready for hydrogen, and developing power generation capacities from nuclear sources and power storage facilities; 

• energy efficiency – for example, supporting high-efficiency co-generation through bonus support schemes, and increasing the performance of electricity transmission and distribution networks;

• physical access to energy for all consumers, and energy affordability and competitiveness – for example, investing in expanding access to electricity, and developing decentralised energy production and self-production;
• efficient energy markets – for example, implementing measures to increase competition on domestic markets; and
• digitalisation, development of smart grids and cybersecurity – for example, implementing smart meters and implementing digitalisation of transformer stations and remote grid control solutions.

The 2021–30 National Energy and Climate Plan

On 8 October 2021, the National Energy and Climate Plan for 2021–30 (NECP) – issued in line with the Energy Union Strategy (COM/2015/080), which aims to build an energy union that gives EU consumers secure, sustainable, competitive and affordable energy – was approved by Government Decision No 1076/2021. The NECP sets out the national objectives and contributions to achieving the EU’s climate change objectives through five main dimensions: (i) energy security; (ii) decarbonisation; (iii) energy efficiency; (iv) an internal energy market; and (v) research, innovation and competitiveness. The current NECP sets a national renewable energy target of 30.7% by 2030, which is below the EU’s current target of 42.5%, with an additional indicative top-up of 2.5%, to potentially reach 45% by 2030. The draft updated NECP raises this target to 36.2%. However, the European Commission has recommended that the Romanian government increase the share to at least 41% of gross final energy consumption by 2030. Given this recommendation, it is expected that EU pressure will lead to a further increase in the national target. While the final updated NECP was due for submission to the European Commission by 30 June 2024, the Romanian government has not yet submitted it.

Long-Term Strategy for Reducing GHG Emissions

Romania’s Long-Term Strategy for Reducing GHG Emissions (adopted under the Government Decision 1215/2023) provides for a -78% target of GHG emissions reduction by 2030 and -99% by 2050 (both against the 1990 level) in an RO Neutral Scenario. In terms of the share of renewable energy in gross final energy consumption, it envisages an increase from the actual 30.7% target to 34.3%/36.0%/36.2% in different scenarios (in all cases by 2030). However, as mentioned above regarding the NECP, these targets are now less relevant in the context of new developments at EU level.

National Recovery and Resilience Plan

Important changes for the Romanian power industry were also outlined by the Romanian government in the National Recovery and Resilience Plan (NRRP) approved by the European Commission in 2021, which was revised in 2023 to include, among others, a REPowerEU chapter.

The Component 6 (Energy) of the NRRP sets out the six main reforms planned for the energy sector, namely:

• the electricity market reform, replacement of coal in the energy mix and support for a legal and regulatory framework that stimulates private investment in renewable energy;
• the development of a legal and regulatory framework for future technologies, in particular, hydrogen and storage solutions;
• the improvement of corporate governance of state-owned companies in the energy sector;
• green budgeting;
• reducing the energy intensity of the economy through the development of a sustainable mechanism for stimulating energy efficiency in industry; and
• the increase of competitiveness and decarbonisation of the heating-cooling sector.

The REPowerEU chapter includes two reforms, namely:

• creation of a legal framework for the use of state land as acceleration areas for renewable energy sources (RES) investments; and
• setting up one-stop-shops (OSSs) to provide energy advisory services for energy-efficiency renovations and energy production from renewable sources for prosumers.

It also includes seven reforms covering, for example:

• new capacities for electricity generation from renewable sources;
• training for green energy skills;
• digitalisation, efficiency and modernisation of the national electricity transmission network; and
• a pilot project for the installation of 20 MW of floating solar panels on irrigation channels.

In 2022, the government launched several state-aid schemes under the NRRP targeting, for example, wind and solar renewable energy production, green hydrogen production in electrolysis plants, the whole value chain of batteries and the chain of photovoltaic cells and panels.

Modernisation Fund

One other instrument for access to EU funding is the EU Modernisation Fund, an instrument that aims to contribute to the objectives of the European Green Deal by supporting the transition to a green economy.

The Modernisation Fund was established by EU Directive 2018/410, with the aim of supporting investments in the modernisation of energy systems and the improvement of energy efficiency, including the financing of small-scale investment projects, in line with the objectives of the EU’s 2030 climate and energy framework and with the long-term objectives set out in the Paris Agreement.

