THE NATIONAL ENERGY REGULATORY AUTHORITY (AUTORITATEA NAȚIONALĂ DE REGLEMENTARE ÎN DOMENIUL ENERGIEI)

Department for Energy Efficiency

REPORT

ON THE PROGRESS ACHIEVED IN THE FULFILMENT OF NATIONAL ENERGY EFFICIENCY OBJECTIVES

26 APRIL 2018

Str. Constantin Nacu, nr 3, Sector 2, Bucharest, post code: 020995 Tel. +40 213278100 Fax: +40 213124365 E-mail: [email protected]. Website: www.anre.ro

CONTENTS 1. INTRODUCTION 4

2. UPDATES OF THE MAIN LEGISLATIVE AND NON-LEGISLATIVE MEASURES IMPLEMENTED IN THE PREVIOUS YEAR (as per Part 1 point b of Annex 11 of Law No 121/2014 on energy efficiency, as subsequently amended and supplemented) 6

A. Primary legislation 6

B. Secondary legislation 6

3. MACROECONOMIC INDICATORS OF THE TREND IN ENERGY CONSUMPTION (as per Annex 11 Section 1(a) to Law No 121/2014 on energy efficiency, as subsequently amended and supplemented) 10

4. POSITION HELD BY ROMANIA IN EUROPE FROM THE VIEWPOINT OF ENERGY EFFICIENCY 19

4.1 Quantitative appraisals and qualitative estimations on energy efficiency in Romania and the possibilities for a prospective decrease in energy consumption should consider the current level of such consumption. 19

4.2 Energy productivity 21

5. MONITORING IN THE FIELD OF ENERGY EFFICIENCY 27

5.1 Monitoring of economic operators 27

5.2 The monitoring of localities with over 5 000 inhabitants 31

5.3 Monitoring of energy efficient equipment market 33

5.4 Monitoring the National Energy Efficiency Action Plan (NEEAP) 34

6. STATEMENT OF ENERGY AUDITS AND ACCESS TO THE SYSTEM OF AUTHORISATION OF ENERGY AUDITORS AND CERTIFICATION OF ENERGY MANAGERS 60

6.1 Certificates of energy managers 60

6.2 Authorisation of energy auditors 65

7. ACHIEVEMENT OF EU TARGETS 80

8. ANALYSIS OF THE TREND IN THE PATTERN OF CONSUMPTION OF ELECTRICITY AT FINAL CONSUMERS 89

9. DEGREE OF ENERGY INDEPENDENCE 90

10. ENERGY POVERTY 91

11. CONCLUSIONS 95

The paper includes 25 tables and 39 figures.

1. INTRODUCTION

On 18 July 2014, the Parliament of Romania adopted Law No 121/2014 on energy efficiency, as subsequently amended and supplemented, which was published in the Official Gazette, Part I No 574 of 1 August 2014. The law transposes Directive 2012/27/EU of the European Parliament and of the Council of 25 October 2012 on energy efficiency, amending Directives 2009/125/EC and 2010/30/EU and repealing Directives 2004/8/EC and 2006/32/EC, as published in the Official Journal of the European Union, series L No 315 of 14 November 2012. The law provides that the improvement of energy efficiency is a strategic objective of the national energy policy due to its major contribution to achieving food safety with energy, sustainable development and competitiveness, to saving primary energy resources and to reducing greenhouse gas emissions. The policy measures in the field of energy efficiency are applied throughout the entire chain: primary resources, production, distribution, supply, transport and final consumption.

An indicative target of reducing energy consumption by 19 % is set to be achieved by 2020 at national level.

In accordance with Article 3(2)(e) of Law No 121/2014 on energy efficiency, the Department for Energy Efficiency from ANRE has the following responsibility: “to send to the Government, by 30 April each year, as from 2015, for the purpose of informing the European Commission, a report on the progress achieved in the fulfilment of the national energy efficiency objectives, which is prepared in accordance with Annex 11, Part 1”. The provisions of Annex 11 to the law: The general reporting framework, Part I: The general framework for annual reporting is set out in Annex 1. This annual report is the third report prepared in accordance with the law and includes the information requested in Annex 11, Part I(a), (b), (c), (d) and (e) to Law No 121/2014 on energy efficiency. It is specified that Article 3(2)(e) and Annex 11 to Law No 121/2014 on energy efficiency transpose into Romanian law the provisions of Article 24(1) and of Annex 14 to Directive 2012/27/EU. ANRE received information from the European Commission on how to prepare annual reports. Moreover, meetings were held at European level under the project “Concerted Action - Energy Efficiency Directive”, in which participate the competent authorities of the EU Member States. During these meetings, the DG ENER representatives provided detailed information about the preparation of annual reports. Among other things were presented the definitions and method of calculation of the specific reporting indicators, which cannot be found explicitly in the statistical reports of the authorised institutions (INS at national level, EUROSTAT at European level). Moreover, the significance of indicators where multiple interpretations were possible was clarified. This report was prepared in accordance with the information and specifications received.

ANRE is part of the Energy Efficiency Committee in Brussels (the EED Committee) from DG Energy Unit C3, Energy Efficiency, of the EC, which is mandated to assist the European Commission by adopting measures implementing Directive 2012/27/EU, and to support it in its assessment and evaluation activity. This Committee serves as a forum for information and good practices exchange at EU level for the purpose of preparing working documents explaining the key provisions of Directive 2012/27/EU. In the communications sent to the Energy Efficiency Department of ANRE, DG ENER requested that the annual reports also include other indicators, which are not listed in Part I, point a of Annex 14, adding the note that this inclusion is voluntary. Account has been taken of this request insofar as possible. In order to enable the aggregation of results and comparisons, the representatives of the European Commission’s DG ENER recommended that all the Member States use the EUROSTAT database as a source of primary information in order to ensure uniform reporting. Under these conditions, primary information from the EUROSTAT database was used in the preparation of this Report.

2. UPDATES OF THE MAIN LEGISLATIVE AND NON-LEGISLATIVE MEASURES IMPLEMENTED IN THE PREVIOUS YEAR (as per Part 1 point b of Annex 11 to Law No 121/2014 on energy efficiency, as subsequently amended and supplemented)

A. Primary legislation • Government Decision No 129/2017 supplementing Article 8 of Government Decision No 1215/2009 laying down the criteria and conditions required for the implementation of the support scheme for promoting high-efficiency cogeneration based on the useful heat demand. Date: 16 March 2017. Official Gazette No 192/17 March 2017 • Government Emergency Order No 24/2017 amending and supplementing Law No 220/2008 establishing the system for promoting energy production from renewable energy sources and amending certain legislative acts. Official Gazette No 224/31/03/2017

B. Secondary legislation  Order No 103/2017 of ANRE amending Order No 95/2014 of the President of ANRE establishing the Energy Efficiency Department within the National Energy Regulatory Authority and designating its head. Date: 25.10.2017. Official Gazette No 847/26.10. 2017  Order No 53/2017 of ANRE approving the Regulation authorising legal persons conducting business involving assembly and operation of cost sharing systems for heat and hot water for consumption in condominium type buildings. Date: 22.6.2017. Official Gazette No 546/11.7.2017  Order No 77/2017 of ANRE approving the Regulation on the organisation and functioning of the green certificate market. Date: 18.8.2017. Official Gazette No 697/29.8.2017. It repealed Order No 60/2015 on 1 September 2017. It was amended by Order No 127/2017.  Order No 127/2017 of ANRE amending Order No 77/2017 approving the Regulation on the organisation and functioning of the green certificate market. Date: 22.12.2017. Official Gazette No 1031/28.12.2017  Order No 79/2017 of ANRE amending and supplementing the Regulation on the issuing of green certificates, as approved by Order No 4/2015 of ANRE. Date: 18.8.2017. Official Gazette No 683/23.8.2017  Order No 78/2017 of ANRE approving the methodology for establishing the annual static quantity of green certificates and the mandatory quotas of green certificates to be purchased. Date: 18.8.2017. Official Gazette No 686/24.8.2017. It repeals Order No 41/2016  Order No 110/2017 of ANRE establishing the estimated mandatory quota of green certificates to be purchased for 2018. Date: 12.12.2017. Official Gazette No 997/15 December 2017  Order No 31/2017 of ANRE amending Order No 145/2014 implementing smart electricity measurement systems. Date: 25.4.2017. Official Gazette No 305/28.5.2017.

 Order No 17/2017 of ANRE amending Order No 145/2014 implementing smart electricity measurement systems. Date: 24.3.2017. Official Gazette No 216/29.3.2017  Order No 124/2017 of ANRE amending and supplementing Order No 28/2014 approving the Framework Contract between the administrator of the support scheme and the payer of the contribution for the collection of the contribution for high- efficiency cogeneration, and the Framework Contract between the producer of electricity and heat in high-efficiency cogeneration and the administrator of the support scheme for the payment of the bonus/non-granted bonus/regularisation ante- overcompensation and the return of the undue bonus/overcompensation  Order No 123/2017 of ANRE approving the contribution for high-efficiency cogeneration and certain provisions on the invoicing thereof. Date: 20.12.2017. Official Gazette No 1023/22/12/2017. It repeals Order No 119/2013  Order No 105/2017 of ANRE amending and supplementing the procedure for endorsing new projects or projects involving the refurbishing of cogeneration plants, as approved by Order No 115/2013. Date: 14.11.2017. Official Gazette No 933/27.11.2017  Order No 99/2017 of ANRE approving the reference bonus values for the electricity produced from high-efficiency cogeneration and the reference prices for the heat from cogeneration, which are applicable in 2018. Date: 20.10.2017. Official Gazette No 853/30.10.2017. It repeals Order No 78/2016  Order No 98/2017 of ANRE approving the reference price values for the heat supplied under SACET from central heating plants with cogeneration units, which are not covered by the support scheme for the promotion of high-efficiency cogeneration, as applicable in 2018. Date: 20.10.2017. Official Gazette No 853/30.10.2017. It repeals Order No 69/2016  Order No 100/2017 of ANRE amending and supplementing the methodology for the determination and monitoring of the contribution for high-efficiency cogeneration, as approved by Order No 117/2013 of ANRE. Date: 20.10.2017. Official Gazette No 848/26.10.2017  Order No 97/2017 of ANRE approving the reference price for the electricity produced in high-efficiency cogeneration, as applicable in 2018 to producers of electricity and heat from cogeneration, which are entitled to a bonus. Date: 20.10.2017. Official Gazette No 848/26.10.2017. It repeals Order No 68/2016.  Order No 95/2017 of ANRE amending the methodology for the determination of prices in heat supplied under SACET from central heating plants with cogeneration units, which are not covered by support schemes for the promotion of high-efficiency cogeneration, as approved by Order No 111/2014. Date: 16.10.2017. Official Gazette No 822/18.10.2017  Order No 94/2017 of ANRE amending the methodology for the determination and adjustment of prices in electricity and heat produced and supplied from cogeneration units, which are covered by the support scheme, and of the bonus for high-efficiency cogeneration, as approved by Order No 15/2015. Date: 16.10.2017. Official Gazette No 822/18.10.2017  Order No 86/2017 of ANRE amending and supplementing the methodology for determining and monitoring the overcompensation of the activity of production of

electricity and heat from high-efficiency cogeneration, which is entitled to the bonus type support scheme approved by Order No 84/2013 of ANRE. Date: 26.9.2017. Official Gazette No 769/28.9.2017  Order No 81/2017 of ANRE amending the Regulation for qualifying the production of useful electricity and heat in high-efficiency cogeneration, as approved by Order No 114/2013. Date: 29.8.2017. Official Gazette No 721/6.9.2017  Order No 80/2017 of ANRE amending and supplementing the Regulation for determining the method of collection of the contribution for high-efficiency cogeneration and of payment of the bonus for the electricity produced in high- efficiency cogeneration, as approved by Order No 116/2013. Date: 23.8.2017. Official Gazette No 721/6.9.2017  Order No 52/2017 amending Order No 119/2013 approving the contribution for high- efficiency cogeneration and certain provisions on the invoicing thereof. Date: 22.6.2017. Official Gazette No 418/26.6.2017.  Order No 51/2017 of ANRE amending Order No 69/2016 of ANRE approving the reference price values for the heat supplied under SACET from central heating plants with cogeneration units, which are not covered by support schemes for the promotion of high-efficiency cogeneration. Date: 22.6.2017. Official Gazette No 481/26.6.2017.  Order No 43/2017 of ANRE amending Order No 78/2016 approving the reference bonus values for the electricity produced from high-efficiency cogeneration and the reference prices for the heat from cogeneration, which are applicable in 2017. Date: 13.6.2017. Official Gazette No 461/20.6.2017.  Order No 44/2017 of ANRE amending and supplementing the methodology for the determination of prices in heat supplied under SACET from central heating plants with cogeneration units, which are not covered by support schemes for the promotion of high-efficiency cogeneration, as approved by Order No 111/2014 of ANRE. Date: 13.6.2017. Official Gazette No 450/16.6.2017.  Order No 39/2017 of ANRE amending and supplementing the methodology for the determination and adjustment of prices in electricity and heat produced and supplied from cogeneration units, which are covered by the support scheme, and of the bonus for high-efficiency cogeneration, as approved by Order No 15/2015. Date: 29 May 2017. Official Gazette No 412/31.5.2017  Decision No 1111/2017 of the Energy Efficiency Department amending and supplementing Decision No 2794/2014 of the Director of the Energy Efficiency Department approving the Regulation on the certification of energy managers and of companies providing energy services, and the Regulation authorising energy auditors in the relevant industry. Date: 26.7.2017. Official Gazette No 655/09.8.2017  Decision No 860/2017 of the Director of the Energy Efficiency Department approving the templates for the statement of annual total energy consumption and for the energy consumer’s energy assessment questionnaire. Date: 13.6.2017. Official Gazette No 514/4.7.2017  Decision No 859/2017 of the President of ANRE approving Decision No 1765/2013 of ANRE approving the templates for the statement of annual total energy consumption and for the energy consumer’s energy assessment questionnaire. Date: 13.6.2017 Official Gazette No 514/4.7.2017.

 Order No 7195 of 19 December 2017 of MDRAPFE amending Annex 1 to Order No 2822/2017 of the Deputy Prime Minister, the Minister for Regional Development, Public Administration and European Funds approving the National Programme for the increase of energy efficiency in residential blocks, with funding in 2017  Order No 7067 of 7.12.2017 of MDRAPFE amending Annex 1 to Order No 2822/2017 of the Deputy Prime Minister, the Minister for Regional Development, Public Administration and European Funds approving the National Programme for the increase of energy efficiency in residential blocks, with funding in 2017  Order No 6394/2017 of MDRAPFE amending Annex 1 to Order No 2822/2017 of the Deputy Prime Minister, the Minister for Regional Development, Public Administration and European Funds approving the National Programme for Energy Efficiency Increase in Residential Blocks, with funding in 2017  Order No 2822 of 27.4.2017 of MDRAPFE approving the National Programme for Energy Efficiency Increase in Residential Blocks, with funding in 2017 - Annexes 1 and 2  Order No 857/2017 of the Minister for the Environment amending and supplementing the Guidelines for funding the Programme for the reduction of greenhouse gas emissions in transport by promoting the infrastructure for clean and energy-efficient road transport vehicles: reloading stations for electric vehicles and plug-in hybrid electric vehicles, as approved by Order No 1559/2016 of the Minister for the Environment, Waters and Forestry.  Order No 1364/2017 of the Minister for the Environment amending and supplementing the Guidelines for funding the Programme for the reduction of greenhouse gas emissions in transport by promoting clean and energy-efficient road transport vehicles, 2017-2019, as approved by Order No 660/2017 of the Deputy Prime Minister and of the Minister for the Environment.  Order No 660 of 24 April 2017 of the Minister for the Environment approving the Guidelines for funding the Programme for the reduction of greenhouse gas emissions in transport, by promoting clean and energy-efficient transport vehicles , 2017-2019, as published in Official Gazette of Romania No 293 of 25 April 2017 - UPDATED in AUGUST 2017.  The Guidelines for funding, which is pending public debate for the Programme for the reduction of greenhouse gas emissions in transport by promoting clean and energy- efficient road transport vehicles, (Rabla Plus Programme) 2017-2019, as approved by Order No 660/2017 of the Deputy Prime Minister and of the Minister for the Environment.  Instruction No 233 of 15 May 2017 of the President of the Environmental Fund Administration (Administrația Fondului pentru Mediu) on the amount allocated under the Programme for fostering the renewal of the national vehicle fleet and the Programme for the reduction of greenhouse gas emissions in transport by promoting clean and energy-efficient road transport vehicles.  Instruction No 716 of 29 November 2017 amending Instruction No 233/15 May 2017 of the President of the Environmental Fund Administration on the extension of the period of application under the Programme for fostering the renewal of the national vehicle fleet and the Programme for the reduction of greenhouse gas emissions in transport by promoting clean and energy-efficient road transport vehicles.

 Instruction No 707 of 21 November 2017 of the President of the Environmental Fund Administration amending Instruction No 233/15 May 2017 regarding the amounts allocated under the Programme for fostering the renewal of the national vehicle fleet  Instruction No 671 of 13 October 2017 of the President of the Environmental Fund Administration amending Instruction No 233/15 May 2017 regarding the amounts allocated under the Programme for fostering the renewal of the national vehicle fleet  Instruction No 648 of 27 September 2017 of the President of the Environmental Fund Administration on the extension of the period under the Programme for fostering the renewal of the national vehicle fleet and the Programme for the reduction of greenhouse gas emissions in transport by promoting clean and energy-efficient road transport vehicles.  Instruction No 241 of 22 May 2017 of the President of the Environmental Fund Administration approving the amendment of the De Minimis Aid Scheme for the Programme for fostering the renewal of the national vehicle fleet  Instruction No 232 of 12 May 2017 of the President of the Environmental Fund Administration on the organisation of the period of application under the Programme for fostering the renewal of the national vehicle fleet and the Programme for the reduction of greenhouse gas emissions in transport by promoting clean and energy- efficient road transport vehicles.  Instruction No 484 of 27 September 2016 of the President of the Environmental Fund Administration regarding the opening of the period under the Programme for the deployment of renewable energy powered heating systems, including replacing or upgrading classical heating systems; beneficiaries are administrative-territorial units, public institutions and religious establishments.  Instruction No 483 of 27 September 2016 of the President of the Environmental Fund Administration regarding the opening of the period under the Programme for the deployment of renewable energy powered heating systems, including replacing or upgrading classical heating systems; beneficiaries are natural persons.  Order No 2425/2016 of 23 December 2016 of the Environmental Fund Administration (AFM) approving the Guidelines for funding the Programme for the performance of energy efficiency works; beneficiaries are natural persons.  Order No 2228/2016 of 21 November 2016 of the Environmental Fund Administration (AFM) approving the Guidelines for funding the Programme for the performance of energy efficiency works; beneficiaries are legal persons.

