The capping of prices on the energy and natural gas market has been extended; MACEE applies voluntarily and other changes: GEO no. 32/2024

The takeaway 

The Government has adopted Emergency Ordinance no. 32/2024 (EOG no. 32/2024) for the amendment of the Government Emergency Ordinance no. 27/2022 (EOG no. 27/2022) regarding the measures applicable to final customers in the electricity and natural gas market between 1 April 2022 and 31 March 2023. The application of those measures has been extended until 31 March 2025 by Law no. 206/2022 approving GEO no. 27/2022.

The main changes brought by GEO no. 32/2024 are: 

• The duration of the support scheme for all final customers in the electricity and natural gas market is extended until 31 March 2026.

• The Mechanism for the Centralised Acquisition of Electric Energy (MACEE) becomes optional from 1 April 2024 until 31 December 2024, after which it will be eliminated.

• The formula for calculating the contribution to the Energy Transition Fund for producers and entities producing electricity and natural gas, aggregate entities producing electricity, traders of electricity and natural gas, suppliers of electricity and natural gas and aggregators has been changed to be independent of electricity for the trading activity. 

• The regulated price for the centralised purchase of electricity has been decreased from RON 450/MWh to RON 400/MWh. 

• The same threshold also applies to the calculation of the contribution to the Energy Transition Fund for producers and for partners in hedging contracts.

In detail

A. Support scheme

GEO no. 32/2024 extends from 31 March 2025 to 31 March 2026 the period of application of the support scheme for all final customers in the electricity and natural gas market.

The price for the standard offers for customers provided for by GEO no. 27/2022 to art. 1 paragraph (1) and/or (2) applicable until 31 March 2025 cannot exceed the final invoiced price provided by GEO no. 27/2022 to art. 1 paragraph (1) and/or (2), and for the period 1 April 2025 to 31 March 2026, electricity/natural gas suppliers have to prepare and publish/communicate standard offers for which they have purchased, on the date of preparation of the offer, a quantity of electricity /natural gas at least equal to 50% of the final customers’ consumption in the competitive regime and in the universal service regime from the portfolio. 

An obligation has been introduced for the supplier to break down the final price into the same components in the supply offer, in the supply contract and in the final price invoiced to the end customer. The price applied to end customers of natural gas/electricity per consumption tranche is the sum of the three main components: the component related to energy and supply, the component related to the system/network (transport and distribution) and the component including taxes, commissions, taxes and fees.

In the period 1 April 2024 to 31 March 2025, the supply component of the prices applied to customers taken over as a last resort is RON 80/MWh for the electricity supply activity and RON 15/MWh for the natural gas supply activity.

As of 1 April 2024, natural gas producers which carry out onshore or offshore extraction activities, regardless of the start date of this activity, as well as natural gas sales activities, have to deliver at the price of RON 120/MWh (decreased from RON 150/MWh) the necessary quantities of natural gas resulting from the current internal production activity to the suppliers of household customers, the suppliers of thermal energy producers or directly to the thermal energy producers and to the transport operator and system/concessionaire operators distribution holders of an operating licence – network operators.

B. The MACEE mechanism

The end date of the period of application of the MACEE, Centralised Procurement Mechanism has been changed from 31 March 2025 to 31 March 2024. Through MACEE, the sole purchaser buys electricity quantities from electricity producers and sells the purchased quantities to electricity suppliers which have contracts concluded with final customers, the electricity transport and system operator and the electricity distribution operators, at the same price.

As of 1 April 2024, it will be possible to apply MACEE voluntarily, so all electricity producers will be able to voluntarily participate in this mechanism, thus resuming transactions based on competitive mechanisms. The transaction value through the Centralised Purchase Mechanism has been reduced from RON 450/MWh to RON 400/MWh. 

The contribution to the Energy Transition Fund will not be paid for transactions carried out through MACEE. 

The quantities of electricity from renewable sources traded through MACEE that can benefit from guarantees of origin of the production of electricity from renewable sources are determined according to GEO no. 32/2024 annex no. 12, for 90% of the quantities determined according to this annex, in compliance with the provisions of the Regulation on issuing and tracking guarantees of origin for electricity produced from renewable sources. 

As of 1 April 2024, the maximum value of the weighted average price of electricity at which the National Energy Regulatory Authority (ANRE) calculates the amounts to be settled from the state budget for electricity suppliers is RON 700/MWh. 

C. Changes to the contribution to the Energy Transition Fund 

We draw your attention to the following changes regarding the applicability and calculation method of the contribution to the Energy Transition Fund:

a) For producers (annex no. 6 of GEO no. 27/2022): 

• the reference price has been reduced from RON 450/MWh to RON 400/MWh; 

• the deduction percentage for imbalance expenses for wind and solar electricity producers has been increased from 5% to 10%.

   

  b) For electricity and natural gas producing entities, aggregated electricity producing entities, electricity and natural gas traders, electricity and natural gas suppliers and independent electricity aggregators for trading activity (annex no. 6.1. of GEO no. 27/2022): 

• the date by which the contribution is due has been changed from 31 August 2023 to 31 March 2025; 

• the profit margin that is added to the average monthly purchase price has been increased from 2% to 10%; 

• the definition of the average purchase price regarding suppliers that carry out trading activity and that do not specifically allocate purchase contracts between the supply activity and the trading activity has been clarified. In this case, for the purpose of calculating the average purchase price, the entire purchase made by the suppliers is taken into account, regardless of the destination of the electricity/natural gas (except for purchases through MACEE).

   

  c) For partners in hedging contracts:

• The reference price in the calculation formula has been reduced from RON 450/MWh to RON 400/MWh. 

[Government Emergency Ordinance no. 32/2024 for the amendment and completion of the Government Emergency Ordinance no. 27/2022 regarding the measures applicable to end customers in the electricity and natural gas market in the period 1 April 2022 to 31 March 2023, as well as for the amendment and completion of some normative acts in the field of energy and the adoption of some measures in the field of energy, published in the Official Gazette no. 273 dated 29 March 2024]