On 9 May 2022, the Romanian government approved Emergency Ordinance No 60/2022 on the establishment of the institutional and financial framework for the implementation and management of the funds allocated to Romania through the Modernisation Fund. This is in accordance with the EU Commission Implementing Regulation 2020/1001 of 9 July 2020, which lays down detailed rules for the application of Directive 2003/87/EC of the European Parliament and of the Council with regard to the operation of the Modernisation Fund, supporting investments to modernise the energy systems and improve the energy efficiency of certain member states.

Recently, the Ministry of Energy has approved the state-aid scheme to support investments in new capacities for the production of electricity from renewable energy sources, relating to the Modernisation Fund. The government has also recently launched the call for projects under the Modernisation Fund, targeting renewable energy production (wind, solar and hydro), the total estimated budget of the scheme being EUR400 million.

Long-Term Renovation Strategy

Moreover, on 27 November 2020, the Romanian government approved Decision No 1034/2020 approving the Long-Term Renovation Strategy to support renovation of a national park of residential and non-residential buildings, both public and private, and for its gradual conversion into a highly energy-efficient and carbon-free park by 2050. This was further amended in January 2023 to include the implementation of renewable energy sources technologies, such as the installation of heat solar panels, photovoltaic panels and heat pumps.

Additional material changes for the power industry should come from the following:

• a new proposed methodology for allocating electricity grid capacity through a competitive process and other envisaged amendments regarding the grid connection;
• a new proposed regulation on licensing in the electricity sector; and
• a new proposed procedure for confirming the right of foreign entities based in EU member states to participate in the Romanian electricity markets.

Romania has a well-established power market structure and clear assignment of responsibilities between the regulatory authorities (eg, the Ministry of Energy, ANRE and Transelectrica). Romania’s energy situation is at the intersection of tradition and transformation, reflecting both its historical dependence on conventional energy sources and its commitment to transition to a sustainable, low-carbon future. As an EU member state, Romania aligns its energy system and policies with the overall European energy framework, while taking into account its specific energy challenges and opportunities.

In order to observe the EU Third Energy Package 2012, Romania has unbundled the generation and distribution/sale operations from transmission operations for every company acting in the Romanian power market.

The obligation to trade electricity exclusively on the centralised markets operated by OPCOM was repealed by GEO No 143/2021, which put an end to the ten-year ban on the conclusion of directly negotiated bilateral power purchase agreements.

The renewable energy sector is an important part of power generation in Romania. The Romanian state encouraged renewable development in the context of the first renewable wave in 2011, through a support scheme based on a green certificates trading mechanism, combined with a mandatory green certificates acquisition quota that is annually set by ANRE. The support scheme is still available for projects which became operational by the end of 2016, while the new renewables projects will benefit from the new CfD support mechanism.

Transactions

On the electricity market, commercial transactions are wholesale or retail, and prices are set according to supply and demand, as a result of competitive mechanisms. In regard to the wholesale component, the following types of transactions can be concluded on the wholesale electricity market, in all timeframes:

• directly negotiated bilateral transactions;
• transactions concluded following auctions on organised markets; and
• electricity import and export transactions.

In addition, long-term hedging products are tradeable on exchanges in a transparent manner, and long-term supply contracts may be negotiated on over-the-counter markets, subject to compliance with European competition law.

Specifically, transactions on the wholesale electricity market can be conducted, among others, on the following electricity trading platforms organised and administered by OPCOM:

• the day-ahead market;
• the intra-day market;
• the centralised market with double continuous negotiation for electricity bilateral contracts;
• the centralised market for electricity bilateral contracts with different trading arrangements;
• the centralised market for electricity from renewable energy sources supported by green certificates;
• the centralised market for universal service;
• the electricity market for large consumers; and
• the centralised market for awarding long-term electricity contracts.

Besides OPCOM, the Romanian Commodities Exchange (Bursa Română de Mărfuri – BRM) organises and manages the market for standardised forward products, the market for flexible forward products, the market for electricity derivatives settled by physical delivery, and the electricity market for large end-customers. Also, BRM acts as the electricity market operator and nominated electricity market operator of the day-ahead and intra-day markets, respectively.

Another notable platform is the balancing mandatory market, intended to balance deviations from the programmed values of electricity production and consumption, which is organised and administered by the TSO.

Prices

Commercial transactions of wholesale electricity are conducted on the competitive market, as described above. Since 1 January 2021, the Romanian electricity market has been fully liberalised and the electricity prices have been deregulated, including for household consumers.

