Romania (2012)

Degree of reliance on imported energy:

The energy sector in Romania is a critical segment of the economy. Romania has traditionally been a significant European producer of oil, gas and coal and, more recently, of uranium, which has allowed the country to keep its energy import dependence rather low –around 30% – compared to other countries in the region. However, the domestic production of primary energy resources, especially oil and gas has entered a terminal decline, as the current annual reserve replacement for oil and gas is no more than15–20%. 
 
The installed generation capacity allows Romania to export some of the produced electricity to neighbouring countries. In 2008 Romania exported 4.43 TWh.

Main sources of Energy:

Total installed electricity capacity (2008): 16,582 MW 
- Thermal:  56.9% (9,431 MW) 
- Hydro-electric: 35.2% (5,843 MW) 
- Nuclear: 7.8% (1,300 MW) 
- Other RES: 0.01% (8 MW) 
 
Romania has significant fossil fuel and hydroelectric resources. Domestic production supplies 70% of the primary energy demand. 
 
Primary energy demand (PED) of Romania in 2010:
<ul>
<li>
Gas: 35.7%</li>
<li>
Oil: 29%.</li>
<li>
Coal: 18.1%.</li>
<li>
Hydro: 10.3%.</li>
<li>
Nuclear: 6.3%</li>
</ul>

 
Share to total primary energy supply in 2009* (IEA): 34 406ktoe 
Oil: 23.8% 
Natural gas: 30.6% 
Nuclear: 8.9% 
Hydro: 3.9% 
Biofuels and Waste: 11.4% 
Geothermal/ solar/ wind: 0.1% 
Coal and peat: 21.4% 
 
*Share of TPES excludes electricity trade 
 
Romania holds fifth place in BMI’s updated Power Business Environment Ratings, this quarter just two points behind Poland and three ahead of Hungary. The score reflects a relatively low level of import dependence, a high proportion of renewable energy, growing PED and an established competitive landscape.

Country:

Romania

Extent of the network:

The extent of connection to the electricity network is not 100% although it is close. Romania has an extensive interconnected power transmission and distribution network with an overall length of about 600,000 km. The national grid operates on 750 kV, 400 kV, and 220 kV for transmission and 20 kV, 10 kV, 6 kV, 1 kV and 0.4 kV for distribution.

Capacity concerns:

At present, the energy sector in Romania faces significant challenges on both national and global levels, including improving the security of energy supplies, increasing economic competiveness and reducing the sector’s impact on the environment.   
 
Energy transportation infrastructure – power lines, oil and gas pipelines – are relatively developed, but ageing, as most of the networks have been built in the 1960s and 1970s. The country was until recently – as in all the countries in this region – isolated from the energy networks of its neighbours, as one of the main objectives of all the Communist regimes in the region was to reach energy independence at the country level. Romania is currently developing several power and gas interconnections. The oil and gas storage capacities also have to be developed further to comply with the new EU requirements.

Potential for Renewable Energy:

According to the EU Renewables Directive, Romania will have to source 24% of its final energy demand from renewable sources by 2020, up from 17.8% in 2005. For electricity production, this means that renewables have to account for 38% of Romania’s total power demand. Since hydro power alone will not meet this target, the contribution of other renewable energy sources is crucial. 
 
Hydropower 
Analysis of the total small hydro potential in Romania shows the country has the capacity for  around 780 small hydroelectric plants (of below 10 MW/unit), with a total power of 2,150 MW, able to provide approximately 6 TWh per year. At the moment, small hydro plants in Romania account for a total capacity of 1,125 MW, but this capacity is not entirely functional, leaving the high potential of small-scale hydropower largely untapped. 
 
Bioenergy 
Romania is covered 40% by agricultural land and 27% by forest. Biomass is only used for heating purposes, direct burning for cooking and hot water. District heating systems are the most immediate and low-cost application. About 95% of the biomass currently used is firewood. The south plain region is the most promising for the utilization of agricultural waste and the Carpathian mountains the most promising for the development of district heating plants from firewood and wood waste. There are no special incentives for the implementation of biomass projects. 
 
