Bright absentee, the new energy strategy of Romania appears to be a long-awaited document. Energy companies, academics and industry experts, political parties, think-tanks and even representatives of the government apparatus (the one called to develop this project) frequently offer reasons for the importance of such a strategic framework, occasionally mixed with a dose of frustration.

But why is the new national energy strategy important? Is it a truly necessary document? On what grounds? Didn’t we already have numerous such strategies? How much did they contribute to the development of the Romanian energy sector? What entitles us to believe that a new attempt will be more successful? To outline answers to such questions, prior explanations are necessary.

Romania has in force the Energy Strategy for 2007-2020, adopted by Government Decision in September 2007. The strategic objectives have a generality that makes them valid even today, here and worldwide: energy security, sustainable development, economic competitiveness. However, the energy strategy for 2007-2020 is currently considered obsolete and largely irrelevant.

On the one hand, because its time horizon (2020) is already close; secondly, because it includes specific strategic proposals that have already been overtaken by events – for example, the Nabucco gas pipeline and Constanța-Trieste oil pipeline – alongside ­other proposals, unrealistic in terms of land resources; and, very important, because it is not a legally mandatory document, cross-party, assumed by the Romanian Parliament.

Former Energy Minister Răzvan Nicolescu initiated in the autumn of 2014 the institutional approach to develop a new national energy strategy. An inter-institutional work methodology was defined, the stages of development of the strategy were established, and substantial sessions were held for debate in an advisory committee of independent experts under the Ministry of Energy. But the process was stopped unexpectedly, with the government reshuffle late last year.

While preserving in declarations the completion deadline given by the former team (October 2015), the new leadership of the ministry stopped work on strategy development and removed this project from the priorities of the institution. The ‘deliverable’ element of the effort in the fall of 2014 is the so-called “radiograph of the status quo” – a comprehensive document available to the public, which thoroughly reviews all sub-sectors of Romanian energy, accompanied by qualitative risk analysis (SWOT), on which the following stages of construction of the strategy would be based.

It is not the place to look for reasons for suspending the process of drafting the energy strategy. It is much more significant to understand why its completion is important, what it should and should not include, and how it should look like.

The energy strategy of a country has the role of guiding the expectations and long-term actions of all “stakeholders”: authorities, investors, operators, consumers. As enactment specifying the fundamental objectives of development in the national energy sector, the strategy will show investors what are long-term priority directions and sub-sectors which are affected by political or strategic constraints. For initiators of energy policies, for lawmakers and regulators, the energy strategy will be a legislative anchor and a base for principles of action, depending on which any secondary legislation and any sectoral policy initiative should be harmonized. For consumers, the strategy will show the ways for energy consumption optimization.

Increased risk

As an EU Member State and party to other international treaties, Romania has firm obligations on environmental and economy de-carbonization policies. They will be reflected directly in the energy strategy and will play a major role in defining the ways of action through which the Romanian state will ensure its energy security, economic competitiveness and sustainable development. Also, the strategy will reflect the geopolitical risks of the country, which require the adaptation of energy security policies, but also the additional infrastructure costs to achieve solutions to diversify foreign energy sources and back-up domestic sources.

To all these we should add the characteristics of an exceptionally volatile and confuse context in the energy markets, in which new technologies play a role on the one hand progressive, on the other hand disruptive in relation to conventional mechanisms and structures of energy markets. Planners of public energy policies and managers of energy companies or large energy consumers are facing unpredictable evolutions of markets and an increased risk for large investment projects. In such a context, the role of guide and guarantor of the energy strategy is even more relevant.

Thus, what should the energy strategy contain? Of course, the fundamental objectives, already mentioned: energy security, competitiveness, sustainable development. They should be explained through sectoral and sub-sectoral strategic objectives – oil and gas, coal, electricity, nuclear, hydro, renewables. In turn, each of them must be accompanied by the results of risk assessments, which should highlight the vulnerabilities and strengths of our energy system. Of course, environmental and geopolitical policies constraints, but also the position of Romania as a player on the European single market, will model ways of action to achieve these sectoral goals.

Conceptual clarifications must be included (for example, the energy market model suitable for Romania) or clarifications of principle (such as defining and separating the multiple roles of the state in the energy sector: legislator, regulator, arbitrator, shareholder, owner, and consumer).

The strategy must clearly articulate, in stages, the process of development and integration of national energy markets into regional markets, with the entire energy infrastructure and institutional capacity needed. Then, a complex quantitative modeling is required, with at least three forecast scenarios for the evolution of energy consumption, differentiated by degrees of optimism.

Based on these data, the strategy will stipulate the priority actions of the state in the energy sector, according to the overall strategic objectives. These priority directions of action, at sectoral and sub-sectoral level, will be specific enough to allow prioritization and allocation of investment resources, but not so specific as to relate to individual projects.

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The full version of this article can be read in printed edition of energynomics.ro Magazine, issued on December 2015.

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