In full energy transition and under the pressure of unprecedented challenges, Distribuție Energie Electrică Romania (DEER) is consolidating its leading position in distribution infrastructure through an ambitious investment and development plan. Mihaela Suciu, Managing Director of DEER, talks about the strategic pillars of this accelerated modernisation effort: digitisation, sustainability, fair access to energy and adapting the network to the new realities of decentralised consumption and production. Investments, increasingly attracted from non-reimbursable funds, are targeting performance, flexibility and resilience – essential ingredients for a grid ready to support the Romania of the future.
Dear Mrs. Mihaela Suciu, what are the main pillars of the new DEER Development and Investment Plan for the next period, including the period 2025 ‑ 2029? What are the main investment projects?
Mihaela Suciu, Managing Director of DEER
Firstly, I would like to emphasise that investments are the pillars of the DEER strategy in fulfilling our mission to bring the future into the present. We are all engaged in this broad investment process, which comes with challenges, but also with rewards. All the investments we are making have the same goal: to provide network users in the DEER area with a distribution service that meets the quality standards required by the applicable standards.
Distribuție Energie Electrică Romania (DEER) is the largest national electricity distribution operator. We serve almost half of the country, 40.7% of the territory, 18 counties, about 4 million users. It is obvious that the investments we need to make mean allocating significant financial resources.
Since these investment costs are recognised in the network tariffs charged to users, in order not to burden their bills, we have made every effort to ensure that part of these resources come from European funds. In the last year, we have managed to sign financing contracts from the Modernisation Fund for investment projects worth more than half a billion euros. We are not stopping here. In the Development Plan for the next 10 years, we have included other projects from non-reimbursable funds – the Sustainable Development Programme – for which we will submit projects. We are proud of the fact that DEER’s endeavours to identify other financial resources for investment projects have been very successful. And I would like to congratulate the entire DEER team who have managed to realise these important projects.
All of our investments are absolutely necessary and I would not be able to say that some are more important than others, that those aimed at reducing the number and time of interruptions in the supply of electricity to users or those aimed at achieving the decarbonisation targets that we have set ourselves at country level are more important.
That is why in the Development Plan we have included directions aimed at strengthening the networks in order to ensure the necessary technical parameters by improving performance indicators, as well as implementing measures to minimise technical network losses and combat energy theft, all of this by adopting advanced technologies in the energy sector. Our first objective is to ensure access to electricity for all electricity users (consumers, prosumers and producers). In fact, the objective prioritises the completion of Romania’s electrification and the maintenance of the electricity distribution system in close correlation with socio-economic development.
On the other hand, we have many directions aiming at the energy transition. Another objective of the DEER is to identify and implement best practices for protecting the environment and ensuring energy efficiency in RED development. We have projects that are an integral part of our strategy to ensure sustainable development and respond to community and environmental needs. For example, to reduce company-wide greenhouse gas emissions, we aim to renew our fleet with Euro 6 or electric cars. We want to develop networks to ensure the connection of electric vehicle charging points. We have measures to increase the adequacy of the grid to increase the capacity to integrate energy from renewable, intermittent sources.
We aim for clean energy and energy efficiency by ensuring the distribution of energy produced from renewable sources, by reducing our own technological consumption (OTC), by reducing maintenance costs, especially transport costs, by using equipment with advanced technical features and zero maintenance.
But all this cannot be achieved without utilising the latest technologies. Which means digitalisation and automation. Our development plan foresees the digitalisation of the grids and the step-by-step implementation of the SMART GRID concept, by implementing digital solutions for fault isolation and energy re-supply in rural and urban areas, by digitising transformer stations and solutions for remote grid control (integration of stations into SCADA, by using intelligent equipment and systems for power quality assurance – SMI and analysers), by increasing the flexibility of the distribution system through digitalisation, by developing smart metering.
Are the investments recognised by the new RRR announced by ANRE sufficient? What should be the level of this rate to enable the network to meet the challenges of the future?
We appreciate ANRE’s efforts to set a regulated rate of return at a reasonable level, reflecting the conditions of the economic environment in Romania, coupled with encouraging distribution operators to realise ambitious investment plans. The increasingly complex challenges facing the energy sector – from demand growth to the transition to renewables and the digitalisation of infrastructure – require an integrated approach and adequate long-term financial resources. It is essential that all stakeholders remain open to adjustments in the indicators that reflect the cost of equity and borrowed capital, so that the investments we have set ourselves in our medium and long-term plans deliver the economic efficiency that every commercial company needs.
