Hidroelectrica, Nuclearelectrica to be forced to sell more electricity on regulated market

Public power utilities Hidroelectrica and Nuclearelectrica will have the obligation to deliver up to 65% of their electricity generation to regulated markets, at capped prices, Romanian media reported.

This obligation is envisaged under a draft order published by the Romanian Energy Regulatory Authority (ANRE). The order was drafted in line with the Emergency Government Ordinance no. 114/2018, Romania Insider reported.

Once ANRE’s new order is implemented, the amount of electricity sold on the free market will decrease.

The draft order also imposes an obligation for Hidroelectrica and Nuclearelectrica to sell electricity for regulated markets at a price equal to production costs plus 5%. The new obligations will be in force over the next three years.

The two companies are now responsible for half of the Romanian domestic generation.

According to Romanian media, these new state measures could increase power prices in Romania and lower the profitability of the state power companies.

The European Federation of Energy Traders (EFET) earlier warned that the Emergency Government Ordinance no. 114/2018 increases turnover tax for the electricity sector, which will lead to an increase in electricity prices.

As local media reported earlier, the Ordinance no. 114/2018 will have a major impact on companies doing business in the energy, telecom, and banking sectors because it introduces new taxes and rules.

A week ago, the Bulgarian government decided to impose an obligation on state-owned power utilities to provide an additional amount of electricity on the day-ahead market (DAM) of the Independent Bulgarian Energy Exchange (IBEX) in order to stabilize the market.

In December last year, experts warned that the region will face a major electricity price hike.

According to forecasts from S&P Global Platts Analytics, power prices across continental Europe’s four largest markets will average around EUR 58 per MWh per in 2019, compared to EUR 54 per MWh in 2018 and EUR 37 per MWh in 2016.