Romania

Romania

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

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Taxes and incentives

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, hydraulic utilized in power plants with an installed capacity of maximum 10 MW, biomass and residues fermentation gas.

  • Electricity from renewable sources is excise duties exempt.
  • Accelerated depreciation for tax purposes can be used fortechnological equipment, tools and installations computers and related peripheral equipment.
  • Buildings and land used within hydroelectric, thermoelectric and nuclear power plants, as wellas 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 income tax) can be applicable for the companies which fulfill certain conditions imposed by the legislation in force.
  • Reinvested profit starting 1 July2014 is applicable for tax relief. This involves profit reinvested in the production and/or acquisition of technical equipment (machines, equipment and work installations) used for carrying out economic activities put into operation no later than 31 December 2016.
    • The types of equipment eligible for this tax relief are defined in subgroup 2.1 of the Catalogue regarding the classification and the normal useful life of fixed assets.
    • The profit which can be reinvested represents the balance of profit (loss) account for the period, namely the accumulated accounting profit from the beginning of the year, in the year in which the investment is realized. The tax relief is granted up to the limit of corporate tax due for the period in which these investments are made.
    • The corporate tax relief applies only for new fixed assets. Also, taxpayers which benefit from this incentive are required to keep the specific fixed assets for at least half of their normal economic useful life established according to the accounting applicable regulations, but no more than 5 years.
    • Taxpayers who benefit from this incentive cannot apply theaccelerated depreciation method for this equipment.

Operating subsidies

Green certificate system

The price of a green certificate has been set between the Romanian new leu (RON) equivalent of EUR29/General Certificate (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

The Romanian Regulatory Authority in the Field of Energy (ANRE) calculated the estimated quota of GCs acquisition for 2015 for the electricity suppliersas 0.274 GC/MWh supplied to final consumers.

Additional information

Legal basis

Electricity Law 123/2012 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 by filling a request for accreditation and accompanied by 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 of 30 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 and delivered 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:

  • 0.7 GC/MWh for new hydroelectric power plants with installed capacity of maximum 10 MW
  • 1 GC for each 2 MWh for hydroelectric power plants with an installed capacity of maxim 10 MW
  • 0.5 GC/MWh for wind power, up to31 December 2017 and 0.25 GC/MWh beginning 1 January 2018
  • 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 theprevious 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 andthe quantity of electricity detailed in the paragraph above, supplied annually to final consumers.

For 2015, the estimated quota of acquisition of GCs for the electricity suppliers is 0.274 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 EUR119.7702 per each non-purchased certificate.

The GCs are issued by the transmission system operator and are valid for 12 months. The trading value of a GC has been established by ANRE as betweenthe RON equivalent of EUR29/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.

During the period 1 July 2013 to31 March 2017, trading is temporarily deferred for a certain number of GC for each 1MWh generated and delivered by the electric energy producers from renewables resources, accredited byANRE up to 31 December 2013, as follows:

  • 1GC for hydroelectric power plants with installed capacities of maximum 10 MW
  • 1GC for wind power plants
  • 2GC for solar power plants. 

Taxes and Incentives for renewable energy

A 2015 KPMG report that provides updates on renewable energy promotion policies for over 31 countries.

 
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