Daniel Vlasceanu, Partner at Vlasceanu and Partners: Critical Legal Aspects During Romania’s Energy Transition

As an external lawyer, Daniel Vlasceanu collaborated with a renowned litigation law firm prior to joining the Bucharest office of a foreign law firm. Subsequently, Daniel activated within the Legal Department of OMV Petrom, the largest energy integrated operator in the SEE region where he progressively advanced to several management positions. Within the same organization, Daniel moved into the Business Development Department where he managed streams of several strategic projects of national importance (such as Neptun Deep). Daniel holds an LLM degree (Bucharest University), an LLM degree (Vienna University) and an Energy MBA (Vienna University of Economics and Business). As of 2016, he founded Vlasceanu and Partners.

Vlasceanu & Partners offers highly specialized legal services in areas including energy law, financing and banking, real estate and urbanism, corporate and commercial law, M&A and private equity, employment law, EU funding and public procurement, competition. The firm takes pride in having the largest energy-focused legal team currently acting in the Romanian market. Their team consists of young, dynamic professionals, the majority of whom have received foreign education and possess a practical, results-oriented mindset.


Our enlarged conversation with Daniel Vlasceanu, Partner at Vlasceanu and Partners, shed light on some critical legal and regulatory aspects pertaining to energy and environment in Romania during the energy transition.


Dear Daniel Vlasceanu, how the evolution of the energy sector in Romania is seen from the lens of a lawyer?

Daniel Vlasceanu: Over the past two decades of activity, I have witnessed significant developments in Romania’s energy landscape, particularly in the oil and gas and renewable energy markets.

In the oil and gas industry, notable progress has been made in offshore exploration and development. ExxonMobil’s entry into the Neptun Deep license in 2008 (on a 50-50% basis with OMV Petrom) marked a pivotal moment. The joint venture (ExxonMobil – OMV Petrom) explored, appraised, and began developing what is to become the largest energy project ever undertaken in Romania. However, due to the imposition of several fiscal measures that burdened the project over its anticipated lifespan, ExxonMobil decided to exit the Neptun Deep project and left Romania after 14 years. The project was subsequently assumed by OMV Petrom, which became the operator, and Romgaz, which acquired ExxonMobil’s stake. There is hope that gas production will begin in the existing decade. On a positive note, Black Sea Oil and Gas initiated production from a shallow offshore block in the Black Sea—the first new offshore production since the fall of communism.

Onshore, Romania has seen only a handful of new discoveries, such as the Caragele field (operated by Romgaz) or Totea belonging to OMV Petrom. Meanwhile, several large international players, including Repsol and the (US) First Reserve Fund, have entered and exited the market. Although a few investors remain active, the lack of new bidding rounds or new acreage made available for exploration since 2010 has led to a slow decline in the sector. In the last years, the several players either exited Romania or relinquished their blocks. Meanwhile, some of the remaining players are adapting by shifting focus towards more sustainable sectors, such as photovoltaics and bio-methane (similar to trends seen among oil and gas giants globally).

Romania’s renewable energy sector experienced rapid growth during the first wave (2007–2012), with approximately 1,400 MW of photovoltaic capacity and 3 GW of wind capacity installed. However, following the removal of green certificate incentives—a trend that impacted much of Europe—there was a hiatus in new installations. In recent years, however, the sector has seen a resurgence, particularly around 2019–2020, which was reflected in the construction of new facilities starting in 2022. Despite a proliferation of authorized projects on paper, the lack of stringent criteria, such as financial viability checks, has meant that only a small percentage of such authorized projects will ultimately become operational. In 2023, the second wave of renewables resulted in a few hundred MW of new photovoltaic capacity and 72 MW of wind power. 2024 saw a further increase in new projects, with large-scale wind farms expected to start construction in 2025.

A new trend has opened for the last year, and it related to the development of storage installations. I expect this trend to increase exponentially, with a number of installations to become operational by end of 2025 and furthermore in 2026.

As an energy-focused attorney, I have had the privilege of directly contributing to some of the most significant projects in Romania. I coordinated the legal and commercial upstream activities of the Neptun Deep project for several years and co-managed, alongside an ExxonMobil experienced counterpart, the efforts to secure the necessary onshore land for the project. Later, I was involved in the implementation of the Ratesti project, a 155 MW photovoltaic plant developed by Econergy, which became operational in 2023. This remains to date the largest operational photovoltaic project in South-Eastern Europe.

