According to the Romanian authorities, in the next 15-20 years the national energy sector will need investments of over 30 billion Euros.
According to Romanian authorities, in the next 15-20 years the national energy sector will need investments of over 30 billion euros in order to become competitive and to secure its energy independence. Part of the investments will be attracted through a fund comprising the minor stakes held by the state in energy companies. Last year the government launched the idea of setting up such a fund, with over 1 billion euros in capital, which should bring together all the stakes held by the Energy Department. The Romanian state holds stock worth several hundred thousand euros in energy companies, including OMV Petrom, but if consolidated, the value of the stock may exceed 1 billion euros.
On the other hand, according to a government estimate, the electricity production capacity of the Romanian industry will go up by nearly 19% in the coming six years, after units producing about 5,000 MW have become operational. Concurrently, old power plants producing one-quarter of the capacity of the new units will be decommissioned. As a government resolution reads, “within a year after launching a new production facility, an existing unit with a capacity accounting for one-quarter of the capacity of the new investment shall be decommissioned.”
The new projects include a biogas plant built by the Amonil Slobozia fertilizer producer, a 500-MW plant running on pit coal at the Oltenia Energy Complex, an 800-MW plant built by Braila Power, a joint venture of E.ON and Enel, and a new 200-MW unit to be opened by the Hunedoara Energy Complex. Other projects focus on the upgrading on existing units and the building of new ones by ELCEN Bucharest and the thermal power plants in Arad, Govora and Braila. At the end of March, the Government approved the establishment of a Romanian-Bulgarian joint company to develop a hydropower plant on the Danube, at Turnu Magurele – Nicopole. The installed power of the planned unit will reach about 400 MW, and it will help strengthen Romania’s energy security and decrease its reliance on imports, the Government said. Moreover, the new project would entail the building of new road and railway routes between Romania and Bulgaria, while also helping in the engineering of the River Danube, with dams, drainage and port elevation works expected to contribute to flood prevention.
The new projects will be funded, in part, from the sale of greenhouse gas emission certificates, which Romania is to receive in 2013-2020 under the Kyoto Protocol. Prime Minister Victor Ponta:
. “Romania has the incredible luck of having nuclear energy, coal-based energy, hydropower, and a huge potential for renewable energy, so I believe at this point the great challenge for Romania is to export electricity. We produce more than we need to consume, and we need to be able to export. First and foremost, I would like to have a strategy in place not only for Romania, but for Romania and the Republic of Moldova, therefore not for 20, but for 24 million people. We also need to have the infrastructure required in order to export to other countries, to cope with the competition within the EU.”
In turn, the representative of the Council of Foreign Investors in Romania, Mihai Bogza, spoke about renewable energy, which has seen outstanding growth over the past few years, but which brought about increases in consumer prices:
“In 2008 Romania tried to choose between cleaner, but more expensive energy, and better competitiveness for consumers. In other words, whether consumers should pay for more expensive or for cheaper energy. It seems that in 2008 Romania made the wrong choice, without an impact analysis, and it encouraged facilities that exceed what Romania can afford at present in terms of competitiveness with respect to the other industries, which consume energy. So at present Romania is in a difficult position: on one hand, we have very large investments in renewable sources, and investors who want to see a return on their investments; on the other hand we have the other industries, which say ‘we cannot afford to buy this greener, renewable, but more expensive energy’.”
A lot of problems are yet to be solved in the state-owned energy companies as well. The delegate minister for energy Razvan Ionescu:
“Over the years, a huge amount of debts has accrued in this sector, a lot of inefficiency, but I hope—in fact it is one of my objectives—to step up the process of improving the efficiency of these companies, and have their political subordination replaced by corporate governance principles.”
We should also note that the energy produced by wind farms, photovoltaic parks and biomass plants covers 21% of the national output, accounting for the second-largest source of electricity after coal, which covers 27% of the total. Nuclear power accounts for 17% of the total output, while hydropower plants produce nearly 20% of the energy in Romania.
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