Wind energy 
Romania’s potential in wind energy is considered to be the highest in South Eastern Europe. It is estimated at around 14,000 MW installed capacity, generating around 23 TWh per year.  The Moldova and Dobrogea provinces (in the southeast of the country, near the Black Sea) were considered the most appropriate areas for wind farm developments. The southeast of Dobrogea was ranked second in terms of potential in Europe according to specialized studies.  
 
At the end of 2009, Romania had an installed wind capacity of just 14 MW. 2010 was an excellent year for Romania’s wind sector, with installed capacity increasing 33-fold to reach 462 MW. Wind power produced around 280 GWh in 2010, but given the fact that most of the new installed capacity became operational only towards the end the year, a much higher production can be expected in 2011.

The Fantanele wind farm operated by Czech multinational CEZ started operations in August 2010, using 2.5 MW GE turbines. By the end of the year, 300 MW were operational, with another 37.5 MW to be added in 2011.  A 90 MW wind farm with 3 MW Vestas turbines and operated by EDP came online in November 2010, and was followed by a 30 MW Enel wind farm using 2 MW Gamesa turbines in December. The Monsson Alma 21.8 MW wind farm also became operational in 2010, as well as 6.2 MW from various smaller players. 

Solar energy 
Currently there is no solar generation in Romania; however, the country has considerable potential.  In more than half of the country’s territory, solar radiation is between 1,100 – 1,300 KWh/m2/year, which offers a good opportunity for solar electricity generation.  The potential for solar power through the use of photovoltaic cells is about 1,200 GWh/year. 
 
Geothermal Energy 
Regarding geothermal energy, Romania shows the third highest potential in Europe, with major potential locations in the Western Plain, South Plains (Bucharest region) and Southern Carpathian regions. Total potential reaches around 1.94 TWh per year.

Potential for Energy Efficiency:

In 2005, compared to 1996, the energy efficiency index (ODEX) decreased by 26% at the whole economy level. 
 
During 1996-2006, energy efficiency in the industrial sector increased by 35% in Romania.  Most of the domestic industrial branches registered an improvement in the energy efficiency level during the past 10 years.  The most significant evolutions were registered in the textile and food processing industries.  In the great energy consuming branches (chemicals, steel, etc.), the trend was also positive. 
 
In the household sector, energy efficiency improved significantly in 1996-2006 (by 36%).  The household sector in the last years was characterised by improving the performance of existing buildings, the development of improved standards for the new dwelling places and extending of the energy labelling of household appliances and receivers.   
 
Industry
<ul>
<li>
42% overall efficiency improvements in the sector from 1996-2008.</li>
<li>
Equipment modernisation, annual auditing obligations, and support from the Romanian Fund for Energy Efficiency for incurred costs.</li>
</ul>

Utilities
<ul>
<li>
Hydroelectric – €2.2 billion in new investments from 2010-2012.</li>
<li>
35 MW new planned wind capacity under construction.</li>
</ul>

Transport
<ul>
<li>
Vehicle fleet updating, fuel consumption monitoring in the government fleet, metro system modernisation, and pollution taxes for vehicles.</li>
</ul>

Residential
<ul>
<li>
Auditing and certification schemes for reducing home energy use, and thermal rehabilitation of social and private housing, particularly multi-storied dwellings, with aims to reduce final energy consumption by 30-35%.</li>
<li>
EE Labelling  for appliances.</li>
<li>
EPC for real estate transactions (Jan 2011).</li>
</ul>

Public
<ul>
<li>
2007 public lighting efficiency improvement project, and promotion of energy savings in public services and companies under the National Strategy for Energy Efficiency.</li>
<li>
District heating rehabilitation and modernisation.</li>
</ul>

Ownership:

