Intellinews romania energy sector report june 2013 - Full Report Available on


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The IntelliNews Romania Energy Sector Report offers an extensive summary of the Romanian energy sector, segmented into electricity, thermal, water, gas, oil and renewable energy markets. It includes a complete coverage of the latest developments, trends and corporate news, accompanied by thorough statistics and comments. This sector report is ideal to keep you abreast on recent company and industry news. Written by local professionals, it is a unique market and business intelligence analysis, tailored to save time by providing in-depth information, while helping you to make confident and informed business decisions.

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Intellinews romania energy sector report june 2013 - Full Report Available on

  1. 1. Intellinews - Romania Energy Sector Report - June 2013The IntelliNews Romania Energy Sector Report offers an extensive summary of the Romanian energy sector,segmented into electricity, thermal, water, gas, oil and renewable energy markets. It includes a completecoverage of the latest developments, trends and corporate news, accompanied by thorough statistics andcomments. This sector report is ideal to keep you abreast on recent company and industry news. Written bylocal professionals, it is a unique market and business intelligence analysis, tailored to save time by providingin-depth information, while helping you to make confident and informed business decisions.Romania’s economy continues to expand this year, by some x.x-x% this year and possibly more in thecoming years, driven by industry, but the negative output gap remains wide. The change in the structure ofeconomy, rather than investments technology, will however push down the energy consumption thusimproving energy efficiency. Energy market liberalisation will particularly result in higher natural gas prices[hence shrinking consumption in sectors like fertilizers production that has capitalised on cheap gas so far]while the renewable energy support mechanism has already pushed up end-user electricity-related cost.Domestic consumption of energy will stabilise at a lower level in response to higher energy prices. Sectorslike chemistry and metallurgy are under significant pressure. Hopefully, the less energy-intensive sectors[more value-added] will offset the predictable decline of the energy-intensive ones and furthermore supportfurther growth.Romania’s net energy consumption decreased sharply by xx% y/y in Q1 after a more moderate x/x%y/y decline in 2012. The definition includes all the energy inputs less the exports of electricity and petroleumproducts. The decline in energy consumption occurred in spite of rising GDP – x.x% y/y in 2002 [x.x%y/y filtering out the volatile impact of agriculture] and x.x% y/y in Q1 of 2013. Technically, the energyintensity decreased visibly in 2012 and rather sharply in Q1 of 2013. More in detail, the improvement incountry’s energy intensity was driven by i. certain shift in the structure of industry, toward less energyintensive sectors [automobiles, compared to steelmaking, chemical industry or fertilizers production] and ii.warmer weather in Q1 of 2013.The weather plays an important role in country’s energy consumption, particularly in the winterquarters. The impact of renewable energy capacities coming online last year and in 2013 was also visible inthe structure of energy inputs. Besides hydropower generation returning to normal levels, more wind powerput the coal-fired plants under pressure.The government intervened in order to prevent excessive negative impact of volatile renewable energycoming into the grid – some 8.7% of the total power generation as of Q1. On a one hand, it extendedlimited support to coal-fired plants by allowing them better access for a guaranteed part of their capacity andon the other hand the executive trimmed down the support given to renewable energy producers under law220/2008 [on quota and trading system of green certificates]. In fact, this latter action turned to be the keystory in this first half of the year – besides the visible decrease in energy consumption.Lower imports of energy inputs in Q1 this year [natural gas mainly, but also certain amounts of coal] notablyresulted in much smaller trade deficits and a Current Account surplus in Q1.In the upstream area, there is a visible shirt in the attitude expressed by both PM Victor Ponta and presidentTraian Basescu vis-à-vis the shale gas. Both of them expressed support for exploration and exploitation ofIntellinews - Romania Energy Sector Report - June 2013