In conclusion, at present Romania continues to develop a range of highly regarded and impactful energy projects, with the RES sector showing promising prospects for the future.

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© Photo: Justin Iancu / Energy Industry Review

The EU has committed itself to a clean energy transition which will contribute to fulfilling the goals of the Paris Agreement on climate change and provide clean energy to all. Romania is also committed to support the European path. If you were to name the most relevant critical legal and regulatory aspect pertaining to energy and environment in Romania during the energy transition, what would that be?

Daniel Vlasceanu: In long-term projects, investors prioritize transparency, stability, and predictability, as they must undergo internal approval processes that assess the project from various perspectives, including economic, technical, and legal considerations. Romania is fortunate to have large energy investors with extensive expertise and resources. However, these investors often face multiple opportunities in various global regions, creating natural competition between projects. As such, if a project’s expected economic outcomes are altered due to regulatory changes, such as the introduction of a new tax, this can send a highly negative signal which could ultimately jeopardize the project’s viability.

Therefore, it is essential for our country to strengthen investors’ confidence by establishing a long-term, stable regulatory framework, developed through consultations with relevant stakeholders. Romania remains one of the last countries in the EU where renewable energy projects can still be developed, and the country has the potential to advance these projects rapidly within a highly supportive public and political environment. In this context, the recent adoption of the 2025-2035, with a 2050 outlook, Energy Strategy represents a positive step towards creating such necessary stable regulatory environment. We also underline the public consultations held this year regarding the regulatory framework that introduced the grid bond mechanism (ANRE Order no. 53/2024), as well as the ongoing consultation (at the time of this material) regarding the future regime for guarantees of origin. These initiatives are indicative of a signal of normalcy, and we hope that Romania will continue to enact policies and regulatory measures that restore the shaken trust of investors.

 

In your view, what are the major challenges during this process?

Daniel Vlasceanu: The world is changing, and the energy sector is at the core of the most relevant transformations in our society. Energy transition, as the name suggests, is a long-term process; during this process, one can expect substantial changes of the involved “technical” elements (without considering the inherent political changes): technical improvements, change of strategies at European/ global level, social adherence/ dismissal of certain policies, variations in the cost and/ or availability of equipment etc. At the domestic level, Romania will have to consider these aspects by reference to its available energy resources and the intended Energy Strategy just approved by the Government on 21 November 2024 (but not published in the Official Journal at the date of this material).

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© Photo: Justin Iancu / Energy Industry Review

How could Romania make the most of these challenges?

Daniel Vlasceanu: Where there is challenge there is always opportunity. For example, the fact that we had 5-6 years without new RES facilities developed and put into function was obviously an opportunity at the beginning of the 2020s. Romania should exploit its advantages compared to other countries: the geographical position of the country (i.e. close to areas with financial availabilities – such as Middle East of Asia- Pacific) coupled with affiliation to Nato, EU and OECD offers the guarantee of stability. At the same time, the public support for RES industry is unprecedented in Europe. Between our urban areas there is sufficient land surfaces that may allow for large developments for various RES projects (not just PV and wind, but also, for example, biomass or bio-methane). The relatively spread network of water accumulations may also facilitate photovoltaic projects (as already announced by Hidroelectrica on Olt River) or hydrogen projects (specifically along the Danube). Apart from incentivizing the battery production, Romania should also support manufacturing (or even only assembly) sites of various equipment required by the RES sector. Also, the human factor should be prioritized and enable for development (and reconversion) of specialised labour force that will be in such high demand in the following years when large projects will enter construction phase.

 

The Government adopted the Emergency Ordinance no 134/2024 for amending and supplementing the existing legislative framework, regarding both the Electricity and Natural Gas Law no. 123/2012 and the Law no. 220/2008 on the promotion of energy production from renewable sources. The Ordinance aims to create a solid and sustainable framework for the development of energy storage capacities. How do you appreciate this measure?

Daniel Vlasceanu: Storage is a must have – Romania cannot go another direction. There are too numerous reasons/ benefits to justify storage implementation. As such, removal of barriers for storage projects (especially some non-justified ones, such as double taxation) is only welcome. Also, the exemption from the obligation to purchase green certificates for the stored energy is another useful amendment.