In the year 2000, the former national electricity company CONEL was dissolved. The following commercial companies were established:
<ul>
<li>
Transelectrica S.A. (<a href="http://www.transelectrica.ro/EN/index.php">http://www.transelectrica.ro/...) National Power Grid Company for electricity transmission, electricity market management, and foreign electric system interconnection.</li>
<li>
Termoelectrica S.A (<a href="http://www.termoelectrica.ro/">http://www.termoelectrica.ro/</a>) commercial Company for Electricity and Heat Generation - electricity generation from thermal power plants, district heating, and related fuel supplies.</li>
<li>
Hidroeléctrica S.A. (<a href="http://www.hidroelectrica.ro/">www.hidroelectrica.ro/</a>)</li>
<li>
Commercial Electricity Generation Company for the production and delivery of hydroelectric power.</li>
<li>
Eléctrica S.A: Commercial Electricity Distribution and Supply Company for nuclear power production. It is controlled by Nuclearelectrica S.A. (http://www.nuclearelectrica.ro/en</li>
<li>
(SNN SA) a state-owned company.</li>
<li>
PETROM SA (<a href="http://www.petrom.ro">www.petrom.ro</a>) An integrated enterprise and former National Oil Company, it is the largest oil and gas company.</li>
<li>
ROMGAZ. S.A S.N.G.N (<a href="http://www.romgaz.ro/?page_id=463">http://www.romgaz.ro/?page_id=463</a>): Charged with exploration, production and underground storage of gas. Romgaz is open for foreign investment, although the Ministry of the Economy is still the primary shareholder. 
 </li>
</ul>

Structure / extent of competition:

The Romanian electricity market was fully liberalised as of 1 July 2007. However, the market continues to include regulated segments, such as:
<ul>
<li>
the supply of power to household consumers, the maximal power (as approved by the technical connection permit) of which does not exceed 100kVA, until such consumers use for the first time the right to eligibility;</li>
<li>
the supply of power by the supplier of last resort</li>
<li>
the green certificates market, the support scheme aiming at encouraging the renewable energy sources; the price of the green certificates traded on the relevant market ranges between EUR 24 and EUR 42 per certificate (a proposal for the increase of the maximum value to 50% being currently under discussions).</li>
</ul>

 
In the spring of 2009, the Romanian government has proposed a restructuring of the national power generation sector segment that is still owned by the state. As most of the power generation capacity is still state-owned, this restructuring will dramatically alter the competitive landscape of this sector.

Existence of an energy framework and programmes to promote sustainable energy:

National Energy Sector Strategy (2007-2020) 
In 2007 the Romanian government approved a long term Energy Strategy, building up on the National Energy Strategy on Medium Term (see below). 
The government's strategy emphasizes: 
-  increasing energy efficiency 
- boosting renewable energy 
- diversifying import sources and transport routes 
- modernizing lines 
- protecting critical infrastructure. 
 
Law 220/2008 enacted by the Parliament in early November 2008 Parliament, transposing the provisions of the EU Renewable Energy Directive (2001/77/EC) into national legislation and creating a comprehensive legal basis for the development of electricity generation from RES. 
As per this directive, Romania should produce 33% of its electricity form RES including large HPPs and 8.3% excluding those by the year 2010. The country’s binding target for the share of energy from RES in final energy consumption is 24% for 2020. 
 
In 2010, the Romanian Renewable Energy Law was fundamentally amended in favour of RE producers. It reiterated the previous renewable energy target of 8.3% (excluding large hydro) for total gross electricity produced in Romania by 2010, and also introduced a 20% target for 2020. However, the share reached for renewable electricity in 2010 was just 1.25%. 
The most important points of the amended law are:
<ul>
<li>
Wind power will receive two green certificates per MWh produced until 2017 and one certificate for the rest of the promotion scheme, which is set for 15 years. This encourages early deployment.</li>
<li>
The value of the green certificates is adjusted yearly, applying the inflation index of the EU-27 (approximately 2% per year) both for the cap and the floor</li>
<li>
The 2020 quota of renewable electricity (excluding large hydro) increased from 16.8% to 20%</li>
<li>
The penalties for suppliers for each non-procured certificate increased from EUR 70 to EUR 110</li>
<li>
A monitoring principle was inserted in the law, but it is as yet unclear how this will be used by the regulator, and if it will be beneficial for the wind industry.</li>
</ul>

In addition, the energy regulator has drafted secondary legislation, but this has not been adopted officially while the renewable energy law awaits approval from the European Commission. At the end of 2010, the Romanian authorities sent six pre-notifications to the Commission related to the approval of the law, and a positive decision is expected to be issued in April 2011 at the earliest.

