The current situation in the Romanian electricity market seems to be a rather turbulent one – in trends, in markets, in consumption. There are also changes and decisions awaited for in legislation both at local level and at European level. One of the leading companies in the local market also passed through a change in top management, so we asked Mr. Martin Zmelik for some comments on the main challenges he identified as country manager of CEZ Romania. We focused on the projects he has in mind for the future and on the philosophy behind these projects.
What are the company’s goals for the next period of time?
There are two directions we are focusing on: to continue the consolidation of the current activities, because we would like to have an operational excellency, not only to be the best on the local market, but to also improve our processes and activities every year. In the distribution sector we will focus mainly on improvement in terms of reducing losses, and still working on the safety and quality of the network. In regard with CEZ Vânzare, we are working on transforming our company for an open market. We are a traditional provider of these kind of services and for us the challenge is to provide additional services that come hand in hand with the liberalization.
For the operations, we have two priorities: to properly operate our two renewable capacities we have – the wind farm in Dobrogea and the hydropower plant in Reșița – and to continue the discussions in the Brussels and Romania in order to complete some notification processes related with the supporting scheme.
We intend to develop and the main direction is the energy efficiency. We believe, and I personally believe, that energy efficiency is the future opportunity for this industry. Now there are a lot of new trends in terms of technology and a strong push to provide more robust and detailed services for the clients, like the distance reading. At the same time the price for the end consumer is a still quite sensitive issue, so we need to find solutions. That is why we think that energy efficiency is a kind of an anchor.
This stress on energy efficiency is easy to understand when you look from the consumer’s side. Why is it important from a energy provider’s point of view?
First of all, it is useful because it allows us to broaden our portfolio of services in new directions. In this turbulent context, we should be more flexible, more responsive, more versatile. These are challenges we are not going to answer with the traditional approaches of a distributor or supplier. The needs of the customers are increasing and we have to adapt. Also, despite these conditions, we believe that building a long time relationship with the customer is the future. We need to create a kind of partnership in order to better understand and fulfill more needs than strictly delivering and supplying.
Can you be more precise on the services you intend to offer?
We run our analytics and the directions we would like to go are the public lighting, small co-generation and energetic audits, which we are already doing . We would also like to provide some complex solutions for the industrial complexes, which includes consultancy.
The market for energetic audits is populated mainly by small players. How do you see the competition on this market?
For us, is very important how complex it might be. If you just provide the audits, and not the solutions, there may be as many companies as you like. In my opinion, it must be a company that will do it from A to Z. We do not compete for just providing the audits, so I will not tell whether 100 or 200 companies are too many. For us it is important that we provide all services form the beginning to the end; not only giving you the status-quo and then leave you on your own. We would like to be partners in all solutions, provided by us or by some joint ventures companies with other partner companies.
Do you have any specific prospect partner companies in mind right now? Are they from Romania?
No, at the moment we are looking for the best opportunities to start. It is an early stage in energy efficiency and we would like to find the customers who are open to explore the market with us. Based on their needs and requests we will also identify the partners. Basically, what we do in Romania is that we go with local partners because that is how we see our mission here. We are long term investor in Romania so our first natural answer is to look for local, strong partner.
Energy efficiency also means some initial investments. Can you tell me if you have any plans on how much are you going to invest?
I will not provide you with a certain number, because for energy efficiency we consider this more like a complex solution, including the financing. There are a lot of cheap external financing solutions available, so it is very important to first understand the whole funding scheme which might include EU funds, institutional banks etc. For us it is more like to find a proper partner who is able to work together with us for a success story.
I understand that you see this kind of projects as self-sustainable activities. Is this assumption correct?
Of course. It is one of the lessons we learn from the green certificates scheme: it is better to go for self-sustainable projects that can survive on a specific business environment.
Do you have any specific plans for introducing new services for households?
This is another direction that we are considering. There are several models that European utilities and also our company in the Czech Republic already introduced.
There is a potential of providing additional services to the household, like the maintenance. The classic provider stops at the pluck, or at the meter, to be more precise. There are still lots of services around like maintenance of the installment inside the household, consultancy on consumption and managing the consumption, improving the installations etc. We are not targeting this at the moment, because we are focusing on energy efficiency, but overall there is another opportunity on the market.
Now, on the smart metering issue, what is the status?
We finished our second stage of the pilot project in our region and we are evaluating just how it goes. First of all, in order to be ready to apply the whole solution there are some technical issues that need to be sorted out, for example the strength of the signal. We are testing all this in order to see how robust and reliable the technical solutions are. At the moment we have more than 14.000 smart-metering equipments installed and we are preparing another stage to be really able to comply with the rules. And also we are having discussions with the service providers and the clients to identify what are the most wanted features, and where do we see the benefits to modify and upgrade the system. For example, some clients might be interested in how is the voltage development in their installation, while some small companies might be more interested in the energy consumption curve.
Obviously, smart metering is another necessary tool that should be available if you want to go with energy efficiency. That is why we selected several clusters with this pilot, and one cluster is formed by small agencies interested in energy efficiency, in order to really understand what are the benefits for them.
You took over the management of CEZ Group in Romania this July, after more than four years as Chief Officer Operations. In order to describe your focus as CEZ Romania’s CEO, you recently used the phrase “enlightening current operations”. What would that mean?
There are many ways in order to develop a business. One is by massive acquisitions, another is by consolidate your activity, yet another by using your know-how and position in the market in order to run different pillars of activity. If I would rephrase this motto, I would say that we would like to be better and better with every year. Not just complying with the rules, or just fulfilling the company’s standards, but constantly thinking on how to move the company into new directions in terms of the services we provide.
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The full version of this article can be read in printed edition of energynomics.ro Magazine, issued this November.
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