Taxing the loss negatively affects renewable energy investors

Martin Moise presented at the event Solar Energy Bucharest Summit the main challenges of the renewable energy industry in Romania. The founder of Patres stressed the need for legislation that is in line with the new production design, the need to support prosumers and the implementation of energy storage solutions. These three measures are essential for the sustainable development of the energy sector.

The way the contribution to the Energy Transition Fund is calculated leads to taxation of losses and affects renewable energy producers

One of the problems Martin Moise points out is how to calculate the contribution to the Energy Transition Fund, a measure that affects investors and renewable energy producers.

"We still, in Romania, tax the loss because of how the contribution to the Energy Transition Fund is calculated. No profiling expenses are recognised and imbalance expenses are only recognised up to 5%. We have situations on figures that are as real as possible, producers who suffered net losses over the winter and in the end the state came in and overtaxed. Moreover, the ANAF comes and considers a retroactive law and demands significant amounts, because of an abusive legislative interpretation. This puts existing investments at risk", said Martin Moses.

Support for prosumers has a positive impact on industry

In terms of support for prosumers, the legislative changes have positive effects, such as waiving the obligation to obtain planning permission or reducing VAT to 5% for individuals. However, the proposal to exempt prosumers from the payment of green certificates raises concerns about existing parks and the need to maintain a balance between different categories of producers.

"When we also think about prosumers and try to support them, the measures taken by both Parliament and the regulator have been very good. I mention here the waiver of the obligation to obtain planning permission and the reduction of VAT to 5% for individuals. But there may be other elements which, if they help prosumers, could affect old plants. Here I refer to the proposed exemption from the payment of green certificates for consumers. Yes, it will help prosumers, but it will create a very big problem at existing parks. Or here there has to be some balance, because the green certificate scheme is not over yet, there are still plants that have not been written off," said the Patres founder.

Patres has always supported the rights of prosumers

Patres has been a strong supporter of the prosumer concept since its inception. Over the years, Martin Moise and the Patres team have promoted the rights and benefits of prosumers in the renewable energy industry. This advocacy has materialised through active involvement in Parliament and lobbying for the abolition of the obligation to obtain construction permits for prosumers, simplification of connection procedures and reduction of tax bureaucracy, including the abolition of income taxation for prosumers. With these measures, Patres wanted to provide a favourable framework for prosumers to develop their own energy production and consumption systems, thus encouraging energy autonomy and sustainability at individual and community level.

"Patres has supported the idea of prosumers since its inception in 2014. In fact, Patres has also campaigned extremely hard in Parliament for the abolition of the building permit, the simplification of connection procedures, the elimination of red tape from a tax point of view and the elimination of the obligation to pay income tax for prosumers. So, yes, we support prosumers and have always supported them. Personally, I am a prosumer and I have panels in my house. Concretely, when we discuss an advantage that we give to one category or another category, we have to see one main thing: if we give an advantage to one party, do we not create a disadvantage in the other party?

I come and say this: if we are going to exempt prosumers from paying for green certificates, on a scheme that has not yet ended, are we not in fact doing exactly the same thing? Again, are we not keeping our word to the investors who put their money into the first wave of renewables? Because that's where the impact, in fact, will go with this exemption, bundled with the large consumer exemption. All it does is reduce the share of green certificates that suppliers have to buy, which will immediately show up on the balance sheets of the companies that invested.

Or we, we come and say so, in the end, to be able to invest in a country, that country has to be predictable. When you make a business plan, you expect that investment to pay for itself within a reasonable time. Unfortunately, in Romania, things don't quite work that way, because every year there is another idea, another change that comes along and affects the feasibility of the projects.

Going further, when we talk about segmentation and equating a prosumer with a large manufacturer, this is not really the case. Prosumers, you know, are exempt from a lot of the obligations that manufacturers have. I will give just one example, the balancing obligation. Because a prosumer is not going to pay imbalances, instead a producer has to forecast production, has to notify energy to the market and has to bear the imbalances." said the Patres representative.

Romania can attract investors to support the sustainable development of the sector and contribute to achieving the European energy transition objectives. It is essential that these issues are addressed in a balanced way, ensuring fair and appropriate treatment for all players in the renewable energy industry, in order to promote a green and sustainable economy.

Investors need to integrate storage solutions

Martin Moise advises investors to include energy storage in the design of solar and wind farms at the design stage to avoid problems caused by price fluctuations and grid imbalances.

"I would like to make a recommendation to all investors in this room: when you design a solar or wind farm, you must put storage in that farm. Unfortunately, this weekend we had an extraordinarily sad moment, which in my view happened far too quickly. We ended up in a situation where we shut down the parks on Sunday with negative prices. The notification made in the market by the operators was zero, basically all the energy that the parks, which we operate, would have ended up in the balancing market, that is the positive imbalance. As Mr Ivan said very well, the price for positive imbalance went up to €2,000. So, basically, if we had produced in those hours, we would have paid €2,000 for every MW/hour we injected into the grid. The obvious and logical decision was to shut down the plants. Or this is extremely inconvenient.

This is precisely because there is no storage in these parks. That's why I come with this recommendation: when designing any kind of park, think about it from the beginning with storage. It will help enormously. It's not an accident what happened over the weekend. It is a situation that we will see more and more often, it is a situation that we have seen in Germany, for example, many times before the energy crisis, and it will not go away. Virtually every weekend when we have a combination of very windy and very sunny weather, either here or in Europe, there is a risk of negative prices", Martin Moise warned.

The need for legislative stability is essential for the development of the renewable energy industry in Romania

Martin Moise drew attention to the fact that over the years Romania has undergone frequent changes in energy legislation, which has created uncertainty and affected the feasibility of projects. In order to ensure a favourable investment environment for renewable energy, it is essential that the government provides legislative stability and respects its commitments. By creating predictable legislation, Romania can attract investors, stimulate innovation and promote the sustainable development of the renewable energy sector.

Agriculture and renewable energy: a win-win for the environment and the economy

At the Solar Energy Bucharest Summit, Martin Moise argued that renewable energy and agriculture can work effectively together, bringing economic and environmental benefits to both sectors. He pointed out that there is a false debate between energy and food and that, in reality, these two areas can complement each other. Martin Moise exemplified that the development of photovoltaic parks on agricultural land does not negatively affect farming, but provides additional opportunities for farmers.

"By the nature of the investment in photovoltaic parks, the land can also be used for grazing animals or other agricultural activities, thus contributing to a dual use of the land.

The issue of the 50 hectares, which you all know, is a situation, from my point of view, that has been taken into a false discussion, because we should not have a conflict between energy and food. The things are actually complementary. We are talking about 10,000 MW that should be installed in Romania in the next 10 years, a large part of which will be on rooftops. We are probably talking about 4-5,000 MW on agricultural land. That is 6,000 hectares, less than 1% of Romania's agricultural area, is insignificant. Moreover, sheep can graze in PV parks, so there is, by the nature of the investment, a dual use of the land, Martin Moise explained.