Thus, prices on the wholesale electricity market are set according to supply and demand, as a result of competitive mechanisms.

However, the electricity market segments related to electricity transmission and distribution services are currently regulated, representing a natural monopoly of the state under Romanian law. Therefore, in this case, the tariffs charged by the TSO and DSOs are laid down or determined by ANRE (the transmission service tariff, the system service tariff, and the electricity distribution service tariff).

The allocation of cross-border capacity (auction-based) for transmission services is implemented by the TSO according to regulations enacted by ANRE and additional rules set by the TSO itself.

Both import and export transactions to and from other jurisdictions are permitted under Romanian legislation. Aspects related to certain indirect restrictions imposed on electricity export transactions were subject to the ECJ Decision in case C-648/18 (related to a dispute between ANRE and the producer Hidroelectrica SA). In brief, ECJ stated that a legal provision which requires national electricity producers to offer for sale all the electricity available to them on centralised markets (ie, the platforms managed by the only operator designated for national electricity market trading services) constitutes a measure having an equivalent effect of a quantitative restriction on exports that cannot be justified on grounds of public security connected to the security of energy supply, in so far as such legislation is not proportionate to the objective pursued.

The Romanian transmission interconnection system is administered by the TSO, which ensures the performance of import and export transactions with neighbouring power systems in Serbia, Hungary, Ukraine, Bulgaria and Moldova. The TSO is the entity responsible for the allocation of cross-border capacities and organises auctions in this respect, while the electricity market participants must notify the TSO of imports, exports, and transits by trading intervals with external partners on each border.

Pursuant to the TSO’s data, in 2023, physical cross-border export trade increased by 42% compared to 2022 (8.2 TWh compared to 5.8 TWh), while cross-border import flows decreased by 27% (5.1 TWh compared to 7.0 TWh).

According to public information provided by ANRE, on 16 July 2024, Romania had an installed capacity in electricity production facilities of 18,320.78 MW, including renewable energy, mainly produced as follows:

• hydro – 6,617.94 MW (36.12%);
• wind – 3,026.91 MW (16.52%);
• coal – 2,762.20 MW (15.08%);
• hydrocarbon – 2,715.23 MW (14.82%);
• solar –1,648.89 MW (9.4%);
• nuclear – 1,413 MW (7.71%); and
• biomass – 106.27 MW (0.58%).

There are no specific laws stipulating a percentage limit for electricity supply that is controlled in the market. However, general laws regulating the protection of competition on the market are applicable and concentrations resulting from mergers, acquisitions and similar operations may be subject to merger control exercised by the Romanian Competition Council.

Generally, the obligation to notify the Romanian Competition Council is triggered by any economic concentration where, in the year preceding the operation, the aggregate worldwide turnover of the undertakings concerned exceeds the equivalent in Romanian lei (RON) of EUR10 million, and there are at least two undertakings involved in the operation that each achieved, on Romanian territory, a turnover exceeding the equivalent in RON of EUR4 million.

In regard to dominance/market power, there is a relative presumption of dominance when one or more undertakings hold(s) a (cumulative) market share of 40% or above, which triggers the obligation not to abuse such a position.

In addition to EU legislation, the main legislation governing competition in Romania are the Competition Law, Unfair Competition Law No 11/1991 (the “Unfair Competition Law”) and Order No 1511/2023 on the implementation of the regulation for the organisation and functioning of the Romanian Competition Council.

The Competition Law and the Unfair Competition Law

The Romanian Competition Council, as an antitrust regulatory authority, is responsible for monitoring energy market participants’ compliance with the Competition Law and the Unfair Competition Law, as well as for ensuring effective competition and for addressing distortion or restriction of competition. The Romanian Competition Council may conduct investigations, request information and arrange interviews and may also adopt decisions imposing administrative fines of up to 10% of the company’s turnover generated in its last fiscal year for wilful or negligent violations of certain prohibitions. However, fines may vary according to circumstances and depending on the particular violation.

Regulation (EU) No 1227/2011 on Energy Market Integrity and Transparency (“REMIT”)

In addition, Regulation (EU) No 1227/2011 on Energy Market Integrity and Transparency (“REMIT”) sets out the monitoring of wholesale energy trading in Europe and prohibits insider trading and market manipulation. ANRE is responsible for the national monitoring of compliance with REMIT, and it has authority with regard to specific anti-competitive behaviours. ANRE has recently intensified its activity in this field – according to its data, from 2018 until 19 September 2022, ANRE started and/or carried out a total of 68 investigations of wholesale electricity and gas market participants, with 49 investigations completed by the same date. According to its oversight competencies, ANRE co-operates with and informs the Romanian Competition Council when it has good reason to suspect that certain acts that could constitute violations of competition laws are or have been committed on the wholesale energy market.

