​On Friday, the government will pass an emergency decree that will establish a mechanism for purchasing electricity to protect the population and the economy, Prime Minister Nicolae Chuke said.

UPDATED Order accepted.

Marian Neatsu, Secretary General of the Government:

• The emergency decree provides for a mechanism that can provide for the following year some things of a principled nature.
• The first of these is the sustainability of the measures that the Government and the Government Coalition have taken during this year of the energy crisis, which are aimed at compensating energy prices for vulnerable consumers, for household consumers and for some non-household consumers. consumers, respectively SMEs, sub-lessees from agriculture, etc
• This is the mechanism we worked on together with the Minister of Energy and NARE.

Virgil Popescu, Minister of Energy:

• “The system is quite ingenious, in France there is a similar system, only there only nuclear energy is included in this platform, here we are talking about a platform for a wider technology.
• The purchase price of this energy is the approximate price from Decree 119, that price of 450 lei, for which the state does not charge absolutely any contributions to the transition fund. this is the price that ensures the further development of companies and allows the development of new electric power capacities.
• Only the capacity that was commissioned before Order 27 will participate in this system, so we are signaling the market for new investment, in the sense that their energy will not be captured in this system.
• In 2023, we estimate that approximately one third of the energy market will be in this system.
• We can talk about the purchase and the price of electricity purchased by suppliers, which will practically allow to maintain these ranges of 68 bans for individuals up to 100 kWh, 80 bans up to 255 kWh, maybe 1.3 lei by amending Decree 119 in the Parliament for the rest of consumers and 1 lei for small and medium-sized enterprises, state institutions, which are now contained in Resolution 119.
• I believe that this system will make it possible to maintain price stability throughout the period of application of this mechanism.”

Question and answer session:

Why is it necessary to amend the Decree 119 in the Parliament, instead of coming from now on with a price of 1.3 lei for all Romanians who consume more than 255 kWh?

• “I avoided it for 2 reasons. Firstly, because we wanted this order to clearly regulate the market functioning mechanism for the next year or for the period of the order’s validity, and we did not want to complicate anything. The second aspect is that we will include all price categories in the law by which the Resolution is adopted.
• Order 119 regulates compensation for all categories of household and non-household consumers specified here. Obviously, there was room for one more price adjustment.
• As far as I know, during this week the political decision-makers have agreed that next week there will be a debate on the provisions of GEO 119, which is in Parliament, so that the law can be passed in the decision-making chamber, the House. deputies, after the law on the adoption of Decree 119 will be adopted next week. (..)
• Large industrial and residential consumers with a monthly consumption of more than 255 kWh still received energy at the market price. Now the price will be 1.3 lei.”, said Marian Neatzu.

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The Prime Minister also announced the prices of energy carriers for the population, small and medium-sized businesses and large consumers.

“We will adopt an emergency resolution through which we will provide energy procurement mechanisms in such a way as to ensure the protection of the population and the economy, in such a way that we maintain the price of electricity for domestic consumers at 0.68 lei for those who consume up to 100 kilowatts, 0.80 lei for those who consume from 100 to 255 kilowatts.

We will keep the price of 1 lei for small and medium-sized enterprises and the novelty that appears due to the implementation of this mechanism and, of course, the changes that will be introduced in the parliament to Decree 119, we will ensure the price for large consumers of 1.3 lei.

In addition, for domestic consumers who consume more than 255 kilowatts, they will benefit from the same energy price of 1.3 lei, with the clarification that unlike the previous provisions, those who consume more than 255 kilowatts will pay the first 255 kilowatts at a cost of 0.80 lei,” Chuke said at the beginning of the government meeting.

The Government’s decision: Energy market regulated until 2025. Pricing and centralized purchasing

On Friday, the Government wants to create a mechanism for the centralized purchase of electricity by an extraordinary decree, which aims to limit the income of electricity producers. The only buyer will be OPCOM, and the selling price will be 450 lei/MWh.

• The mechanism of centralized electricity purchase will be established for a period of more than 2 years, for a period of time January 1, 2023 – March 31, 2025.

What changes is the government making through GEO

The regulatory act is aimed at establishing temporary measures to limit the income received by electricity producers, in the sense that:

– Introduction of a mechanism for centralized electricity procurementoperations with electricity are used:

• 1. manufacturers whose total installed capacity is greater than or equal to 10 MW, with the exception of producers of electricity from renewable energy sources, for the technologies and installed capacity provided for in Article 3, paragraph (1) of Law no. 220/2008, to create a system of promotion of the production of energy from renewable energy sources, with the following changes and additions, power generation capacities put into operation after the date of entry into force of this emergency decree, as well as producers with power generation capacities and thermal energy in cogeneration, which supplies thermal energy to SACET.
• 2. electricity suppliers which have contracts concluded with end consumers, the operator of transportation and electricity supply systems, and operators of electricity distribution, to cover their own technological consumption of the networks that operate them. The company “OPCOM” SA, Operator of the electricity and natural gas market, has been identified as the sole buyer.

– During the period of using the centralized procurement mechanism electrical energy the price paid by a single buyer to electricity producersfor the amount of electricity sold by them through this mechanism is 450 lei/MWh and at the same time a single buyer sells the purchased amount of electricity to electricity suppliers which have contracts concluded with end consumers, the operator of transportation and electricity supply systems and electricity distribution operators, through the mechanism of centralized electricity purchase, with a price of 450 lei/MWh.

– to implement the mechanism of centralized procurement, market participants, to whom the provisions of this regulatory act apply, are obliged transmission to OPCOM and/or Compania Nationala de Transport al Energei Electrice Transelectrica SA, as the case may be, of annual consumption forecasts, broken down by month, to take them into account in the procurement procedures organized by OPCOM.

– OPCOM organizes the annual procurement procedurein December of the year preceding the year of application, based on the confirmed data sent by ANRE and the monthly procurement procedure, which aims to supplement the amount of electricity sold/purchased each month within the framework of the annual procedure.

– Annual and monthly volumes of electric energy received under the mechanism of centralized procurement are firm obligations of market participants, which are subject to the provisions of this regulatory act.

• SEE DRAFT GEO AND KEYNOTE HERE

Violation of the centralized procurement mechanism is punishable by a fine of 1 to 5% of the turnover.

The GEO project amends the current Government Ordinance on Emergency Situations No. 27/2022 on measures for end consumers in the electricity and natural gas market in the period from April 1, 2022 to March 31, 2023.

The mechanism of centralized procurement is defined in detail in the new Appendix – Appendix 11.

The GEO project stipulates that “failure to comply with the obligations stipulated in Appendix No. 11 is a violation and is subject to ANRE sanction in the form of a fine for violation of 1% to 5% of annual turnover for the financial year preceding the sanction.”

The draft GEO also states that the centralized procurement mechanism does NOT work economic entities, producers of electricity from renewable energy sources (..) power generation capacities put into operation after April 1, 2022, as well as producers with power generation capacities and thermal energy in cogeneration, which supply thermal energy to SACET.