Electric turbulence: Romania’s electricity prices hit all-time high on output troubles

Sorin Melenciuc 19/09/2019 | 12:04

Electricity prices in Romania hit an all-time record as domestic output falls and the country relies on import to cover its consumption.

The prices on the Romanian Day-Ahead Market (DAM) managed by local operator OPCOM rose to RON 750/MWh (EUR 158/MWh) on Wednesday, an all-time high.

The price in Romania was three times higher than in Hungary (which fluctuated between EUR 50 and EUR 71/MWh) or in Slovakia and the Czech Republic, where the prices were much lower.

Romania has currently major output problems due to its insufficient coal and hydro power, and one of the two units of its sole nuclear power plant was closed on Wednesday for technical issues.

On Thursday at 11.50 AM, Romania was producing 4,494 MW of electricity and was consuming 5,780 MW, relying on imports to cover its needs.

Lower output and consumption

Romanian businesses have significantly reduced their electricity consumption this year, while producers cut output, an adverse reaction that could be related to new taxes introduced since the beginning of this year and to higher prices in the market.

Local companies reduced consumption of electric energy by 4.4 percent in the first seven months of this year, to 24.94 TWh, while the total national consumption increased slightly by 0.3 percent to 32.56 TWh, according to the National Institute of Statistics (INS).

Public lighting consumption rose by 12.5 percent in the same period and households’ electricity consumption surged by 19.4 percent mainly due to harsher weather during the first months of this year and to higher consumption during the summer months.

In the first seven months of 2019, Romania was a net electricity exporter, after a period og high imports at the beginning of the year.

The official statistics body said that Romania imported 2.13 TWh in January-July and exported 2.37 TWh.

However, electricity export declined by almost a third (-31.9 percent) in the first 7 months of this year while import rose by 45.2 percent.

Switched to turbulent mode

Romania was long an electricity exporter in the region as its Communist-built power supply industry was large and diversified.

But the situation has changed dramatically this year due to lack of investment, poor management and regulatory changes, a recent BR Analysis showed.

“Romania has bigger problems with ensuring its real power production capacities. Causes? The regulatory and tax framework. We must quickly drop the obligation to trade energy produced by new capabilities on the stock exchange futures market. This regulation creates major problems with the financing of new investments,” said Razvan Nicolescu, a former energy minister and now energy consultant at Deloitte.

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Sorin Melenciuc | 19/12/2022 | 18:45

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