RWEA: Investigations on wholesale electricity price hike should take into account overall market structure

Georgeta Gheorghe 22/08/2017 | 13:51

The Romanian Wind Energy Association (RWEA) believes the recent concern of the Romanian authorities to analyse the causes that led to the hike in wholesale prices of electricity is a normal one. At the same time, it expresses its concern regarding the conclusions expressed, which fail to fully cover market functioning conditions, the association said in a press release. 

The association argues that, although the investigation has not yet been finalised, the conclusions already issued do not fully convey the real situation on the market, such as the role of renewable energy.

According to official data released for 2016, renewable energy already represents more than 10 percent of the national electricity consumption, confirming thus, the important role in the energy mix of the country, RWEA argues. Moreover, wind energy contributed, in periods characterised by high consumption, both in winter season, as well as in summertime, reaching shares of around one third of annual consumption.

Wind energy, as an uncontrollable source, cannot function in predictable conditions similar to the conventional ones, but nevertheless brings important benefits to consumers, as it represents not only a cheap, but also a clean energy source. In order to be integrated in fair conditions in the market and to contribute in a positive way to the national consumption of energy, the wind energy and in general, the renewable one, need a corresponding market structure, the association argues. According to RWEA, there should be a possibility to stock and aggregate the production among more producers. Moreover, there should be flexible prices and contracts on centralised markets that can cover production costs. Plus, there is a need for a liquid market, as well as insurance instruments against long-term risks, both in what concerns energy as well as green certificates.

Despite small progress, wind energy is exposed to market fluctuations, due to constraints determined by standardised products, which do not follow the real production profile, as well as the lack of a liquid intra-day market.

According to the association, Romania is the EU country with the biggest balancing costs for wind energy production and with exposure to products and  standardised contracts that are not well adapted to the type of production. That is why, the association urges Romanian authorities to take into account in their analysis the entire market structure and to interpret the effects in an integrative manner and not separately.

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