Romania’s government pins spike in electricity prices on lack of investments, expensive coal and gas production

Romania’s Ministry of Energy has notified the energy regulator ANRE and Competition Council as electricity prices on the day-ahead market averaged at RON 445 per MWh, after peaking at RON 550 per MWh on Thursday.

The prices were higher than at the start of the year, when the grid operator Transelectrica announced that Romania was running the risk of going into an energy crisis.

The Ministry of Energy said that the prices have gone up compared with the same period of last year due to a combination of factors such as insufficient production from renewable sources and lack of investments in new generation capacities.

“On the back of the lower production of hydropower plants and the increase in consumption, Romania covered its electricity consumption through a significant contribution in the system of coal and gas producers, whose production costs are higher,” said the Ministry of Energy. It added that the energy acquisition contracts of distributors have expired and they had to cover their energy needs from the stock exchange OPCOM.

The Ministry explained that the output of wind capacities was very low and in the past the higher production from wind projects pulled down prices.

According to government data, the consumption of electricity currently stands at around 7,500MW to 8,000MW, up by over 1,000MW versus the same period of last year. Several parts of the country are under red code for extreme temperatures.

The Ministry of Energy went on to say that energy prices in Romania are also influenced by those in the region. It added that several unplanned disconnections of the nuclear reactors at Cernavoda also put pressure on prices.

“Aside from the high energy consumption rates recorded in this period, Romania is still a net exporter of energy. The amount of exports in the first semester was 70 percent higher compared with the same period of last year,” said the Ministry of Energy.