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October 28, 2021

PM Boc: Fewer but stronger energy companies to be competitive within EU

Referring to Romania’s energy strategy, Prime Minister Emil Boc stated yesterday that the intention is to use an energy mix for each of the energy production companies that will be created, underlining that in the end there will be only a small number of strong companies able to compete against similar EU companies.

‘The Romanian companies will be forced to withstand external competition after all the tourism and agricultural works in the country will be completed, because they will enter in a direct competition against foreign companies, PM Emil Boc stated yesterday at the opening of the ‘Mediafax Talks about Energy’ conference.

‘That is why, from our point of view, the strategy we set out (…) is the restructuring of the energy sector while keeping in mind the manner of organization of EU companies. That is why our opinion is that we have to use a primary energy mix for each of the production companies that will be created in view of obtaining security in the production of electric energy in Romania. That is why we will create a limited number of strong companies that would be capable of competing against similar EU companies and that would support investments in new, clean technologies, thus becoming leaders on the South-East Europe market by starting off from what I said before: the use of an energy mix as happens everywhere within the EU’ Boc added.

In his turn, Tudor Serban, secretary of state within the Ministry of Economy, pointed out that the number of energy distribution companies will be reduced from three to two, as will happen in the case of the electricity production companies that are owned in their entirety by Electrica. In the opinion of PSD MP Iulian Iancu, Romania has done some legislative mistakes in the energy domain and the ‘rethinking’ of the system becomes compulsory in the current economic context and in the context of the global developments registered in this sector.

Prime Minister Boc claims that the Romanian energy market lacks real competition because the energy produced in the hydro-electric plants and the Cernavoda nuclear plant is favored over that produced in thermal power plants. He pointed out that the thermal power plants produce 54.3 per cent of electric energy, the hydro-electric plants produce 28.4 per cent and the nuclear power plant produces 17.3 per cent.

The Prime Minister also added that the Government plans to contract a foreign loan of up to several billion Euros in order to modernize the dual purpose power/heat plants because the apartment heating units cannot represent a favorable long-term solution for the heating system. He opined that this ‘massive investment’ will be recovered in 10 years’ time from the savings that would result from ensuring the energy source.

Nabucco, the priority, South Stream not ruled out

Romania supports the Nabucco project but does not rule out taking part in other European projects such as South Stream, depending on the European Union’s support for these energy investments, PM Emil Boc added. Asked whether South Stream is included among the European projects that Romania would support, Boc answered that all projects are being considered. He added that the talks are at a general level because the international context and Romania’s energy policy are taken into consideration.

Romania’s first LNG terminal to be built in 2 years

Romania’s first liquefied natural gas (LNG) terminal could be launched in 2 years’ time following an investment of several hundred million Euros. According to PSD MP Iulian Iancu, Qatar is the main supplier considered by the authorities. The value of the investment, estimated at several hundred million Euros, will be influenced by several factors such as the capacity of the project, the method of construction and the structure of the shareholding. Algeria, Egypt and Iraq are other partners that Romania could consider for this project. Tudor Serban, secretary of state within the Ministry of Economy, added that Romania has received 3-4 proposals from companies interested in this project. A special interest continues to be shown for the construction of the nuclear reactors of the Cernavoda nuclear plant. Tudor Serban pointed out that, apart from the companies already announced, the list also includes Russian companies that want to take part in the project. However, the authorities are currently not willing to give up their 51 per cent share package.

EBRD offers EUR 150 M for energy center in Turceni

The European Bank for Reconstruction and Development (EBRD) will offer next week a credit of EUR 150 M for the Turceni Energy Center, secretary of state Tudor Serban also stated on Thursday. He added that the authorities are negotiating with other banks too, banks such as the Romanian Commercial Bank and Deutsche Bank, in order to draw investments in the energy sector. ‘The only problem is that of guarantees, but I hope that we will find solutions. The efforts have been significant but we are very well mobilized when it comes to the restructuring of the energy system,’ Serban added.

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