Lipsa investițiilor urcă prețul energiei – Deputat, Av. Dr. Remus Borza
Source: Financiarul.ro.
Potential Crisis in Romania’s Energy Sector Due to Miners’ Strike
The ongoing miners’ strike at the Oltenia Energy Complex poses a significant threat to the stability of Romania’s national energy sector. With coal reserves dwindling, a 330 MW energy unit at the Rovinari Power Plant has been shut down. During a visit to Târgu-Jiu, Minister Anton assured miners of a salary increase of 1,000 lei, which translates to an additional 100 million lei in payroll for a company that has incurred losses exceeding 2 billion lei over the past five years. By refusing to implement workforce restructuring, cost optimization, and technological upgrades, the government is effectively steering CE Oltenia towards bankruptcy. The recent surge in CO2 certificate prices, which have skyrocketed from 5 to over 20 euros in just one year, will only accelerate this outcome.
Historical Context of the Energy Sector
This troubling situation, while unfortunate, is not unexpected, as it reflects a persistent trend in Romania’s energy landscape over the past three decades. Since the 1990s, every Romanian government has struggled with the mining sector. Populist and protectionist policies have cost the country over 10 billion euros. Had there been a focus on restructuring, efficiency, and modernization in the energy sector, particularly in mining, Romania would have faced fewer losses and would now boast new production capacities. Notably, in the last 30 years, no major power generation facility has been inaugurated. Exceptions exist, but they are solely from the private sector, with OMV PETROM‘s 860 MW combined-cycle gas plant in Brazi, operational since 2012, being the most significant new investment.
Energy Consumption Trends
Over the past decade, January has consistently seen peaks in energy consumption and, consequently, prices. Recently, the market price for electricity has reached over 600 lei per megawatt, though it has yet to surpass the historical high of 651 lei recorded in January 2017. Currently, prices hover around 635 lei. During cold spells, residential heating drives up demand, a trend that has persisted for generations. Even before 1989, such peaks were common. However, Romania has lost approximately 30 million MW in annual consumption due to the closure of energy-intensive industrial facilities.
Understanding the Role of Oltenia Employees
The 13,000 employees at Oltenia must recognize that they are not merely workers in a small shop but are part of a strategic company vital to Romania’s energy security. They should also be aware that, following the Tribunal’s declaration of the strike as illegal, they may face severe consequences, including daily losses of 15 million lei for the company. While Hidroelectrica can help mitigate some of the production shortfall caused by CE Oltenia, it cannot fully compensate for it. The Danube’s flow has been recorded at 4,000 cubic meters per second, with reservoir levels at 51%, allowing for increased energy generation. I spoke with the general director this morning and recommended boosting production in January to maximize profits. Optimistic weather forecasts suggest a warming trend, which will likely reduce consumption and increase water reserves due to melting snow. The substantial snowpack will help fill reservoirs in March and April, enabling Hidroelectrica to generate additional energy. Any shortfall that Hidroelectrica cannot cover will need to be addressed through energy imports. In Hungary, the Czech Republic, and Slovakia-markets interconnected with Romania-energy prices are up to 50% lower than domestic rates, which explains the daily import of 500 to 1,600 MW. As long as imported energy remains cheaper than domestic prices, there is little cause for concern.
Future Price Trends and Market Dynamics
As temperatures rise, we can expect a decline in peak consumption, leading to a stabilization of prices. The 4,500 MW of installed photovoltaic and wind capacity will also contribute significantly to production, although recent weather conditions have limited their output. While current prices in the day-ahead market exceed 500 lei per megawatt, we anticipate an average spot market price below 300 lei starting in February.
Speculative Behavior in the Energy Market
The surge in day-ahead market prices is partly due to speculative behavior among key market players, including producers, suppliers, and consumers. Globally, spot markets are typically residual and punitive; however, in Romania, they have evolved into wholesale markets. I have advocated since 2012 for all market participants to secure long-term contracts. Many have failed to heed this advice and are now facing prices of 500 lei per MWh instead of the more reasonable 200 lei per MWh.
Investment Challenges in the National Energy System
The primary challenge facing Romania’s energy system is the lack of investment in new production capacities and the modernization of existing facilities. In recent years, the government has taken a significant portion of the profits from state-controlled companies. By appropriating 90% of these profits and nationalizing the financial reserves of energy companies in late 2022, it is no surprise that we are witnessing an increase in failures within the energy transport system managed by Transelectrica. Currently, over 8,000 MW are unavailable due to planned or unplanned repairs, conservation, or environmental permit issues. Major energy producers like Hidroelectrica, CE Oltenia, and CE Hunedoara are operating facilities that have exceeded their optimal lifespan, with some units-both hydro and thermal-operating for over 60 years. If the government does not recognize the urgent need for modernization and the establishment of new energy production capacities, the challenges within the energy system will only worsen with each passing year.
