Otilia Nutu, Expert Forum’s energy and infrastructure analyst, told HotNews.ro that the new emergency regulation on capping and compensating energy prices will not be able to be implemented unless new changes are made. This draws attention to the fact that there is a risk that Romania will not be able to provide the necessary electricity and we will have a blackout situation. “You regulate the price in vain if you don’t have enough electricity and you have to import it,” says Otilia Nutsu.

“For residential customers, the limits under the order will ensure the same bill as last year, but the real question is whether that will be the case if there is enough electricity. It’s no use saying the current is cheap if it isn’t. The solution is to either raise the price or cut electricity. Most likely, the ordinance will be corrected again, it must be changed, otherwise we will be left without electricity. We may see different ceilings, different prices or turn off the lights,” Otilia Nutsu, expert forum energy and infrastructure analyst, told HotNews.ro.

It claims that there were no real consultations with market players. “The decree appeared from today to tomorrow. The fundamental problem is that they do not think when they adopt some laws. They make them without preliminary calculations and analysis, and then see where they are broken and begin to fix them. Legislation is being made on its knees because it contradicts arithmetic,” he explained.

Under the new rules, small suppliers will not be able to supply energy to household consumers

Nutsu says there are many distortions in the new order that could block the operation of small electricity suppliers. More precisely, we are talking about the price limit of 1,300 lei and the difference with which suppliers buy energy on the foreign market.

“The problem is that suppliers have already made offers to buy and haven’t found energy at that price, because offers to sell are still coming in at much higher prices, and then the transaction doesn’t actually go through. Today it became known that one of the suppliers cannot afford to cover the necessary (…) Most likely, one of the suppliers will refuse residential consumers or even those who receive a limit, and will say that they will only sell to those for whom they are not obliged to limit the final price”, – explains Otilia Nutsu.

What happens to the customers of these providers? In accordance with the law, customers – domestic or non-domestic consumers will be taken by suppliers of last resort – large companies such as ENEL, Electrica.

The analyst of the “Expert Forum” explains that these companies will not be able to provide the necessary electricity for new consumers, as they do not have additional reserves. “These companies will not be able to provide their energy, because they already have very big problems, because the state did not even cover the difference of money from last winter (there are delays in payment), and they will find themselves in this situation: either they borrow from the bank system, or they will borrow from the parent companies, or they will leave Romania,” says Otilia Nutsu.

Actually, it was NARE that reported this situation to the Government, which recommended the creation of supplier companies to take over customers in the event of the departure of large companies.

• “Practically, we are returning to the situation before privatization. If many small suppliers refuse and large companies have to take customers, we may witness the departure of some large companies from Romania,” says Otilia Nutsu.

Romania has not prepared its facilities for electricity production

Otilia Nutsu explains that the main problem is that we have too little energy on the market compared to what is needed, and Romania has not prepared for it.

“Unlike us, all other EU countries have invested huge amounts in energy this year. The other day I was driving through Bulgaria and saw whole hectares of solar panels, which did not exist even a year ago. In Germany alone, from what they installed this year, they produced 2 terawatts per hour. “Energy capacity from sources other than gas has increased everywhere,” the analyst explains.

Otiliu Nutsu warns that, according to a report presented by TransElectrica, if it gets cold, Romania will have problems with electricity production capacity.

“In Europe at the moment there are no conditions to achieve blackouts or interruptions for domestic consumers of electricity or gas, but in our country it may be due to a reduction in electricity production. Nothing has been done to increase gas production. Laws were passed that prohibit exports in conditions where we are net importers of energy carriers, which means we will not be able to cover part of the demand,” the expert explains.

I am looking for a goat

The analyst of “Expert Forum” claims that trade commissions for energy contracts kept the current order and “among the market subjects found alternatives in this sense.”

“I find it absolutely incredible that OPCOM has proposed an option that has been introduced in the regulation, which virtually eliminates all market mechanisms on the platforms from this solidarity fund and from those excessive taxes that practically distort the entire functioning of the market, but they are very happy as long as there are trading fees under this contract. I see that no one is engaged in solving the situation, but only in searching for the scapegoat. Whether it’s a war in Ukraine or decisions coming from Brussels, you regulate the price for nothing if you don’t have electricity and you’re forced to import it,” concludes Otilia Nutsu.

Editor’s note. OPCOM was founded in 200 and is a subsidiary of the national electricity transport operator Transelectrica, which acts as the administrator of the electricity market in accordance with the provisions of the current primary and secondary legislation.

After the adoption of Decree 27/2022, Prime Minister Nikolae Chuke convened a meeting of the Inter-Ministerial Committee on Energy Sustainability and Implementation of Energy Infrastructure Projects.

The Prime Minister assured that there will be no problems with energy supply in winter, and the price restrictions on energy carriers and compensatory measures will remain in force. The government asked NARE to provide information on energy prices and the state of implementation of the bill payment support scheme.

On the other hand, President Marcel Cholaku has already announced that the energy ordinance will be amended in the parliament. PSD President said it is necessary for public services, churches and Metrorex to benefit from capping and compensating energy prices

On the other hand, experts draw attention to the fact that the legislation on the limitation and compensation of energy bills, which was supposed to solve the problem of price increases that started last year, actually had the opposite effect: it deepened the problem even more, the state budget can no longer compensate the bills, suppliers there is nowhere to get money, distributors no longer have to invest in the network, and the price on the stock market has reached a historical record today.

• The boomerang effect of energy measures. What does Marcel Cholaku know and not tell us?