ANRE’s Investigative and Enforcement Powers

Pursuant to the Energy Law, ANRE Order No 18/2023 on the methodology for monitoring the wholesale electricity market, and ANRE Order Nos 62/2013 and 25/2017, regulating investigation activity, ANRE has both investigative and enforcement powers. In other words, ANRE may require disclosure of data, information and documentation, and may also adopt decisions imposing administrative fines for market manipulation and insider trading, ranging between 5% and 10% of the company’s turnover generated in the last fiscal year preceding the application of the sanction.

The construction and operation of generation facilities in Romania are governed by a significant number of regulatory acts considering the various steps and procedures that need to be followed, including the following.

The General Civil Construction-Related Framework

The general civil construction-related framework is comprised of three main pieces of legislation, namely: Law No 50/1991 regarding the authorisation of construction works; Law No 350/2001 regarding land planning; and Law No 10/1995 regarding quality management in construction works. There are also various secondary pieces of legislation regulating specific situations (eg, the category of land on which the facility is to be built, which can determine legal and technical specificities). The above-mentioned framework was amended in 2023 in order to further encourage the development of renewable capacities.

Environment-Specific Aspects

In regard to environment-specific aspects, the construction and operation of generation facilities must in principle abide by the provisions of: Government Emergency Ordinance No 195/2005 on environmental protection; Law No 292/2018 regarding the environmental impact assessment of certain public and private projects (the “EIA Procedure”); and Order No 1798/2007 for the approval of the environmental permits’ issuance procedure.

Specific Energy Regulatory Framework

The main relevant piece of legislation is the Energy Law, supplemented by various ANRE orders and regulations (ie, ANRE Order No 12/2015 approving the regulation for the award of licences and authorisations in the electricity sector and ANRE Order No 80/2013 for the approval of the general conditions related to the setting-up authorisation and the general conditions related to the power production licence). The type of facility can also attract the application of other specific pieces of legislation.

The Construction of Generation Facilities

For a proper understanding of the construction permitting phase of generation facilities, an analysis should be performed covering three distinct levels (which to some extent overlap).

Civil construction permitting

From a strict civil construction perspective, an envisaged generation facility must obtain the general approvals required under Romanian law for the erection of any construction, usually by undertaking a two-phase permitting process, consisting of:

• The approval of urban planning documentation – usually an urban plan (“PUZ”) – which will determine or amend the urban parameters that the facility will need to comply with. The legal framework in this respect was amended in 2023 with the aim of encouraging renewable capacities development. For example, the works for the construction of power production and storage capacities from renewable sources located within and outside the urban areas of localities, including transformer stations, cables and installations for their connection to the public electricity grid, are now exempted from the obligation to prepare urban planning documentation.
• The issuance of a (final) building permit which allows for the commencement and development of the facility construction works, according to the conditions laid down in the permit.

Each phase regularly starts with the issuance by the relevant authority of a distinct certificate of urbanism, which establishes the (prior) endorsements required for the issuance of the final approval document pertaining to each phase.

Environmental assessments

The construction phase of generation facilities is also, in principle, conditional upon:

• a strategic environmental assessment (SEA procedure) usually finalised with the issuance of an environmental endorsement (relevant for the approval of the urban planning documentation); or, alternatively, a screening decision where the completion of the entire SEA procedure is not deemed necessary by the competent environmental authority, following an initial assessment of the specificities of the urban planning documentation; and
• an environmental impact assessment (EIA procedure), usually finalised with the issuance of an environmental approval (relevant for obtaining the actual building permit); or, alternatively, a screening decision where the completion of the entire EIA procedure is not deemed necessary by the competent environmental authority, following an initial assessment of the specificities of the wind/solar energy project.

The environmental assessments mentioned above will also determine the potential impact of the urban planning documentation/envisaged generation facility by reference to water bodies and protected natural areas, which may trigger the obligation to carry out other specific assessments and obtain relevant approvals for the generation facility’s construction.

The SEA procedure is usually conducted by the relevant local county environmental protection agency (for local and county plans and programmes) and the National Environmental Protection Agency (for national and regional plans and programmes). The EIA procedure is usually conducted by the relevant local county environmental protection agency, with certain exceptions – for example, if the construction covers more than one county, has a cross-border impact or is developed within the perimeter of the Danube Delta Biosphere Reserve or at the limits of its perimeter, in which case, other authorities have competence in the matter.

