Romania’s electricity prices hit record high on production shortages. Expert: If we don’t wake up, there is a risk of a disastrous blackout

Sorin Melenciuc 10/01/2019 | 10:54

Romania’s electricity prices hit record high in this period of RON 610/Mwh (EUR 130) as the production cannot cover consumption and the country heavily relies on imports. Experts warn that Romania risks higher imports and higher prices and even “a disastrous blackout” if the government doesn’t take urgent measures.

Several electricity production capacities are now in maintenance in one of the coldest periods of the year and Romania relies heavily on wind and hydro power to produce electricity.

On Thursday, at 10:35, Romania’s total electricity production was 8,554 MW, while total consumption reached 9,327 MW – and the difference was covered by imports of almost 800 MW, according to Transelectrica data consulted by Business Review.

Despite its large power capacities in theory, Romania has challenges in ensuring power production as many coal power capacities built during the communist regime are outdated and need to be modernized.

But the energy sector in the country face now regulation and fiscal challenges.

“Romania has bigger problems with ensuring the real power production capacities. Causes? Regulatory and tax framework. We must quickly give up the obligation to trade on the stock exchange future energy produced by new capabilities. This regulation creates major problems with the financing of new investments,” Razvan Nicolescu, a former Energy minister and currently energy consultant at Deloitte said.

Political involvement in such a sector risks having disastrous consequences, according to the experts.

“We have to stop imposing new taxes every month. These include the politicization, de-professionalization and decapitalization of state-owned companies. If we do not wake up, we will import more and more, we will pay higher prices and we will even risk a disastrous blackout,” Nicolescu warns.

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