|  09.11.2012

Reviewing the package of regulations in the energy sector

Taking "immediate measures" again, as the authorities did it for the last 10 years, cannot be the solution to solve the issues of pricing and production in energy segment or any other segment in economy

Having a solid plan regarding the rehabilitation and construction of the production units, the predictability of the electricity prices will be the natural consequence. However, without a support scheme from the state and/or from de European Union, it is hard to imagine finding consistent financing for big projects, but certainly not impossible.

• The investments in electricity production units are mandatory in order to have a balanced energy system which will be beneficial for all the players on the electricity market, being them energy producers, traders or consumers.

New investments in production area would be a catalyst for new, better and improved transport system as well, if one takes into account that TSO may impose new technical standards for connecting to the grid. Consequently, one may find solutions for all the problematic aspects, starting with consistent measures for sustaining the energy production.

• It may seem strange to see so many renewable projects given the stormy financial conditions that the world economy is sailing through. However, we should keep in mind that renewables are the nowadays "must" in order to weigh down the "dirty" industries and so - maybe- when the quota for renewable energy production will be reached, the appetite for starting renewable projects will dramatically fall.

ANRE announced 1.5%  quota of green energy in 2012 vs. 8.3% as it  was the mandatory target for 2011 and thus forecasted that no more than 5% from the consumed energy vs. 10 % target will be “green”, then the influx of new projects in renewable naturally occurred.

• The most urgent need is to review and change the package of the energy regulations in accordance with the new energy law. Now, we have a new energy law, but many other rules and regulations issued quite some time ago are still in force, simultaneously with the new rules provided by the energy law.

Then, when we will have a complete and comprehensive legislative package, the authorities should think about increasing the production capacity. Even if the renewables seems to be the star of the moment, the authorities should considerto support the production of energy from other sources, such as hydro, nuclear or thermo power plant. A balanced energy production system should become one of the important bullets of the authorities’ agenda.

• Romania currently offers an appealing support scheme for renewable projects. How bad and which projects will be impacted by the changes in the number of green certificates if the energy regulatory institution proves that the market states an ‘overcompensation’ situation? That's the questions that all renewables investors try to find the answer at this point. Unfortunately, considering that Romania have no history regarding centralized green certificates market, the specific answer is still awaited.

• Romania, among other countries, faces the need to reduce the exposure to volatile energy prices. However, the renewable energy projects are estimated to transfer a higher final power price to end-consumers, since the energy suppliers transfer the costs of subsidies received by producers in the final price invoiced to end-user. Can price volatility be tackled under such circumstances? Any movement at the producers' level will influence the final price paid by the end-consumers. In order to temporarily transfer the risk of price volatility in other area than the production of energy and the industrial consumers, some time ago the traders were invented. Meantime, the energy stock exchanges have shown that trading energy on their platforms could be also beneficial.  With sufficient quantity of electricity on the market and stable legal framework, the price volatility could be, at least, controlled and keep it in the safe zone.

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