Energy-specific permitting

In addition to the above, several energy-specific approvals must also be obtained in the construction phase of a generation facility, namely:

• a grid connection permit, issued by the relevant TSO or DSO (depending on the installed capacity), necessary to connect the facility to the power grid; and
• a setting-up authorisation issued by ANRE, which can be viewed as an “electricity-specific” building permit.

The setting-up authorisation must be obtained before commencement of the construction works and is required for the establishment of new electricity generating facilities of over 1 MW power. In those cases where the setting-up authorisation is not mandatory, the applicable legislation still requires that ANRE should be notified about the construction works, and kept informed about the status thereof through regular reports.

The Operation of Generation Facilities

Following the construction of a generation facility, several approvals are necessary for its operation, mainly governed by the relevant environmental and energy-specific regulations.

From an environmental standpoint

Under Romanian law, energy generation is qualified as an activity with a significant environmental impact, regardless of the source used for electricity production or the capacity of the plant. A generation facility therefore requires an environmental permit, which must be maintained for the entire operation period of the facility.

Depending on the generation facility’s potential impact on water bodies and protected natural areas, specific endorsements and authorisations will subsequently be required.

Regarding the necessary energy-specific approvals

Generation facilities can be operated only after obtaining the required power production licence from ANRE, with some exceptions expressly provided for by law, for the commercial exploitation of the generation facility (ie, strictly for performing the electricity generation activity).

The commercial exploitation of power generation facilities may be carried out without holding a power production licence in the case of:

• power-generation facilities that can be started without voltage from the national power grid, self-starting groups used for internal purposes; and
• generation facilities with a total electrical power of less than 1 MW.

In connection with all of the approvals presented under 3.2 Obtaining Approvals to Construct and Operate Generation Facilities, the relevant authorities impose various specific terms and obligations on their holders, determined on a case-by-case basis, depending on the nature of the generation facility and the conditions under which it has been built and operates.

Typical Terms Imposed in Relation to the Construction of Generation Facilities

The building permit imposes on its holder all the relevant obligations and terms that must be met in connection with the construction works, including:

• the date by which the works must be commenced, ie, during the building permit’s validity period (usually no more than 24 months from the date of issuance);
• the timeline of the construction works; and
• various obligations in connection with the construction and site organisation (eg, the appropriate signalling of the site and the decommissioning of the temporary site constructions at the end of the works).

At the same time, the environmental approval contains all technical and legal conditions relevant from an environmental standpoint that must be observed during the construction phase of a generation facility, including references to the type of environmental parameters that need to be monitored and their duration, as well as the measures imposed in order to avoid, prevent or reduce and compensate for any significant adverse effects on the environment during the construction works.

Through the setting-up authorisation, ANRE imposes, among other things, a time limit of not less than one year for the completion of the construction (corresponding to the duration of the setting-up authorisation), which is decided by ANRE, on a case-by-case basis, depending on the particularities of the construction. This authorisation also imposes on its holder the obligation to establish and apply, throughout the works execution, measures for the protection of persons, property and the environment, and to obtain all the approvals required by law for the completion of the authorised facility.

Typical Terms Imposed in Relation to the Operation of Generation Facilities

Once the environmental permit has been issued, it will be valid only for the period for which the annual visa is granted, which imposes on its holder the obligation to conduct a specific procedure annually in order to obtain such visa. Other than aspects related to its validity, the environmental permit also imposes certain obligations on its holder – often technical in nature – which ensure the compliant operation of the generation facility from an environmental perspective, usually in the form of a compliance programme.

The power production licence is valid for a maximum of 25 years and lays down the holder’s rights and obligations; the conditions for its transfer, modification, suspension or withdrawal; the conditions under which ANRE is entitled to apply sanctions to the holder, etc.

Amendments to Terms Imposed in Relation to the Construction and Operation of Generation Facilities

As a general principle, once the above-mentioned approvals have been granted, their terms and conditions must be complied with accordingly.

They are only usually amended if subsequent changes affect the holder’s statute or structure, if new elements become relevant or the conditions or circumstances underlying their issuance have changed (ie, any updates of the specific conditions associated therewith, such as amendments to the technical characteristics that lead to the modification of a facility’s installed power).