Current energy debates or legislation:

Romanian President Traian Basescu said in May that the deregulation of gas and electricity prices for households should be put on hold. Complete deregulation needs to be delayed until around 2015, when Romania hopes to adopt the euro. The gas and electricity markets should be liberalized at separate points in time for corporate and household consumers because average Romanians earn much less than Eurozone citizens. 
 
In Early-February, the International Monetary Fund asked Romanian authorities to deregulate gas and electricity prices and to come up with a new price calculation formula. Later, the Government announced that a deregulation calendar would be set up by September 2011, and deregulation would unfold between 2013 and 2015.

Major energy studies:

SEE Business,2010,Romanian Electricity Market

http://www.see-business.biz/index.php?option=com_content&view =article&id=112:romanian-electricity market&catid=53:markets-news-offers&Itemid=115S

Role of government:

The Ministry of Economy and Commerce (<a href="http://www.minind.ro/">MEC, http://www.minind.ro/</a>) is responsible for drawing up the national energy strategy for energy sector evolution, such as power and thermal energy, hydroelectric and nuclear power, oil, natural gas, mineral resources, mine-geology fields. 
 
The Ministry of Agriculture, Forests, Waters and Environment (<a href="http://www.madr.ro/">MAPAM, http://www.madr.ro/</a>) is responsible for the development of the general environmental policy and specific legislation related to water management and environmental protection. It is also the Implementing Authority for the projects financed through the ISPA – Environmental Program. 
 
Responsibility for the implementation of the environmental policy at local level lies with local authorities.

Government agencies in sustainable energy:

The Romanian Agency for Energy Conservation, established in 1991, is in charge of promoting energy efficiency but has limited financial and human resources.  Responsibilities include energy efficiency policy making and programme implementation. ARCE has operational and financial autonomy under the supervision of the Ministry of Economy and Commerce. ARCE is financed from extra budgetary funds and funds from the state budget 
 
The Romanian Energy Policy Association – APER, established in 1995, is an independent professional organization (NGO, non-profit) established under the EC SYNERGY programme. APER provides energy information and knowledge to decision makers and experts in the energy policy development and analysis fields. 
 
<a href="http://www.enero.ro">ENERO</a> – Centre for Promotion of Clean and Efficient Energy in Romania 
ENERO is a non-governmental, non-profit R&D organisation active in the energy field. The objectives of ENERO are to develop the efficient and clean use of energy, renewable energy sources and to support new and innovative energy technologies, to promote the alignment to the European Union acquis in the energy field. ENERO was founded in 1999. 
 
The Romanian “Energy cities” Network 
<a href="http://www.oer.ro">OER</a> is a non-governmental organization, for municipalities interested in improving the energy efficiency in public services (district heating, public lighting, water and gas supply, waste collection and storage, local transportation, etc.) and in promoting renewable energy and environmental protection. OER was formed in 1997. 
 
Institute for Studies and Power Engineering (ISPE), founded in 1949, is a Consulting & Engineering Company 100% private. ISPE developed, practically all the National Power System, from the generation up to transmission and distribution for heat and power. The ISPE’s medium and long-term development goals follow closely the Romanian strategy for EU integration. . 
 
ISCE - Institute of Electric Power Studies & Consulting (<a href="http://www.isce.ro">ISCE</a>) provides information, consultancy and studies on renewables for national and local decision makers. It also offers feasibility studies in the field of energy including RES for public and private organizations, co-operates with other institutions specialized in energy matters to promote RES and RUE. 
 
ICPE - Research Institute for Electrical Engineering New Energy Sources Laboratory <a href="http://www.icpe.ro">ICPE</a>, founded in 1950, is participating in the 5th Framework Programme, the Specific Programme on Energy, Environment and Sustainable Development (<a href="http://www.cordis.lu/eesd">EESD</a>).

Energy planning procedures:

The Energy Efficiency Finance Facility (EEFF) is a grant-supported financing line for Romania from the EU and the European Bank for Reconstruction and Development (EBRD), aimed at promoting the energy efficiency investments in Romania’s private sector through local partner banks. 
 
