Laurenţiu Urluescu, AFEER: "The balancing prices have increased in an unreasonable way"

This month, suppliers face huge prices on the balancing market, prices that have even reached a level of 16,000 lei per Megawatt, Laurentiu Urluescu, president of the Romanian Energy Suppliers Association (AFEER), told us.

Laurenţiu Urluescu specified: "If the measures ordered by the prime minister are implemented, it will be somewhat better, but now it also depends on production, so no one guarantees that everything will be perfect. Anyway, the draft order proposed by ANRE regarding the prices in the balancing market could bring more availability in this market and less fluctuating prices. The supply companies are having problems during this period due to balancing prices which have risen unreasonably and far exceed the margin of the supply component which must also cover the financial costs - especially since the state settled us after one year of the capped prices for end consumers - and all other services. Now we found ourselves on imbalances with some higher costs than all the regulated components; for example, with an average supplier, only the imbalances go somewhere around 90 lei per Megawatt hour, which is huge. Unfortunately, although we requested a cap on these prices, ANRE proposes another calculation method, but it's a good start because it will somehow allow the balancing price to come out much lower than it is currently. We expect the new calculation model to reduce our recorded losses. Unfortunately, no impact study of this method of calculation has been done, in order to estimate what the corresponding reduction would be. I expect that in the first half of next month this order will be approved, because any delay in its approval makes it difficult for energy suppliers, who are already facing significant losses after the first two months of summer. In terms of reflecting these losses in the bill paid by end consumers, they benefit from the capping scheme approved by the government until April 2025. Now, it is true that those with the high ceiling, of 1.3 lei per Kilowatt, who currently benefit from price offers below this ceiling, may also feel the difference in the balancing price in their bill. We are not talking about the whole price, because according to the law we are only recognized for a part of these costs and those will be felt. In the short term, these losses resulting from imbalances will be covered by companies through loans taken from banks, which they will pay over time. If they fail to pay them by April 2025, it is likely that some companies more affected by the imbalances will transfer some of these costs to the bill that the final consumer will pay. That's why ANRE's intervention on the market of imbalances is more than necessary".

Regarding the power outages in our country recorded recently, the president of AFEER showed that these were only local outages, caused by the exponential increase in consumption in certain areas where the distribution network is weaker and failing. Mr. Urluescu also said that there will always be power outages when consumption increases greatly in the respective areas; in summer due to air conditioners, in winter due to electric heating devices, etc.

He made it clear that we cannot talk about a blackout in Romania, because a major system failure occurs due to the cascading failure of some major transmission lines, and not due to the balancing of production in consumption.