How the law strikes in green energy producers

According to Government Emergency Ordinance no. 57/2013, recovery of green certificates, whose grant was delayed, will be starting on April 1, 2017 for new hydro power plants with installed capacity of 10 MW, and solar power plants, and respectively, from 1 January 2018 for wind powe, staggered up to 31 December 2020. In line with the amendments to Law no. 220/2008, it was amended also the Regulation of issue of green certificates.

Less money for manufacturers

Renewable energy producers are obviously affected by the legislative change. Furthermore, not only the capitalization of these assets is delayed, but there is a real risk that in 2017 and, respectively, 2018 the deferred certificates to be below their current value. Besides the immediate and direct effects of the legislative changes, it’s important to note and send the negative message to investors and prospects in terms of legal certainty and protection of investments. Changes to Law no. 220/2008 by GEO. 57/2013 are the least objectionable not only economically, but also legal.

The first criticism aimes at violation of the prohibition on retroactivity of the law, as it is stipulated by art. 15 (2) of the Constitution. In this regard, it should be kept in mind that Law no. 220/2008 in the form before amendment of July 2013 clearly established the number of green certificates issued monthly and transmited to system operator, which would have benefit producers of energy from renewable resources.

So prior to the modification of Law no. 220/2008, renewable energy producers gained legal right accreditation to issue green certificates, which then had to be issued monthly by the transmission system operator ( in this case , Transelectrica SA). However, the enactment of the Emergency Ordinance no. 57/2013 and delaying the release of part of the green certificates that renewable energy producers were entitled have led to changes in the initial contents of these rights – with consequent violation of the prohibition on retroactivity law.

A second criticism is considering the compatibility of GEO. 57/2013 and the requirements of protecting private property, as set forth by art. 44 (1) of the Constitution and by art. Additional Protocol 1 of the ECHR. This problem arises in the context of the GEO no. 57/2013 substantially alter the rights of producers of renewable energy on green certificates.

These arguments could be recovered by an action in administrative (including cancellation ANRE Order no. 56/2013 ) , accompanied by a lifting of unconstitutionality of EO no. 57/2013. In addition, once exhausted domestic remedies and whether the Romanian court finds no validity claims producer of electricity from renewable sources, it will be the European Court of Human Rights with a claim based on arguments related to the violation of the principle of legal certainty and protecting the property, requesting that the Romanian state to pay compensation.