Emeritus Professor Ph. D. Eng. Aureliu Leca, the Polytechnic University of Bucharest
The serious situation that the urban energetics is nowadays facing in Romania has multiple causes, that include old installations with a low performance, buildings with large energy losses, a legislation without practical effects, inappropriate regulations, the lack of a national policy in the field, the lack of investments, declarative political willingness and multiple decisions that have been wrong, postponed or that haven’t been taken in due time.
The industrial and urban cogeneration and the centralized supply systems with thermal energy (SACET) are regressing in Romania. The causes of regress (institutional, legislative, technical, administrative, financial, social and in terms of investments) have been generated by the fact that this sector hasn’t been understood at the central level as well as at the local level.
The lack of interest of the policy makers, the modest growth of the national economy and of the energy sector over the last 23 years, the inability of reaching some targets and carrying out some programs and projects aimed, the existence of a technical inheritance with large energy losses and the modest standard of living are elements that are included in the typology of the causes mentioned earlier.
Unfortunately, Romania ranks last in different statistics of the EU in terms of the performance of different fields of activity and drops continually compared to the valuable averages from the respective sectors. The heating sector where are included the urban and industrial district heating, although major in the energy consumption of Romania and with the largest energy losses, remains the main sector for the production and consumption of the power that hasn’t been refurbished.
The price policy for gas encouraged the disconnection from the centralized heating system
Speaking from the institutional point of view, the responsibilities of this subsector have been divided between four central institutions, without coordination between them (the Ministry of Administration and Interior, the Ministry of Economy, the Ministry of Labor and Social Protection, the Ministry of Environment) and two regulators (ANRE (the National Energy Regulatory Authority) and ANRSC (the National Regulatory Authority for Public Utilities Community Services). There was a weak coordination between the last two. ANRSC proved incapable to manage the local issues, while ANRE had disadvantageous effects on co-generation refurbishment. Moreover, the fact that these authorities have been passed for a period of time under the authority of the Government didn’t allow making appropriate economic and social decisions.
There is no real national strategy in the sector, only papers without practical value. The specific laws that have been passed were delayed, or did not produce the expected results, due to the control bodies and to the lack of financing. It has been mistakenly held for a long period of time regulated prices for energy as a social protection measure.
A basic principle of the free economy hasn’t been respected: the separation of the tasks of the regulator from those of the Ministry of Labor and of Social Protection. An element that acted against SACET incorrectly was accounted for by the wrong police of the gas price, that encouraged the people disconnection from the district heating network in favor of the individual heating with thermal power plants for each flat.
The Romanian buildings have energy losses 3 times higher than the EU average
From the technical point of view, the installations and equipments of this subsector belong in terms of age and conception to the years ’60-‘70, have an outdated operating period and very low technical and economic performances. The inefficiency is paid by the consumers. The technical and economic losses of the district heating systems, combined with the reduced capacity of bills payment, led to a continuous drop in the number of operators, from 315 as it was in 1990 to less than 90 as it is today. Most of them entered into insolvency or went bankrupt.
Thus, the dwellings heating has been unjustifiably neglected, coming up with temporary solutions or with the lack of heating in many dwellings. We should add to the large SACET losses the energy losses of about 2,5 – 3 times higher of the dwellings than the average of the values in the EU, only 5% – 6% being updated from the energy point of view.
Judging from the administrative point of view, the installations and equipments from the district heating systems benefited at the beginning from a dedicated exploitation staff, whose number temporally dropped, and the management positions have been occupied politically by people deprived of experience in the sector. The passing of the 18 heat power plants in 2001 under the administration of the local authorities accounted for a transfer of difficult issues, not a solution. The local authorities, lacking the experience of managing such complex activities, didn’t show interest in the reorganization and revamping of the local heating systems.
Moreover, between the achievable commitments promised during an electoral mandate and the revamping of a heating system, needing a longer period of time and being more difficult, the mayors chose the first ones. Taking into account the independent decisions, but also the lack of local experience and also the lack of a responsible coordination on the part of the central authorities, many of the centralized local systems have been destroyed. The few localities where such systems have been revamped or have been kept in operation are exceptions.
Chronic under-financing and lack of investments
From the financial point of view, SACET have always been underfinanced, because the expenditures have been most of the time higher than the collections. The payment of the bills, usually incomplete, the subsidies from the central and local budget, have been in some cases delayed, partly, or missed. The loans for urgent needs and the delayed payment of the private fuel suppliers led to arrears, to hard to bear fines and to the fall into insolvency or bankruptcy of the operators. Considering the financial situation in perspective, in particular due to the rise in the fuel prices, the economic and financial conditions of the district heating operators will aggravate.
The investments were most of the time lacking, due to the incapacity of the operators to be granted loans, taking into account their bad financial situation and the impossibility to offer some guarantees, or to the lack of possibility of financing the investments by the local authorities budgets, or to the impossibility to access European funds, or to the lack of attractiveness. If we take into account the necessary investments for the revamping of the district heating systems in Romania (the generation source/cogeneration, the transmission network, the distribution network and the annexes ) amounts to around EUR 4.5 – 5 billion in the following 10 years.
Energy poverty of over 40% in Romania
The social issues are probably the most difficult to deal with due to the low incomes of the occupants from the public housings supplied by SACET. The end consumer must pay all the final costs of the heating system: the high cost of the fuels, the high expenses, the losses from the system, the cost of heating for a dwelling with large energy losses. On the one hand, “the energy poverty” in Romania is over 40%. On the other hand, Romania ranks the last place in EU in terms of the average income, by 48% of the European average, with the highest price for heat EU, related to the purchasing power.
The average monthly income is over 2.000 lei for 16% of the population, between 1.000 and 2.000 lei for 34% of the population and under 1.000 lei for 50% of the inhabitants. In this context, there is concern that the average gross income to rise slower than the energy prices rise in the perspective of the natural gas price rise as well as for electricity, Romania ranking the last place in EU in terms of the social assistance expenses.
Translated by Silktrans