The modification of the approvals issued by ANRE can also be initiated by the authority itself as a result of a change in the conditions existing at the date of their award (including in the case of amendments to the applicable regulatory and legislative framework and/or legal decisions) or as a result of events substantially affecting the authorised/licensed activities or hindering the performance of an authorised/licensed activity.

Expropriation Rights

According to the Energy Law, if the land necessary for the construction and operation of the facility is the private property of a third party, the applicant for a setting-up authorisation must, as a first option, seek to purchase the land from the owner; alternatively, the law offers applicants the possibility to initiate the legal procedure of land expropriation for public utility causes. Following the expropriation procedure, the applicant must also obtain the concession of the land in question during the facility’s existence.

The general expropriation procedure involves the completion of specific procedural steps, both administrative and judicial. The procedure is finalised with a decision of the Romanian courts which, if the expropriation has been ascertained, will also establish the amount of the required compensation. The compensation must be fair and prior to the actual expropriation and, in principle, amounts to the circulation (“real”) value of the land, as established under an expert report, and the value of damages caused to the owner. The amount of compensation can also be established by mutual agreement with the expropriated person(s).

Romanian law also regulates a more streamlined expropriation procedure in the case of works for the construction, development of production, transmission and distribution of electricity which are considered to be of national interest.

Limitation Rights

Since the works for the construction of generation facilities for which setting-up authorisation is granted, and the activities and services for which licences are granted by ANRE (including the power production licence) are considered, with only a few exceptions, as being of public interest, certain limitation rights arise as a consequence of these approvals, for example:

• right of use to carry out the works for the facility’s construction and to ensure its proper operation;
• right of way to install/dismantle electrical networks or other equipment related to the facility;
• right of access to public utilities; and
• the right to obtain the restriction/cessation of certain activities that endanger people or goods.

Pursuant to the applicable regulations, except for nuclear power plants, there are no energy-specific requirements regarding decommissioning of generation facilities.

However, generation facilities are deemed to be “constructions” in the meaning of the applicable related legislation and, therefore, decommissioning of a generation facility is subject to the general civil constructions-related framework.

In addition, the general conditions attached to the licence for the commercial exploitation of power-generating facilities approved under ANRE Order No 80/2013 provide a general obligation incumbent on such licence holders to gradually perform, based on economic grounds, the modernisation and refurbishment or the conservation or decommissioning of the generation facilities, as the case may be.

Concerning nuclear facilities, specific requirements for their decommissioning are stated mainly in Law No 111/1996 on the safe deployment, regulation, authorisation and control of nuclear activities.

The construction and operation of transmission lines and associated facilities are mainly regulated by the same pieces of legislation mentioned under 3.1 The Construction and Operation of Generation Facilities, supplemented by various secondary regulatory acts adopted by ANRE, such as the Technical Code of the Electricity Transmission Network approved under ANRE Order No 20/2004.

The construction of transmission facilities is subject to the same general approvals and procedures that govern generation facilities, with certain particularities.

The Construction of Transmission Facilities

The construction of transmission facilities requires the fulfilment of the general civil permitting procedures for the authorisation of construction works – that is, urban planning documentation and a building permit – and is realised in accordance with the specific technical and security norms set forth in the applicable regulatory acts issued by ANRE.

From an environmental perspective, Romanian law requires the performance of an EIA procedure for the construction of overhead power lines with a voltage of 220 kV or more, and a length of 15 km or more. In other cases, the need to complete an EIA procedure is analysed on a case-by-case basis.

The Operation of Transmission Facilities

Obtaining an environmental permit for the operation of transmission facilities is mandatory under the applicable environmental legislation, but only with regard to high and medium voltage power lines.

In regard to energy sector-specific approvals, the operation of transmission services requires the issuance by ANRE of an electricity transmission licence. Given the express qualification of transmission networks as the public property of the state, and of electricity transmission activity as a public service of national interest, electricity transmission services in Romania are also provided under a concession agreement.

In Romania, the only TSO authorised by ANRE to provide electricity transmission and system-related services is Transelectrica, which operates under Electricity Transmission Licence No 161/2000, as amended.

The terms and conditions usually imposed in the necessary approvals for generation facilities are also typically applicable in the approvals required for the construction and operation of transmission facilities. See 3.3 Approvals to Construct and Operate Generation Facilities.

The development of the electricity transmission network is deemed to be in the interest of public utility, and applicants that are developing the network therefore have the possibility to resort to the legal procedure of land expropriation, as detailed under 3.4 Eminent Domain, Condemnation or Expropriation Rights.

