Changes in Grid Connection Rules in Romania

1. Preliminary remarks

Against the background of an increasing number of grid connection applications by reference to the available grid capacity, the National Energy Regulatory Authority (“ANRE”) has finally adopted, after two rounds of public consultations involving a large number of market players, significant changes to the grid connection rules laid down under Order No. 53 approving the Methodology regarding the allocation of electricity grid capacity for the connection of electricity production sites, as well as amending and supplementing certain orders of the President of the National Energy Regulatory Authority with regard to users’ connection to the public electricity grid (the “Order”), which was published in the Official Gazette on 2 August 2024.

Firstly, the Order approves the Methodology for the allocation of electricity grid capacity for the connection of electricity generation plants (the “Methodology”), applicable starting with 1 January 2026, which regulates the allocation of available grid capacity through market-based methods, thereby aiming at promoting a mechanism to ensure a competitive environment and greater predictability for the development of energy projects.

Secondly, the Order brings important changes to ANRE Order no. 59/2013 for the approval of the Regulation on users’ connection to public electricity grids (the “Grid Connection Regulation”), which refer, among other things, to the conditions for the issuance of the technical connection endorsements (ATR) by the grid operators, the conditions for the establishment, enforcement and refund of the financial guarantee, etc. In addition, in order to update the Grid Connection Regulation, the Order brings certain amendments to the ANRE regulations on the framework technical connection endorsements and framework grid connection agreements.

Please find below a brief presentation of the main aspects set forth under the Order, as well as some context aspects.

2. Grid capacity allocation pursuant to the Methodology

General considerations. The Methodology, which shall apply as from 1 January 2026, is based on existing general legislative provisions, including those laid down in the Electricity and Natural Gas Law No 123/2012 (the “Energy Law”), according to which “Where grid operators do not have sufficient capacity to connect all the electricity generation capacities for which connection has been requested, they may apply market-based methods for allocating the existing grid capacity as per the regulations approved by ANRE.” [our emphasis].

Pursuant to this new framework, ANRE aims to provide a more efficient and adaptable framework for managing the growing demand for grid capacity. Among other things, the Methodology aims to replace the current approach of granting grid capacity on a first-come-first-served basis with a mechanism for allocating grid capacity based on an auction for projects with an installed capacity equal to or exceeding 5 MW to be connected to the 110 kV and medium voltage grids. According to this mechanism, the money collected through auctions will be used by grid operators for grids developments necessary to cover the applicants’ requests for capacity allocation.

Following the auction and full payment of the allocated grid capacity, such capacity becomes reserved capacity in the grid, allowing the future user to submit the connection application and obtain the technical connection endorsement (ATR). The issuance of the ATR is now conditional on the fulfilment of all payment obligations for the allocated capacity under the capacity allocation contract.

The TSO will develop and manage the auction platform for the allocation of the available grid capacity and will organize the related allocation works. Auctions will be organized every year (“Year N”) for a period of 10 years starting from the second year after the auction year (N+2).

Auction timeline. The Methodology describes the steps leading up to the auction, using the following timeline:

Deadline	Running steps
15 January in Year N	TSO publishes on its website the available capacities for each grid area starting with Year N+2 (for which no supplementary grid development works are required).
16 January – 28 or 29 February in Year N	Grid users apply for capacity allocation for a specific year of the allocation period and a specific grid area. The year requested for the capacity allocation needs to correspond to the year of the project commissioning. The applications will be filed with the competent grid operator, i.e. the TSO (for projects with an installed capacity exceeding 50 MW) or the DSO (for projects with an installed capacity of less than or equal to 50 MW).
Within five business days from the application submission date	Grid operators verify the information and documents provided along with the capacity allocation application.
Within two business days after registration of the application for capacity allocation and complete documentation	Grid operators confirm to the relevant users, by electronic mail, their registration for the auction and that the required data will be uploaded to the capacity allocation platform.
1 – 10 March of Year N	DSOs will submit to the TSO applications for capacity allocation with the full documentation submitted by users.
Until 15 March of Year N	The TSO will finalize the list of applications for capacity allocation with the complete documentation received from the DSOs, including those filed with the TSO, and will upload into the capacity allocation platform, for each of the electricity grid zones, the capacity requested for allocation by each user, expressed in MW.
16 March – 15 June of Year N	The TSO will carry out an overall solution study whereby it will determine the required supplementary grid development works to satisfy all capacity applications.
Until 15 June of Year N	The TSO will publish, for each grid zone, information detailing various aspects, including global solution study results, available grid capacity, available grid capacity from supplementary grid development works (with N and N-1 grid elements in operation), user-requested capacity for connection, estimated grid development works costs, starting bid prices, and auction session dates.
At least 2 business days before 1 July of Year N	The TSO will publish on its website the list of auction participants corresponding to user applications.
From 1 July of Year N	The TSO will hold daily auction sessions on successive business days, one per business day, for the allocation of available grid capacity in each year of the allocation period, in chronological order.