3. MACROECONOMIC INDICATORS OF THE TREND IN ENERGY CONSUMPTION (as per Annex 11 Section 1(a) to Law No 121/2014 on energy efficiency, as subsequently amended and supplemented)

In accordance with Annex 11 Section I to Law No 121/2014 on energy efficiency, as subsequently amended and supplemented, annual reports account for the basis in following up on the progress achieved in regard to the national targets for 2020. They must include, as minimum information, an estimate of several indicators (as listed under the law) for the year preceding the last year ended. This report should thus include information for

2016. It is also provided that, in the sectors where energy consumption is kept stable or indicates a certain growth level, the underlying causes are reviewed and the assessment is included with the estimates. Table 1 shows the values recorded in 2016 for the indicators listed in Annex 11 Section I(a) to the law. In order to enable comparisons and to identify trends, values from the period 2011-2015 were also listed. The designation of indicators and the order of their presentation are consistent with the designation and order in Annex 11 Section I(a) to the law. Table 1 No Indicator m.u. 2016 2015 2014 2013 2012 2011 primary energy thousand 1 31 259 31 304 30 637 30 970 33 644 34 830 consumption toe final energy thousand 2 consumption, of 22 280 21 892 21 721 21 834 22 801 22 771 toe which: industry thousand 2.1 6 318 6 472 6 471 6 310 6 787 7 105 toe transport thousand 2.2 6 029 5 577 5 473 5 354 5 448 5 349 toe households thousand 2.3 7 415 7 375 7 401 7 722 8 061 7 860 toe services thousand 2.4 1 806 1 762 1 768 1 785 1 763 1 774 toe agriculture thousand 2.5 453 458 421 469 498 434 toe Million gross added value, of 3 EUR 135 078 128 658 124 193 120 286 115 534 113 894 which: 2010 Million 3.1 industry EUR 50 299 47 183 44 526 43 097 41 478 47 253 2010 Millions of 3.2 services EUR 66 007 63 049 61 320 59 475 58 759 47 891 2010 total disposable Not millions of 4 income of applicabl 117 259 108 418 101 505 73 860 76 615 EUR households e * in prices of Millions 2010 of EUR Gross 151 054 144 107 138 599 134 462 129 876 128 287 5 domestic 2010 product in current Millions 169 771 160 313 150 357 144 253 133 511 132 590 prices of EUR

At the parity of millions of 334 232 322 690 302 405 291 491 287 710 273 507 purchasing EUR PPP power

GDP growth rate compared to the % 4.8 4.0 3.1 3.5 1.2 2.0 6 previous year thousand production of 3 280.8 3 460.3 3 317.2 3 322.5 3 788.5 3 945.1 7 electricity based on toe production of heat TWh 38.1 40.2 38.5 38.6 44.0 45.8 production of thousand 778.5 838.7 958.5 1 029.8 1 245.3 1 288 electricity based on toe 8 combined production of TWh 9.0 9.7 11.1 12.0 14.5 15.0 electricity and heat production of heat thousand 9 based on production 1 833.5 1 830.0 1 862.3 2 025.4 2 133.9 2 361.3 toe of thermal energy production of heat based on combined electricity and heat thousand 10 1 502.5 1 515.1 1 537 1 648.1 1 729.5 1 928.6 production plants, toe including industrial residual heat consumption of fuel thousand 11 11 for production of 10 542.9 10 760 10 943.1 12 798.1 13 677 toe 134.4 heat millions of passengers - 12 passengers 23 740 22 630 23 326 21 510 21 489 20 621 kilometres - km millions of 13 tons-kilometres 74 863 65 863 59 159 59 209 55 654 52 477 tons-km thousands 19 19 20 14 population of 19 760.3 20 020.0 20 096.0 870.6 947.3 199.0 inhabitants losses in transport thousand 15 and distribution 1 073.4 1 077.1 1 068.8 1 116.7 1 335.0 1 363.0 toe networks heat produced in the plants supplying thousand 16 330.9 314.9 325.3 377.5 404.4 432.6 district heating toe networks fuel consumption in the plants supplying thousand 17 373.5 476.9 504.5 572.7 459.2 611.9 district heating toe networks Source: EUROSTAT

*the value is not available on the date of this report (N/A) In order to provide a more comprehensive picture of the endeavours to increase energy efficiency at national level and on the results obtained, the values of other energy indicators at macro-economic level were also calculated (primary energy intensity, final energy intensity etc.). The values of these indicators are listed in Table 2. Table 2 No Indicator MU 2016 2015 2014 2013 2012 2011 1 Gross internal consumption of thousand 32 402.0 32 429.9 32 157.6 32 427.7 35 373.2 36 558.4 primary energy toe 2 Energy GDP calculated EUR 4.7 4.4 4.3 4.1 3.7 3.5 productivity in EUR 2010 2010/kgoe GDP calculated in EUR at the EUR 10.3 10.0 9.4 9.0 8.1 7.5 purchasing power PPP/kgoe parity 3 Primary GDP calculated in kgoe/EUR 0.214 0.225 0.232 0.241 0.272 0.285 energy EUR 2010 2010 intensity GDP calculated in kgoe/EUR 0.191 0.202 0.214 0.225 0.265 0.275 EUR GDP calculated in EUR at the kgoe/EUR 0.097 0.100 0.106 0.111 0.123 0.134 purchasing power PPP parity 4 Final energy GDP calculated in kgoe/EUR 0.147 0.152 0.157 0.162 0.176 0.177 intensity EUR 2010 2010 GDP calculated in kgoe/EUR 0.131 0.136 0.144 0.151 0.171 0.172 EUR GDP calculated in EUR at the kgoe/EUR 0.066 0.068 0.072 0.075 0.079 0.083 purchasing power PPP parity 5 Primary energy consumption per toe/capita 1.582 1.575 1.536 1.547 1.674 1.724 inhabitant 6 Final energy consumption per toe/capita 1.127 1.102 1.089 1.091 1.135 1.127 inhabitant 7 Final energy consumption of toe/capita 0.375 0.371 0.371 0.386 0.401 0.389 households per capita Source: EUROSTAT The main observations and comments on the values of these indicators are the following: The primary energy consumption (row 1 of Table 1) is a fundamental indicator in the monitoring of progress achieved overall at EU level and by each Member State in their reaching of targets, as set under Directive 2012/27/EU. This indicator is defined as the difference between the gross consumption of primary energy and the non-energy consumption of all the energy carriers (e.g. natural gas used as raw material in the chemical industry). The values are shown in a graph in Figure 1.

Primary energy consumption dropped by 0.14 % in 2016 compared to the previous year, considering the GDP increase by 4.8 %. Compared to 2011, primary energy consumption dropped by 10.3 %, whereas GDP increased by 17.8 %.

In order to provide a more comprehensive picture of the national trends, row 1 of Table 2 also presents the trend in gross primary energy consumption, noting that it is used in the calculation of the “primary energy intensity” indicator. The trend in this indicator is virtually similar to that of primary energy consumption.

Figure 1

Source: EUROSTAT RO EN Evoluția consumului intern brut de energie Trend in the gross domestic primary energy primară și a consumului de energie primară consumption and primary energy consumption mii tep thousand toe consum de energie primară primary energy consumption consum intern brut de energie primară gross domestic primary energy consumption

Final energy consumption (row 2 of Table 1) increased by 1.8 % in 2016, compared to the previous year, and the GDP amount was higher by 4.8 %.

The low temperatures in the winter of 2016 led to an increase in energy consumption for heating, such consumption having a significant share, particularly in households and the services sector. The ‘heating degree days’ indicator - “The number of degrees-days represents a characteristic of the climate-micro-climate correlation for constructions, depending on their specificity and the climate and geographical area where they are located.” (for Romania, according to Eurostat) was 2 918 in 2016, compared to the previous year, i.e. 2 786. It is obviously inferred that final energy consumption increased on the background of an increase in energy efficiency in the final consumption sectors (Figure 2). Thus: - Final consumption in the industry dropped by 3.4 %, whereas the gross value added (GVA) increased by 6.6 %. - Final consumption in services increased by 2.5 %, but GVA increased by 4.7 % - Household consumption was higher by (only) 0.4 %; - Energy consumption in transport increased by 8.1 % due to an increase in the amount of activities performed; thus, the amount of transported goods increased by 13.7 % compared the previous year. Figure 2

Source: EUROSTAT RO EN Evoluția consumului final de energie Trend in final energy consumption mii tep thousand toe consum final de energie final energy consumption

Gross domestic product (GDP) is expressed in EUR at a first stage, depending on its value in the national currency and its parity to the euro. Certain corrections are frequently made and the most common ones are: - removing the influence of the variation in prices on the domestic market (calculated in euro) with reference to a certain year chosen as reference year (2010) with expression of GDP in euro for 2010; - introducing the influence of the population's purchasing power and using the purchasing power parity (PPP) between the national currency and EUR, with expression of GDP in EUR PPP. The GDP values in EUR for 2010, EUR and EUR PPP (from the EUROSTAT database) are listed in Table 1 and Figure 3. The same approach was used in Table 2 listing the energy efficiency indicators. Figure 3

Source: EUROSTAT RO EN Produsul intern brut al României în perioada Gross domestic product of Romania in the 2011-2016 period 2011-2016 Milioane euro 2010 Millions of EUR in 2010 Milioane euro Millions of EUR Milioane euro PPC Millions of EUR PPP

For developed countries, such corrections, more specifically the choice of a measurement unit in the calculation of GDP has a relatively low influence on the final result.

For Romania, this choice influences considerably the values of macro-economic energy efficiency indicators and the qualitative estimations thereof. Energy productivity is an indicator recently introduced by EUROSTAT in order to characterise the efficiency in energy use. Its values are listed in the section entitled “Sustainable Development indicators (NEW) - Goal 7 - Affordable and clean energy”. Considering the novelty of this indicator, below is given its description by EUROSTAT: Short Description: The indicator measures the amount of economic output that is produced per unit of gross inland energy consumption. The gross inland energy consumption is the primary energy consumption (PEC) plus energy carriers employed for non-energy purposes. The economic output is either given as in the unit of Euros in chain-linked volumes to the reference year 2010 at 2010 exchange rates or in the unit PPS (Purchasing Power Standard). The former is used to observe the evolution over time for a specific region while the latter allows comparing Member States in a given year. The following are observed: - By definition, the “Energy productivity” indicator is the reverse of the “Primary energy intensity” indicator.

It is explicitly noted below that: - the values calculated in “EUR 2010/kg.ep” are used (only) to examine the trend of energy productivity in time (more specifically, the efficiency in use at macro-economic level) for a certain region/country - for international comparisons on energy productivity in a given year, the values calculated in “EUR PPP/kg.ep” are used.

The values of this indicator for Romania, which are taken from the EUROSTAT database, are listed in row 4 of Table 2.

In the analysed period (2011-2016), energy productivity in Romania (in EUR 2010/kg.oe) increased steadily by 34 %. At EU-28 level, in the same period, there was a 9 % increase.

Energy productivity at the level of national economy is first of all a macro-economic parameter. Its values depend both on the technical performances of energy use and (particularly) on the structure and performances of the national economy. The ongoing increase and the importance of energy productivity values were enabled by technical measures of increase in the efficiency of energy use and, to a large extent, by structural economic measures The intensity of primary energy (Energy intensity of the economy) is the traditional indicator used at national and international level to characterise the efficiency in the use of energy at a macro-economic level. However, EUROSTAT has recently prepared a new list

of sustainable development indicators - “Sustainable Development indicators (NEW) – including the new “Energy Productivity” indicator referred to above. The EUROSTAT database (still) contains the archive of the “Sustainable Development indicators (OLD)” section, which also includes the “Primary Energy Intensity” indicator. Considering its traditional nature and the fact that specialists and summary and decision-making bodies are familiar with it, Table 2 also presented the values of this indicator. There is a steady and strong decrease in energy intensity, irrespective of the method of calculation, more specifically the measurement unit used (Figure 4). This tendency characterises the entire development following 1992. Figure 4

Source: EUROSTAT RO EN Intensitatea energiei primare la nivelul Primary energy intensity at economy level economiei tep/1000 Euro 2010 toe/EUR 1 000 in 2010 tep/1000 Euro toe/EUR 1 000 tep/1000 Euro ppc toe/EUR 1 000 PPP

The value of this indicator depends greatly, for Romania, on the expression of GDP and affects the comparisons made with the international status quo. Irrespective of the method of calculation, more specifically the measurement unit used, primary energy intensity has a steady decreasing tendency. In the period 2011-2016, primary energy intensity dropped by 24.9 % if calculated in toe/EUR 1 000 for 2010. This decrease is higher than the EU mean value. According to EUROSTAT, the primary energy intensity at EU-28 level, as calculated in toe/EUR 1 000 for 2010, decreased by 11.5 % in the analysed period.

4. POSITION HELD BY ROMANIA IN EUROPE FROM THE VIEWPOINT OF ENERGY EFFICIENCY

4.1 Quantitative appraisals and qualitative estimations on energy efficiency in Romania and the possibilities for a prospective decrease in energy consumption should consider the current level of such consumption.

Romania has the lowest primary energy consumption value per capita in the 28 EU Member State (1 582 toe/capita in 2016), almost twice lower than the EU-28 average in the same year (2 997 toe/capita) (Figure 5). Under these conditions, primary energy consumption per capita still reveals a decreasing tendency, with 91.7 % in 2016 compared to the value in 2011. Energy efficiency policies have had a significant contribution to this development.

Figure 5

Source: EUROSTAT RO EN Consumul de energie primară pe locuitor în Primary energy consumption per capita in anul 2016 2016 tep/locuitor toe/capita Consum energie primară/locuitor Primary energy consumption/capita Consum energie primară/locuitor-media Primary energy consumption/capita-EU-28 UE28 average Belgia Belgium Bulgaria Bulgaria

Cehia Czech Republic Danemarca Denmark Germania Germany Estonia Estonia Irlanda Ireland Grecia Greece Spania Spain Franta France Croatia Croatia Italia Italy Cipru Cyprus Letonia Latvia Lituania Lithuania Luxemburg Luxembourg Ungaria Hungary Malta Μalta Olanda Netherlands Austria Austria Polonia Poland Portugalia Portugal Romania Romania Slovenia Slovenia Slovacia Slovakia Finlanda Finland Suedia Sweden Marea Britanie Great Britain

Without performing an exhaustive review, we will present certain energy consumption values in the household sector compared to the European status quo. According to the data in Table 1, the household sector has the highest rate in final energy consumption at national level (34.5 % in 2011 and 33.2 % in 2016). This leads to the idea that efforts need to be made in this sector to increase energy efficiency. This idea is however common to all the EU Member States. In Romania, energy consumption in the household sector per capita, as recorded in 2016 (0.375 toe/capita), accounted for 71.5 % compared to the EU-28 average. Differences from Northern countries are normal and are given by the differences in weather conditions.

However, differences have also been recorded in relation to countries with similar geographical weather conditions or even milder conditions (Italy, Slovenia, Croatia etc.). Differences grow significantly and they reach limit levels if we are to consider the electricity consumption in the household sector per capita. Romania has the lowest electricity consumption per capita in the EU (i.e. 0.0525 toe/capita in 2016), which is 2.6 times lower than the EU-28 average (i.e. 0.1362/capita). The fact that, in the past years, a decrease has been recorded in energy consumption at national level in the household sector as well is the result of the energy efficiency policy and of the programmes implemented (thermal insulation of residential blocks, labelling of household appliance receivers etc.).

4.2 Energy productivity

According to the abovementioned EUROSTAT statements, for international comparisons the value of the indicator expressed in EUR PPP/kgoe is used. The values of this indicator in 2016 for the 28 EU Member States are listed in Figure 6. In 2016, the “Energy Productivity” indicator had, for Romania, the value of EUR 10.3 PPP/ kgoe, which is higher than the average of the EU-28 (i.e. EUR 9.1 PPP/ kgoe).

Figure 6

Source: EUROSTAT

RO EN Productivitatea energiei în anul 2016 Energy productivity in 2016 Euro PPC/ kgoe EUR PPP/ kgoe Productivitatea energiei Euro PPC/ kgoe Energy productivity EUR PPP/ kgoe Media UE 28 EU-28 average Belgia Belgium Bulgaria Bulgaria Cehia Czech Republic Danemarca Denmark Germania Germany Estonia Estonia Irlanda Ireland Grecia Greece Spania Spain Franta France Croatia Croatia Italia Italy Cipru Cyprus Letonia Latvia Lituania Lithuania Luxemburg Luxembourg Ungaria Hungary Malta Μalta Olanda Netherlands Austria Austria Polonia Poland Portugalia Portugal Romania Romania Slovenia Slovenia Slovacia Slovakia Finlanda Finland Suedia Sweden Marea Britanie Great Britain

In 2016, the “Energy Productivity” indicator had, for Romania, the value of EUR 10.3 PPP/kgoe, which is higher than the average of the EU-28 (i.e. EUR 9.1 PPP/kgoe). Romania is ranked sixth in a rank order list of the EU Member States.

The Department for Energy Efficiency of ANRE has pleaded for several years (including in the previous Progress Reports) for international comparisons by using macro- economic energy efficiency indicators calculated with GDP at the purchasing power parity. This viewpoint was also shared by other prestigious international organisations, among which the World Energy Council. We consider that the current view of EUROSTAT, which is materialised in the introduction of the new indicator, and the abovementioned methodological indications engender a much more accurate reflection of the realities pertaining to each state.

