Bogdan Tudorache
Electricity suppliers are taking every effort to ensure that substantial increases in wholesale market prices are felt as little as possible by final consumers, announced AFEER, the suppliers’ association.
“We call for a correct information of the final consumers, for the correct, balanced and non-biased presentation of the reality in the electricity market, of the causes and factors that determined the major price increases,” they say.
“We are going through a difficult period, with turbulence, unpredictability and many changes, which create a state of discomfort among operators and consumers. We have entered a spiral of general price growth in all sectors of the economy, with a direct impact on consumers. The current situation on the energy market is more complicated: the prices of fuels – coal, natural gas, oil – have increased in all markets, either European or international. In addition, due to the EU’s clear commitment to decarbonization, the price of emission allowances has reached unexpected values, around 50 euro/ton (compared to a price of 21 euro/ton in June 2020), and for the future, an upward trend is also estimated. These days, we see that there are historical maximums at the price of energy traded on the spot market (it reached 1,000 lei / MWh!) and records for energy consumption, amid the heat wave and disconnection of a reactor at Cernavoda. In this context, it is absolutely necessary to present the situation correctly in the public space, not unjustifiably present suppliers as being the main culprits for price increases. The truth is that, in the context of the explosion of trading prices on the wholesale energy market, suppliers come, responsibly, as is natural, to support customers with solutions to maintain a balance in bills and in relation to them,” says Ion Lungu, AFEER executive director.
Supply prices are strongly influenced by the price of energy traded on futures markets managed by OPCOM, with delivery in the following year, which increased by more than 50%. Also, on the Day Ahead Market, the traded energy prices are 150% higher, compared to the same period in 2020, says Cristian Culea, member of the AFEER Steering Committee.
The situation of the monthly price increases on the Day Ahead Market (DAM):
- for April there is a price increase of 150% in 2021 compared to 2020, at 309 lei / MWh from 123 lei / MWh
- for May, the increase of the energy price by 140%, to 289.31 lei / MWh in May 2021 compared to 120.4 lei / MWh in May 2020
- in June, the energy price increased by 160%, to 382 lei / MWh compared to 146.7 lei / MWh
- July, 150% increase in energy prices: 447.29 lei / MWh compared to 179.41 lei / MWh.
With regard to balancing market prices, which determine the cost of imbalances, legislative changes at the beginning of the year (introduction of 15-minute settlement, single imbalance price) have led to unpredictability and cost increases (a peak of 2,500 lei / MWh!) for suppliers, states Mr. Culea.
On the other hand, at the level of the Romanian market there are, at this moment, a small number of long-term wholesale energy sales offers, mainly short-term offers (monthly, weekly) which induces an unpredictability in forming the price offer for the final consumer.
“These disturbances in the market have as main cause an offer below the level of demand, determined by the lack of production capacities, in the last years the investments in new capacities being almost non-existent. In this situation, in order to ensure the supply of energy to consumers, suppliers had to buy imported electricity at lower prices than those in the local market,” say AFEER officials.