 

In addition, by 1 July 2025, the TSO is required to prepare and publish a procedure on the Methodology implementation, as well as guidelines for the use of the auction platform.

Participation guarantee, starting bid price and offered bid price. Bidders who have received the grid operator’s confirmation of the registration of the capacity allocation application are required to deposit a participation guarantee no later than 24 hours before the start of the auction session. The amount of the participation guarantee will be determined by multiplying the capacity requested by the bidder (expressed in MW) by 1% of the starting bid price.

This guarantee will be refunded by the TSO to the bidders whose bids have been declared unsuccessful within 2 business days after the end of the auction, and to those whose bids have been declared successful within 2 business days after receipt by the TSO of the allocation contract signed by the bidder. In this regard, failure to sign the allocation contracts by the deadlines set out in the Methodology shall lead to the enforcement of the participation guarantee and the loss of the allocated capacity.

The starting bid price will be established as the ratio between the total estimated value of the supplementary grid reinforcement works and the total available grid capacity, including the supplementary grid development works for each grid zone and for each year of the allocation period. The starting bid price for the following year is recalculated considering the amount of unallocated capacity in the current year. The bid price is the maximum price that the bidder is ready to pay for the allocation of a 1 MW grid capacity and must be higher than or equal to the starting bid price.

After the auction closes in each session, the accepted bids will be ranked in descending order based on the bid prices. The best bid will be the one with the highest bid price. If two or more bids have the same price, they will be ranked according to their time stamps, with the earliest bid taking precedence

General allocation rules. The Methodology provides some general rules for the allocation of the available grid capacity, as follows:

(i) the auction session shall no longer take place if in any year of an allocation period the sum of the requested allocation capacities is less than or equal to the available connection capacity, in which case all the allocation applications shall be accepted.

(ii) if the sum of requested allocation capacities is greater than the available connection capacity in the year for which the allocation is requested and which does not include capacity from additional grid development works, but is lower than the available grid capacity in the year for which allocation is requested, and which includes the capacity from additional grid development works, then the auction will be conducted, and all bids will be accepted in full in terms of the capacity tendered. In this case, users will pay the starting bid price for bids declared successful.

(iii) if the indicated capacity is greater than the available grid capacity (which includes the capacity from additional grid developments works), the auction will be conducted, and all bids will be accepted in full insofar as the capacity auctioned is concerned, until the available capacity is reached. For each winning bid, users will pay the bid price.

(iv) if the indicated capacity is greater than the available grid capacity, which does not include the capacity from additional reinforcement works, the auction will be conducted considering the value of these works scheduled for the first year following the current auction year. All bids will be accepted in full insofar as the auctioned capacity is considered, until the available capacity for the current year is reached. Finally, each winning bidder shall pay the bid price.

Capacity allocation contracts. Finally, successful bidders will conclude capacity allocation contracts, which shall include at least the mandatory clauses set out in the Annex to the Methodology, including the allocated capacity and the amount to be paid for the capacity in question. This amount is to be determined by multiplying the allocated capacity by the bid price and shall be paid in full within 4 months from the conclusion of the capacity allocation contract (the first instalment represents at least 20% of the value of the allocated capacity and shall be paid no later than 30 days after the conclusion date of the contract). In addition, bidders are required to provide a financial guarantee of 1% of the contract value (to secure the payment of the allocated capacity) before concluding the capacity allocation contract. Failure to pay for the allocated capacity within the contractual deadlines shall result in the loss of the allocated capacity and the guarantee.

Furthermore, both the DSO / TSO and the user shall pay late payment penalties of 0.01% per day of delay if they do not fulfil certain obligations provided in the contract (e.g. the grid operators do not commission the installations resulting from the additional grid development works within the deadlines set for each auction session or the user does not power-up the project).

3. Amendments to the Grid Connection Regulation

Capacity allocation contract and payment of the allocated capacity. Considering the new grid capacity allocation rules under the Methodology, applicable as from 1 January 2026, the grid connection application will also have to be accompanied by the capacity allocation contract for projects with an installed capacity equal to or greater than 5 MW, and the issuance of the ATR for such projects will be subject to the fulfilment of all obligations regarding the payment of the allocated capacity according to the capacity allocation contract.

Deadline for obtaining the building permit. Under the previous and current version of the Grid Connection Regulation, users must provide proof of having obtained the building permit for the production/ consumption and production site in question not later than 12 (twelve) months after the conclusion of the connection agreement and 18 (eighteen) months after the issuance of the technical connection endorsement. If the building permit is not submitted to the grid operator, the technical connection endorsement ceases to be valid, and the connection agreement shall automatically be terminated.