4.3 Primary energy intensity is considered to be the most representative synthetic indicator of the efficiency in the use of energy at national level. The value of this indicator depends to a great extent, for Romania, by the method of calculation and expression of the GDP. EUROSTAT presents the GDP values in the period 1975-2015 for all the EU Member States by using a variety of measurement units (current price EUR, 2005 EUR, 2010 EUR, EUR PPP, national currencies etc.) EUROSTAT also presents the values of gross primary energy consumption in the same period. Among the multiple possible variants, EUROSTAT shows the intensity of primary energy expressed (only) in kgoe/2010 EUR without any indication of the scopes (or restrictions). The respective values are shown in Figure 7. Figure 7

Source: EUROSTAT RO EN Kgep/Euro 2010 Kgoe/2010 EUR Intensitatea energiei primare Primary energy intensity Intensitatea energiei primare-media UE28 Primary energy intensity - the EU-28 average Belgia Belgium Bulgaria Bulgaria Cehia Czech Republic Danemarca Denmark Germania Germany Estonia Estonia Irlanda Ireland Grecia Greece Spania Spain Franta France Croatia Croatia Italia Italy Cipru Cyprus Letonia Latvia Lituania Lithuania

Luxemburg Luxembourg Ungaria Hungary Malta Μalta Olanda Netherlands Austria Austria Polonia Poland Portugalia Portugal Romania Romania Slovenia Slovenia Slovacia Slovakia Finlanda Finland Suedia Sweden Marea Britanie Great Britain

Please note that for the (new) “Energy Productivity” indicator (the reverse of the “Primary Energy Intensity”), it is indicated that, for international comparisons, the values with GDP calculated at PPP are to be used. Such a specification does not exist in the traditional indicator. Under these conditions, we opted for international comparisons by using also the “Primary Energy Intensity” indicator, as calculated in kgoe/2010 EUR. The primary energy intensity for Romania (0.2145 kgoe/2010 EUR) was 1.81 times higher than the EU-28 average in 2016 (0.1186 kgoe/EUR 1 000 in 2010). The value of the respective ratio has a steady decreasing trend and this is unquestionably a positive phenomenon. The analysis of the data revealed that the highest energy intensity values (as calculated in 2016) were recorded in:  Bulgaria (0.4226 kgoe/2010 EUR),  Estonia (0.3459 kgoe/2010 EUR). They are followed by several countries in our geographical area with energy intensities similar to that in Romania:  The Czech Republic (0.2390 kgoe/2010 EUR),  Poland (0.2314 kgoe/2010 EUR),  Hungary (0.2314 kgoe/2010 EUR),  Romania (0.2145 kgoe/2010 EUR),  Slovakia (0.2089 kgoe/2010 EUR),  Lithuania (0.2037 kgoe/2010 EUR).  Latvia (0.2029 kgoe/2010 EUR).

Romania pertains thus to the group of former Socialist countries still paying a tribute to the economic structures inherited from the period of centralised economy. The significant element in this context is the fact that the primary energy intensity at the economy level is steadily decreasing, which is a strategic objective pursued at all levels. The fact that this indicator is (still) higher than the EU-28 average is the result of calculation hypotheses and the change in these hypotheses may lead to different results. Based on the primary information provided by EUROSTAT, the team which prepared the report calculated the primary energy intensity value for Romania and the EU-28 average by using various measurement units. The results are given in Figure 8.

Figure 8

Source: EUROSTAT RO EN Intensitatea energiei primare pentru Romania Primary energy intensity for Romania and the si media UE28 EU-28 average

For Romania, the choice of the measurement unit for the calculation of GDP has a decisive influence on the value of the energy intensity. Thus, primary energy intensity for Romania, as calculated in kgoe/2010 EUR, is 2.5 times higher than the version according to which the same indicator is calculated for the same country and for the same year in kgoe/EUR PPP.

For developed countries, such differences are insignificant and it explains the minor differences between the EU-28 average values calculated with different measurement units. It explains that the value of the “Primary Energy Intensity” indicator should be used with certain caution, particularly in international comparisons. We consider that the indication of the measurement unit in which this indicator is expressed is an obligation. Many renowned international organisations (e.g. World Energy Council) and specialist bodies make various additional corrections to the calculation of primary energy

intensity when they make international comparisons and when they want to outline the actual progress achieved in regard to energy efficiency. In the period 2007-2015, the energy intensity of the industry in Romania decreased by approximately 42 % due to the measures adopted in order to increase energy efficiency and to the restructuring in the crisis period. Considering that the energy intensity of the Romanian economy is still a little below the EU average (for the comparison made in kgoe/EUR PPP), the policies and measures for energy efficiency increase need to be further implemented in order to ensure sustainable development.

5. MONITORING IN THE FIELD OF ENERGY EFFICIENCY

The work of the Directorate for Energy Efficiency Monitoring (DMEE) of the Energy Efficiency Department (DEE) was focused on four main coordinates:  Monitoring compliance with Law No 121/2014, as subsequently amended and supplemented, for the main categories of energy consumers: 5.1 Economic operators 5.2 Local authorities  Checking compliance with the provisions of directives and regulations providing for the market supervision work: 5.3 Monitoring the energy consuming equipment market.  Monitoring energy savings achieved through the implementation of the National Energy Efficiency Action Plan (NEEAP) 5.4 Monitoring the NEEAP Considering that in 2015 the Integrated Information System software platform (MIS) of ANRE was extended by the component intended for energy consumer monitoring, in 2017 DMEE continued to carry out the implementation of this platform.

5.1 Monitoring of economic operators The monitoring activity was performed based on the Annual Statements of Total Energy Consumption and the Energy Assessment Questionnaires completed by the economic operators in accordance with Article 9(4) of Law No 121/2014 on energy efficiency, as subsequently amended and supplemented. Considering that these operators have the obligation to submit the documents with the statistical data on energy consumption from the previous year, by 30 April each year, the data presented in this chapter pertain to 2016, the deadline for completion of this report overlapping with that by which the Energy Efficiency Department receives the abovementioned documents. Thus, in 2016, 719 economic operators with large consumption of 1 1000 toe/year were subject to monitoring, of which: - final energy consumers with over 50 000 toe/year: 34 (5.16 %) - final energy consumers between 5 000 and 50 000 toe/year: 188 (28.53%)

- final energy consumers between 1 000 and 5 000 toe/year: 437 (66.31%) Energy management for 2016 at final energy consumers with annual consumption of energy resources above 1 000 toe was provided by 443 energy managers attested by ANRE, 19 authorised natural persons (PFA) and 53 companies providing energy services authorised by ANRE. The coverage rate of certified and authorised energy management is 96.2 %. This energy management has the following structure: - own energy managers certified by ANRE - 375 consumers (56.9 %) - PFAs and energy services companies - 259 consumers (39.3 %) - without certified management - 25 consumers (3.8 %). The monitoring was also based on the analysis of the energy efficiency improvement programmes, which economic operators must develop in accordance with Article 9(1)(b) of Law No 121/2014 on energy efficiency, as subsequently amended and supplemented. Considering that these operators have the obligation to submit this programme with energy efficiency measures applied in the previous year by 30 September of the year when they were prepared, in the course of 2017 the monitored economic operators from various activity segments reported energy savings of 129 398 toe as per the table: Table 3

Number CAEN Energy savings Classification as per CAEN code of index measures [toe] A Agriculture, forestry and fishing - 20 40 3 162 B Mining and Quarrying - 13 37 4 053 C Processing industry - 387 1 321 71 184 D Production and supply of electricity and heat, gas, 106 40 881 hot water and air conditioning - 30 (without energy distributors included in P2) E Water distribution; sanitation, waste management, 88 3 286 decontamination activities - 29 F Constructions - 20 30 757 G Wholesale and retail trade; repair of 80 3 024 motor vehicles and motorcycles H Transport by truck (without the transportation sector 22 1 426 included in P11) I Accommodation and food service activities 14 158 J Information and communication 11 140 K Financial and insurance activities 13 190 L Real estate activities 71 524

M Professional, scientific and technical activities 8 119 N Administrative and support service activities 4 9 O Public administration and defence; compulsory 5 189 social security P Education 9 277 Q Human health and social work activities - 1 hospital 3 19

TOTAL 1 862 129 398 Source: ANRE Figure 9 presents the breakdown of energy efficiency measures by field. Figure 9

Source: ANRE RO EN Număr de măsuri Number of measures

The implementation of these measures lead to the energy savings presented in Figure 10. Figure 10.

Source: ANRE RO EN Economii de energie Energy savings

The main energy efficiency improvement measures pertaining to the C CAEN branch of activity were:  Upgrading of compressor plant  Upgrading of dust exhaust system  Insulation of heat transfer fluid pipes  Mounting of induction coils to compensate the power factor  Replacement of refrigeration and vaporising unit  Installation of LED lighting  Mechanical engine with variable torque  Installation of frequency convertors  Thermal insulation of pipes and vessels  Upgrading of the treatment plant for the water supplying steam boilers  Adjustment of burners in central heating plants  Replacement of average frequency rotary convertors with static ones  Recovery of insulation in furnaces  Automation of boilers, insulation of pipes  Recovery of heat contained in burned gases at furnaces  Recovery of heat from refrigeration compressors

 Resizing of electrical engines  Monitoring of compressed air  Recovery of hot air from the burning furnace for product drying  Upgrading of burning system in furnaces for avoiding incomplete burning

The work for the implementation of the Integrated Information System software platform of ANRE (MIS) In order to facilitate the collection and, particularly, the processing of the reporting data from energy consumers monitored in the industry, the online reporting procedure was initiated in 2015 based on the MIS information software of ANRE, which was extended with a component pertaining to energy efficiency problems. In 2017, Decision No 860 of 13 June 2017 introduced the obligation of energy managers to upload the data to the (MIS) Integrated Information System software platform of ANRE for the collection of accurate data and the automated preparation of the summary report on the stage of implementation of the energy efficiency programmes by economic operators. The work was carried further in 2017 and, by the end of the year, we had reached 738 economic operators to whom reports were issued with a user name and a password.

5.2 The monitoring of localities with over 5 000 inhabitants

In accordance with Article 9(20), (21) and (22) of Chapter IV of Law No 121/2014 on energy efficiency, the local public administration authorities with a population above 5 000 inhabitants have the following obligations: “Article 9(20) Local public administration authorities from the localities with population exceeding 5 000 inhabitants must prepare energy efficiency improvement programmes including short-term measures and 3-6 year measures in accordance with Article 6(14)(a) and (b). (21) Local public administration authorities from the localities with a population exceeding 20 000 inhabitants must: a) prepare energy efficiency improvement programmes including short-term measures and 3-6 year measures in accordance with Article 6(14)(a) and (b); b) appoint an energy manager, who is certified in accordance with the legislation in force, or conclude an energy management contract with an authorised natural person certified under the law, or with a legal person acting as provider of energy services certified under the law. (22) The energy efficiency improvement programmes referred to in paragraphs 20 and 21(a) shall be prepared in accordance with the template approved by the Energy Efficiency Department and shall be submitted thereto by 30 September of the year of preparation.” Based on the abovementioned legal provisions, the Energy Efficiency Department should have received the Energy Efficiency Improvement Programmes from the local public administration authorities in the localities with a population exceeding 5 000 inhabitants,

hereafter referred to as “EEIPs”, which are prepared as per the template approved by Decision No 7/DEE/12.2.2015 of ANRE and published on the ANRE website, hereafter referred to as “approved template”, by 30 September of the year of preparation, followed by yearly submission of updated tables, as presented in the approved template. The situation on 30 December 2017 is the following: - out of a total number of 671 local public authorities with population exceeding 5 000 inhabitants 22 local public authorities reported EEIPs/information between 1 April and 30 December 2017 (Pitești Municipality, Hunedoara Municipality, Sector 2 Municipality, Botoșani Municipality, Reghin Municipality, Cugir Municipality, Sighetul Marmației Municipality, Târnăveni Municipality, Cluj Napoca Municipality, Bacău Municipality, Sibiu Municipality, Craiova Municipality, Turda Municipality, Copșa Mică Town, Ineu Town, Săliște Town, Onești Municipality, Piatra Neamț Municipality, Cernavodă City, Brăila Municipality, Arad Municipality, Timișoara Municipality) - 25 energy managers were certified for the localities.

Considering the fact that, in spite of all the actions intended to facilitate the preparation of energy efficiency improvement programmes, which had been conducted previously, (e.g. presentation and training seminars destined for the local authority representatives, request/information/clarification letters), the number of the local authorities with population exceeding 5 000 inhabitants who complied with the legal provisions was very small (approximately 3 %), and due to the fact that Law No 121/2014 on energy efficiency, as subsequently amended and supplemented, does not provide for non-compliance sanctions, the following actions were initiated: - 87 local public authorities from the localities with population exceeding 20 000 inhabitants were notified in Letter No 82705/5 December 2017 of ANRE with regard to their obligations under Article 9(21) and (22) of Law No 121/2014 on energy efficiency, as subsequently amended and supplemented; - over 570 local public authorities from the localities with population between 5 000 and 20 000 inhabitants were notified in Letter No 2485/12/01/2018 of ANRE with regard to their obligations under Article 9(20) and (22) of Law No 121/2014 on energy efficiency, as subsequently amended and supplemented; - the support of the Ministry of Regional Development, Public Administration and European Funds was requested by Letter No 2484/12 January 2018. - in regard to the actions performed in 2016 in order to facilitate compliance with the legal provisions of local public authorities [a seminar organised by ANRE in collaboration with North Eastern Regional Development Agency (RDA) on 15 March 2016 - Piatra Neamt, a seminar organised by “Arena Constructiilor” on 31 March 2016 - Bucharest, a seminar organised by ESCOROM on 8 April 2016 - Azuga, a seminar organised by FINACON on 18 October 2016 - Bucharest], on 7 November 2017, ANRE attended the “CONVENTION OF MUNICIPALITIES FOR CLIMATE AND ENERGY” WORKSHOP - Energy transition and adaptation to the effects of the climate changes: Local strategies and support policies” A number of 118 local public authorities responded to Letters Nos 82705/5.12.2017 and 2485/12.1.2018 of ANRE.

The table below shows the situation of EEIPs preparation/submission by TAUs to DEE, as follows: Table 4 No Number of Number of Number of Number of inhabitants/Type of localities localities which localities locality submitted the which EEIP by 31 submitted March 2017 the EEIP by 31 March 2018 1 > 20 000 105 23 45 Municipalities 91 23 44 Towns 13 0 1 Communes 1 0 0 2 5 000 – 20 000 566 22 55 Municipalities 19 3 7 Towns 172 11 30 Communes 375 8 18 TOTAL 671 45 100 Source: ANRE

5.3 Monitoring of energy efficient equipment market In order to check compliance with the provisions of directives and regulations from the market supervision activity, 37 on-site controls were performed in 2017 and the summary of results was reported to the Ministry of the Economy for the annual reporting to the European Commission. Controls were aimed at checking compliance with the energy labelling regulations for electric domestic appliances, 3 888 energy labels being checked in this respect. In order to check compliance with the directives and regulations on market supervision in the field of ecodesign and energy efficiency labelling, the Energy Efficiency Department of ANRE cooperates with: the Ministry of Energy - a national contact point responsible for the implementation of Directive 2009/125/EC on ecodesign, the National Consumer Protection Authority (Autoritatea Națională pentru Protecția Consumatorilor - ANPC), the Accreditation Association in Romania (Asociația de Acreditare din România - RENAR) and the Association of European Producers of Electric Domestic Appliances in Romania (Asociația Producătorilor Europeni de Electrocasnice din România - CECED Romania). At international level, ANRE participates in working groups within the “Administrative Cooperation Group” (ADCO) for the issue of energy labelling and of ecodesign:  ADCO -Eco-design – Directive 2009/125/EC (ECOD)

 ADCO Energy Labelling – Directive 2010/30/EU and Regulation (EU) 2017/1369 (ENERLAB) In order to apply the European regulations on energy labelling and ecodesign for industrial equipment falling within the remit of ANRE, actions were initiated in order to develop international cooperation and the know-how transfer: - attending the ADCO meeting of groups of experts in ecodesign - Bucharest - April 2017, - attending the meetings of the energy labelling and ecodesign group of the Network of European energy agencies - EnR (videoconferencing), - attending two meetings of the consortium of the European project INdustrial and tertiary product Testing and Application of Standards - INTAS). Given the limited possibilities of ANRE to test equipment for compliance with the ecodesign directive and related regulations, ANRE participates, in the framework of the Horizon 2020 Programme, in the European project INTAS (March 2016-February 2019) with the purpose of ensuring the necessary know-how transfer for the test-based evaluation of complex and large energy impact products in accredited laboratories (with special reference for industrial fans and power transformers). In the period August-October 2017, in the framework of the INTAS European project for checking compliance with Commission Regulation (EU) No 548/2014 on implementing Directive 2009/125/EC of the European Parliament and of the Council with regard to small, medium and large power transformers, with a budget of approximately EUR 11 000 from European funds, 28 160, 250 and 400 KVA transformers were tested in collaboration with FISE Electrica Serv in the laboratory and on site. Based on the experience gained with the measurements under the INTAS project, the following shall be prepared: a) procedures to support national supervisory authorities on the European market in the assessment of compliance of large-size and very complex industrial products (transformers and industrial fans) with Directive 2009/125/EC; b) procedures to support the representatives of the industry of complex and large-size industrial equipment in order to become aware of their obligations under the Ecodesign Directive and to conform, as accepted by the European market surveillance authorities; c) a joint European procedure for checking compliance of large-size industrial products with Directive 2009/125/EC.

5.4 Monitoring the National Energy Efficiency Action Plan (NEEAP) In accordance with Article 8(8) of Law No 121/2014 on energy efficiency, as subsequently amended and supplemented, the Energy Efficiency Department of ANRE prepares, by 30 March, an annual follow-up report on the NEEAP implementation based on the reports received from the institutions involved in the implementation of this law. Considering that the National Energy Efficiency Action Plan (NEEAP IV) was submitted to the European Commission in December 2017, we consider that the 2017 achievements took into account the targets included in NEEAP III, the Government Decision approving the NEEAP IV still pending endorsement at inter-ministerial level.

