By Toma Barbarasa, Attorney at Law, Theodora  Geangos, Attorney at Law, Daniele Iacona, Attorney at Law at Schoenherr & Asociatii

The Law no. 121/2014 on energy efficiency (“the Law”) which transposes the 2012/27/EU Directive of the European Parliament and of the Council of October 25, 2012 on energy efficiency into national law and creates the legal framework for the development and implementation of the national policy in the field of energy efficiency was published in the Official Gazette no. 574/2014. The Law aims to increase energy efficiency in Romania, targeting a reduction by 19 percent of energy consumption by 2020. In this regard, the Energy Efficiency Department is set up under the National Energy Regulatory Authority (ANRE), the body being responsible for drafting legislative proposals, promoting the development of energy services market, monitoring the implementation of the national plan for energy efficiency and cooperating with various authorities involved in the process.

The private sector – energy efficiency measures

The new law introduces (Art. 9) certain obligations imposed on economic operators who will have to carry out an energy audit conducted by competent professionals every four year, and to prepare programmes to improve energy efficiency including short-, medium- and long-term measures.

Also, economic operators will be required to complete and submit the annual energy consumption statement to the Department by April 30 of each year, and those who have not completed energy audits until the entry into force of the Law (August 4, 2014) are required to carry out them by December 5, 2015.

Exceptionally, operators whose annual energy consumption exceeds 1,000 tonnes of oil equivalent and who had implemented a certified energy or environment management system are not obliged to conduct an energy audit.

The specialized fund established for energy efficiency investments will be accessible to a wide range of suppliers of solutions for improving energy efficiency, from energy service companies to final consumers. The structure and operating model of the fund will be subsequently regulated by the Government.

The public sector

In order ensure efficient energy consumption in buildings (Art. 6), 3 percent of the total floor area of buildings owned and occupied by the central governments should be renovated annually to meet minimum energy performance standards set by law. This measure could be extended to buildings owned by local governments.

Since 3 percent corresponds to areas of hundreds of thousands of square meters, it is expected to create instruments and significant incentives for this sector by 2020, the deadline by which these will be applied.

General measures

In view of energy savings, between January 2014 and December 31, 2020, there will be taken specific measures to save each year 1.5 percent of the annuals energy sales of energy distributors or suppliers.

Accordingly, the energy policy measures are aimed at:

i. training of energy auditors and independent energy audits;

ii. creating standards, rules and regulations that lead to the adoption of energy efficient technologies;

iii. supporting development to energy services companies (ESCO, which provide services and implement measures to improve energy efficiency inside the consumers’ place or as regards the installations and which, therefore, take financial risks, as payment for such services is based on improving energy efficiency and meeting other performance criteria agreed  by the parties).

iv. establishing a specialized investment fund for energy efficiency and financing instruments or tax incentives to implement energy efficient techniques;

These measures will be implemented through national programmes for energy efficiency, the target with respect to energy savings being 1 percent for 2014-2015, 1.25 percent for 2016-2017 and 1.5 percent for 2018-2020.

Penalties

As regards penalties for economic operators who do not comply with the new legal provisions, substantial fines are established for breaking the law, the amount varying according to the annual fuel consumption and the illegality they committed. Exceptionally, operators whose annual energy consumption exceeds 1,000 tonnes of oil equivalent and who do not conduct the required energy audit every four years, the fines provided range from 10,000 lei to 20,000 lei.
 

Conclusions 

The measures on energy efficiency are likely to boost this sector and we will possibly see new and more and more specialized energy services suppliers emerging and developing. It is also expected to see increasing interest amid banks in terms of offering financial incentives to players in this field, so that the Law no. 121/2014 may be a good opportunity for investors in the energy sector who have been in a prolonged stagnation up to now.