Pursuant to the new amendments, the deadline for obtaining the building permit can be extended on a one-off basis by up to 12 months, with the grid operator’s written consent and ANRE’s notification, if the user provides an additional financial guarantee of 5% of the connection fee within 5 business days after receiving the grid operator’s consent, and the delay is proven to be beyond the user’s control. The grid operator shall respond in writing to the user’s request within 10 business days, and if the grid operator fails to respond within 10 days, the deadline will automatically be extended with a period equal to the delay period, up to 12 months. Although this amendment is generally beneficial, given that the procedure for obtaining building permits can in practice take more than 12/18 months, the main potential pitfalls of the new regime are that (i) users will have to provide a financial guarantee in all cases, with no distinction being made between the reasons for delay in obtaining building permits and (ii) grid operators will have to make their own assessment of the reasons for delay, which could leave room for discretion.

Financial guarantees. Other changes relate to the financial guarantee to be provided by the user in favour of the grid operator, which is now a condition for the issuance of the technical connection endorsement.

In respect of the financial guarantee, while the previous regime required the guarantee only if grid reinforcement works were needed, the Order makes the financial guarantee mandatory for all production projects over 1 MW, regardless of any grid reinforcement works that are required (conditions maintained only for consumption places).

In terms of the financial guarantee amount, this is now capped at 5% of the grid connection fee, an amendment that represents a significant departure from the previous regime and provides applicants with the possibility of a clear assessment of the amount of the guarantee, eliminating differences in the enforcement of the legal provisions by grid operators (generally caused by the previous possibility to set any percentage up to a maximum of 20% of the connection fee depending on the grid reinforcement needed).

As regards the deadline for the establishment of the guarantee, producers will have to establish it before the ATR issuance, as opposed to the former regime under which the guarantee needed to be established before the conclusion of the connection agreement.

Additionally, the Order narrows the forms of financial guarantees to bank guarantee letters, term bank deposits, or direct payments to the grid operator, excluding the endorsed cheque file and the extensive reference to any other legal form accepted by the grid operator. This amendment is aimed at ensuring a uniform approach to the forms of financial guarantees to be provided in favor of grid operators.

In terms of the financial guarantee duration, it must now be maintained throughout the term of the connection agreement, until the final power-up of the user installation.

The Grid Connection Regulation sets forth new cases in which the financial guarantee can be enforced by the grid operator, namely if (i) the building permit is not submitted within the time limits set out in the connection contract (as may be prolonged pursuant to the new amendments), (ii) the user does not request in writing the conclusion of the connection contract at least 30 calendar days before the expiry of 12 months from the ATR issuance; or (iii) the user does not sign the connection contract proposed by the grid operator by the end of 12 months after the ATR issuance.

Pursuant to the new amendments, the financial guarantee provided by the user shall cease/be refunded to the user in the following cases: (i) upon final power-up of the user’s installation, except where the guarantee has been enforced for the reasons specified in the Grid Connection Regulation; and (ii) upon termination of the connection contract, except in the case of rescission (Romanian: “reziliere”) and/or in the case of enforcement of the guarantee for the reasons specified in the Grid Connection Regulation.

The new provisions on the financial guarantees will also impact the grid connection applications for which an ATR was not issued upon the adoption of the Order.

Deadline for requesting the conclusion of a connection contract. According to the new amendments, after receiving the connection offer, expressed in the ATR, the user may request in writing the grid operator to conclude the connection contract at least 30 calendar days before the expiry of the ATR (i.e., 30 days prior to the expiration of the 12-month term after the ATR issuance). The previous version of the Grid Connection Regulation stipulated that the connection contract had to be concluded within 12 months from the ATR issuance but did not provide for a 30-day deadline.

ATR termination. Another novelty is the user’s possibility to request the termination of the ATR’s validity, in which case (i) the connection contract (if concluded), terminates automatically on the date of the ATR termination, (ii) the financial guarantees provided by the user will be enforced by the grid operator, and (iii) the capacity approved for connection will become available for the connection of other users. In addition, among other cases of ATR termination, the new amendments refer to the termination of the connection contract, as opposed to the previous form which referred only to the rescission (Romanian: “reziliere”) of the connection contract.

4. Conclusions

While the recently adopted amendments and additions are aimed at simplifying and improving the grid connection procedures by strengthening and complementing the existing regulatory framework, adapting it to the requirements and changes in the energy sector, it remains to be seen how they will actually work in practice.

The grid capacity allocation mechanism through auctions may have positive effects by replacing the current first-come-first-served principle which lacks clear criteria for prioritizing grid connection requests. It nevertheless requires a robust implementation capacity on which its feasibility and efficacy depends.

As far as changes in financial guarantees are concerned, the capped amounts may provide the applicants with the possibility to clearly assess the amount of the guarantee, eliminating potential differences in the application of existing legal provisions by grid operators. However, the new deadline for the establishment of financial guarantees could pose additional investment risks, as investors may be concerned about making financial commitments before they have a full picture of the projects’ terms and conditions.

While the new amendments generally seem to be aimed at combating speculative projects that artificially block the grid capacity, they could actually negatively impact investors with genuine intentions.