In this context, ANRE requested from the following institutions the data needed to prepare the 2017 report: the Ministry of Regional Development and Public Administration (Ministerul Dezvoltării Regionale și Administrației Publice - MDRAP), the Ministry of Education (Ministerul Educației - ME), the Ministry of Transport (Ministerul Transporturilor - MT) and the Ministry of the Economy (Ministerul Economiei - MEc). Also, information was requested from the specialised directorates of ANRE with regard to the energy efficiency increase in electricity networks, the promotion of high- efficiency cogeneration and smart metering. In the preparation of this report, data was used from the Follow-up Report on the work of auditors and energy managers and from the Follow-up Report on final energy consumers, which are prepared by the Energy Efficiency Department. At the same time, data was requested from the mayor’s offices from the localities exceeding 20 000 inhabitants on the energy savings obtained following the application of the measures of thermal rehabilitation of public buildings, and the improvement of public lighting efficiency. Based on the statistical data and the reports received on the 2017 actions, the main fields where significant energy savings have been achieved are:  EE in the industry receiving a State aid under GD No 495 /2014 The authority responsible for the administration of the State support scheme is the Ministry of the Economy. The purpose of GD No 495/2014 is to establish a State support scheme with the aim of exempting from the application of Article 8(2) of Law No 220/2008 establishing the system for promoting energy production from energy renewable sources, as republished, as subsequently amended and supplemented, a percentage from the amount of electricity supplied to intensive electricity industrial consumers in accordance with the relevant European regulations, more specifically the “Environmental and Energy Aid Guidelines 2014-2020”, which are prepared by the European Commission. The provisions of the abovementioned government decision are applicable to undertakings in the sectors exposed to the risk of losing their competitiveness because of the funding of the support granted for energy from renewable sources, such risk being due to the electro-intensity of the beneficiary and to exposure to international trade. The aid will be granted if the undertaking is listed among the sectors in Annex 1. The state aid is granted on the condition that the beneficiaries of the aid pay at least 15 % of the number of green certificates pertaining to the mandatory quota, without the reduction granted under this exempted scheme. Depending on the electro-intensity of undertakings, the beneficiaries will pay the following rates in the number of green certificates pertaining to the mandatory quota: a) 15 % for electro-intensity above 20 %; b) 40 % for electro-intensity between 10 % and 20 %; c) 60 % for electro-intensity between 5% and 10 %. For electro-intensive undertakings set up for less than a year and listed among the sectors in Annex 1 to the Guidelines, the data estimated for the first year of business is used. After the first year of business, the Ministry of the Economy checks compliance by the undertaking with the eligibility criteria set under this scheme and then regulates the financial aid granted, where applicable. For the second year of business, the data for the first year of

business is used. For the third year of business, the arithmetic mean of the data for the first two years of business is used. Starting with the fourth year of business, the arithmetic mean of the three previous years is used. The validity period of the state support scheme is 10 years. Following the implementation of this state support scheme in the period 2015-2016, as a result of implementation by beneficiaries of the energy efficiency measures, the following savings were achieved:  2015 - 56 130.6 toe  2016 - 104 745 toe

A. ENERGY EFFICIENCY INCREASE IN NETWORKS  Reduction of own technological consumption in electricity distribution networks ANRE regulated the targets for reduction of OTC rate in the EDN as per the data in Table 5.

Table 5 Electricity distribution OTC [%] company HV MV LV target achieve target achieve target achieve d d d E-Distribuție Banat 0.64 0.91 3.57 3.92 14.30 14.41 E-Distribuție Dobrogea 1.71 1.54 4.35 5.54 13.22 15.75 E–Distribuție Muntenia 0.60 0.64 3.44 3.44 15.64 16.50 Delgaz Grid 0.97 1.00 2.81 2.70 16.50 15.75 Distributie energie Oltenia 1.15 1.07 3.98 3.97 18.00 17.09 SDEE Muntenia Nord 0.98 0.93 5.50 5.60 13.80 15.34 SDEE Transilvania Nord 1.00 1.20 4.10 4.40 11.00 10.61 SDEE Transilvania Sud 1.02 1.09 3.95 3.75 15.50 15.50 Source: ANRE

For 2017, the electricity distribution companies reported in EEIP energy savings of 11 095 toe, as per Table 6. Table 6

Electricity distribution company No of Energy saving Investment value* measures [toe] [RON] 1 Distribuție Energie Oltenia 20 1 451 68 001 000

(CEZ) 2 SDEE Muntenia Nord 60 175 37 147 000 3 SDEE Transilvania Nord 14 702 19 250 000 4 SDEE Transilvania Sud 7 364 20 038 000 5 E-Distribuție Banat 10 1 055 15 341 120 6 E-Distribuție Dobrogea 13 496 12 159 450 7 E–Distribuție Muntenia 20 2 128 45 336 350 8 DelGazGrid (E.ON) 11 4,724 191 105 000 TOTAL 155 11 095 408 377 920 Source: ANRE Compared to 2016, the OTC trend is fluctuating, with increases in some of the concessionaire distributors and decreases in others, as per Table 7.

Table 7 Electricity distribution company 2016 2017 1 Delgaz Grid 60 180 58 987 2 DEE Muntenia Nord 80 186 77 512 3 SDEE Transilvania Nord 55 038 54 160 4 SDEE Transilvania Sud 66 785 65 989 5 E-Distribuție Banat 49 500 49 895 6 E-Distribuție Dobrogea 48 770 51 336 7 E–Distribuție Muntenia 98 508 97 009 8 Distributie energie Oltenia 85 948 78 934 TOTAL 544 915 533 822 Source: ANRE

The main energy efficiency improvement measures adopted by distribution operators were:  securing measurement groups  balancing network phase loading  reconfiguring/optimising the LV network  replacing equipment, carrying out refurbishing and upgrading works to reduce OTC  upgrading of PT + LEA 0.4 kV + connections  telemetry at consumers  upgrading the EDN

 upgrading the EDN by relocating the PTA  upgrading LEA and LES  switching transformers

 SMART METERING

Based on the legal provisions, ANRE issued Order No 145/2014 implementing smart electricity measurement systems. It defined the SMI functionalities of electricity which are to be deployed in Romania, and the stages to be completed until the implementation calendar and the national electricity SMI implementation plan have been established. On 26 February 2016, this order was amended and supplemented by Order No 6/2016. In 2016, ANRE monitored the pilot projects developed in 2015 and 2016 by the concessionaire operators of the electricity distribution service and reviewed their results from the technical and economic viewpoint, following up on and identifying the technical issues caused by the structure and degree of repowering of distribution networks, and the issues related to the structure and level of implementation costs and estimated benefits, with the purpose of establishing the conditions for the large-scale implementation of SMI in Romania. Table 8 presents the breakdown of pilot projects on the SMI implementation developed in 2015 and 2016. Table 8 2015 2016 TOTAL No of Total No of Total No of Total Distribution No of clients value of No of clients value of No of clients value of operator pilot included in SMI pilot pilot included in SMI pilot pilot included in SMI pilot projects pilot projects projects pilot projects projects pilot projects projects [RON] projects [RON] projects [RON] 12 388 3 10,126 4 083 403 6 31 122 8 305 562 9 41 248 E-Distribuţie Banat 965 E-Distribuţie 11 865 4 10 227 3 928 854 4 26 565 7 936 769 8 36 792 Dobrogea 623 E-Distribuţie 13 215 17 156 1 11 016 3 940.472 4 50 539 5 61 555 Muntenia 654 126 Distribuţie Energie 15 816 15 816 2 20 150 0 0 0 2 20 150 Oltenia 050 050 14 265 22 178 2 22 622 7 913 352 2 48 721 4 71 343 DelgazGrid 570 922 SDEE Transilvania 21 167 21 167 2 23 024 0 0 0 2 23 024 Sud 273 273 SDEE Transilvania 2 5 470 3 232 573 2 8 210 2 480 500 4 13 680 5 713 073 Nord SDEE Muntenia 2 2 139 1 429 431 0 0 0 2 2 139 1 429 431 Nord TOTAL 61 511 46 204 107 715 18 104 774 18 165 157 36 269 931 408 055 463 Source: ANRE

Under the pilot projects, approximately 270 000 consumers were integrated in SMI, of all the eight concession areas of the electricity distribution service and tests were made on several technical solutions implemented in urban and rural areas, with various densities of electricity consumption in the recently upgraded low voltage electricity networks and in the electrical networks not upgraded.

Based on the conclusions in the assessment reports on the pilot project results, which are prepared during the two years (2015 and 2016), ANRE had to approve by 31 March 2017, under a presidential order, the national SMI implementation calendar with calendar data on the implementation stages, and the national SMI implementation plan on the investment works pertaining to each concessionaire distribution operator, their value and the funding sources, and measures for the information of final clients. The abovementioned deadline was proposed for extension under the Draft amending Order No 145/2014 of the President of ANRE, as subsequently amended and supplemented, subject to public consultation on 6 March 2017 in order to have an acceptable period available for public debates. Considering the obligations of ANRE under Article 66 of Law No 123/2012 on electricity and natural gas, as subsequently amended and supplemented, and the results of the analyses conducted in 2015, 2016 and 2017 based on the follow-up on the pilot projects developed, the draft Order of ANRE on the preparation and approval of the plan and national calendar for the implementation of the smart electricity measurement systems was prepared. This document was approved by Order No 17/2017. Considering that the verification, validation and processing of submitted data, and the assessment of results, which underlie the decision-making process regarding the SMI implementation conditions, required a longer time than initially estimated, it was considered that the duration of the communication of the provisions of this order cannot lead to a delay in the issue of the ANRE order by more than one month, namely April 2017. On 10 March 2017, the draft order on the national implementation of the smart electricity measurement systems and the establishment of the implementation calendar was submitted for public consultation for a period of 30 days. In the period 28 March-7 April, work sessions were held with concessionaire distribution operators to debate the provisions in the draft order. They gave rise to a series of topics on which opinions could not be harmonised and, considering their technical, economic and administrative complexity and implications, a sound justification of an approach decision could not be established. Considering the arguments brought forth by operators as regards the relevant international practice, they were requested to provide relevant data to ANRE from the experience of countries where the multinational companies they work for conduct their business. In order to provide the opportunity for sound justification of the views expressed and to collect international experience as well, a proposal is made to extend the deadline for the issue of the order approving the framework conditions for the national implementation of the smart electricity measurement systems and the establishment of the implementation calendar by 30 June 2017. The document was approved by Order No 31/2017. Considering the particularities of each distribution operator regarding the method of approach to the same provisions in the draft order, ANRE decided to hold meetings in the period 3-6 April with each distribution operator, and a second joint meeting was planned for 7 April.

A number of 169 specific observations/proposals and 38 general observations were submitted to ANRE, from concessionaire distribution operators and from 6 producers of SMI equipment. A number of 36 proposals to amend provisions were accepted and a series of provisions were recast. Consequently, the draft Order on the implementation of smart electricity measurement systems at national level and the establishment of the implementation calendar - second stage was submitted for public consultation for a period of 10 calendar days. On 19 December 2017, ANRE submitted for public consultation the draft amending Order No 145/2014, such amendment being necessary for supplementing the order with provisions on the possibility of concessionaire electricity distribution operators to perform investments in smart measurement systems in 2018. The implementation period proposed in the draft order cannot be consistent with the deadline referred to in Article 66 of Law No 123/2012, since the implementation of the smart electricity measurement systems within this deadline is not financially and logistically sustainable, more specifically, impossible to be achieved by distribution operators. Under these conditions, the process of approval of the draft Order on the implementation of smart electricity measurement systems at national level and the establishment of the implementation calendar was stopped and the legal deadline needed to be revised. Order No 145/2014 of ANRE, as subsequently amended and supplemented, includes provisions on investments in smart electricity measurement systems developed by concessionaire electricity distribution operators only until 2017. In order to ensure the continuity of the actions required for the implementation of smart electricity measurement systems, until the approval of rules approving the implementation calendar and the plans for implementation of smart electricity measurement systems at national level, the deadline for the enforcement of Order No 145/2014 of ANRE needs to be extended and it must be supplemented with provisions on the possibility of concessionaire electricity distribution operators to perform investments in 2018 in smart measurement systems, under certain specific conditions on the approval and inclusion thereof in the regulated tariffs. In regard to the savings achieved after the SMI implementation, the reports submitted by distribution operators (DO) revealed:  OTC before the implementation of SMI - 104 497 MWh, representing 10.52 % in the electricity consumption achieved by SMI integrated consumers  OTC after the implementation of SMI - 97 415 MWh, representing 9.81 % in the electricity consumption achieved by SMI integrated consumers Therefore, by reducing OTC, savings of 7 082 MWh (609 toe) were recorded and the reference year was 2015.

B. PROMOTION OF HIGH-EFFICIENCY COGENERATION In 2017, a series of specific regulations were issued for the development of the programme for promoting high-efficiency cogeneration, as follows:  Order No 39/2017 of the President of ANRE amending and supplementing the Methodology for the determination and adjustment of prices in electricity and heat produced and supplied from cogeneration units, which are covered by the support

scheme, and of the bonus for high-efficiency cogeneration, as approved by Order No 15/2015 of the President of ANRE;  Order No 43/2017 of the President of ANRE amending Order No 78/2016 of the President of the National Energy Regulatory Authority approving the reference bonus values for the electricity produced from high-efficiency cogeneration and the reference prices for the heat from cogeneration, which are applicable in 2017;  Order No 52/2017 of the President of ANRE amending Order No 119/2013 of the President of the National Energy Regulatory Authority approving the contribution for high-efficiency cogeneration and certain provisions on the invoicing thereof;  Order No 37/2017 of the President of ANRE amending the calculation methodology for determining the amounts of electricity produced in high-efficiency cogeneration for certification through guarantees of origin, as approved by Order No 61/2015 of the President of the National Energy Regulatory Authority;  Order No 80/2017 of the President of ANRE amending and supplementing the Regulation for determining the method of collection of the contribution for high- efficiency cogeneration and of payment of the bonus for the electricity produced in high-efficiency cogeneration, as approved by Order No 116/2013 of the President of the National Energy Regulatory Authority;  Order No 81/2017 of the President of ANRE amending the Regulation for qualifying the production of electricity in high-efficiency cogeneration, as well as for verifying and following up on consumption of fuel and on useful electricity and heat production in high-efficiency cogeneration, as approved by Order No 114/2013 of the President of the National Energy Regulatory Authority;  Order No 86/2017 of the President of ANRE amending and supplementing the Methodology for determining and monitoring the overcompensation of the activity of production of electricity and heat from high-efficiency cogeneration, which is entitled to the bonus type support scheme approved by Order No 84/2013 of the President of the National Energy Regulatory Authority;  Order No 94/2017 of the President of ANRE amending the Methodology for the determination and adjustment of prices in electricity and heat produced and supplied from cogeneration units, which are covered by the support scheme, and of the bonus for high-efficiency cogeneration, as approved by Order No 15/2015 of the President of the National Energy Regulatory Authority;  Order No 97/2017 of the President of ANRE approving the reference price for the electricity produced in high-efficiency cogeneration, as applicable in 2018 to producers of electricity and heat from cogeneration, which are entitled to a bonus;  Order No 99/2017 of the President of ANRE approving the reference bonus values for the electricity produced from high-efficiency cogeneration and the reference prices for the heat from cogeneration, which are applicable in 2018;  Order No 100/2017 of the President of ANRE amending and supplementing the Methodology for determination and monitoring of the contribution for high-efficiency cogeneration, as approved by Order No 117/2013 of the President of the National Energy Regulatory Authority;  Order No 105/2017 of the President of ANRE amending and supplementing the Procedure for endorsing new projects or projects involving the refurbishing of

cogeneration plants, as approved by Order No 115/2013 of the President of the National Energy Regulatory Authority;  Order No 123/2017 of the President of ANRE approving the contribution for high- efficiency cogeneration and certain provisions on the invoicing thereof.  Order No 124/2017 of the President of ANRE amending and supplementing Order No 28/2014 of the President of the National Energy Regulatory Authority approving the Framework Contract between the administrator of the support scheme and the payer of the contribution for the collection of the contribution for high-efficiency cogeneration, and the Framework Contract between the producer of electricity and heat in high-efficiency cogeneration and the administrator of the support scheme for the payment of the bonus/non-granted bonus/regularisation ante-overcompensation and the return of the undue bonus/overcompensation. The values of the primary energy savings in high-efficiency cogeneration with reference to separate production of electricity and heat, as achieved in 2017 by producers accessing the cogeneration support scheme, are listed in Table 9. Table 9 MU 1st quarter 2nd quarter 3rd quarter 4th quarter Total 2017 2017 2017 2017 2017* GWh 1181 440 285 989 2 895 toe 101 566 37 840 24 510 85 054 248 970 Source: ANRE * The regulated value after the annual qualification calculation is found in Table 10 The support scheme for the promotion of high-efficiency cogeneration was established in Romania under Government Decision No 219/2007 on the promotion of cogeneration based on useful heat, as subsequently amended and supplemented (national transposition of Directive 2004/8/EC on the promotion of cogeneration based on a useful heat demand in the internal energy market and amending Directive 92/42/EEC which, as of 5 June 2014, was replaced by Directive 2012/27/EU), and implemented by Government Decision No 1215/2009 establishing the criteria and conditions required for the implementation of the support scheme for the promotion of high-efficiency cogeneration based on the useful heat demand, as subsequently amended and supplemented. By Government Decision No 925/2016 amending and supplementing Government Decision No 1215/2009 and Government Decision No 129/2017 supplementing Article 8 of Government Decision No 1215/2009, the legal framework for applying and implementing the support scheme for the promotion of high-efficiency cogeneration based on the useful heat demand is supplemented with a view to achieving consistency with the specific provisions of the Guidelines on State aid for environmental protection and energy 2014-2020 (EEAG) and Council Regulation (EU) 2015/1589 laying down detailed rules for the application of Article 108 of the Treaty on the Functioning of the European Union. In this respect, the bonus type scheme included micro-cogeneration unit plants and/or low power cogeneration units totalling an installed electricity capacity of less than 1 MW. In accordance with Government Decision No 925/2016, the support scheme is applied only to producers of electricity and heat from cogeneration requesting from ANRE to grant such support for the electricity produced from high-efficiency cogeneration for the

cogeneration capacities included on the List referred to in Article 9(4) of Government Decision No 1215/2009, as subsequently amended and supplemented, by 31 December 2016, and for new cogeneration facilities replacing, before 31 December 2016, existing cogeneration facilities having received the bonus for the high-efficiency electricity within the limit of the installed electricity capacity included on 31 December 2016 on the List referred to in Article 9(4) for every producer acting as a beneficiary of the support scheme. The bonus scheme accounts for a State aid (N 437/2009 - Romania), being authorised by the European Commission as compatible with the common market, in accordance with Article 87(3)(c) of the EC Treaty, under Decision C(2009)7085, as amended by Decision C(2016)7522 final. The authorisation was communicated by publication in the Official Journal of the European Union C31/9.2.2010. The bonus type support scheme entered into force effectively on 1 April 2011. The main regulatory action lines in the promotion of electricity produced in high- efficiency cogeneration for 2017 were: a) the preparation of rules to enable the application of the bonus type scheme established under Government Decision No 219/2007 promoting cogeneration based on the useful heat demand and implemented by Government Decision No 1215/2009 establishing the criteria and conditions required for the implementation of the support scheme for the promotion of high-efficiency cogeneration based on the useful heat demand, and the follow-up on the application thereof; b) the preparation of rules as a result of the fact that, under Government Emergency Order No 64/2016, Law No 123/2012 on electricity and natural gas was amended and supplemented in the sense that the natural gas purchase price was liberalised, and that Government Decision No 1215/2009 was amended and supplemented; c) the issue of decisions amending/supplementing the List of capacities producing electricity and heat in cogeneration, with final accreditation; d) the issue of monthly/annual decisions approving the amounts of electricity produced in high-efficiency cogeneration entitled to a bonus; e) the issue of decisions for overcompensating the production of electricity and heat in high-efficiency cogeneration for the evaluation period 1 January 2016-31 December 2016; f) the issue of decisions approving the bonus for electricity and the regulated prices for the electricity and heat produced in high-efficiency cogeneration for the second semester of 2017 for producers using natural gas, as a result of the liberalisation of the price in natural gas; g) the issue of annual decisions approving the bonus for electricity and the regulated prices for the electricity and heat produced in high-efficiency cogeneration and the performance of the ante-overcompensation analysis, which is a preliminary analysis of the overcompensation for the evaluation period 1 January-31 December 2018; h) the issue of opinions for approving the formulas for determining/adjusting the price for the heat produced and supplied from cogeneration units where operators and the local public administration have chosen to determine the heat price on the basis of formulas, and the issue of opinions for approving the regulated prices for heat in cogeneration determined on the basis of these formulas; i) the issue of opinions for the preliminary/final accreditation of new projects or of projects for repowering cogeneration units;

j) the performance of analyses for adjusting the contribution for the second semester of 2017 and the determination of the value of the contribution for cogeneration as of 1 January 2018. For the 32 producers concerned, the total amount of electricity produced in high- efficiency cogeneration entitled to a bonus for the period January-December 2017 was 4.858 TWh before the regulation of March 2018 and 5.039 TWh after the regulation in March 2018, with a 1.06 % increase compared to the value pertaining to 2016.

