Aggregation in Romania's Electricity Market: Legal Rules for Flexibility

Aggregation becomes legally operative in Romania only where it becomes system-facing: the balancing market, under TSO validation.

Where aggregation legally exists - and why that place matters

1. Closing the loop: why aggregation needs to be located precisely

By now, a recurring theme should be evident across the Romanian electricity market framework: similar-looking activities are not necessarily the same legal activity.

Trading electricity, assuming imbalance responsibility, and aggregating flexibility often rely on similar technologies and may even be carried out by the same corporate group. Yet Romanian law treats them as distinct functions, subject to different regulatory gates, different authorities and different consequences.

From the previous analysis, three propositions should be clear:

• Trading and aggregation are not interchangeable legal categories, even when supported by the same digital infrastructure.
• Day-Ahead and Intraday markets are designed primarily as trading environments, which may recognise aggregate market participation but do not, by themselves, create system-recognised aggregated operational units.
• PRE / BRP status assigns financial responsibility, not operational authority, and cannot be used as a substitute for aggregation approval.

This final article addresses the remaining - and decisive - question:

If aggregation is not trading, not PRE, and not created by wholesale market participation alone, where does aggregation actually exist in Romania in legal and operational terms?

The answer requires precision.

Aggregation, in the sense that matters for system operation and regulatory compliance, exists in Romania as a system-facing activity within the balancing market framework, subject to technical validation and ongoing oversight by the Transmission System Operator (Transelectrica).

This does not deny the existence of aggregation concepts at market level. It clarifies where aggregation becomes legally operative, enforceable, and system-relevant.

2. From economic idea to legal function: how aggregation is understood in Romania

In many electricity markets, aggregation is discussed primarily as an economic or commercial tool. Assets are pooled to improve access to markets, to reduce transaction costs, or to improve price discovery. In such contexts, aggregation often remains largely a matter of contractual design.

Romanian law takes a more structured approach once aggregation moves beyond pure commerce.

Where aggregated resources can influence system behaviour, the law treats aggregation as:

• a technical function, not merely a contractual arrangement;
• an activity with direct implications for system security and stability;
• a function that must be observable, controllable and enforceable in real time.

This approach is consistent with the EU balancing philosophy embedded in Regulation (EU) 2019/943 and related network codes: flexibility that can affect frequency, congestion or adequacy must be under the effective control of the system operator.

As a result, Romanian regulation does not rely solely on market rules or contractual declarations to "create" aggregation. Instead, it anchors aggregation in operational procedures, technical validation and ongoing system integration.

3. The decisive legal anchor: Transelectrica's aggregation capability confirmation

The point at which aggregation becomes a legally meaningful, system-facing activity in Romania is Transelectrica's procedure for the confirmation of aggregation capability (TEL-07.VI ECH-DN/25, originally PO 25/2021).

This procedure is not an ancillary document and not a formality. It is:

• issued by the TSO in execution of ANRE's regulatory mandate,
• explicitly linked to participation in the balancing market,
• designed to verify that an entity can act as a reliable system participant, not merely as a market trader.

Its stated objective is precise: to enable participation in the balancing market through aggregated resources, under conditions that protect system security.

Aggregation, as operationalised by Romanian law, is not a general market privilege. It is a system role, with clearly defined entry conditions and technical obligations.

4. What aggregation legally requires: a cumulative test, not a label

Under the Transelectrica framework, aggregation does not arise by declaration, branding or contractual wording. It exists only once a set of cumulative conditions is satisfied.

4.1 Licence scope: the legal entry point

Aggregation must fall within the scope of an ANRE licence. This may take the form of:

• an independent aggregation licence, or
• another ANRE licence (producer, trader, supplier) in which aggregation is explicitly recognised as a permitted activity, where granted in practice.

Licensing establishes legal entitlement, but it does not by itself create aggregation in the operational sense.

4.2 Technical capability confirmation by the TSO

Transelectrica must confirm that the aggregator has:

• a suitable aggregation architecture,
• robust communication and control capability,
• systems tested under operational conditions.

This confirmation is not theoretical. It involves technical review, testing and validation. Without it, aggregation remains legally incomplete.