In Romania, the transmission service is currently provided in the entire national territory exclusively by a single TSO, Transelectrica (licensed in this respect and certified in accordance with the ownership unbundling model by ANRE). 

From an ownership perspective, the existing transmission grid on Romanian territory, together with the sites on which it is located, represent the public property of the Romanian state (the “old network”). Transelectrica has been granted the right to use these assets via a concession agreement, while the rest of the assets in the electricity transmission system are privately owned by Transelectrica.

Although the Energy Law does not currently exclude the possibility for other entities to construct and operate transmission facilities and certify themselves accordingly, the present situation of the Romanian transmission network and service amounts to a natural monopoly situation as defined by the Energy Law.

Principal Laws

The main laws governing the provision of the transmission service in Romania include:

• the Energy Law;
• ANRE Order No 72/2017 on Technical Norms regarding technical requirements for connection to grids of public interest; and
• ANRE Order No 171/2019 approving the methodology that establishes the tariffs for electricity transmission services.

To benefit from electricity transmission services, an agreement must be concluded with Transelectrica on the basis of the framework agreement approved under ANRE Order No 132/2022.

Establishment of Charges and Terms of Service

Transmission charges are established by ANRE according to the methodology approved in this respect, and also considering the TSO proposals, taking into account the following main aspects.

The main rules for establishing the regulated tariffs for the activities and services carried out in the electricity sector (including transmission and system services) are the following:

• non-discriminatory treatment of all service customers;
• limited coverage of the justified expenses for the relevant service, together with a reasonable profit percentage; and
• a calculation method providing incentives for growth in service efficiency.

Accordingly, as of 1 January 2024, ANRE approved the following relevant tariffs under Order No 109/2023:

• 31.67 RON/MWh for the transmission service;
• generally, 3.82 RON/MWh for injecting electricity into the grid; and
• 27.72 RON/MWh for taking electricity from the grid.

As of 1 June 2024, the tariff for system services amounts to 12.84 RON/MWh as approved under ANRE Order No 15/2024.

As mentioned, transmission terms of service are provided under the agreement concluded between Transelectrica and the energy transport service beneficiary on the basis of the electricity transmission framework agreement approved under ANRE Order No 132/2022.

Transelectrica must provide network access for the benefit of all electricity transport network users in a non-discriminatory manner, offering the same tariff to every applicant.

Third parties may access the transmission grid on regulated terms provided that the connection is technically and economically feasible and the security of the national energy system is not endangered.

Public energy network users must therefore pursue the stages listed under the regulation on users’ connection to power grids of public interest approved under ANRE Order No 59/2013:

• a preliminary user documentation and exchange of information stage;
• submission of a connection application and the relevant documentation to the TSO, to obtain the technical connection endorsement;
• establishment of the technical connection solution and issuance of the technical connection endorsement by the TSO; 
• conclusion of the connection agreement between the TSO and the user;
• connection works (ie, grid reinforcement works (if any), connection installation works, and realisation of the user installation works) and commissioning of the connection installation by the TSO (as a rule, the TSO is responsible for grid reinforcement and connection installation works and the user is responsible for user installation works);
• where necessary, setting the user installation under voltage for trial by the TSO;
• issuance of the connection certificate by the TSO, for the place of energy consumption and/or production; and
• final setting-up of the user installation under voltage by the TSO.

The construction and operation of electricity distribution facilities are mainly regulated by the same pieces of legislation mentioned under 3.1 The Construction and Operation of Generation Facilities, subsequently supplemented with specific secondary ANRE legislation for the distribution sector.

Refer to 3.2 Obtaining Approvals to Construct and Operate Generation Facilities, which applies to general civil construction permitting requirements for distribution facilities.

As with electricity transmission facilities, an EIA procedure must be conducted, as mentioned in 4.2 Obtaining Approvals for the Construction and Operation of Transmission Lines and Associated Facilities. However, Romanian law does not require an environmental permit for the operation of distribution facilities.

Energy-Specific Approvals

As a matter of principle, distribution facilities are operated based on and according to an electricity distribution licence issued by ANRE in line with specific procedures established in this respect.

Electricity distribution in Romania, except for distribution through closed distribution systems, is a public service of general interest and therefore, as a rule, an electricity distribution licence is granted to economic operators who have concluded a concession agreement in this respect (ie, concessionary DSOs). Nonetheless, ANRE also grants electricity distribution licences to economic operators that own distribution networks in an area already subject to concession, provided that the written consent of the relevant concessionary DSO has been obtained. Such consent can only be withheld for well-grounded and objective reasons, from a technical and/or economic point of view.