Figure 11

Source: ANRE RO EN Cantitatea de energie electrica care a The amount of electricity entitled to a bonus beneficiat de bonus pentru cogenerare de for high-efficiency cogeneration in the period inalta eficienta in perioada 01.04.2011 – 1 April 2011-31 December 2017 31.12.2017

Following the analysis on the overcompensation of the production of electricity and heat in high-efficiency cogeneration for the evaluation period 1 January 2016-31 December 2016, it was noted that, following the application of the support scheme for the indicated period for 44 units producing electricity and heat in cogeneration (operated by 37 producers), the overcompensation of the production of electricity and heat in cogeneration was recorded in 15 plants (12 producers) in a total amount of RON 139 913 507. No cases of regulation of ante-overcompensation were recorded for the period 1 January 2016-31 December 2016. The value of the contribution for the second semester of 2017 was revised following the evaluation of June 2017 on the accrued costs and revenues under the support scheme, and the forecast costs for the second semester of 2017, being RON 12.31/MWh, without VAT, as approved by Order No 52/2017 of ANRE. A decisive factor in the reduction of the contribution from the determined value of RON 13.01/MWh, without VAT, as approved by

Order No 117/2016 of ANRE, was the consideration of the quantum of the overcompensation for the evaluation period 1 January 2016-31 December 2016. The provisions of Order No 123/2017 of ANRE are effective as of 1 January 2018 and the value of the contribution for cogeneration is RON 11.94/MWh, without VAT.

Figure 12

Source: ANRE RO EN Evolutia contributiei pentru cogenerare in perioada 01 aprilie 2011- Trend in the contribution for cogeneration in the period 1 April 01 ianuarie 2018 2011-1 January 2018

The data related to the monitoring of the support scheme for cogeneration for 2011, 2012, 2013, 2014, 2015, 2016 and 2017 is set out in Table 10.

Table 10 - Results of the application of the support scheme for 2011-2017

Indicator MU 2011 2012 2013 2014 2015 2016 2017 Total value of the contribution thousand 690 928 770 757 708 624 invoiced to consumers and exporter 1 072 840 RON 931 877 626 447 194 519 suppliers 1) The amount of electricity invoiced to final consumers (including that consumed by suppliers and producers under own supply/own GWh 32 639 46 450 44 930 45 457 46 476 47 103 48 669 consumption) to which the cogeneration contribution was applied The amount of exported electricity 3 310 to which the cogeneration GWh 1 465 1 108 1 959 0 1) 0 1) 0 1) 1) contribution was applied Amount of electricity produced in high-efficiency cogeneration, for GWh 3 491 6 008 5 654 5 102 4 717 4 739 5 039 which the support scheme was granted The total value of the bonuses due thousand 594 978 927 896 887 842 to the producers in cogeneration 1 098 112 RON 473 098 234 796 761 872 entitled to the bonus type scheme The amount of imported electricity with guarantees of origin for production of electricity in high- GWh 0 0 0 0 0 0 0 efficiency cogeneration, for which the return of the contribution was requested Fuel saving achieved in high- efficiency cogeneration processes benefitting from the bonus in GWh 2 131 3 498 3 430 3 016 2 623 2 751 2 864 accordance with the qualifying regulation Source: ANRE 1) In accordance with Government Decision No 494/2014 amending GD No 1215/2009 establishing the criteria and the conditions required for the implementation of the support scheme for the promotion of high-efficiency cogeneration based on the heat demand, it is provided that suppliers supplying electricity for export are exempted from the payment of the contribution for high-efficiency cogeneration, more specifically of the single monthly paid tariff expressed in RON/kWh. The single bonuses for the electricity produced in high-efficiency cogeneration in 2017 (for the 7th year of entitlement) with the value of: - RON 188.70/MWh for the units using predominantly natural gas from the transport network;

- RON 200.18/MWh for the units using predominantly natural gas from the distribution network; - RON 160.93/MWh for units using predominantly solid fuel, were approved by Order No 78/2016 of the President of ANRE and were applied in the 1st semester of 2017. The reference bonuses in the 2nd semester of 2017 (for the 7th year of entitlement) were: - RON 158.98/MWh for the units using predominantly natural gas from the transport network; - RON 177.79/MWh for the units using predominantly natural gas from the distribution network; - RON 160.93/MWh for units using predominantly solid fuel, were approved by Order No 43/2017 of the President of ANRE, which amended Order No 78/2016 of the President of ANRE, and applied in the 2nd semester of 2017. In 2017, two producers accessed the scheme for cogeneration units under 1 MW, namely: - S.C. Colonia Cluj-Napoca Energie S.R.L, for CT3 and CT8 (the producer had already accessed the bonus type support scheme for CTZ Someș Nord, a plant with an installed capacity above 1 MW) - the company R.A.G.C.L. Paşcani, for the plant CT5/Pașcani. Based on the operation data for 2016, which is submitted by the producers from cogeneration in 2017, the following were assessed in accordance with Article 13(3) of GD No 219/2007 on the promotion of cogeneration based on the useful heat demand, as subsequently amended and supplemented:  outputs of electricity and heat from cogeneration based on the calculation method referred to in Annex II to Directive 2004/8/EC (currently replaced by Annex I - D2012/27/EU) - (Table 11);  cogeneration (electricity/heat) capacities (Table 12);  quantities of fuel used for heat and electricity production from cogeneration (Table 13);  quantities of electricity produced in high-efficiency cogeneration and primary energy savings obtained through the use of high-efficiency cogeneration, established as per Annex III to Directive 2004/8/EC (currently replaced by Annex II - D2012/27/EU) - (Table 14):

Table 11 - National production of electricity and heat from cogeneration Electricity produced Electricity Total from cogeneration produced from Useful heat produced in electricity (Annex II - cogeneration in cogeneration units (Annex Year produced in D2004/8/EC, replaced the national II - D2004/8/EC, replaced cogeneration by Annex I - total by Annex I - D2012/27/EU) units D2012/27/EU) production

of which of which Total Total Autoproducers Autoproducers TWh TWh % % Legal % persons 2007 14.23 6.62 14.65 10.7 73.2 15.85 2008 14.06 6.21 15.62 9.6 71.5 18.04 2009 12.33 6.26 13.74 10.8 66.3 17.50 2010 11.93 6.54 17.74 10.8 69.0 22.46 2011 13.47 7.28 17.45 11.9 71.9 23.50 2012 12.54 6.72 16.07 11.4 66.1 22.37 2013 11.1 6.6 18.78 11.3 57.9 21.99 2014 10.7 6.1 19.38 9.4 55.4 21.86 2015 9.2 5.6 16.07 8.5 51.0 18.43 2016 8.90 5.29 10.78 8.2 45.9 13.07 Source: ANRE

Table 12 - Cogeneration heat and electricity capacities in Romania in 2016 Maximum capacity Electricity Heat Cogeneration technology Gross Net MW MW Gas turbines in combined cycle, with heat recovery 225 228 Gas turbines with heat recovery 173 250 Internal combustion engines 188 169 Steam backpressure turbines 715 2 981 Steam condensing turbines with cogeneration sockets 2 840 5 297 Other cogeneration technologies 2 10 TOTAL 4 143 8 934 Source: ANRE

Table 13 - Quantities of fuel used for heat and electricity production from cogeneration

of which: Total fuel Fuel used for Year used by cogeneration Renewable Solid fossil Fuel Natural Other fuels cogeneration sources and

units fuel oil gas waste (Annex II - D2004/8/EC, replaced by Annex I - D2012/27/EU) Legal Legal persons % % % % % persons 2007 221.4 122.8 38.2 8.3 52.8 0.0 0.7 2008 216.8 118.1 39.5 6.3 52.8 0.0 1.4 2009 188.6 112.4 39.8 6.9 49.7 0.5 3.1 2010 186.1 117.3 38.6 3.8 50.8 1.9 4.9 2011 200.3 124.3 38.2 3.5 52.4 2.0 3.9 2012 188.5 114.5 38.4 3.3 53.7 2.0 2.7 2013 159.7 103.6 37.4 0.6 54.6 3.6 3.8 2014 154.1 97.7 36.0 0.5 54.4 5.4 3.7 2015 135.0 90.3 34.9 0.8 54.8 6.4 3.1 2016 128.0 82.2 28.5 1.4 59.8 6.4 3.9 Source: ANRE

Table 14 - Production of electricity in high-efficiency cogeneration and primary energy savings from the use of high-efficiency cogeneration

Electricity produced Fuel consumption in from high-efficiency high-efficiency PES in absolute PES (Annex III - cogeneration cogeneration value (Annex III - D2004/8/EC, Year (Annex III - (Annex III - D2004/8/EC, replaced by Annex D2004/8/EC, D2004/8/EC, replaced by Annex II - D2012/27/EU) replaced by Annex replaced by Annex II - D2012/27/EU) II - D2012/27/EU) II - D2012/27/EU) TWh Legal persons Legal persons % 2007 4.4 67.9 10.5 13.4 2008 3.7 62.4 9.2 12.8 2009 3.5 49.6 8.2 14.2 2010 3.3 47.5 8.0 14.5 2011 3.4 43.3 8.3 16.0 2012 3.0 36.7 7.2 16.4 2013 4.4 56.9 10.5 15.5

2014 3.3 39.7 8.7 18.0 2015 2.9 34.4 7.7 18.3 2016 2.9 35.1 8.3 19.1 Source: ANRE PES - primary energy savings compared to separate production of energy (Primary Energy Savings) In 2017, 10 decisions were issued on the qualification of amounts of electricity produced from high-efficiency cogeneration from renewable energy sources, which are entitled to additional green certificates in accordance with Article 6(4) of Law No 220/2008 establishing the system for promoting the production of energy from renewable sources, as republished, as subsequently amended and supplemented.

E . ENERGY EFFICIENCY IN THE RESIDENTIAL SECTOR

Deployment of the National Programme for Improvement of Energy Performance in Residential Blocks

The purpose of the National Programme for Improvement of Energy Performance in Residential Blocks, in accordance with Government Emergency Order No 18/2009, as subsequently amended and supplemented, and with Joint Order No 163/2009 of the Ministry of Regional Development and Public Administration (MDRL), No 540/2009 of the Ministry of Public Finance (MFP) and No 23/2009 of the Ministry of Internal Affairs (MAI) approving the Detailed Regulations implementing GEO No 18/2009, as subsequently amended and supplemented, is: - to increase energy performance in residential blocks built as per projects prepared until December 2005 by reducing energy consumption in heating, so that the annual specific energy consumption calculated for the heating of households falls below 100 kWh/m2 of useful area; - to ensure and maintain heat indoors; - to reduce greenhouse gas emissions and to introduce, where applicable, alternative energy production sources; - to improve the urban aspect of localities. The statement on the completion of works in residential blocks included in the abovementioned national programme is set out in Table 15 and Figures 13 and 14.

Table 15 No of completed No of completed Period blocks flats 2009 291 8 984 2010 502 22 390

2011 521 18 878 2012 61 2 285 2013 75 2 184 2014 68 3 534 2015 36 953 2016 103 3 351 2017 33 1 246 TOTAL 1 690 63 805 Source: MDRAP Figure 13 Figure 14

Source: MDRAP Source: MDRAP RO EN Evoluția numărului de blocuri finalizate Trend in the number of completed blocks Evoluția numărului de apartamente finalizate Trend in the number of completed flats

In order to reach the aim of the Programme, the following are funded: a) thermal rehabilitation works to the envelope: thermal insulation of outer walls of the block, replacement of the existing outer joinery, including that pertaining to the entrance to the residential block, thermal insulation of the terrace, thermal insulation of the floor above the last level where the lattice mast exists, enclosure of balconies and/or loggias with thermally insulating joinery, including thermal insulation of bulwarks, the thermal insulation of the floor over the underground. b) works of thermal rehabilitation to the heating system: repairing/recovery of the distribution installation between the connection point and the floor over the underground/heat channel, including its thermal insulation, mounting of thermostatic valves to radiators, repairing/replacement of boiler and/or burner from the central heating plant of the block/block section; c) rehabilitation and upgrading of the heat transfer fluid distribution plant - heating and hot water for consumption, the common part of the residential block, including mounting of thermostatic valves in radiators and the insulation of underground pipes/heat duct in order to reduce heat and mass losses and to increase energy efficiency;

d) works of thermal rehabilitation of the system supplying hot water for consumption; e) where applicable, the installation of alternative systems for production of energy from renewable sources - heat solar panels, electricity solar panels, heat pumps and/or biomass central heating plants, including their purchase.

Depending on the results of the technical expertise and the energy audit conducted on the block, these works may be supplemented with: repairing of construction elements in the facade, where there is the danger of falling off and/or affecting the functionality of the residential block, repairing of the terrace/lattice mast type roof, including the repairing of the rainfall collector drains from terrace/lattice mast envelope, dismantling of installations and equipment mounted visibly on the facades/terrace of the residential block, and their remounting after the intervention works, recovery of interior finishes in the areas of intervention, repairing/recovery of ventilation channels in flats in order to maintain/achieve natural ventilation of occupied spaces, development performance of works for reconnecting the residential block to the centralised heat production and supply system, the individual energy consumption measurement equipment for heating and for hot water for consumption, the repairing of protection sidewalks in order to remove infiltrations at the infrastructure of the residential block, repairing/replacement of the cold water distribution installation and/or of sewage and/or rainfall collectors in the underground of the residential block up to the connecting manhole and replacement of the fluorescent and incandescent filament lighting fixtures in common areas with high energy efficient lighting fixtures and increase lifetime. For the residential blocks completed in 2017, savings of 9 929 791.64 kWh/year were recorded (854 toe/year) The energy savings, as calculated for the period 2011-2017 in residential buildings included in the National Programme, are presented in Table 16.

Table 16 Calculated energy savings [kWh/year] [thousand toe/year] 572 859 052 49.26 Source: MDRAP

F. ENERGY EFFICIENCY IN GOVERNMENT BUILDINGS AND PUBLIC SERVICES

 Thermal rehabilitation in buildings held and occupied by the central public administration In order to apply Article 5(1) of Directive 2012/27/EU on energy efficiency, the inventory of the buildings with areas above 250 square meters was prepared, including relevant energy data about them, as referred to in Order No 3466/2013 of MDRAP, published in Official Gazette of Romania, Part I, No 778/2013 and Order No 263/2015 of MDRAP, published in Official Gazette of Romania, Part I, No 490/2015.

 In order to achieve the 3 % annual renovation rate in this category of buildings, as calculated with relation to the total useful area of the heated and/or cooled buildings, which are held and occupied by the central public administration, the following actions were carried out:

a) The following actions were initiated/completed for 185 buildings, as applicable:  the technical expertise on the resistance structure of buildings;  the preparation of the energy audit, including the preparation and the posting of the energy performance certificate for inventoried buildings;  the preparation of the energy efficiency plan, with specific objectives and actions on major renovation/thermal rehabilitation of inventoried buildings and the estimated energy saving; b) energy performance increase works were carried out in 162 buildings, consisting in:  replacing the existing exterior joinery with energy efficient joinery;  performing the partial thermal insulation of certain envelope elements of the building;  replacing the incandescent/fluorescent filament lighting fixtures with economic and highly efficient lighting fixtures;  performing maintenance/repair works to the interior heating installations, including replacing the central heating plant with high performance units. c) Complex energy performance increase works were carried out in 50 buildings (major rehabilitation). Compared to the energy saving achieved in the period 2015-2016, more specifically 26 051 200kWh/year, in 2017 an additional saving of 10 051 847 kWh/year was achieved (864.45 toe) accounting for the energy efficiency works indicated above. The annual primary energy saving, as calculated after the performance of specific energy efficiency increase works, is presented in Table 17.

Table 17 Calculated energy savings [kWh/year] [thousand toe/year] 36 103 047 3.1 Source: MDRAP

 Thermal rehabilitation of public buildings In order to assess the impact of this measure, ANRE submitted Letter No 3485/16 January 2018 to 100 municipalities with over 20 000 inhabitants, requesting information on the energy savings achieved after the application of the measure of thermal rehabilitation of public buildings (exterior insulation, mounting of thermally insulating joinery, upgrading of heating system).

Until the preparation of this report, 46 municipalities responded to the request of ANRE, of which a very small number presented values of energy savings from the applied measures. Considering also the responsibility of local public administration authorities with population of more than 5 000 inhabitants to prepare energy efficiency improvement programmes also including the measure of thermal rehabilitation of public buildings, DEE reviewed these programmes and the total recorded value was 12 860 toe.

 Rehabilitation of public lighting

In order to assess the impact of this measure, ANRE submitted Letter No 3485/16 January 2018 to 100 municipalities with over 20 000 inhabitants, requesting information on the energy savings achieved after the application of the measure of improving the efficiency of public lighting Until the preparation of this report, 46 municipalities responded to the request of ANRE, of which a very small number presented values of energy savings from the applied measures. Considering also the responsibility of local public administration authorities with population of more than 5 000 inhabitants to prepare energy efficiency improvement programmes also including the public lighting improvement measure, DEE reviewed these programmes and the total recorded value was 2 058 toe.

G. ENERGY EFFICIENCY IN THE TRANSPORT SECTOR Retrofitting of urban public transport The analysis of 14 EEIP has revealed energy savings of 1 430 toe. The main energy efficiency measure was the renewal of the fleet of buses, trolleybuses and tramways. Other measures applied: Purchasing equipment for monitoring tramway routes, retrofitting the transport network infrastructure and mounting fuel probes and GPS. Extension of the underground transport in Bucharest The electrical underground substations and the installations for the ventilation system, which had 30 years, were further retrofitted. The installations for the ventilation system were retrofitted in six underground stations and resulted in energy savings of 200 toe. The replacement of the LED lighting in two underground stations led to energy savings of 100 toe. The electrical underground substations were retrofitted, resulting in energy savings of 1 400 toe. The rolling stock fleet was also retrofitted and 16 underground trains were purchased, resulting in energy savings of 1 400 toe. By the implementation of eight measures, energy savings of 4 317 toe were achieved.

