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  • Service: Tax
  • Type: Regulatory update
  • Date: 10/8/2013

Romania 

Taxes and Incentives
Romania Taxes and incentives for renewable energy KPMG Global Energy & Natural Resources.

Support schemes

Investment and other subsidies


Tax incentives


In Romania, the following tax incentives may be applicable to energy produced from the following renewable sources: wind, solar, geothermal, hydro, biomass and residues fermentation gas.


  • Electricity from renewable sources is excise duties exempt.
  • Accelerated depreciation for tax purposes can be used for technological equipment, computers and related peripheral equipment.
  • Buildings and land used within hydroelectric, thermoelectric and nuclear power plants, as well as buildings and land relating to transformation and connection posts, are not subject to local taxes.
  • Reinvested dividends can be dividend tax exempt, provided the dividends are used for the purpose of creating new work places or developing the activities of Romanian entities.
  • Incentives (for example, exemption from payments to unemployment funds or monthly grants) can also be available to companies which provide places of work for students, recent graduates or disabled persons.

Operating subsidies

Green certificate system


The price of a green certificate has been set between the Romanian new leu (RON) equivalent of EUR29/General Collateral (GC) and EUR59/GC. Currently, the price of a green certificate is equivalent with the maximum value of EUR59/GC, since the demand of GC is higher than the offer.

Quota obligation

In December 2012, the Romanian Regulatory Authority in the Field of Energy (ANRE) calculated the estimated quota of GCs acquisition for 2013 for the electricity suppliers as 0.21 GC/MWh supplied to final consumers.

Additional information

Legal basis: Electricity Law 13/2007 and Law 220/2008 for approval of the support scheme for electricity from renewable sources (Law 220/2008) and the secondary relating legislation issued by ANRE.


Administrative procedures: The activity of production of electricity from renewable sources requires a license granted by ANRE. Such a license can be obtained by an entity that meets certain requirements (relating to its financial position, technical resources, etc.) and provides a specific set of documentation.


The license is granted for a fixed term, but no longer than 25 years. In case of production of electricity from renewable sources, the maximum period during which ANRE should issue the relating license is reduced to 30 days (from 60 days).


Green certificate scheme: In order to promote investments in renewable electricity production capacities, a Tradable Green Certificates (TGC or GC) system has been in place in Romania since 2004, coupled with a supplier quota obligation system. Under this framework, energy producers are entitled to receive a set amount of GCs according to the amount of electricity generated by them from renewable sources. The revenue from GC sales represents additional revenue for eligible renewable producers on top of electricity sales on the market.


According to Law 220/2008, the producers of electricity from renewable sources benefit from a different number of green certificates depending on the fuel used. For example:


  • between 0.5 and 3GC/Mw for hydroelectric power, varying on the capacity of the plant
  • 2 GC/MWh for wind power, until 31 December 2017
  • 1 GC/MWh for wind power, starting with 1 January 2018
  • 6 GC/MWh for solar power.

According to a report issued by ANRE, the green certificates scheme should be reduced in order to avoid overcompensation. Therefore, the authorities intend to grant 1.5 GC/MWh for new wind plants, 1.3 GC/MWh for re-used wind plants, 2.3 GC/MWh for new hydroelectric power and 3 GC/MWh for solar power.


The support scheme is granted for a period of 3 to 15 years, depending on the age of the plants and the installed capacity. Eligible electricity producers will be able to enter the scheme only if the commissioning/refurbishment of the power plant are performed before 31 December 2016.


Sale: The annual mandatory GCs acquisition quota is established based on the quantity of renewable electricity produced and on the final electricity consumption of the previous year, without exceeding the level corresponding to the mandatory quota for the electricity produced from renewable sources.


The quantity of electricity for which the annual mandatory GCs acquisition quota is established includes the electricity purchased by electricity suppliers for their own consumption or for the sale to final consumer, the electricity used by the electricity producers for their own consumption (other than CPT), and for the supply of end consumers directly connected to the power plant.


Electricity suppliers and electricity producers previously mentioned have the obligation to acquire annually a number of GCs which is equivalent to the product between the annual mandatory GCs acquisition quota and the quantity of electricity detailed in the paragraph above, supplied annually to final consumers.


For 2013, the estimated quota of acquisition of GCs for the electricity suppliers is 0.21 GC/MWh delivered to final consumers. Any supplier that fails to fulfill this obligation must pay the equivalent value of the GC at a premium of EUR117.6 per each non-purchased certificate.


The GCs are issued by the transmission system operator and are valid for 16 months. The trading value of a GC has been established by ANRE as between the RON equivalent of EUR 29/GC and EUR59/GC. Currently, the price of a green certificate is equivalent with the maximum value of EUR59/GC, because the demand of GC is higher than the offer.

 

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