So far, the EEFF has been used to finance 45 EE investment projects with a combined value of EUR 33.5 million.  Through the EEFF, Romanian companies may borrow up to EUR 2.5 million to finance energy-saving investments, benefiting from 15% EU incentive grant upon the successful completion of the project.

Energy regulator Date of creation:

The National Electricity and Heat Regulatory (<a href="http://www.anre.ro/">ANRE, http://www.anre.ro/</a>):
<ul>
<li>
Established according to the Law no.99/2000, is organized as an independent public legal person of national interest under the Prime Minister co-ordination.</li>
<li>
ANRE operates as its own organisation with regulation approved through government decision.</li>
<li>
Its mission is to create and implement fair and independent regulations to ensure an efficient, transparent and stable functioning of the electricity and heat market while protecting the interests of consumers and investors.</li>
</ul>

 
National Regulatory Authority in Natural Gas Sector (ANRGN):
<ul>
<li>
ANRGN (according to the GO no. 41/2000 approved by Law no. 791/2001) is a legally constituted public institution, which elaborates, applies and monitors the regulation system necessary for the natural gas sector and market function on efficiency, safety, competition, transparency and consumers and environment protection terms.</li>
</ul>

Degree of independence:

The Regulatory Committee of ANRE is assisted by the Advisory Council, which is made up of nine members that are appointed by order of the Minister of Economy and Trade (art.9, par. (9) Of the Electricity Law No. 318/2003). 
 
The Advisory Council supports the harmonisation of the interests of companies and consumers, assesses the impact of ANRE regulations and makes suggestions for their improvement. 
 
Each member of the Advisory Council represents their association or organisation. 
 
ANRE is entirely financed from funds outside the budget through fees obtained for licenses, authorizations and other regulatory activities levied upon the regulated companies and through funds provided by international organizations. 
 
The financing of ANRGN (National Regulatory Authority in the Natural Gas sector), has permitted ANRGN to develop its activity independently.

Regulatory framework for sustainable energy:

Relevant legislation in Romania is as follows:
<ul>
<li>
Energy Law (2007)</li>
<li>
Law on electricity (2007)</li>
<li>
Law on energy efficiency (2006)</li>
<li>
National Strategy for Energy Efficiency (2007-2020) (2007)</li>
<li>
Government Decision regarding the “Strategy for the Promotion of Renewable Sources of Energy” (2003).</li>
<li>
Government Decision regarding the “Promotion of Electricity Produced from RES” (2004)</li>
<li>
South-East European Energy Community Treat (2006)</li>
</ul>

 
A system of tradable Green Certificates is in place, including a purchase obligation for distribution companies and the obligation to fulfil an annual quota of purchased green electricity since 2004, available for SHPPs under 10 MW installed capacity.  
 
In July 2010, the Romanian Energy laws 220/2008 and 139/2010 have been signed by 
Parliament and the President. These laws offer support to large scale commercial development of wind energy solutions over the next 7 years. 
 
Law 139/2010 aims at improving the existing Green Certificate’s system and sets a target for gross domestic consumption of electricity from RES at the following levels:
<ol>
<li>
8.3% for 2010;</li>
<li>
16% for 2015; and</li>
<li>
20% for 2020.</li>
</ol>

 
From the perspective of further regulatory changes, it is to be noted that the currently applicable green certificate regime is in effect until 2012, a new framework to be implemented following such period being currently under approval procedure.

Regulatory roles:

The ANRE regulates electricity and heat (only the heat produced in cogeneration). Responsibilities include:
<ul>
<li>
Tariff setting, licensing, protection of consumer and investor interests, and regulation of access to the transmission and distribution grids.</li>
</ul>

 
ANRE issues, sets up and monitors mandatory regulations to be implemented at national level with a view to ensuring the proper functioning of the electricity sector and market in terms of efficiency, competition, transparency and consumer protection. 
 