Retrofitting of rail transport The analysis of the EEIPs received from the economic operators in this sector revealed energy savings of 1 816 toe, which accounts for 20 % of the target of 8 900 toe.

At the National Railway Company (Compania Națională de Căi Ferate C.F.R. SA) measures were implemented to improve the energy efficiency of rail operation buildings as per the Energy Efficiency Improvement Plan of CNCF CFR SA for the period 2013-2026, leading to energy savings of 960 toe/year. Economic exterior lighting systems were deployed in railway stations and LED signalling units were mounted, leading to energy savings of 10 toe/year. In total, by the implementation of measures to improve energy efficiency, energy savings of 973 toe/year were achieved. At CFR Călători SA energy efficiency measures were implemented at:  SRTFC Bucharest - works for retrofitting the lighting installation, leading to savings of 14 toe;  SRTFC Timisoara - works for retrofitting the heating installation at the service shop in Arad, the thermal insulation of administrative buildings, leading to savings of 5 toe;  SRTFC Galati - works for retrofitting the central heating plant at the service shop in Buzau and Tecuci, leading to savings of 2 toe.

By the implementation of these measures, energy savings of 21 toe were achieved. At SNTF CFR Marfă SA the measures were further implemented to increase the rate of electrical traction to the detriment of the Diesel traction, with savings of 9.46 toe/million of gross tons per km, the equivalent of 755.72 toe. Moreover, the burning parameters of central heating plants were corrected and timer thermostats were mounted, leading to savings of 16 toe. Therefore, the total saving achieved in 2017 was 771.16 toe. At SC Regiontrans SRL, by the implementation of the measure on equipment with new TEDOM type engines, a saving of 51 toe was achieved

Retrofitting of waterborne transport The analysis of the EEIP received from CN Administrația Porturilor Maritime SA Constanța revealed the implementation of the following types of energy efficiency measures, with energy savings of 64 toe: - the optimisation and improvement of efficiency in 21 W interior lighting installations and the exterior night lighting at the warehouses in Port Constanta Sud; - turning the central heating plant from the administrative office in Mangalia, which operated on M type fuel, to a gas powered plant; - regulation of the air excess coefficient in the central heating plant. - retrofitting of five transformer stations in Constanta Port Navrom SA installed equipment for monitoring the hydrographic and mechanical parameters on 10 ships, thus achieving a 5 % reduction in the total consumption of these ships, which means a reduction of the fuel amount by 358 toe.

Retrofitting of air transport The analysis of the EEIP revealed the implementation of the following types of energy efficiency measures, with energy savings of 3 731 toe:

- Bucharest airport: rehabilitation of the thermal insulation of ventilation pipes in terminals, recovery of the thermal/hydro-insulation of buildings on the airport platform, optimisation of the beaconing lighting and purchase of a new MT 20 kv PIF feeder in Otopeni, with energy savings of 50 toe; - The Romanian administration of air traffic services, Romatsa, replaced the thermal insulation for the hot water installation, leading to energy savings of 0.4 toe; - The Carpatair airline company continued the implementation of the measures pertaining to the Modernisation Programme, achieving energy savings of 95 toe: using low power at take-off, lowering the altitude for reduction of traction from take-off to climb, optimising the centring of the load in relation to the centroid of the aircraft - The Blue Air airline company installed Winglet devices on the wings of two aircrafts, which led to energy savings of 878 toe, purchased 5 new B737-NG aircrafts, which led to savings of 73.40 toe, and for the deployment of the internal maintenance programme for the fleet of aircrafts, savings of 2 634 toe were achieved. Consequently, the total savings achieved in 2017 by the application of five measures are 10 901 toe - Tarom national airline company achieved zero energy savings.

H. The National Investment Plan By Commission Decision C(2012) 4564 final of 6.7.2012 and under Article 10c(5) of Directive 2003/87/EC of the European Parliament and of the Council regarding the application to give transitional free allocation for the modernisation of electricity generation notified by Romania, DG Climate Action of the European Commission authorised the application of Romania for the transitional free allocation of greenhouse gas certificates for electricity producers for the period 2013-2020. By Commission Decision C(2012) 8776 final of 5.12.2012 on State aid SA.34753 (2012/N) – Romania, regarding the transitional free allocation of greenhouse gas certificates for electricity producers under Article 10(c) of the ETS Directive, DG Competition of the European Commission informed, in connection with the application of Romania, that the aid granted under the system of transitional free allocation of greenhouse has certificates is compatible with the internal market and decided not to raise objections to the notified measure. The following objectives were pursued: Main objective - environmental protection, by reducing greenhouse gas emissions for producers of electricity based on fossil fuels Secondary objective - energy efficiency, by retrofitting the sector of polluting electricity generation. The transitional derogation allows for a transitional free allocation for the purpose of retrofitting the production of electricity in the respective country in the period 2013-2020. In this context, Romania has been entitled to the following, as from December 2012:  a mechanism for the transitional free allocation of greenhouse gas certificates for 39 polluting electricity producers for the period 2013-2020;

 ex post grants for 29 investments authorised by the European Commission, which are completed after 25 June 2009 for retrofitting the electricity production system in Romania, designated as the National Investment Plan (NIP). On grounds of the two EC Decisions and under Article 60(3) of Law No 226/2013 approving GO No 164/2008 amending and supplementing GO No 195/2005 on environmental protection, GD No 1096/2013 approving the mechanism for transitional free allocation of greenhouse gas certificates for producers of electricity, for the period 2013- 2020, including the National Investment Plan, was adopted. In accordance with Article 1 of GEO No 30/2015, ME manages the value of the greenhouse gas certificates allocated on a transitional free basis, implements the NIP, and monitors and implements the investments from NIP. ME has the obligation to prepare annually the NIP Implementation Report and the report of payments justifying the number of certificates to be issued and the National Allocation Table of Romania for 2013-2020. After they have been approved by the European Commission, ME, as an institution responsible for the implementation of the greenhouse gas certificate trading scheme in Romania, issues the allocated free certificates to the accounts of operators for each year, paid in accordance with GD No 1096/2013, as subsequently amended and supplemented. The operators owning the installations referred to in Annex 1 to GD No 1096/2013 (Annex 1 to the Report) and receiving transitional free allocation of greenhouse gas certificates in the period 2013-2020 pay the value of these certificates to the NIP account, which allocates grants for NIP investments to a rate of 25 % in the value of eligible expenditure under the “first-come, first-served” principle, depending on the order in which the funding was requested and approved and within the limits of the available funds. The grants are allocated from the NIP account under a grant contract and ex post payments are made against supporting documents accompanying the refund applications. Of the 29 investments included in NIP, based on the approved refund applications and applying the legal framework in force, four grant contracts have been concluded to date, namely:  Grant Contract No 1/29.8.2016, with the beneficiary S.C. CE Oltenia S.A. for the investment ‘Rehabilitation and retrofitting of the lignite powered energy block No 7’- Electrocentrale Ișalnița Branch  Grant Contract No 2/29.8.2016, with the beneficiary S.C. CE Oltenia S.A. for the investment ‘Rehabilitation and retrofitting of the lignite powered 330 MW energy block No 4’- Electrocentrale Rovinari Branch  Grant Contract No 3/14.9.2016, with the beneficiary OMV Petrom SA for the investment in a combined cycle gas turbine - CECC Brazi  Grant Contract No 4/7.12.2017, with the beneficiary SNGN Romgaz SA for the investment in a combined cycle gas turbine - Iernut Two of these investments have been completed to date as per Table 1 - RO-015: The combined cycle gas turbine in Brazi, with OMV Petrom as beneficiary, started its commercial operation in August 2012 and was commissioned in 2017. Its electricity production was 2 695 151 MWh;

- RO-025: The rehabilitation and modernisation of the 330 MW lignite powered block No 4 - CE Rovinari. After retrofitting and refurbishment, the block was commissioned in 2015 and its commercial operation started in 2017. The electricity production was 2 137 253 MWh.

Table 18 Investment Year Specific Reduction of Energy emissions emissions savings [t CO2/MWh] [t CO2/year] [toe/year]* RO-015 Combined cycle gas 2017 0.3590 962 151 230 510 turbine in Brazi, with OMV Petrom as beneficiary RO-025 Rehabilitation and 0.9015 69 870.38 6 667 retrofitting of the 330 MW lignite powered energy block No 4 Total 237 177 Source: Ministry of Energy *1 MWh = 0.086 toe

6. STATEMENT OF ENERGY AUDITS AND ACCESS TO THE SYSTEM OF AUTHORISATION OF ENERGY AUDITORS AND CERTIFICATION OF ENERGY MANAGERS

The work involving the authorisation of energy auditors/certification of energy managers supports the promotion and development of a system which ensures the availability of audits capable of harnessing the energy saving potential of the final energy consumer. The relevant number of energy auditors authorised annually indicates the opening of the energy services market, providing final energy consumers with the possibility to conduct the energy audit in accordance with the legal provisions. Through the information on the type of authorisations and contact details of the persons authorised by ANRE, which are available on the ANRE website, free and unconditional access is ensured for the interested parties. At the end of 2017, the following were certified: 441 energy managers, 207 energy auditors as natural persons, 72 energy auditors as legal persons, of which 19 energy auditors as PFA, 71 approved energy services providers (of which 20 PFA). The structure of authorisations/certificates/accreditations for 2017 is set out in Table 19. Table 19

2017 Total New Extension of certificates/authoris certifications/auth ations orisations Energy managers 116 71 45 Energy auditors as natural persons 68 39 29 Energy auditors as legal persons 15 11 4 Companies providing accredited energy services 14 14 - Source: ANRE

6.1 Certificates of energy managers The certification/authorisation/accreditation work by month, for 2017, is the following:

Figure 15 The statement of energy manager certificates granted in 2017

Source: ANRE RO EN Număr de atestate de manageri energetici Number of energy manager certificates acordate în anul 2017 granted in 2017 Număr atestate Number of certificates Luna/2017 Month/2017 IANUARIE JANUARY FEBRUARIE FEBRUARY MARTIE MARCH APRILIE APRIL MAI MAY IUNIE JUNE IULIE JULY AUGUST AUGUST SEPTEMBRIE SEPTEMBER OCTOMBRIE OCTOBER NOIEMBRIE NOVEMBER DECEMBRIE DECEMBER

Figure 16 Statement of extensions of energy manager certificates in 2017

Source: ANRE RO EN Număr de prelungiri de atestate de manageri Number of extensions of energy manager energetici / 2017 certificates/2017 Număr de prelungiri atestate Number of certified extensions Luna/2017 Month/2017 IANUARIE JANUARY FEBRUARIE FEBRUARY MARTIE MARCH APRILIE APRIL MAI MAY IUNIE JUNE IULIE JULY AUGUST AUGUST SEPTEMBRIE SEPTEMBER OCTOMBRIE OCTOBER NOIEMBRIE NOVEMBER DECEMBRIE DECEMBER

Figure 17 Statement of approval of companies providing energy services in 2017

Source: ANRE RO EN Număr de societăți prestatoare de servicii Number of companies providing energetice agreate/autorizate în anul 2017 approved/authorised energy services in 2017 IANUARIE JANUARY MARTIE MARCH APRILIE APRIL MAI MAY IUNIE JUNE IULIE JULY AUGUST AUGUST SEPTEMBRIE SEPTEMBER NOIEMBRIE NOVEMBER DECEMBRIE DECEMBER

Figure 18 Statement of certification of energy managers and of approval of companies providing energy services in 2017

Source: ANRE RO EN Atestare manageri energetici și Certification of energy managers and agreare/autorizare societăți prestatoare de approval/authorisation of companies servicii energetice pentru anul 2017 providing energy services for 2017 Manageri energetici Energy managers Societăți prestatoare de servicii energetice Companies providing accredited energy IANUARIE JANUARY FEBRUARIE FEBRUARY MARTIE MARCH APRILIE APRIL MAI MAY IUNIE JUNE IULIE JULY AUGUST AUGUST SEPTEMBRIE SEPTEMBER OCTOMBRIE OCTOBER NOIEMBRIE NOVEMBER DECEMBRIE DECEMBER

6.2 Authorisation of energy auditors The work of energy auditors carrying out their activity in the industrial, transport or services field is regulated by the Regulation for authorising the relevant energy auditors approved by Decision No 2794/2014 of ANRE, as amended and supplemented by Decision No 111/2017 of ANRE (Regulation). In accordance with the Regulation, energy auditors acting as legal persons must submit the Annual Report on the energy audit work to the Authorising Commission from ANRE, by 30 January of the year following the analysed year. Statement of authorisations of energy auditors acting as natural and legal persons in 2017 Figure 19

Source: ANRE RO EN Autorizare auditori energetici, persoane fizice Authorisation of energy auditors as natural și juridice and legal persons Număr autorizații Number of authorisations Autorizații persoane fizice Authorisations of natural persons Autorizații persoane juridice Authorisations of legal persons IANUARIE JANUARY FEBRUARIE FEBRUARY MARTIE MARCH APRILIE APRIL MAI MAY IUNIE JUNE IULIE JULY AUGUST AUGUST

SEPTEMBRIE SEPTEMBER OCTOMBRIE OCTOBER NOIEMBRIE NOVEMBER DECEMBRIE DECEMBER

Figure 20

Source: ANRE RO EN Autorizare persoane fizice acordate în anul Authorisation of natural persons in 2017 2017 Număr de autorizații Number of authorisations Luna/2017 Month/2017 IANUARIE JANUARY FEBRUARIE FEBRUARY MARTIE MARCH APRILIE APRIL MAI MAY IUNIE JUNE IULIE JULY AUGUST AUGUST SEPTEMBRIE SEPTEMBER OCTOMBRIE OCTOBER NOIEMBRIE NOVEMBER DECEMBRIE DECEMBER

Figure 21

Source: ANRE RO EN Autorizare persoane juridice acordate în anul Authorisation of legal persons in 2017 2017 FEBRUARIE FEBRUARY APRILIE APRIL MAI MAY IULIE JULY OCTOMBRIE OCTOBER DECEMBRIE DECEMBER

In 2017, 44 energy auditors acting as legal persons conducted energy audits at 232 economic operators. The reports submitted by them have revealed that over 1 300 energy efficiency improvement measures were identified, representing estimated energy savings of 145 086 toe/year, with an investment value of approximately RON 1 139 723 thousand. The same as in previous years, frequently proposed energy efficiency measures were included in the following categories: - introduction of variable torque actuation, - reduction of losses in the compressed air networks, - compensation of the power factor, - optimisation of burning in ovens, - optimisation of operation in installations and technological flows, - efficiency improvement of lighting in production facilities,

- rehabilitation of heat networks, - switch to energy efficient engines actuated with variable torque with frequency convertors

For the period 2010 – 2017, the situation on the preparation of energy audits is the following: Table 20

Number of Estimates Economic Estimated costs Year Auditors energy efficiency energy savings operators (thousand RON) measures (toe) 2010 14 72 275 176 200 1 628 212 2011 6 41 103 112 171 128 813 2012 23 198 564 406 652 1 791 466 2013 33 226 701 196 705 663 684 2014 37 349 432 26 790 1 160 678 2015 73 431 1 118 247 611 750 761 2016 70 330 1 286 144 818 2 185 336 2017 72 232 1 341 145 086 1 139 723 Source: ANRE

Figure 22

Source: ANRE RO EN Evoluția numărului de autorizații acordate Trend in the number of authorisations auditorilir energetici – persoane juridice și a granted to energy auditors acting as legal operatorilir economici care au realizat persons and economic operators which audituri energetice în perioada 2010-2017 conducted energy audits in the period 2010- 2017 Auditori energetici PJ Energy auditors as legal persons Operatori economici Economic operators

The decreasing trend in the number of economic operators which prepared energy audits is maintained in 2017 as well. The explanation lies in the fact that, under Article 9(1)(a) of Law No 121/2014 on energy efficiency, as subsequently amended and supplemented, energy audits are conducted regularly, every four years, so operators which conducted energy audits in 2015 must conduct the next energy audit in 2019, those which conducted energy audits in 2016 also conduct the next audit in 2020 and so on.

Figure 23

Source: ANRE RO EN Periodicitate audituri după anul 2014 Regularity of the audits after 2014

In the period 2015-2017, a steady number of 70 authorisations of energy auditor as legal persons in the database of ANRE was maintained. In 2017, a number of 11 new legal persons requested a new authorisation. The types of energy audits conducted in 2017 and their distribution by activity segment are presented in the graphs and tables below.

Figure 24

Source: ANRE

RO EN Tipuri de audituri energetice elaborate în anul Types of energy audits prepared in 2017 2017 Tipuri de audituri energetice Types of energy audits Audituri complexe Complex audits Audituri electroenergetice Electricity audits Audituri termoenergetice Heat audits Număr audituri energetice Number of energy audits

This year, economic operators also opted, with a majority, for the preparation of complex energy audits. Figure 25

Source: ANRE RO EN Economii de energie, estimate, per tipuri de Estimated energy savings by types of energy audituri energetice (t.e.p) audits (toe) Tipuri de audituri energetice Types of energy audits Audituri complexe Complex audits Audituri electroenergetice Electricity audits Audituri termoenergetice Heat audits Economii de energie (t.e.p) Energy savings (toe)

According to the estimations of energy auditors, the implementation of the energy efficiency measures recommended in the framework of complex energy audits could bring about cumulated energy savings of over 100 000 toe.