4.3 Formation of system-recognised aggregated units

Aggregated assets must be structured into recognised operational constructs - UD, CD or ISD - which become the points of interaction with the system operator.

This step is where aggregation becomes visible to the system and subject to system rules.

4.4 Real-time integration and controllability

Aggregation implies ongoing obligations. The aggregator must:

• interface with EMS and SCADA systems,
• receive and execute instructions from the TSO,
• deliver responses that are measurable, verifiable and enforceable.

At this stage, aggregation ceases to be merely a market or commercial concept. It becomes system responsibility.

4.5 Balancing market participation

Aggregated units are designed to:

• offer balancing services,
• respond to activation by the TSO,
• be settled within the balancing framework.

Absent this integration, aggregation does not exist in the legally operative sense recognised by Romanian regulation.

5. Why system-level aggregation is structurally tied to balancing

The fact that aggregation is anchored in balancing is not the result of regulatory inertia. It reflects functional reality.

5.1 Balancing is inherently system-facing

Balancing services:

• directly influence frequency and stability,
• require fast and reliable response,
• expose the TSO to operational risk if performance is inadequate.

Aggregation amplifies both flexibility and risk. That combination demands visibility, control and enforcement mechanisms that only the TSO can provide.

5.2 Wholesale markets serve a different purpose

Day-Ahead and Intraday markets are designed to:

• optimise commercial exchanges,
• allocate energy volumes efficiently,
• support EU-wide market coupling.

Even where aggregate market participation is recognised, these markets are not designed to:

• test real-time responsiveness,
• validate control systems,
• enforce dispatch performance.

Allowing system-level aggregation to emerge through wholesale markets without a dedicated framework would undermine responsibility allocation and system security. The current separation is therefore a design choice, not an omission.

6. Why "partial" aggregation does not hold legally

A frequent argument in market discussions is that aggregation could exist commercially without full system integration.

Romanian law draws a clear boundary here.

Once assets are pooled, centrally controlled, and presented as a combined flexible resource, the activity becomes system-relevant, regardless of how it is described contractually.

At that point, TSO oversight is unavoidable. Aggregation, in its system-facing form, cannot be split into "commercial" and "technical" halves without creating regulatory blind spots.

7. The risks of operating outside the balancing framework

Where aggregation-like behaviour occurs outside the balancing framework, the legal risks are real.

Activities may be requalified as:

• unlicensed aggregation,
• unauthorised system-facing operation,
• breach of licence conditions.

In practice, these risks surface through:

• ANRE compliance reviews,
• refusals or delays in TSO onboarding,
• adverse findings in financing and M&A due diligence.

Romanian energy regulation applies a substance-over-form approach. What matters is what the activity does, not what it is called.

8. Strategic implications for investors and operators

For investors and operators, the strategic implications are clear.

Aggregation-driven business models must be designed around balancing from the outset. Trading strategies, even when technologically sophisticated, must remain within the boundaries of market participation rules.

Experienced market entrants therefore:

• separate trading and aggregation functions,
• delay VPP deployment until balancing qualification is achieved,
• design technical systems with TSO requirements in mind from day one.

Attempts to "grow into" system aggregation through trading shortcuts almost always increase regulatory and investment risk.

9. Aggregation exists where system responsibility exists

Romania's electricity market design is internally coherent.

Trading markets optimise commerce. PRE assigns financial responsibility. Aggregation, as a legally operative system function, exists where control, accountability and system impact converge: in the balancing market.

Aggregation therefore exists in Romania - in the sense that matters for compliance, enforcement and bankability - only where it is:

• technically validated,
• operationally enforceable,
• and anchored in the TSO framework.

This is not a constraint to be bypassed. It is a structural feature to be understood, respected and designed around.

Contact

Horia Grigorescu

+40 744 310 710

If you are building a VPP, planning balancing-market entry, or structuring an aggregation licence strategy in Romania and want a clear regulatory map of the TEL-07 pathway, unit formation, and bankability risks, send us a short summary of your model and target assets.

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Short, practical notes on energy regulation, project bankability, corporate work and tax disputes - written from mandates, not theory.