  2. 2. shale. Nonetheless, the outlook remains moderate in spite of the EIA updated evaluation showing abundantreserves. Chevron holds licenses for two large areas in Romania and received permits for explorationsalready.Nonetheless, the potential for shale gas turning into a major factor for Europe’s gas market remainsmoderate in spite of Ukraine’s and Poland’s efforts. Other projects, like Nabucco or TAP mightcontribute more likely to the diversification of the gas mix in Europe – and hopefully in Romania. Theconsortium that operates the Shah Deniz block – the first source of gas to fill either Nabucco or TAP,was expected to make a choice between the two routes in June 2013. For Romania, Nabucco would be morebeneficial – since TAP aims at bringing the gas through Turkey-Greece-Albania-Italy to Europe[compared to the route through Turkey-Bulgaria-Romania-Hungary-Austria – under Nabucco].Another important choice in the upstream area is the one expected from OMV-Exxon that will pick a route[destination] for the gas to flow [starting 2019] from Romanian offshore. Output is expected at x.xbn cubicmeters per year / compared to xx-xxbn cubic meters to flow through Nabucco or TAP in a first stage.Domestic energy prices remain low, market reforms advance slow. Electricity and natural gas prices remainroughly the lowest in EU [except for Bulgaria in some cases] and the pressures for higher prices are visible,yet not immediate due to sluggish advance of market reforms. Hiking the regulated natural gas prices towardmarket levels is being pursued as a preparatory stage before full liberalisation of the market. The problemhowever is that since there is no functioning market in place yet, the “market level” can be onlyarbitrary.The two-pillar liberalisation process already endorsed by the government is however realistic and workable.Still, the executive and the market regulator lag behind plans to set up a natural gas exchange – whichis critical for one of the two pillars [price hikes being the second pillar]. Gas market liberalisation dependscritically on first having a market with an adequate structure [including diversified supply and tradinginstitutions among others].The reforming the electricity market also advances slowly, speaking of the expected market couplingprospects. Power grid operator signed a memorandum with the members of Prague-based area that includesCzech Republic, Slovakia and Hungary but no follow-up is available yet. Domestically, the market regulatorANRE has reportedly drafted plans for an OTC market and Transelectrica might waive certain fees for theelectricity exported. Speaking of the market developments, more wind and hydro power pushed down theshort-term prices while the medium-term future prices remain more or less steady [even though at historic lowlevels]. Romania’s Official Journal has published the emergency ordinance that amends the 220/2008law on the support mechanism for energy producers that use renewable energy resources.The amendments are: temporarily withholding part of the support [the tradable green certificates] extended toinvestors. Licensing of new projects is restricted. Solar farms built on productive farming land are bannedfrom support. The association of investors in wind farms announced plans to appeal in court and at the EC theordinance.The effects of the ordinance will be better visible after the market regulator runs a first profitability evaluation[supposedly as soon as possible].But at first sight investors in wind farms and micro-hydro might be entitled tochallenge the ordinance since the internal rates of return [IRR] for their projects might fall under the target setunder the law 220/2008 – though final results can be provided only by market regulator ANRE.Investors in photovoltaic will probably not have their profits lowered below the target.The country’s refining sector hit in Q1 the lowest activity level in the past decades as the crude oilunder processing dropped to below x mn tonnes. This occurred however as country’s largest refineryIntellinews - Romania Energy Sector Report - June 2013