ANRGN regulates the natural gas sector. Responsibilities include:
<ul>
<li>
Tariff setting, authorizing and licensing companies, protecting consumers, controlling natural gas sector companies, issuing technical norms, and regulating access to the transmission and distribution grids.</li>
</ul>

Role of government department in energy regulation:

The Ministry of Economy and Commerce (<a href="http://www.minind.ro">MEC</a>) (according to the Government Decision no. 738/2003) is responsible, inter alia, for drawing up the national energy strategy regarding the energy sector evolution, such as power and thermal energy, hydroelectric and nuclear power, oil, natural gas, mineral resources, mine-geology fields. 
<a href="http://www.minind.ro/">http://www.minind.ro/</a> 
 
The Ministry of Agriculture, Forests, Waters and Environment (MAPAM) is responsible for the development of the general environmental policy and specific legislation related to water management and environmental protection. It is also the Implementing Authority for the projects financed through the ISPA – Environmental Program. Responsibility for the implementation of the environmental policy at local level lies with local authorities. 
<a href="http://www.maap.ro">http://www.maap.ro</a>

Regulatory barriers:

The investment climate surrounding RE projects is dependent on the regulatory system being put in place. Law 220/2008 promotes energy generation from RES by the EU Commission, and would regulate a support scheme. While the support scheme applicable to RE is essential, there are additional barriers that lower the appetite for investments in this sector, such as the complexity and timeframe of the administrative procedures. Developers experience lengthy permitting periods that prove to be excessively complicated, triggering higher risks during the development phase.

References:

IEA Energy Statistics (2009). Available at: <a href="http://www.iea.org/countries/non-membercountries/romania/">http://www.ie... [Accessed 16th September 2013] 
 
Austrian Energy Agency Country Profile - Romania. Available at: <a href="http://www.enercee.net/countries/country-selection/romania.html">http://... 16th September 2013] 
 
KPMG. Central and Eastern Europe Hydropower Outlook. Available at: <a href="http://www.kpmg.com/HU/en/IssuesAndInsights/ArticlesPublications/Pages/C... 16th September 2013] 
 
Romania Power Report Q2 2011. Business Monitor International. April 2011. Available at: <a href="http://www.researchandmarkets.com/reports/1829925/romania_power_report_q... [Accessed 16th September 2013] Restricted Access 
 
V. Popovici. 2010 Power Generation Restructuring in Romania – A critical assessment. Energy Policy. Volume 39. Issue 3. Pp 1845-1856. March 2011 Available at: <a href="http://www.sciencedirect.com/science/article/pii/S0301421511000334">http... [Accessed 16th September 2013] Restricted Access 
 
FRD Center. Energy Efficiency in Romania January 2011. Available at: <a href="http://www.slideshare.net/JackieBP/energy-efficiency-in-romania-jan-2011... 16th September 2013] 
 
Global Wind Energy Council. Romania. Available at: <a href="http://dev6.semaforce.be/index.php?id=176">http://dev6.semaforce.be/inde... 16th September 2013] 
 
F. Bujac, M. Boje Blarke. Evaluating the Potential of Renewable Energy Sources in Romania. January 2011. Master Thesis. M.Sc. Program of Sustainable Energy Planning and Management. Aalborg University. Available at: <a href="http://projekter.aau.dk/projekter/files/43947478/Master_thesis_Florin_Bu... [Accessed 16th September 2013] 
 
G. Cacerea, M. Preda. Getting the Deal Through – Electricity Regulation, Romania Chapter. South East Europe Legal Group (SEE Legal). Available at: <a href="http://www.seelegal.org/upload/documents/Romania/Getting%20the%20Deal%20... 16th September 2013] 
 
3E News. Complete Liberalisation of Romanian Energy, Gas Markets To Wait Until 2015. 9 May 2011. Available at: <a href="http://3e-news.net/show/15403_complete%20liberalization%20of%20romanian%... 16th September 2013] 
 
The In-House Lawyer. Significant Changes in RES-electricity market. 8 April 2011. Available at: <a href="http://www.inhouselawyer.co.uk/index.php/eastern-home/9298-significant-c... 16th September 2013] 
 
Mondaq, M. Cojocaru. Romania: Renewables Support Scheme Likely to be Amended. 7 July 2011. Available at: <a href="http://www.mondaq.com/x/137340/Renewables/Renewables+Support+Scheme+Like... 16th September 2013]

Tags by :

energy, electricity generation, electricity, energy efficiency, renewable energies, wind, heating, domestic heating

REEEP