Ivan: Measures for Romanians to no longer pay for almost the most expensive energy in the EU

Energy is a subject of great interest and, following the discussions started, five measures have been agreed upon within the governing coalition, which were also sent to the government, in order to lower the price of electricity, Energy Minister Bogdan Ivan said on Tuesday at a press conference.

"The subject of energy is a subject of great interest. (...) Since we started discussions in search of solutions so that Romanians no longer pay for almost the most expensive electricity in Europe, we have made serious progress. We are already at the stage where we have five measures that have been agreed upon inside the governing coalition and that have been sent to the Romanian government to be passed in a memorandum. These will come in addition to measures to solve the underlying problem, namely increasing generation facilities," Ivan said, adding that the measures were established together with employers and other players in the field, agerpres reports.

He said that the average duration of implementation of the measures varies between two weeks and six months, but that, in his opinion, a reasonable time horizon could be about six months, a year, by which the first effects will be seen.

According to the minister, one of the measures concerns the market maker mechanism, with the Energy Regulatory Authority creating the legal framework for this mechanism to be agreed on, and in the meantime, the ministry, as a shareholder in the main companies that generate energy in Romania, will ask their management for an analysis on the desire to qualify as a market maker.

"We have created the legal framework, we have a few months to operationalise this mechanism that will be able to lead, together with the other measures, to a decrease in the final price. The goal is very simple. None of these measures work on their own. If they are not taken in full, in a very clear and precise way, we will not have an effect that we estimate today," the minister said.

He added that another mechanism, which has been operationalised since the beginning of the discussions, was the extension of the mechanism for guaranteeing energy transactions on the wholesale market.

"After ANRE set this scheme in place, we can say that a large part of what could be discussed about the speculative potential of the energy market has been eliminated. At the moment, those who want to buy electricity in advance will have to come up with a 10% guarantee on purchases longer than six months and a 5% guarantee on purchases shorter than six months.

But in this mechanism, it is obvious that a large part of what could be discussed about potential gauging mechanisms has been eliminated."

The minister also said that currently, of the total cost of distribution operators, about 20% represents their own technological consumption.

"There are certain losses that, with investment in infrastructure, with integrated digital systems will decrease. It is another single buyer mechanism that was designed together with the market and that will be able to lead to a decrease in this average, which at European level is around 8-10%."

Another point concerns dynamic prices, smart metres, digitally integrated systems. On an analysis of the impact in the UK, Belgium, Spain, Germany, and the Scandinavian countries, this measure, once implemented, led to a drop in the price for the final consumer of about 24%.

"This measure is also integrated with the distribution operators. It is not enough to just install smart metres that do not share data in real time, but we have created a mechanism through the Modernization Fund through which, together with private operators, we create integrated consumption solutions," said Ivan.

He added that together with some of the ministry's partners, the production in Romania of such devices will be announced, using extremely advanced technology and serving the Romanian market and the entire European market.

At the same time, Ivan said that at the moment there are about 40 lines of financing on everything that means energy efficiency, energy, from many government agencies and ministries, from the Agriculture Ministry to the Ministry of European Funds, and there is agreement over the creation of a mechanism under which everything that means investment in energy, in energy efficiency, will have to be agreed upon at the level of a task force, to be led by the Ministry of Energy, in order to have a clear vision of everything that energy funding in Romania entails.

"It is very complicated that today you have 10 pages of financing in different areas, to do research work directly to see what public policies you have in six months, a year, five years, as the Ministry of Energy, how to project public policies for the next five to ten years, if you do not have this global vision on all funding lines. From this point of view, we already have the memorandum ready. It was also sent to the government; work is now being done to approve this document under which we will finally clean up everything that means funding for energy and energy efficiency in Romania. And that will help us a lot substantiate all public policies and provide targeted money," said Ivan.

In his turn, Chairman of the Romanian Energy Centre Corneliu Bodea said that the important thing is that these measures resulted from an authentic and real consultation with the industry and other state bodies.

"I think it is also important that they resulted and represent an intersection of positions, an intersection of the positions of the industry - and believe me that even within the industry it is not easy to intersect the positions of all the players - the Ministry, the regulatory authority, the politics in general. And I think that is valuable. I also believe that this approach is not final. I believe and, with the minister's support, we will continue to have this dialogue and we will continue to identify, to make operational these five measures first of all and to identify new opportunities, new solutions. We also send a message about the concern that industry, politics, state bodies have about what is happening with energy prices. It is a message that must be understood. No one in the industry, or even less in the state authorities, benefits in a climate where energy prices are high," said Bodea.