Mădălin Mihailovici, Veolia Romania: Green energy is profoundly impacting the essential utilities sector

How do you think the essential utilities sector (including water and energy distribution/infrastructure) will evolve in Romania? Will investments continue, and will prices remain stable?

The essential utilities sector in Romania is poised for evolution as the nation seeks to modernize its water and energy distribution infrastructure. The imperative likely drives continued investments to enhance efficiency, reliability, and sustainability. Romania’s commitment to meeting European Union standards will incentivize ongoing financial support for infrastructure development. However, the trajectory of prices remains uncertain. While investment generally may exert upward pressure on prices to fund advancements, increased efficiency and economies of scale could eventually contribute to stabilization.

We remain committed to capitalizing on business prospects and adapting to the evolving landscape. During the recent period, Veolia Romania Integrated Solutions has successfully secured two additional contracts. Firstly, an extension of a contract for the operation of water supply and sewage systems at the “Henri Coanda” Bucharest International Airport apron has been inked, ensuring our involvement for an additional five years. Secondly, an addendum has been signed with the city of Otopeni, solidifying our commitment to providing comprehensive water services, including collection, treatment, and distribution, as well as wastewater services, to its population of over 21,000 residents until 2045.

Yet, we must consider that since 2028, the European Funds for public services will be diminished to zero. Thus, the most viable solution for this sector will become the Public-Private Partnerships.

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The transformative shift towards green energy and digitization is profoundly impacting our industry. The increased adoption of renewable sources has reshaped the dynamics of energy supply, prompting a strategic move towards sustainable practices.

We have initiated seven photovoltaic projects as an integral component of our sustainability and energy efficiency strategy. The Grozăvești, Vitan, Băneasa, and Pantelimon projects are fully operational. Simultaneously, we have successfully concluded the implementation of three additional projects: the Red Treatment Plant, the North Pumping Station (D. Pompei), and the South Pumping Station (Sinai). Currently, these facilities operate at a restricted capacity, exclusively for self-consumption, as they undergo a testing phase to achieve their total 100% operational capacity.

In the context of company-wide energy efficiency, we execute an annual plan encompassing short-, medium-, and long-term actions. Through these initiatives and others, the specific electricity consumption per cubic meter of treated water has markedly decreased to approximately one-third of the levels observed in 2002. These results underscore our steadfast commitment to maintaining a sustainable and energy-efficient business model.

In 2024, Romania’s utilities sector faces dual prospects. Economic dynamism offers growth opportunities, yet escalating prices pose operational challenges. With four elections in 2024, political influences on regulations and policies emerge. Navigating this dynamic landscape demands adaptability for utility companies. Success relies on seizing opportunities, cost management, and aligning with the evolving political climate.