According to the answer of the Ministry of Energy, sent to HotNews.ro’s request, several options for making changes to GEO 27/2022 (ed. regarding the restriction-compensation scheme) are being analyzed. This change may come in a context in which quotations on European spot markets, both for gas and electricity, have fallen significantly in recent months, reaching even lower limits set by the Romanian government. HotNews.ro drew attention to the fact that these ceilings have become too highandthat they are no longer relevant, do not correlate with the evolution of the market and contribute to an artificial increase in prices.

In other words, they began to be perceived and used by market players as price guides rather than restrictions.

The changes of GEO 27 / 2022 will take into account the evolution of prices on exchanges

According to the answer sent to HotNews.ro, the Ministry of Energy says that together with ANRE, it is closely monitoring the developments that are taking place both at the national and European level of the stock exchanges.

In fact, after the changes to GEO 27 / 2022, “electricity/natural gas sales prices can be directed according to the trading values ​​on the stock exchange, and these proposals will be discussed in the near future with the regulatory body,” the Ministry said. of energy, answering questions about what measures it will take given that the quotations on the stock exchanges have fallen below the price limits set by the Government for producers of electricity and natural gas.

The return to the free market will be carried out “as smoothly as possible”

The Ministry of Energy also says that “it is important that the separation from regulated prices and the transition to the free market take place in stages and as smoothly as possible, so that consumers benefit from this trend recorded in European markets as soon as possible.” , but neither producers nor suppliers of energy will be greatly affected.”

“At the same time, we estimate that the values ​​currently regulated by GEO 27 will remain in force, so these values ​​cannot be exceeded by the possible return of high prices in the event of episodes of prolonged cold or This does not mean that suppliers cannot lower prices below the ceiling , if the downward trend in prices continues,” the Ministry of Energy said in response to a question about suppliers who have offers for end users at excessively high tariffs. , even above the maximum price level, despite market trends.

At the moment, GEO 27 /2022 sets price limits both for the sale of electricity and natural gas by producers and to the end consumer.

How far are the exchange prices below the manufacturers’ limits?

Quotations in the spot markets fell significantly, even reaching the level of limits set by the Government for producers. Gas prices on European exchanges have a downward trend, having reached the level of 26 euros/MWh (January 22), and a further decrease is expected. In 2022, when the cap-compensation scheme was developed, at the height of the energy crisis, gas prices rose to around €300/MWh.

Prices are well below the level of 150 lei/MWh (30 EUR/MWh) that Romanian producers are required to sell to cover domestic consumption. In the coming months, especially after the end of the cold season, when consumption will decrease, prices on the exchange may fall well below 20 EUR/MWh.

As for electricity, spot market prices are also trending lower, reaching the level of 50-60 EUR/MWh on Western exchanges. In 2022, at the peak of the energy crisis, prices were around €550/MWh. In this context, how justified is the obligation of producers to sell at a price of 450 lei/MWh (90 EUR/MWh) in the centralized MACCE system?

It will be recalled that the authorities insisted on maintaining the limits on electricity and natural gas in the form that was established in the spring of 2022, at the height of the energy crisis, although it was obvious that their level no longer had anything to do with the evolution of prices over the last period. While the European markets have normalized, the Romanian electricity and gas markets behave as if we are still experiencing an energy crisis.

To better understand the current situation in the Romanian energy market, read:

• Government failure to manage gas and electricity prices: Caps are too high and no longer justified, but lifting them could wreak further havoc on the energy market