Therefore, continued collaboration and transparent dialogue remain the key levers to ensure a sustainable and equitable development of the energy system.
How well prepared will the Romanian grid as a whole be to cope with the new wave of green investment?
The increased share of renewable energy will put significant pressure on existing distribution networks, primarily because their infrastructure is outdated.
The distribution network managed by DEER is a complex electricity network, structured on 3 voltage levels: high voltage (HV), medium voltage (MV) and low voltage (LV). The voltage level at which most of the electrical installations are installed is LV, 63.64%, while 32.92% are MV installations and 3.44% HV installations.
At company level, the majority of assets were commissioned before 2000, are more than 20 years old and have an advanced degree of physical and moral wear and tear. 31% of energy generation sites are connected to plants in cities and 69% outside cities.
Only if the production is of a permanent nature, the effect of the generators connected to the MV and LV electricity grids can be beneficial for the voltage level at the users. In the case of non- permanent generators (such as renewable generators – solar, wind), cases of voltage fluctuations may occur which are difficult to manage.
I would like to emphasise the following: DEER attaches great importance to retrofitting and modernising plants to take over the energy generated by producers. I come back to the first question, precisely to emphasise the importance of investment. Substantial investment is needed in ensuring the flexibility of the grid to adapt to the requirements of distributed generation, congestion prevention (storage, aggregation of distributed generation in conjunction with digitalised planning and AI, etc.), in implementing smart solutions: smart grids/smart metering for real-time energy monitoring and management (smart meters, sensors, automation of substations and transformers, etc.), in developing the communications infrastructure for large volumes of data transfer.
If the investments proposed by the distribution operators are realised within the deadlines, we will be able, within a reasonable timeframe, to have a grid adapted to the efficient use of renewable energy sources. Therefore, I repeat what I have been saying whenever I have had the opportunity: the main challenges we are facing are time (the investments need to be made urgently), money (the necessary investments are many and costly) and labour shortages (a situation faced by the whole industry). With all these challenges, I am confident that the DEER team will succeed in realising the goals we have set ourselves.
What is the growth rate of prosumers? What are your estimates for this segment for 2024/25? What about medium and large wind and solar projects? How do you see storage evolving?
The rate of growth of prosumers in recent years has been accelerating, driven by several converging factors, such as the decreasing cost of PV equipment, improved regulation, increased awareness of sustainability and, above all, support from Romanian government programs. In addition, European and international policies in the field of green energy, together with pressures to reduce carbon emissions, have created a solid supporting infrastructure for the development of this segment.
The number of prosumers increased annually by an average of 250% between 2021-2023. So, if at the end of 2022 we had around 15,000 prosumers registered at DEER, by the end of 2023 the number was 43,000, and at this date we have over 80,000 prosumers, with the number of applications increasing.
We estimate an annual growth of around 30,000 prosumers, with an average installed power of 330 MW.
With regard to storage capacity, if on 31 December 2022 it was 45,744.26 Ah [18.3 MWh, for a voltage of 400V, common for large-scale battery storage systems, e.n.] at DEER level, on 31 December 2024 it reached 320,929 Ah [128 MWh, for a voltage of 400V, common for large-scale battery storage systems, e.n.].
In the current legislative and economic context, the pace of capacity realisation is accelerated for generators with installed capacities below 10 MW and slower for generators with large installed capacities (above 10 MW).
In conclusion, I am convinced that the prosumer segment will continue to grow at an accelerated pace, driven by both economic factors and the increasingly favourable legislative and technological framework.
How is smart metering developing?
DEER has an approved smart metering deployment timetable whereby by the end of 2028, approximately 35% of connected users are to be integrated into the SMI. At the same time, projects have been submitted and Modernisation Fund financing contracts have been signed, with a completion date of 2028, for a further approximately 30% of the users connected to the DEER network.
How have the SAIDI and SAIFI grid quality indicators evolved over the last year?