The law also provides for certain exceptions under which the provision of electricity distribution services is allowed without a licence, including:

• based on a decision issued by ANRE confirming the existence of a closed distribution system;
• to DSOs or managers of industrial parks within the respective industrial parks; or
• to economic operators that own distribution networks supplying electricity to places of consumption with a total approved power of less than 3 MW.

Refer to 3.3 Approvals to Construct and Operate Generation Facilities for details of the types of terms and conditions usually imposed in the approvals required for the construction and operation of distribution facilities. 

An electricity distribution licence must also expressly stipulate the territory in which the performance of the electricity distribution service is acknowledged for each DSO (as opposed to the electricity transmission licence, which is exclusively granted to Transelectrica for the entire national territory).

Other conditions provided in the electricity distribution licence set out the content of the electricity distribution public service that is of general interest, as well as the performance standards and procedures that the facility must comply with. Where applicable, all the terms and conditions contained in the electricity distribution licence may subsequently be supplemented, if not overlapping, by the obligations set out in the relevant concession agreements.

The expropriation procedure detailed under 3.4 Eminent Domain, Condemnation or Expropriation Rights will apply accordingly.

The national territory is divided among the six DSOs that currently benefit from a concession granted by the Ministry of Energy and from an electricity distribution licence issued by ANRE. These regulatory documents appropriately circumscribe the geographical territory in which each DSO performs its services. Nonetheless, distribution services can be provided by more than one operator in the same geographical territory, based on the concessionary DSO’s acceptance of this arrangement.

As a matter of principle, DSOs must ensure access to their respective electricity distribution networks in a non-discriminatory manner for the benefit of all network users.

Principal Laws

The Energy Law is the main act regulating the provision of distribution services and it lists the main obligations incumbent on a DSO. The terms of the distribution service are also set out under the Distribution Grid Technical Code, as well as the General Licence Conditions for Distribution Service Performance approved by ANRE, and also under the agreements concluded with the energy suppliers and users, the mandatory framework of which is established under ANRE Order No 90/2015. The tariffs applied for the electricity distribution service are established according to methodologies approved by ANRE.

Establishment of Distribution Charges and Terms of Service

The electricity distribution charges are established using methodologies approved by the energy regulator. In this respect, ANRE has approved two distinct calculation methodologies, depending on whether the DSO has concluded a concession agreement with the Ministry of Energy.

Non-concessionary DSOs

Under ANRE Order No 102/2016, tariffs are, in principle, established by the DSOs themselves and approved by their executive boards. However, following users’ complaints on the tariff levels, submitted in objections to the DSO, the DSO must apply the tariffs approved by ANRE if the users’ objections are not amicably settled within 30 calendar days from the date of submission.

In setting their tariffs, DSOs must consider only justified expenses covering the following:

• operation and maintenance costs;
• amortisation costs for capital assets used in performing the distribution service;
• coverage of electricity costs for own technological use within the distribution network; and
• financial costs.

Concessionary DSOs

ANRE Order No 169/2018 regulates a basket methodology for establishing the tariffs for distribution services. Distribution tariffs are applicable on a contractual basis to all users connected to the energy distribution network, according to the voltage level of electricity introduction/extraction.

The methodology covers the operating and maintenance costs (controllable and non-controllable) of regulated activities (eg, issuance of technical connection endorsements, carrying out the distribution network connection works, issuance of solution studies for users’ connection to electricity distribution networks, etc) and non-regulated activities (eg, rentals, waste management, IT services, etc). According to ANRE’s methodology, DSOs must prepare proposals on prices and tariffs for distribution services, each of which should then be verified and approved by an ANRE order and subsequently published in the Official Gazette of Romania.

In its review process, ANRE considers, in principle:

• the justified forecasted amount of electricity to be distributed, considering the national economic growth indicator;
• the DSO’s performance standard;
• tariff stability;
• own technological consumption regulated by voltage levels according to the decrease plan approved by ANRE;
• optimal network development;
• the cost-efficient applicable rate for distribution network assets;
• fees related to distribution services, established by central or local authorities; and
• the DSO’s financial sustainability.

Although not expressly provided under Romanian energy-related legislation, ANRE’s tariff decision may be challenged under the wider framework of administrative legislation.