We have also witnessed it on our activity since the end of 2023: we have constantly increased our portfolio of clients investing in various forms in the storage sector. On the basis of the signals received from the market, we believe the trend will continue at least during 2025.

 

You passed along some key issues like the structural changes to Romania’s grid capacity allocation rules. What would be the impact of these new rules on energy players?

Daniel Vlasceanu: The grid capacity auctions are expected to have a significant impact. This new mechanism will address a key element in the development process: capacity availability. one can anticipate an increase in the cost of capacity, land acquisition, and initial cost of development services. However, it remains to be seen whether the anticipated positive long-term effects will offset these cost increases.

In light of the substantial number of MWs authorized on paper (and bearing in mind that a large quantity of these will not translate into operational projects), particular attention must be given to the new recalculation rules for reinforcements, which have come into effect on 2 August 2024 under ANRE Order No. 53 (“Order No. 53”). Previously, it was established that once a project with a connection permit reflecting certain reinforcements (calculated considering all projects authorized or under authorization) was operational, the reinforcements would be recalculated, considering only the functional projects and other projects in the process of becoming operational. This recalculation generally resulted in a substantial reduction of the reinforcements, as many paper projects were excluded from the calculation. And, highly important, such recalculations were final (i.e. not subject to subsequent amendment).

Order No. 53 retains this approach till a certain point, where recalculation is performed once the project is built, taking into account only operational projects and those in the process of being commissioned. However, it also introduces a new provision: projects that are built after the first operational project but based on an earlier valid connection permit may cause curtailment of the initially built project. In other words, under the previous regulation, investors benefitted of the certainty that – once built and operational – their project would not be curtailed by subsequent projects, regardless of when they were constructed. Under the new regulation, investors face the added risk of curtailment by other projects that are constructed later and based on earlier connection permits. It is difficult to imagine any investor willingly assuming such a risk, which is why the vast majority of large projects that have been commissioned or are currently under construction benefit of connection permits that do not impose reinforcements.

We propose that the legislation be amended to allow for an additional recalculation before the commencement of construction. Such a recalculation would provide investors with a clearer understanding of the validity of existing connection permits, the status of operational projects, and the progress of projects under construction at that moment in time. This approach would reduce investment risk and, consequently, facilitate the deployment of large-scale investments.

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© Photo: Justin Iancu / Energy Industry Review

Speaking of the permitting process in Romania, what can we expect from the future?

Daniel Vlasceanu: At present, Romania is one of the most favourable jurisdictions in terms of (lack of) permitting barriers. In contrast to other countries where the issuance of connection permits is either restricted or where permitting procedures for achieving Ready to Build (RTB) status can take even more than four years, Romania’s permitting process, although not without its challenges—such as the absence of adopted rules for calculating the land area to be removed from agricultural use for photovoltaic projects on pastures—remains relatively affordable and efficient (for example, RTB status for utility-scale projects can be reached in less than 1.5 years).

I believe cybersecurity is the energy field is not yet sufficiently addressed as an utmost focus element (as in other countries). I hope that it will not be similar to the oil and gas sector (the most significant improvement in the regulatory framework originated from ugly accidents) and that we will be able to implement the necessary filters before a major accident takes place. We have already seen concerns from the legislative factors in this direction, we expect to have them soon reflected in normative acts.

While the future of the renewable energy sector remains uncertain—a situation that, I believe, is, ultimately, beneficial—there is hope that permitting times in Romania will continue to decrease, and permitting processes will become more streamlined. This could be achieved through the enhancement of local authorities’ expertise, further support from the EU driven by its need to rapidly reduce dependency on Russian gas, and strong political will to promote renewable energy deployment (provided it does not conflict with “local” interests).

 

With an eye to the previous year’s law amendments, how favourable and encouraging is Romania’s legal framework to green investments and not only? Are there any financial or regulatory incentives to promote these investments?