Below is a picture of the types of energy audits conducted by authorised natural persons (PFA) or legal persons (LP), with the indication of estimated energy savings: Table 21 number of audits estimated energy savings (toe) PFA Legal TOTAL PFA Legal TOTAL persons persons Heat audits 5 22 27 889.21 22 004.79 22 894.00 Electricity audits 3 52 55 101.04 8 806.57 8 907.61 Complex audits 10 140 150 974.39 112 310.64 113 285.03 TOTAL 18 214 232 1 964.64 143 122.00 145 086.64 Source: ANRE

Figure 26

Source: ANRE RO EN Număr de audituri energetice realizate per Number of energy audits conducted per sectoare de activitate activity segment Număr de audituri energetice Number of energy audits Învățământ Education Transporturi Transport Administrație publică Public administration

Telecomunicații Telecommunications Agricultură Agriculture Ind cimentului Cement industry Construcții Construction Ind textilă Textile industry Metalurgie Metallurgy Prelucrarea lemnului Wood processing Materiale de construcții Building materials Chimie Chemistry Ind energetică Energy industry Ind alimentară Food industry Ind prelucrătoare Manufacturing industry Servicii Services Sector de activitate Activity segment

The services sector is noteworthy because in 2017, the same as in 2016, the number of economic operators which complied with Law No 121/2014 on energy efficiency, as subsequently amended and supplemented, increased in regard to the conduct of the energy audit. The energy saving potential in this sector is quite significant if we consider the energy auditors’ estimates for the recommended energy efficiency measures. Figure 27

Source: ANRE RO EN Economie de energie estimate pentru Energy saving estimated for the energy măsurile de eficiență energetică recomandate efficiency measures recommended in the

în cadrul auditurilor energetice per sectoare framework of energy audits by activity de activitate segment Sector de activitate Activity segment Servicii Services Agricultură Agriculture Materiale de construcții Building materials Telecomunicații Telecommunications Ind textilă Textile industry Transporturi Transport Economii de energie (t.e.p) Energy savings (toe)

Figure 28

Source: ANRE RO EN Economii de energie estimate pentru măsurile Energy saving estimated for the energy de eficiență energetică recomandate în cadrul efficiency measures recommended in the auditurilor energetice, per sectoare de framework of energy audits by activity activitate segment Sector de activitate Activity segment Ind energetică Energy industry Ind cimentului Cement industry Ind prelucrătoare Manufacturing industry Chimie Chemistry Economii de energie (t.e.p) Energy savings (toe)

Activity segments where energy efficiency measures have been identified, which are likely to bring about substantial energy savings, i.e. over 10 000 toe, are: the energy industry, the cement industry and the manufacturing industry. Significant energy savings can also be achieved in the chemistry industry according to the energy auditors’ estimates. It is noteworthy that these data are estimates and account for information pertaining to energy audits conducted by 232 economic operators. ANRE’s database includes 700 economic operators with annual energy consumption above 1 000 toe and approximately 600 economic operators recording an annual energy consumption below 1 000 toe. However part of them are exempted from the preparation of the energy audit because they implemented an energy and/or environment management system or are small and medium enterprises. In accordance with Article 9(1)(a) of Law No 121/2014 on energy efficiency, energy audit is mandatory for all types of energy consumers and underlies the establishment and application of energy efficiency measures. The programme of energy efficiency improvement measures must include the recommendations from the energy audits.

Figure 29

Source: ANRE RO EN Costuri pentru implementarea măsurilor de Costs for the implementation of the energy eficiență energetică recomandate în cadrul efficiency measures recommended in the auditurilor energetice, mii lei (estimări) framework of energy audits, thousand RON (estimates) Sector de activitate Activity segment Ind alimentară Food industry Metalurgie Metallurgy Administrația publică Public administration Telecomunicații Telecommunications

Agricultură Agriculture Construcții Construction Prelucrarea lemnului Wood processing Ind textilă Textile industry Învățământ Education Transporturi Transport Costuri (mii lei) Costs (thousand RON)

Figure 30

Source: ANRE RO EN Costuri pentru implementarea măsurilor de Costs for the implementation of the energy eficiență energetică recomandate în cadrul efficiency measures recommended in the auditurilor energetice, mii lei (estimări) framework of energy audits, thousand RON (estimates) Sector de activitate Activity segment Ind energetică Energy industry Ind prelucrătoare Manufacturing industry Servicii Services Ind cimentului Cement industry Chimie Chemistry Materiale de construcții Building materials Costuri (mii lei) Costs (thousand RON)

The data submitted by the energy auditors as legal persons revealed an estimation of the average specific investment of RON 7 855/toe. In the energy industry, the costs for the implementation of energy efficiency measures recommended by energy auditors are very high due to the fact that, in the framework of energy audits, measures were recommended which involve high financial values for their implementation, such as: - Rehabilitation of heat networks - Purchase of lighting fixtures with LED technology - Mounting of photovoltaic panels - Installation of microgeneration units - Variable torque actuations

Figure 31

Source: ANRE RO EN Costuri pentru implementarea măsurilor de Costs for the implementation of the eficiență energetică recomandate, per tipuri recommended energy efficiency measures by de audituri energetice, mii lei (estimări) types of energy audits, thousand RON (estimates) Tipuri de audituri energetice Types of energy audits Audituri complexe Complex audits

Audituri electroenergetice Electricity audits Audituri termoenergetice Heat audits Costuri (mii lei) Costs (thousand RON)

As for the activity of companies providing energy services approved/authorised to conclude energy management contracts with economic operators outsourcing such service, please note that, at the end of 2017, 51 energy services companies (ESC) and 20 authorised natural persons (PFA) authorised to conclude energy management contracts were recorded in the database of the Energy Efficiency Department. In 2017, 9 ESCs were approved until the amended Regulation was published in the Official Gazette and 5 ESCs were granted an authorisation after it had been amended. Of the 51 legal persons approved to provide energy management services, 11 companies did not conclude energy management contracts and, of the 22 PFAs, 5 persons did not conclude energy management contracts. The number of contracts concluded by the 40 energy services companies and by the 22 PFAs is listed in the table below depending on the period for which the contract was concluded and the type of services provider, as follows: Table 22

Total Number of contracts concluded depending on the period number of for which the contract was concluded contracts/ 1 year 2 years 3 years 4 years 5 years Unlimited category ESCs in the 206 153 20 14 10 2 7 industry PFAs in the 101 72 4 2 - - 23 industry Total contracts concluded in the 307 225 24 16 10 2 30 industrial sector ESCs for 8 6 2 - - - - localities PFAs for 3 1 - 2 - - - localities Total contracts concluded for 11 7 2 2 - - - localities Total energy management 318 232 26 18 10 2 30 contracts concluded

7. ACHIEVEMENT OF EU TARGETS

 The progress recorded in the achievement of the national energy efficiency target of reducing primary energy consumption by 19 % until 2020 The national indicative energy efficiency target is based on the primary energy consumption. Romania established as national indicative energy efficiency target for 2020 to save 10 million toe of primary energy, which represents a 19 % reduction in the forecasted primary energy consumption (52.99 million toe) in the PRIMES 2007 model for the realistic scenario. Achieving this target implies that in 2020 primary energy consumption will be 42.99 million toe, while total energy consumption will be 30.32 million toe. The 2017 National Reform Programme (2017 NRP) is the framework platform for defining the development priorities to guide the evolution of Romania until 2020, in order to reach the Europa 2020 Strategy objectives, and for defining structural reforms to respond to the challenges identified by COM for Romania. The annual report for monitoring the implementation of the National Energy Efficiency Action Plan (NEEAP) - 2017 was prepared on the basis of the reports received from the institutions involved in the implementation of Law No 121/2014 on energy efficiency, in accordance with Article 8.8. The Eurostat data presented in Figure 32 is published for up to 2016, and the forecasted values for 2025 and 2030 are published in the EU Reference Scenario 2016. http://ec.europa.eu/energy/en/data-analysis/energy-modelling Figure 32

Source: ANRE RO EN Ținta națională de eficiență energetică National energy efficiency target Mii tep Thousand toe

Date Eurostat Eurostat data PRIMES 2007 PRIMES 2007 Scenariu RO RO scenario

 Progress recorded in the promotion of electricity from energy renewable sources Legislative developments in regard to promoting the production of electricity from renewable sources; data provided by the Energy Efficiency Department of ANRE (General Directorate for Energy Efficiency, Renewable Sources, Cogeneration and Heat) The promotion of production of electricity from renewable energy sources (E-RES) is a stringent necessity of the current period at EU level, which is justified by: environmental protection, increase of energy independence from imports by diversification of energy supply sources, and by economic and social cohesion reasons. Consequently, considering the relatively high level of the investment costs for the production of E-RES, all the European states established E-RES support systems. In this context, by GD No 1892/2004 establishing the system for promoting the production of electricity from renewable energy sources, the system of promotion through green certificates was established in Romania. This system is focused on competitive market mechanisms, namely the system of mandatory quotas combined with the trading of green certificates (GC). The established promotion system was amended by Law No 220/2008 establishing the system for promoting the production of energy from renewable energy sources, as republished, as subsequently amended and supplemented, hereafter referred to as Law, which proposed to make the system more attractive for investors by introducing new facilities, among which the allocation of a larger number of green certificates, under a differentiated system, depending on the type of E-RES production technology. The system of promotion by GCs established under the law was authorised by the European Commission by Decision C(2011) 4938 on State aid SA 33134 (2011/N) for Romania - Green certificates for promoting electricity from renewable sources. In the application of the primary law on the promotion of electricity produced from energy renewable sources, which has gone through numerous amendments and supplements in time (GD No 1892/2004 was amended and supplemented by GD No 958/2006, and Law No 220/2008 was amended and supplemented by Government Order No 29/2010, Law No 139/2010, GEO No 88/2011, Law No 134/2012, GEO No 57/2013, Law No 23/2014, Law No 122/2015 and GEO No 24/2017), ANRE prepared and subsequently amended and supplemented, whenever required, the relevant legislative framework. In 2012, the Parliament of Romania adopted Law No 134/2012 approving GEO No 88/2011, which amended the system of promotion through GCs. For the purposes of this law, ANRE issued Order No 37/2012 amending and supplementing the Regulation for accreditation of producers of electricity from energy renewable sources for the application of the system of promotion through green certificates, as approved by Order No 42/2011 of ANRE. Subsequently, GEO No 57/2013 brought new amendments to the system of promotion through green certificates established under the law.

In the same 2013, the Methodology for monitoring the system of promoting energy from energy renewable sources through green certificates was amended under Order No 17/2013 of ANRE. In March 2014, Law No 23/2014 approving GEO No 57/2013 amending and supplementing Law No 220/2008 establishing the system for promoting the production of energy from renewable energy sources was published in Official Gazette of Romania No 184/14.3.2014. The amendments brought by the system of promotion through Law No 134/2012, GEO No 57/2013 and Law No 23/2014 were authorised by the European Commission under Decision C(2015) 2886 of 4.5.2015. In June 2015, Law No 122/2015 approving certain measures for promoting the production of electricity from renewable energy sources, and amending and supplementing certain administrative acts was published in Official Gazette of Romania No 387/3.6.2015. In the period January-March 2017, the following rules were issued:  Order No 8/2017 of ANRE approving the limit values for trading green certificates and the value of an unpurchased green certificate;  Order No 11/2017 of ANRE establishing the mandatory quota of green certificates to be purchased for 2016;  Order No 26/2017 of ANRE repealing Articles 1 and 2(b) of Order No 8/2017 of the President of the National Energy Regulatory Authority approving the limit values for trading green certificates and the value of an unpurchased green certificate;  Order No 27/2017 of ANRE establishing the estimated mandatory quota of green certificates to be purchased for April-December 2017. As from 1 April 2017, in order to ensure a balance between the producers of electricity from renewable energy sources and final consumers, in the context of providing further support to production of energy from renewable energy sources so as to maintain the national target of 24 %, GEO No 24/2017 amending and supplementing Law No 220/2008 establishing the system for promoting the production of energy from renewable energy sources and amending certain legislative acts was adopted. GEO No 24/2017 introduced new amendments to the system of promotion through green certificates established under the law and, for its application, ANRE issued the following rules:  Order No 77/2017 of ANRE approving the Regulation on the organisation and functioning of the green certificates market;  Order No 78/2017 of ANRE approving the Methodology for establishing the annual static quantity of green certificates and the annual mandatory quotas of green certificates to be purchased;  Order No 79/2017 of ANRE amending and supplementing the Regulation on the issuing of green certificates, as approved by Order No 4/2015 of the National Energy Regulatory Authority;  Order No 110/2017 of ANRE establishing the estimated mandatory quota of green certificates to be purchased for 2018;

 Order No 127/2017 of ANRE amending Order No 77/2017 of the President of ANRE approving the Regulation on the organisation and functioning of the green certificate market. In regard to compliance with the EU requirements on the certification of the E-RES origin, the Regulation for certifying the origin of the electricity produced from renewable energy sources was promoted, on grounds of which ANRE issued the Procedure for supervising the issue of guarantees of origin for the electricity produced from renewable energy sources, as approved by Order No 23/2004 of ANRE. Consequently, ANRE set up the Single Register of Guarantees of Origin and, in the period 2005-2010, on a half-yearly basis, it issued guarantees of origin for the electricity produced from renewable energy sources, permanently updating the data in this register. Following the amendment of the relevant European law, by promoting Directive 2009/28/EC of the European Parliament and of the Council of 23 April 2009 on the promotion of the use of energy from renewable sources and amending and subsequently repealing Directives 2001/77/EC and 2003/30/EC, the rules on the certification of origin of the electricity produced from renewable energy sources needed to be reconsidered and the Regulation for issuing and tracking guarantees of origin for the electricity produced from renewable energy sources, as approved by GD No 1232/2011 (Regulation) was approved. The system of certification of the E-RES origin proposes to enhance transparency towards the client by differentiating between the electricity produced from renewable energy sources and the electricity produced from conventional sources, and is materialised in the allocation of certificates of origin to E-RES producers. The regulation establishes the framework for the organisation and functioning of the system of guarantees of origin for the production of electricity from renewable energy sources in order to prove that electricity or a rate in it, which is supplied to a final consumer by its supplier, is produced from renewable energy sources. The guarantees of origin issued on grounds of this regulation are used by the electricity supplier, at the request of a final consumer, to ascertain the accuracy of the information included on the electricity label. In order to enforce the provisions of GD No 1232/2011, ANRE deployed the web application for the issue and tracking of guarantees of origin on a secured website developed specifically for this purpose. With the development of the application, as from February 2013, a new single register of guarantees of origin became operational in an electronic format, including information on the guarantees of origin issued, transferred or withdrawn. At the same time, ANRE monitors the situation of guarantees of origin for the electricity produced from renewable energy sources, and the outputs are included in an annual report published on the ANRE website by 31 March of each calendar year. As from 2013, the Reports on the monitoring of guarantees of origin for the electricity produced from renewable energy sources and supplied to the electricity networks are found on the website of ANRE.  Monitoring of the system for promoting electricity from renewable energy sources through green certificates By the annual monitoring of the system for promoting electricity from renewable energy sources through green certificates, ANRE aims at:

 evaluating the functionality of the support scheme through green certificates and its efficacy in reaching the national targets set under the law in regard to the E-RES share in the gross final consumption of energy;  assessing the efficiency of the GC support scheme with reference to the required financial effort;  establishing whether, following the application of the green certificate support scheme, the E-RES production is overcompensated;  evaluating the functioning of the green certificates market under conditions of transparency and non-discrimination, in accordance with the legal provisions;  Results from the functioning of the system for promoting electricity from renewable energy sources through green certificates The system for promoting electricity from renewable energy sources through green certificates has been operational since 2005. Below is the trend of the main indicators in this sector for the period 2005-2017; The trend in the installed power capacity in power plants which benefitted from the system of promotion of E-RES and electricity produced in these plants for the period 2015-2017 is shown in Figure 33.

Figure 33

Source: ANRE RO EN Capacități instalate în centrale electrice care The installed capacity of power plants which au beneficiat de sistemul de promovare a E- benefitted from the E-RES promotion system SRE [MW] [MW] Producția de E-SRE care a beneficiat de The E-RES production benefitting from the sistemul de promovare a [GWh] E-RES promotion system [GWh]

Note 1: The values of the installed capacities of power plants which benefitted from the E-RES promotion system pertain to each calendar year end As from the date of entry into force of GEO No 24/2017, ANRE has calculated the annual static amount of green certificates, which represents the total quantity of green certificates estimated to be issued by the end date of the support scheme in 2031 and the quantity of green certificates deferred from trading in the period 2013-2024, divided by the number of years remained until the expiry of the period of application of the system of promotion through green certificates. The mandatory quota for green certificates purchase for 2017 was: - for the period January-March 2017 at the value of: 0.210 GC/MWh - for the period April-December 2017 at the value of: 0.357 GC/MWh

The trend in the annual mandatory quotas of GCs and in the quotas of purchased GCs achieved by economic operators obliged to purchase green certificates, in the period 2015- 2017, is shown in Figure 34.

Figure 34

Source: ANRE RO EN Evoluția cotelor anuale obligatorii de CV și a The trend in the annual mandatory quotas of cotelor realizate de achiziție de CV GCs and in the quotas of purchased GCs achieved

Cote anuale obligatorii de CV Annual mandatory quotas of GCs Cota perioada ianuarie-martie The quota for January-March Cote anuale realizate de CV Annual quotas of GCs

2015* - 0.278 corresponds to exempted electricity consumption of approximately 3.45 TWh 2016* - 0.306 corresponds to exempted electricity consumption of approximately 6.85 TWh 2017* - 0.357 corresponds to exempted electricity consumption of approximately 7.208 TWh

The annual trend in the number of GCs issued upon the application of the E-RES promotion system to this date is shown in Figure 35. Figure 35

Source: ANRE *the value of the biomass also includes high-efficiency cogeneration RO EN Hidro Hydro Eolian Wind Biomasa Biomass Solara Solar Cogenerare înaltă eficiență High-efficiency cogeneration The trend in the impact of the application of the E-RES promotion system on the electricity price at the final consumer, for the period 2005-2017, is shown in Figure 36.

Figure 36

Source: ANRE RO EN 2015 – impactul ține seama de un consum 2015 – the impact takes into account an exceptat în anul 2015 de cca 3,45TWh exempted consumption of approximately 3.45 TWh in 2015 2016 – impactul ține seama de un consum 2016 – the impact takes into account an exceptat în anul 2015 de cca 6,85TWh exempted consumption of approximately 6.85 TWh in 2015 2017 – impactul ține seama de un consum 2017 – the impact takes into account an exceptat în anul 2015 de cca 7,208TWh exempted consumption of approximately 7.208 TWh in 2015

The trend in the achievement of the E-RES national target in the gross final consumption of energy for Romania in the period 2005-2017 is shown in Figure 37.

Figure 37

Source: ANRE *estimated value RO EN Ponderea E-SRE în consumul final brut de Share of E-RES in the gross final energie electrică consumption of energy Gradul de îndeplinire a țintei naționale de The level of achievement of the national energie electrică electricity target

In accordance with the Methodology for monitoring the system of promotion of energy from renewable energy sources through green certificates, ANRE assesses the statement of costs and revenues of producers of electricity from renewable energy sources which benefit from the system of promotion through green certificates based on the data submitted by the accredited producers. The submitted data is processed as per the model calculation used in the notification of the support scheme authorised by Commission Decision C(2011) 4938 of 13.7.2011: State aid SA 33134 – Romania – “Green certificates for promoting electricity from renewable sources”. The system of promotion through green certificates, as established under the law, is applicable to producers for the electricity produced from renewable energy sources, including for the electricity produced in the test period, under the accreditation decision issued by ANRE for commissioning and refurbishment of units/plants taking place until the end of 2016.