  3. 3. owned by the Rompetrol group has completed upgrade works thus remaining in outage for a period of time [itprocessed 40% less crude oil than one year earlier].table Of Contentexecutive Summary1. Macro Updateromania’s Q1 Gdp Up X.x% Y/y Driven By Foreign Trade Items.1.1 Regulatoryromania Enacts Amendments To Renewable Energy To Evaluate Romania’s Amendments To Renewable Support Law – Association.anre Is Supposed To Play A Key Role After The Government Amended Law 220/2008.1.2 Structural Reforms – Privatisationgovernment To Sell Xx% Stake In Power Distribution Company Electrica In October.1.3 Raw Energy Resourcesromania’s Gross Energy Use Drops Xx.x% Y/y In Q1, Power Intake Down X.x% Y/y.romania To Cut Only Partly Cogeneration Contribution Starting As Of 2014 – Market Regulator1.4 Domestic Use Of Raw Energy1.5 Domestic Energy Priceslakshmi Mittal In Energy Price Talks For Arcelormittals Units In Romania.2. Oil, Petroleum Products2.1 Domestic Fuel Prices2.2 Quarterly Updated Statisticstentative Attempt To Compare Activity Of Romania’s Three Refineries.2.3 Regional Outlook: Car Fuel Production/demand; By Country2.4 Corporate Round-upomv Petrom Reports X% Decline In Q1 Revenue And Profit.omv Petrom Earmarks Eur Xxx Mn For Redeveloping Mature Oil Fields.rompetrol Refinery Cuts Q1 Loss, Nears Ebitda Break-even.lukoil’s Romanian Refinery Remains In Loss In 2012 But Rules Out Pulling Out.gazprom Neft Takes Over Bunkering Operator In Romanian Port Constanta3. Natural Gasec Rejects Romania’s Demand For 6-month Delay Of Natural Gas Market Liberalisation.romania Lifts Ban On Natural Gas Exports.shale Gas Update: Better Estimated Reserves, Firm Support From Pm And President.3.1 Quarterly Updated StatisticsIntellinews - Romania Energy Sector Report - June 2013
  4. 4. a. Domestic Production Vs. Importsb. Structure Of The Natural Gas Market, By Final User3.2 Corporate Round-upe.on Romania Asks Xx% Higher Gas Transport Feesromania To Help Moldova Build Mutual Gas Interconnection.romanian Parliament Endorses Bill On Nabucco Gas Pipeline Company.romania To Set Up Joint Venture For Handling Offshore Natural Gasomv Petrom Estimates Gas Flow At Neptun Deep Offshore Exploration At 6.5bn Cu M Per Year.4. Power4.1 Quarterly Updated Statisticsromania’s Electricity Use Down X% Y/y In April After Sharp X.x% Y/y Drop In Q1.4.2 Power Marketsprices On Romanias Day-ahead-market Drop Below Eur 30/mwh In Investigates Romania’s Power Market Operator On Alleged Discrimination.government Gives Preferential Grid Access To Coal-fired Plants In Exchange For Ancillary Services.romania To Lower Electricity Export Fees.4.3 Use Of Electricity In Economy4.4 Corporate Round-upromgaz Enters Electricity Market.enel Green Power Operates 500mw Wind Farms In Romania.hidroelectrica To Auction 25 Small Hydropower Plants In July.verbund Commissions 225mw Wind Farm.ebrd Mulls Eur 200mn Loan To Romanian Power Producer Oltenia.ebrd Cancells Plans On Arranging Eur 207mn Loan For Romanian Power Plant Project.chinese Investor To Get Permit For 600mw Coal-fired Power Plant In Romania By November –Daily.chinas Lightway Solar To Build 50mw Solar Power Park In Romania.energreen Investment Europe Buys 17mw Solar Power Project In Romania.power Grid Operator Faces Problems In Completing Supplementary Connection To Serbia.hidroelectrica Expects Record Profit In 2013.wind Turbine Manufacturer Vestas To Open Service Centre In Romania.enel Romania To Invest Eur 540mn In Power Distribution Network In Next Five Years.ResearchMoz( is the one stop online destination to find and buy market researchreports & Industry Analysis. We fulfill all your research needs spanning across industry verticals with ourhuge collection of market research reports. We provide our services to all sizes of organizations and across allindustry verticals and markets. Our Research Coordinators have in-depth knowledge of reports as well aspublishers and will assist you in making an informed decision by giving you unbiased and deep insights onwhich reports will satisfy your needs at the best price.Contact:Intellinews - Romania Energy Sector Report - June 2013
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