Daniel Vlasceanu: I am confident that the green energy sector, particularly in wind, photovoltaic (PV) energy, and certain green gases such as bio-methane, receives substantial support at the legislative level. Without delving into the political realm, it is my belief that despite the complicated outcome of the recent parliamentary elections, Romania’s trajectory toward advancing its green energy industry will persist. A clear indication of this is the recent removal of one of the major barriers to the Power Purchase Agreement (PPA) market: steps have been taken to enable the cross-border transferability of Romanian Guarantees of Origin (GOs). As of the time of drafting this document, a draft Emergency Ordinance is under public consultation, which would allow ANRE to apply for observer status with the Association of Issuing Bodies (AIB). The Ministry of Energy has projected that Romania could become a full AIB member by mid-2026, which would unlock cross-border transactions involving GOs and facilitate the creation of a Romanian GO market. This, in turn, could support the PPA market’s development. Currently, GOs are not priced in the PPAs under negotiation in Romania, as there is no established GO market, and Romanian GOs have no value, unlike in other countries where they are valued at several EUR/MWh. Once transferability is enabled, renewable energy producers may be able to leverage GOs as an additional revenue stream, as is the case in many other European countries.

Furthermore, after five years, the first CfD auction for 1.500 MW opened in early September 2024 and bids had to be submitted by 18 November 2024 at noon. Our law firm registered the very last bid, and we can confirm that the timeline was extremely tight to prepare the supporting file of such complex bid. It remains to be seen if the rest of the steps (as communicated by the Ministry) to be performed until the expected date of signing the CfD contract with the winning bidders (i.e. 25 January 2025) will be maintained or re-scheduled for a later date. The outcome of the initial CfD auction is expected to provide insight into the pricing and investor interest in future rounds. The Ministry of Energy has announced that in 2025, a further 3,500 MW (comprising both PV and onshore wind energy, no storage) will be supported in a second round of CfD auctions, which has the potential to serve as a significant incentive for renewable energy projects.

In addition, there have been several funding schemes available through the National Resilience and Recovery Plan (PNRR) and the Modernization Fund. The deadline for the final support scheme under the Modernization Fund for construction capital expenditures (CAPEX) for photovoltaic, wind, and hydroelectric projects was 22 August 2024. With a total budget of EUR 400 million, the maximum thresholds for funding were EUR 360,000 per MW for PV projects and EUR 700,000 per MW for wind projects. To date, no evaluation results have been announced.

The aforementioned are just some of the most significant support schemes available in 2024. Numerous similar schemes are expected for 2025, many of which will be based on the lessons learned from previous rounds. Given these developments, one cannot say the sector lacks available funding, which is a fortunate situation that investors should take advantage of.

 

Large RES projects need financing. How is this sector evolving and what are the main drivers here nowadays; what could be expected in the future?

Daniel Vlasceanu: The Romanian RES sector is witnessing a surge in interest from financial institutions, despite certain essential elements facilitating financing in other jurisdictions [such as the lack of power purchase agreements (PPAs)]. Banks, syndicates of banks, and investment funds of various types are increasingly attracted by the potential returns offered by RES projects. Several factors are driving this interest. Commercial banks and bank syndicates see renewable energy as a strategic investment aligned with environmental, social, and governance (ESG) mandates. Investment funds, including private equity and infrastructure-focused funds, are also eager to back projects that promise stable, long-term returns in an energy market poised for growth.

In the absence of PPAs, many projects rely on merchant-based financing models. This approach involves selling energy directly into the market rather than securing long-term off-take agreements. While this introduces a degree of market risk, it also offers flexibility and potentially higher returns. Financial institutions are responding by structuring innovative debt and equity solutions that mitigate risk while capitalizing on market opportunities.

Despite the enthusiasm, the lack of a formal PPA framework remains a significant hurdle. PPAs typically provide revenue certainty, making projects “more” bankable. However, with Romania’s renewable sector evolving rapidly and the government envisaging regulatory changes (as above explained), stakeholders are optimistic about the future availability of PPAs. In the interim, the robust demand for renewable energy and still high electricity prices continue to attract capital. Financial players are betting on the sector’s growth trajectory and the strategic importance of clean energy in meeting Romania’s decarbonization goals.

As a conclusion, the Romanian renewable energy market is at a pivotal moment. While the absence of PPAs presents challenges, the appetite for financing remains strong, driven by merchant models and innovative financial structures. As regulatory frameworks evolve, the sector is likely to unlock even greater investment potential, positioning Romania as a key player in the European green energy transition. 

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