Bogdan Tudorache
An analysis made available to the press by the Association of Energy Suppliers in Romania – AFEER revealed an average increase in prices by 141% in May of this year, on the Day Ahead Market (DAM), compared to May 2020, to 289 lei / MWh, while in June “prices will go up to the value of 375 lei”.
“There are price increases in the market throughout the European Union… Suppliers are a bridge between the market and the consumer… There is a price transmission to the final consumer,” say AFEER officials.
They told Energynomics that the suppliers themselves have to lose from these price increases, which put huge pressure on their own profit margins, especially in view of the pressures of industrial consumers, that are suddenly faced with new contracts at much higher prices than in the previous period and try to negotiate as low price increases as possible.
“The market is still at a loss… prices are not stabilized,” AFEER officials said.
In a common position, AFEER stated that “electricity suppliers cannot be accused of increasing prices to customers, as they are the result of the situation on the European market, where prices are also rising, as well as the specifics of the Romanian market, marked by a deficit of production capacity visible for several years, after the old units became obsolete and no new capacities appeared.”
At the same time, “AFEER condemns any behavior that distorts the market and considers that such conduct would disappear, provided consumers are better informed about the terms and conditions of the contract.”
It should be noted that, at present, energy prices can no longer be at the levels of 2019 and 2020, when GEO 114/2018 and its negative effects on the economy had as an effect by setting an artificial price of energy to the final consumer. In addition, during 2020, the pandemic, through declining consumption, led to a sharp drop in price.
At the same time, energy prices currently reflect not only current market conditions but also the risks associated with future developments.
The resumption of economic activities close to the normal level has increased energy demand throughout Europe, as well as in Romania. Given the insufficient supply of energy in our country, where investments in generation have been virtually non-existent in the last 8 years and import capacity is limited, prices have risen to very high levels, in some ranges even the highest in the Union. In addition, it reflects the price of CO2 certificates, which must be purchased by energy producers based on coal and natural gas, which has already reached 55 euro/ton.
“It is further estimated that these certificates will be able to be traded at even higher prices.
Also, oil (still the world’s main energy source) will influence the prices of other energy resources, from coal to natural gas and electricity. Currently, the price of oil has exceeded the levels of 2019, and natural gas is traded on international exchanges at prices of about 160 lei/MWh, more than double over last year’s value.”
The price of electricity follows the same trends. In Romania there are the same evolutions as the international ones. “Moreover, given the coupling of the market in our country with another 25 energy markets, the influences of prices in these markets are becoming stronger, tending to a single European price,” concluded AFEER officials.
