Switched off: Romania cuts electricity output and consumption on new taxes, higher prices

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.

This year, Romania’s electricity prices hit a record high of over EUR 130/ Mwh in some periods – and these prices have an impact on local businesses.

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.

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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.

In the same time, Romania’s power output dropped by 4.9 percent compared with January-July 2018.

Romania was during a long period of time an electricity exporter into the region as its Communist regime-built power industry was large and diversified.

But a recent BR Analysis showed that the situation is about to change this year due to lack of investment, poor management and bad regulations.

Last year, Romania was still an electricity exporter but the amount of exports was much smaller than in the previous years.

Electricity export declined by 16.3 percent last year compared with 2017 following a decline of 24 percent in 2017 and of 18 percent in 2016.

Compared with 2015, Romania’s electricity export halved last year – and this worsened the country’s trade deficit.