The results of the overcompensation analysis, which is carried out in the analysis year, are included in a report to be published on the ANRE website by 31 March of each calendar year. The cost-benefit analysis, with the update for the 2017 analysis year at an aggregated level for each category of E-RES production technology, taking into account the indicators resulting from the mean value of costs and according to the capacities planned to be commissioned, has identified no risk of overcompensation in the installed capacities. The results of the overcompensation analysis for the 2017 analysis year are published on the website of ANRE.

8. ANALYSIS OF THE TREND IN THE PATTERN OF CONSUMPTION OF ELECTRICITY AT FINAL CONSUMERS

As regards the analysis of the trend in the structure of the electricity consumption at final clients, as calculated on the basis of the data processed by ANRE, the data presented in the attached table reveals the following:  the final electricity consumption recorded in 2016 increased by 1.3 % compared to the level recorded in the previous year;  household consumption increased by 0.4 % in 2016, compared to 2015, but this rate was maintained in the consumption structure;  consumption at non-household clients who changed their supplier compared to 2015 increased by approximately 3.8 % and the consumption rate increased in the final consumption; consumption of non-household clients supplied as a universal service and in a last resort manner decreased by approximately 30.3 % in 2016, compared to 2015, and the consumption rate in the final consumption also decreased.

Table 23

2008 2009 2010 2011 2012 2013 2014 2015 2016

GWh % GWh % GWh % GWh % GWh % GWh % GWh % GWh % GWh %

Consumers supplied under a 23 51 23 55 21 49 20 44 20 45 18 43 15 34 14 31 13 29 regulated regime* 416 % 046 % 365 % 289 % 779 % 966 % 213 % 128 % 533 %

Household 10 23 10 26 11 26 11 25 11 26 11 27 11 26 12 26 12 26 376 % 990 % 246 % 590 % 987 % 670 % 626 % 005 % 054 %

Non-household 13 28 12 29 10 23 8 699 19 8 792 19 7 296 17 3 587 8 % 2 123 5 % 1 479 3 % 040 % 057 % 119 % % % %

Consumers supplied under a 22 49 18 45 22 51 25 56 25 55 24 57 29 66 32 69 33 71 competitive regime 414 % 536 % 075 % 525 % 105 % 805 % 235 % 128 % 344 %

Household 0 % 0 % 0 % 0 % 0 % 0 % 0 % 0 % 0 %

Non-household 22 49 18 45 22 51 25 56 25 55 24 57 29 66 32 69 33 71 414 % 536 % 075 % 525 % 105 % 805 % 235 % 128 % 344 %

Total final consumption 45 100 41 100 43 100 45 100 45 100 43 100 44 100 46 100 46 100 830 % 583 % 440 % 814 % 884 % 771 % 448 % 256 % 877 % *Note 1: the regulated segment also includes electricity supplied to final clients at CMC tariffs for 2012 and 2013

*Note 2: the regulated segment also includes electricity supplied to final clients as a universal service and last resort regime for 2014, 2015 and 2016 Source: Suppliers’ monthly reports - processed by ANRE

9. DEGREE OF ENERGY INDEPENDENCE

Table 24 No 2010 2011 2012 2013 2014 2015 2016 % % % % % % % 1 Total (including energy 78.8 77 77.7 81.7 83.4 82.9 78.4 products obtained and consumed in the population’s households) 2 Coal (including coke) 85.4 81.8 84 81.9 77.8 80.4 80.3 3 Crude Oil 41.5 42.8 43.9 43.4 38.2 37.6 33.1 4 Natural gas (excluding 79.9 78 80.3 87.8 93.6 98.4 86.4 gasoline and ethane from the extraction units included in the crude oil section) Source: Statistical Directory for 2016

10. ENERGY POVERTY

Energy poverty is a major challenge within the EU and it originates in the low income and the energetically inefficient households. In this respect, the European Commission included the interests of vulnerable consumers and in energy poverty in the new European law prepared in the framework of the targets under Europa 2030 and Energy Union. One of the core objectives of the Europa 2020 strategy is to reduce the number of persons exposed to the risk of poverty or social exclusion in the EU. According to Eurostat, 23 % of the European citizens were exposed to the risk of poverty in 2016, i.e. 117.5 million persons.

Figure 38

Source: EUROSTAT According to the Eurostat data for 2016, as presented in Figure 38 at country level, the countries where inhabitants are the least exposed to social exclusion are the Czech Republic (13.3 %), Finland (16.6 %) and Denmark (16.7 %). At the opposite end are Bulgaria (40.4 %), Romania (38.8 %) and Greece (35.6 %). As regards the aim to reduce the number of people at risk of poverty or social exclusion, which is expressed in absolute number of people: 580 000, in the Country Report of Romania for 2018 – SWD(2018) 221 final, the following is noted: “The national target of 580 000 people is already considered reached. In absolute terms, the number of people lifted out of the risk of poverty or social exclusion since 2008 is 1 420 000 (2016). The population taken out of poverty or social exclusion was however higher in 2015 (1 680 000) as compared to 2016.” The package of legislative measures Clean Energy for All Europeans establishes a new approach to the protection of vulnerable consumers, which also includes supporting Member States in their reduction of energy costs for consumers by supporting energy efficiency investments. The energy efficiency proposals of the Commission request from Member States to take into account energy poverty, providing that part of the energy efficiency measures be implemented as a priority for the households affected by energy

poverty and for social housing. Their long-term strategies for renovation of buildings should also contribute to the reduction of energy poverty. The “Clean Energy for All Europeans” legislative proposals will reduce the energy poverty by increasing the affordability of expenses incurred by household consumers. The population health may be improved by rehabilitating buildings with modern low NOx emission heating systems and properly heated households have reduced humidity. European energy consumers will have better options for energy suppliers, for access to reliable tools for energy price comparisons, and the possibility to produce their own electricity and sell it. Enhanced transparency and better regulation signify higher involvement on the part of the civil society in the energy sector as a response to price signals. The European legislative package also includes certain measures meant to protect the most vulnerable consumers of energy. Only a few EU Member States have national law including the concept of energy poverty and there is no consensus on the legal definition of the term. Member States are obliged to measure and to monitor energy poverty and to submit reports to the European Commission every two years, and the Commission will enable the good practice exchange by setting up the Energy Poverty Observatory. In this respect, under the Energy Poverty Observatory project, the EU Energy Poverty Observatory platform was launched in Brussels on 29 January 2018, a portal dedicated to energy poverty intended to be an aggregator of statistical information meant to encompass the multiform reality of this concept. For buildings – a sector which accounts for 40 % of the European energy consumption, through the revision of the Directive on the energy performance of buildings, the European Commission fosters the deployment of innovative and smart technologies in buildings; at the same time, Article 4 of the Energy Efficiency Directive was inserted in the revised version of the Directive on the energy performance of buildings, which also includes additional measures on energy poverty. At European level, two thirds of the buildings were built before the construction standards have been prepared and the renovation rate is approximately 1 %. In the annual activity reports of ANRE and in the national reports submitted to the Agency for the Cooperation of Energy Regulators (ACER) and to the European Commission with a view to fulfilling the reporting obligations provided under Directive 2009/72/EC and Directive 2009/73/EC, ANRE mentioned the following: “In order to mitigate the negative impact of the process of elimination of regulated tariffs/prices on the consumers, a series of protection measures for consumers were proposed in the memorandum approved by the Government with regard to the calendar of gradual removal of regulated tariffs/prices, among which: identification of vulnerable consumers, provision of direct subsidies to these consumers, an increase on the part of suppliers in their consumer awareness-raising actions regarding the market liberalization process, the review of the provisions on the supplier change. Law No 123/2012 on electricity and natural gas defines “the vulnerable client” as the final client belonging to a category of household clients who, on grounds of age, health or low income, are at risk of social marginalisation, and who, in order to prevent such risk, benefit from social protection measures, including financial measures. Social protection measures and the eligibility criteria for them shall be established under legislative acts. Vulnerable clients shall be the main beneficiaries of the social aid envisaged in the process of gradual relinquishment of regulated prices/tariffs.”

Law No 196/2016 on the minimum inclusion income, as published in Official Gazette of Romania, Part I, No 882 of 3 November 2016, will repeal Government Emergency Order No 70/2011 on social protection measures in the cold season, as subsequently amended and supplemented. For the purposes of this law, the vulnerable consumer is defined as “the household client, as a single person or the family which cannot cover, from their own budget, the full heating costs for the household and the income of which is within the limits set under this law”. Law No 196/2016 defines energy poverty as the vulnerable consumer’s impossibility to provide for their minimal energy needs for the optimal heating of the household during the cold season. In accordance with GEO No 82/8.11.2017, as published in Official Gazette No 902/16.11.2017, Law No 196/2016 on the minimum inclusion income will enter into force on 1.4.2019. ANRE, through the Energy Efficiency Department, took over the annual presidency and the Secretariat of the EnR Association - the Association of national energy efficiency agencies in Europe from 23 February 2017 to 22 February 2018, with a view to coordinating the EnR activities at European level, including developing the topic proposed with regard to energy poverty at European and national level. In the period February 2017-February 2018, ANRE coordinated information and good practices exchange in the field of energy efficiency with a view to developing the proposed topic regarding energy poverty at European and national level, in the framework of the new European law prepared in accordance with the strategies of Europa 2030 and Energy Union - Clean Energy for All Europeans. At the same time, at the EnR events organised by ANRE/DEE in 2017 and 2018 participated representatives of the Energy Efficiency Agencies from Member States, and experts from CNR-CME, the Romanian Energy Centre, the Democracy Study Centre etc. The energy poverty topic proposed by ANRE/DEE for the period of its 2017 EnR Presidency was extremely well received at national and European level and the European peers contributed with national good practices in order to strengthen the EnR position document on energy poverty at European level and to ensure the continuity of this topic by the 2018 EnR Presidency - ENEA Italy, with a view to approving the Clean Energy Package in 2018. About the EnR Association - the Association of national energy efficiency agencies in Europe: ANRE is a member of the EnR Association - the Association of national energy efficiency agencies in Europe, which comprises 24 European energy agencies responsible for the preparation, implementation or review of national research, development or dissemination programmes in the fields of energy efficiency, renewable energy and climate changes, with the purpose of strengthening cooperation between member agencies and other European stakeholders with regard to all the relevant aspects for sustainable energy.  Two meetings are organised annually, i.e. EnR Full and Regular Meeting and EnR Regular Meeting, with the attendance of all the members, where the internal issues of the EnR Association are raised and activity reports of working groups are presented.  An important EnR event, which is organised annually, is Thinking Group Meeting, therein participating the managing staff of the national energy agencies in Europe.

 Information is mainly exchanged through the eight working groups and it is also open to other relevant third party organisations wishing to become members of EnR. Also, in addition to their role in the dissemination of information, working groups serve as forums for the preparation and implementation of joint projects under the programmes funded by the European Union, such as the Horizon 2020 Programme of the European Commission. The eight working groups of the EnR Association are:  The Behaviour Change Working Group  the Buildings Working Group  the Energy Efficiency Working Group  the Working Group on Industry  the Labelling and Ecodesign Working Group  the Monitoring Tools Working Group  the Renewable Energy Working Group  the Transport Working Group

In the context of the national energy targets regarding the energy efficiency increase, ANRE fosters, through the Energy Efficiency Department, a constructive dialogue with all the stakeholders in order to include the interests of vulnerable consumers and in energy poverty in the revised European and national energy and energy efficiency legislative framework.

11. CONCLUSIONS

1. As regard the progress recorded in the achievement of the national objectives in the Europa 2020 Strategy, according to the Country Report Romania 2018 - SWD(2018) 221 final, published by the European Commission on 7 March 2018, Romania “is performing well in the areas of employment rates, national greenhouse gas emission, renewable energy, energy efficiency and tertiary education”. In regard to the 2020 energy efficiency objectives, namely: 43 Mtoe (primary energy consumption); 30.3 Mtoe (final energy consumption), the European report indicates the following: “ESI Funds should further contribute to meeting this target but the preparation and implementation of energy efficiency projects are significantly delayed.”

2. In regard to the target of Romania for 2020 to achieve 24 % of energy from renewable sources in the consumption pattern, this value was exceeded at the end of 2016, i.e. reaching 25 %. Country Report Romania 2018 – SWD(2018) 221 final indicates the following: “With 24.8 % renewable energy share in gross final consumption, Romania is well on track and even above in attaining its renewable energy target for 2020. Emergency Ordinance No 24/2017 was adopted on 30 March 2017, approving the amendments to the renewable energy support scheme. This provides support to promoting renewable energy in a sustainable manner while ensuring a reasonable consumer impact. This approach brings the much needed stability and predictability to the Romanian renewable energy sector.”

Figure 39

Source: Country Report Romania 2018 – SWD(2018) 221 final

Table 25 Table C.6: Green growth Green growth performance 2011 2012 2013 2014 2015 2016 Macroeconomic Energy intensity kgoe/€ 0.29 0.27 0.24 0.23 0.23 0.21 Carbon intensity kg/€ 0.99 0.96 0.86 0.83 0.81 - Resource intensity (reciprocal of resource kg/€ 3.51 3.37 3.28 3.25 3.31 3.20 productivity) Waste intensity kg/€ - 1.92 - 1.27 - - Energy balance of trade % GDP -2.7 -3.0 -1.9 -1.4 -0.9 -0.9 Weighting of energy in HICP % 17.77 12.32 12.45 12.21 1225 11.94 Difference between energy price change and % 1.0 1.3 5.0 0.1 2.8 -1.0 inflation Real unit of energy cost of value 24.9 25.6 23.6 22.6 - - added Ratio of environmental taxes to labour taxes ratio 0.18 0.18 0.19 0.22 0.24 - Environmental taxes % GDP 1.9 2.0 2.0 2.3 2.4 2.3 Sectoral

Industry energy intensity kgoe/€ 0.18 0.20 0.18 0.18 0.17 0.15 % of Real unit energy cost for manufacturing industry value 21.0 22.7 21.7 21.4 - - excl. refining added Share of energy-intensive industries in the % GDP 13.67 11.79 11.59 12.20 12.56 12.77 economy Electricity prices for medium-sized industrial users €/kWh 0.08 0.08 0.09 0.08 0.08 0.08 Gas prices for medium-sized industrial users €/kWh 0.02 0.03 0.03 0.03 0.03 0.03 Public R&D for energy % GDP 0.02 0.01 0.01 0.02 0.01 0.02 Public R&D for environmental protection % GDP 0.02 0.02 0.02 0.01 0.01 0.02 Municipal waste recycling rate % 11.7 14.8 13.2 13.1 13.2 35.3 Share of GHG emissions covered by ETS* % 47.0 44.6 38.0 38.2 37.7 Transport energy intensity kgoe/€ 0.77 0.58 0.55 0.60 0.53 0.47 Transport carbon intensity kg/e 2.07 1.63 1.55 1.70 1.50 - Security of energy supply Energy import dependency % 21.6 22.7 18.5 17.1 17.1 22.3 Aggregated supplier concentration index HHI 16.7 12.4 12.8 14.2 17.8 - Diversification of energy mix HHI 0.23 0.23 0.23 0.23 0.23 0.23 Source: Country Report Romania 2018 – SWD(2018) 221 final

3. Final energy consumption increased by 1.8 % in 2016 compared to the previous year considering an increase in energy efficiency in the final consumption sectors.

Thus: - Final consumption in the industry dropped by 3.4 %, whereas the gross value added (GVA) increased by 6.6 %. - Final consumption in services increased by 2.5 %, but GVA increased by 4.7 % - Household consumption was higher by (only) 0.4 %; - Energy consumption in transport increased by 8.1 % due to an increase in the amount of activities performed; thus, the amount of transported goods increased by 13.7 % compared the previous year.

4. An extremely sensitive issue of SACET (centralised heat supply system) and the metering degree at condominium level. Since 1990, their number has constantly increased: in 2014, a number of 70 SACETs were operational and in 2015 six were closed down, and at the end of 2016 and the beginning of 2017 61 SACETs were operational. The main causes for this situation is the absence of a coherent central and local policy and strategy regarding heat supply in localities, and the absence of State funding for the rehabilitation of SACETs.

Another important issue in this sector is the low rate of individual metering at apartment level or in spaces with other purposes in condominiums. Until the date of this report, 24 operators responded to a request from ANRE addressed to heat supply operators in March 2017, declaring the metering rate at condominium level (ranging from 0 %, as declared by Transgex Beius, to 100 %, as declared by Ecoterm SA Făgăraș), and, after all the information has been received, it will be consolidated and a final assessment made. The poor situation on the metering and sub-metering rate at condominium and apartment level was also noted by the European Commission in its letter EU Pilot ref. EUP(2017)9193, where it states that, in Romania, this metering rate is below 50 % considering that the deadline for conclusion of the metering action at country level was 31 December 2016. Paradoxically, although rules are in place providing for the obligation to introduce metering and sub-metering (Law No 51 of 8 March 2006 on public utility community services, as republished, as subsequently amended and supplemented) and the application of penalties for those who do not apply the legal provisions, no significant progress has been recorded in the individual metering action. The reasons are multiple, from the mistrust of citizens in the introduction of heating and hot water exchange devices to the fact that the responsibilities for the application of the law are divided among a large number of institutions and, therefore, there is no actual control over compliance with the metering obligation.

5. At the end of 2017, the following were certified: 441 energy managers, 207 energy auditors as natural persons, 72 energy auditors as legal persons, of which 19 energy auditors as PFA, 71 approved energy services providers (of which 20 PFA).

6. The development on the energy services market is slow, in particular regarding the ESCO type energy services companies. The main obstacles identified in the implementation of energy performance contracts are:  the need to amend the procurement procedure in SEAP  energy efficiency contracts are likely to affect the level of public debt  the law is unclear in regard to the legal regime and the ownership of goods. A positive signal is the fact that ESCOROM and ARPEE have become national administrators of the Code of Conduct, which could constitute, if the issues related to the performance contracts are to be clarified in the forthcoming period, an essential factor in the creation of a pole for the development of ESCO type energy services companies.

7. For a number of NEEAP components, the assessment of the energy savings is difficult because there is no data reported in this respect; therefore, studies are required and a whole process of data collection needs to be implemented to allow for a reasonable indirect estimation of the energy savings.

8. Considering that the National Energy Efficiency Action Plan (NEEAP IV) was submitted to the European Commission in December 2017, we consider that the 2017 energy savings took into account the targets included in NEEAP III, the Government Decision approving the NEEAP IV still pending endorsement at inter-ministerial level.