|  08.11.2012

Priorities for the Romanian national energy strategy, report by Deloitte Romania

Romania does not have an energy strategy adapted to the imperatives of the present period (economic and financial crisis, penetration of renewable energies, new hydrocarbon finds, repositioning in competition of cross-border hydrocarbon infrastructure projects, electricity markets coupling, transposition of the acquis communautaire, mainly the energy-climate change package, etc)

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A set of strategic actions has been proposed in the field of electricity, by means of a study commissioned by Transelectrica regarding perspectives of the National Power System. But there is yet no comprehensive document available that would guide the government, the local administrations, the investors, the economic agents in their efforts to align their commercial policy with the sustainable development of the Romanian energy sector.

Among the main challenges to be addressed by such energy strategy, one could quote:

1. Covering the primary energy demand and limitation/confining of import dependency at acceptable levels;

2. Reaching the established national targets according to the EU energy environment legislative package;

3. Reinforcing institutions that would regulate security of supply, energy efficiency, environment impact, and in general would ensure that the EU energy policy pillars are solid in Romania;

Sustainable development of the Romanian energy sector is still a far desiderate. Some present weaknesses, if not timely addressed, will become acute and may lead to major unbalances in the national economy.

Such weaknesses include:

- aging of power generation capacities and weak capabilities of replacing and environmentally retrofitting them;

- lack of attractiveness for private investors in the conventional power generation sector due to the market power of state owned entities;

- a too generous promotion scheme for electricity from renewable energy sources, that may lead to overcapacity in this subsector, thus affecting the stability and safety of operation of the National Power System;

- a weak culture with regard to energy efficiency, linked mainly to the long term policy of utilising the energy sector as an economic and social protection tool, dis-incentivising the economic agents to adopt competitiveness oriented measures and the population to become energy bill conscious;

- the above political line, a constant during the last two decades and more, has transposed into wrong energy price signals, both in the field of natural gas and in the field of hidden cross-subsidies.

Given the general context of the Romanian energy sector, one could identify some priorities that would be necessary to be addressed in the new energy strategy of Romania:

1. In the field of institutional reform and reinforcement: Institutions with authority and competencies in the energy sector need reinforcement regarding:

- Authority – legislation and governmental practice should grant the necessary access to resources (material, human, logistical, etc) and sufficient independence / autonomy in order to fulfil their role;

- Competence – energy sector specific institutions need empowerment through legislation in order to formulate/adopt decisions vitally necessary for the sector and they should be populated with the necessary competencies which allow a good understanding of the imperatives of the present and a good (informed and proportional) regulatory process;

- Reorganisation and creation/reinforcement of new functions to cope with the imperatives of the years to come (regulation of the thermal energy industry, of the nuclear industry, of the renewable energy sector, etc. another example is given by the granting of building permits on the continental shelf of the Black Sea or for the construction of off-shore hydrocarbon pipelines aiming at bringing the latter to the shore);

The case of the former agency for energy conservation is very relevant: it needs repositioning, empowering, legislative and regulatory framework, correct subordination, competence, affiliations, adequate human resources, adequate financial resources;

Romania’s representation in front of EU energy sector institutions seems to need reinforcement in terms of human resources and allocation of supplementary resources, eventually by utilising also the relevant lobby organisations – Romania’s voice should be better heard and Romania’s priorities should be more often on the agenda of European lawmakers.

2. Identification/definition of the primary energy mix and formulation of energy strategy and energy policy options:

- Organisation and clarification of the debate on the unconventional gas resources / reserves in Romania;

- Evaluation of the main infrastructure projects for hydrocarbons (pipelines, terminals, etc) in the region and formulation of correct options for the national primary energy mix;

- Formulation of strategic decisions regarding the future of extraction and utilisation of coal in Romania:

a. Hard coal

b. Lignite

- Correct dimensioning of the subsector of electricity generation using renewable energy sources with the corresponding investment efforts for the system balancing capacities;

- Correct / optimal dimensioning of the usage of renewable energies in Romania’ economy and households, considering the technological evolutions, the local potential, economic aspects and energy demand;


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