Entrepreneurs who intend to build power plants with a capacity of more than 200 kW will submit a financial guarantee when asking for electricity grid connection permits. Relevant amendments to the Electricity Law were approved by the Cabinet on Wednesday, IPN reports.

According to the authorities, the legislative changes come to unblock the renewable energy market by making applicants and holders of connection permits for power plants with a capacity higher than 200 kW more responsible.

The draft law provides that the value of the guarantee is to be established by the National Agency for Energy Regulation. If the plant will be built and put into operation according to plan, the guarantee will be returned. Otherwise, the persons will be penalized with a fee of 50% to 70% of the amount of the financial guarantee. The funds will be used by the system operator to modernize the electricity networks throughout the country.

"The law will unlock the situation with the connection permits for renewables. For this year we can release a large capacity, which has been blocked, including for speculative purposes, by particular energy market players. From now on, those who want to obtain a permit will submit a guarantee so that we can be sure of the intention to invest," said Prime Minister Dorin Recean.

A transition period will also be granted, until June 30, 2025. During this period, those who renounce the permits obtained for speculative purposes will be absolved of the fine.

At the same time, permit holders representing energy communities or having the status of eligible producer, i.e. have a permit for the construction of a solar park with a capacity of 1 MW or wind park with a capacity of up to 4 MW, will be exempt from submitting the financial guarantee.