As I was saying, our investments are primarily aimed at providing our users with the best possible service that is also environmentally friendly. Our most important indicators are the number and duration of interruptions in electricity supply. And the investments we make result in improvements in these indicators. For example, for the SAIDI (System Average Interruption Durration Index) indicator, which, more understandably, is the average length of time that a consumer has been affected by a power outage over a one-year period, we have seen an 8 per cent decrease from 243 minutes in 2023 to 224 minutes in 2024. We have a lower average duration of planned and unplanned outages by optimising works and repowering on generators. Despite an increase in the number of accidental events in distribution installations, we have managed to reduce the average outage time.
For the SAIFI (System Average Interruption Frequency Index) indicator, which shows how many times the electricity supply was interrupted to a consumer in a year, here we have an increase of 5%, from 2.07 interruptions/year in 2023 to 2.18 interruptions/year in 2024. This increase is driven by network modernisation and development work which has increased considerably in recent years. DEER has invested over the last 4 years, more than 4 billion lei in modernisation, development and digitalisation works of the network, and continues to have an ambitious investment plan, both from its own sources and from European funds, where, so far, it has attracted about 500 million euros.
What was the biggest challenge of 2024 and how did you manage it?
By far the biggest challenge of 2024 was the December cyber-attack that affected the virtual systems (virtual servers) that serve various internal and external business applications. Fortunately, it did not affect the critical power supply (SCADA) systems, which remain functional and secure. DEER specialists, together with the authorities in charge, acted promptly to identify and counter the attack in order to limit its effects. Internally, a Security Committee was set up to analyse and take urgent measures, together with a crisis cell, both within DEER and at Group level, to ensure permanent, transparent and prompt communication with the authorities, the media, the Group, stakeholders and employees. In a short time, most of the applications have been up and running, a few more complex ones have required adjustments or modifications, but business is running normally.
What is certain is that this was a totally unexpected incident, on an unprecedented scale, which was a wake-up call not just for DEER, but for the whole industry and beyond. It reminded us, on the one hand, of the danger that lies behind cyberattacks and, on the other hand, of the particular attention that we need to pay to this area of cyber security. Investigations into the attack are ongoing and the company has taken measures to prevent such cyber incidents. Some of the measures implemented or being implemented are:
- Information system segmentation for rapid isolation;
- Internal measures for computer system utilisation;
- Data encryption, measures to secure sensitive data both in transit and at rest;
- Regular internal briefings on raising awareness of cyber dangers, especially against phishing attacks.
Of course, there are other challenges we face. Every year, we feel the effects of climate change and extreme weather phenomena, which are increasingly frequent in Romania and which have a significant impact on electricity grids, affecting the electricity grid infrastructure.
More specifically, strong winds of over 100, even over 150 km/h, as well as extreme heat-wave temperatures, which lead to overloading the grid, cause increasingly frequent failures in the electricity grid, requiring a fantastic degree of resilience both at company level, but also at human resource level, on the part of colleagues who are forced to intervene in extreme conditions to re-supply affected users.
Also with the forces of nature, with torrential floods, we battled last autumn in the Galati area. People’s homes, unfortunately, were flooded, covered with mud. People suffered terribly. But, you know, our transformer stations were also flooded and covered with mud. In order to get the “light” back on, we have made extraordinary efforts to make the substations functional, to restore the networks, to put the electricity poles back in place. It’s not easy to fight nature on the rampage. Once again, I congratulate my colleagues for the selflessness, dedication, skill, professionalism, passion and even the spirit of sacrifice they showed in those terrible moments. And this was one of DEER’s biggest challenges of the past year that the DEER team handled exemplary.
We cannot fail to mention the permanent challenges we face: time, money and labour. Time – because we are under pressure, and the new deadlines put forward by the European Commission are 2030; money – because we need huge sums of money to make the energy transition; labour – because we, the contractors, and the whole industry, are short of staff, especially highly qualified staff. We are making every effort to create specialists, but also to attract labour to the company: scholarships for pupils and students, partnerships with dual education institutions, partnerships with technical universities, recruitment and retention strategies, effective promotion and performance incentive policies, mentoring programs, specialisation of our employees through continuous training. We are determined to invest in our colleagues, but also to create future specialists.
In an industry as dynamic and challenging as electricity, success is the result of a dedicated and passionate team. Our results are a testament to the commitment and professionalism of our colleagues who, day after day, make our vision of providing a high standard of distribution service, with permanent and accessible conditions, a reality, in order to build a sustainable future for all our approximately 4 million users and future generations.
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The interview first appeared in the printed edition of Energynomics Magazine in late March 2025.
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