Niculae Havrileţ, president of the Romanian Energy Regulatory Authority, ANRE

The development and adaptation of the regulatory system to meet the requirements imposed by the liberalization of energy markets and the requirements for ensuring a predictable regulatory framework and a stable investment climate, without neglecting energy security and sustainable development, is a constant activity of our institution. In the context of challenges of 2015, ANRE has continued the process of harmonization and implementation of the secondary legislation related to the development of the internal energy market.

I. Gas market liberalization and strengthening the competitive mechanisms

Gas market liberalization mainly results in the development of competition. Specifically, the liberalization of this market involves the fact that ANRE no longer determines the gas supply price for end-customers, because in the competitive market prices are formed based on supply and demand.

The gas market in Romania was gradually opened starting with 2001. On January 1st 2007, the market was fully open for non-household customers, and on July 1st 2007 for all gas customers. The measure gave all customers the possibility to exercise their eligibility right and choose their supplier. At the same time, after the full market liberalization, supply at regulated was maintained, as well as the possibility for customers, regardless of annual consumption, to choose for the regulated regime.

In 2014, the share of amounts consumed by household customers in total consumption was 24.67% and the number of such customers accounts for 94.70% of total customers connected to gas networks.

As of August 1st 2014, the “entry-exit” pricing system came into force and the regulated revenue, total revenue and transmission tariffs were approved for the gas transmission through the national system, with validity until September 30th 2015. Also, from August 1st 2014, transmission tariffs were introduced on types of services, on entry/exit point/group of points differentiated in the long term (with a duration of one year) and short term (day, month, quarter).

ANRE has continued the implementation of steps scheduled for 2014 in the roadmaps for gas price liberalization and observed the legal provisions on price evolution for the domestic production. Thus, in 2014, final regulated prices recorded:

• an increase by approximately 3% for household natural gas consumers and thermal energy producers, only for the amount of natural gas used to generate thermal energy in the cogeneration power plants and in the thermal power plants for household consumption, compared to 10% estimated according to the schedule.
• an increase by approximately 1% for non-household natural gas consumers, except thermal energy producers, for the amount of natural gas used to generate thermal energy in the cogeneration power plants and in the thermal power plants for household consumption, compared to 18% estimated according to the schedule.

Access to information

End-customers must have access to information regarding the offers of gas suppliers, to be able to choose the most advantageous offers, depending on consumption profile. In such circumstances, making available varied and handy means of information is an essential measure to allow them to make assessments and comparisons between offers, knowingly choosing to conclude a gas supply contract. Thus, as of January 1st 2015, ANRE established a set of legislative measures ensuring the access of end-customers to information on the commercial conditions of gas supply, in the pre-contractual and contractual stages.

Transparency of gas transactions

Through the consistency of regulatory steps, ANRE has proposed to support the transparent trading process on the centralized market. For this purpose, on December 30th 2014, ANRE published a draft order aimed at increasing the transparency on the two authorized platforms: OPCOM and the Romanian Commodities Exchange.

After the model of the electricity market, the gas trading platforms will be required to publish on their websites, after the end of each auction session, the following information:

a) the list of participants to the auction session, if it includes at least 3 participants;
b) for each transaction concluded for a term higher than or equal to one month, the results of the auction session, mentioning the type of product traded, the starting and the award prices, the contracted amount and the delivery period;
c) for transactions concluded for a term of less than one month, quotations of the previous day at the opening of the trading day and current quotations recorded at the closing of the trading day (weighted average of prices recorded), as well as the total volumes traded.

Moreover, operators of the centralized market are required to publish on their websites all tariffs and fees charged, which can help us understand and even discuss about a market price. This Order, for now in the project phase, is more than necessary and ANRE has advocated over time for a higher transparency of transactions.

II. Monitoring energy consumptions and cutting costs

Energy management services are of major importance within a company, in monitoring energy consumption and cutting related costs by implementing a plan to improve energy efficiency, with measures leading to measurable energy savings, with visible effects in lowering costs.

The analysis of several energy management programs implemented in various sectors of activity has proven that:

• one can get energy and money savings of 5-15% in a very short time, with minimal costs or no costs at all, by applying an aggressive energy management;
• one can get energy and money savings of up to 30%, with small and average costs, with a short amortization period.
• by making investments with high costs in modern technologies and equipment, one can get savings of 50-70%, with amortization periods of up to 6 years.

In this context, the Energy Efficiency Department was established within ANRE, one of its responsibilities being the authorization of energy managers. In December 2014, the conditions for the authorization of energy managers for the industry, the authorization of energy managers for localities with over 20,000 inhabitants and for agreeing the energy services providers ensuring energy management were issued.

Responding to the demands of economic operators, new license areas were introduced, eligible for attesting energy managers, such as electronics and telecommunications engineering, transport engineering, materials engineering, environmental engineering.

III. Promotion of renewable energy

The promotion of electricity from renewable sources (RES-E) is an imperative of the current period at EU level. Given the relatively high level of related investment costs, all European states have established support schemes for RES-E generation.

In 2014, the installed capacity in power plants that benefited from green certificates was 4,733MW, and production that benefited from the promotion system was 7,859GWh.

Following the entry into force of Guidelines of the European Commission on state aid for environment and energy, for 2014-2020, ANRE has drawn up a draft regulation setting regulated selling prices and regimes for trading RES-E in power plants with installed powers of less than 500kW. The methodology sets the rules for takeover and trading, the calculation of regulated selling prices, rules of accreditation of producers that fall within this category and which choose the sale of electricity at regulated prices. At the same time, the Parliament of Romania approved the law introducing, among others, the establishment of a state aid scheme through regulated prices.

Efficiency, integration, information

For 2015, we aim at increasing the efficiency of energy markets and their integration in the European market, the harmonization of the secondary legislation in line with the primary legislation and European codes, the development of trading platforms, the application of European regulations on integrity and transparency of markets and infrastructure development, ensuring the integration of renewable energy sources in a safe and reliable manner, encouraging investments in smart networks, informing and protecting customers.

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The full version of this article can be read in printed edition of energynomics.ro Magazine, issued on June 2015.

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