Ways to boost energy efficiency and keep consumers happy in a liberalized market

Martin Zmelik, CEO CEZ Romania unveils the approach to energy efficiency and the challenges of a liberalized market

What are in your opinion the main current challenges in implementing the efficiency programs in Romania?

For us, the main challenges in implementing the efficiency programs were related mainly to the legislation provisions: on one hand we were pending on them, on the other we had to explain them to our potential partners.

But we surpassed the challenge and managed to perform in this area also. Our commitment for a long-term partnership to the municipalities took the shape of ESCO services resulting in public lightning cost optimization, energetic audit and management for long term sustainable savings.

Our current focus remains on local authorities aiming to improve public lighting efficiency in Oltenia area.

We have already implemented a pilot project in Giurgita - a more efficient lighting system on the county road DJ. 561, Segarcea - Barca, the portion corresponding to Giurgita commune. This lighting system is estimated to lead to a reduction in the electric bill for consumption by over 25% compared to the previous bill, while ensuring qualitative and quantitative parameters for public lighting.

We are currently trying to develop widely this concept and we have also other projects proposed to local authorities that are in different stages of approval.

The adoption of the EU Efficiency Directive 27/2012 is an ambitious objective for the EU: how do you think the market targets can be achieved in Romania?

In order for Romania to be able to align to the Community objective of energy efficiency and reduction of harmful emissions, it needs to expand the Smart Grid projects to a national scale, thus creating the premises for the development of smart cities. We believe that the key concept behind all this is transformation. A transformation in the mentality of people and public institutions, in the business model, the new technologies and the way utility providers relate to the clients’ needs.

CEZ in Romania is under a full transformation phase, our distribution operation model being the first improved in order to face the digitalized utility era.

Among our smart initiatives, we count an increased degree of automation of grids and at the same time and empowering the client over his energy consumption by providing him with the necessary information to take wise decisions about his utility profile.

Another objective of the EU Efficiency Directive 27/2012 is related to smart metering meant to reduce energy losses, to obtain an accurate reading of the energy consumption in real time, connections or disconnections.

CEZ Group in Romania started at the end of 2013 the installing of smart-metering equipment in rural and urban areas of Dolj and Olt County, and will continue this project.

The consumers with smart meters can verify their consumption in real time which gives them a clear view over the costs, on one hand, and the control over it, on the other.

Also, CEZ gives a significant credit to the future of e-mobility, as well, this being the reason we are such ardent promoters of the trend in Romania. We plan to expand our electric car charging station infrastructure and introduce an own concept in the near future. Currently, our company car fleet includes electric cars that are used by our employees in their business trips.

We believe that this kind of initiatives, empowered by stable and predictable primary legislation and educational campaigns, are the main factors that can contribute to Romania’s achieving the market targets.

What do you think is missing from the Romanian market for a more pronounced development of energy efficiency programs?

In the Romanian market the awareness on the importance of energy efficiency programs is not at its peak yet. Putting more focus on consumers’ empowerment actions and also on the potential risks of the energy losses could open a larger interest of the public on energy efficiency solutions. In the process, the new technologies would reach more affordable costs and, thus, the need created by information and education would meet an affordable offer.

Is your company ready to provide energy to householders in a competitive regime? What are the main challenges?

We are already providing products and services designed for a competitive market and, furthermore, CEZ Group in Romania has always had the client at the core of its activities. The competition brings additional motivation to be more creative about our offer, but also as close as possible to our clients’ needs and own development plans.

Our constant pursue of process and cost optimization has now more than ever a clear objective: the satisfied client and/or consumer. As we were expecting, the opening of the market proves a certain mobility of the household clients which will increase in the following years.

Currently, we are providing additional services that come hand in hand with the liberalization stage of the energy market. Our clients receive proper counseling so that they can choose the profile according to the type of use they have. For them we have also designed loyalty programs with Christian Tour and Profi.

Alongside products tailored to consumers, we give additional services meant to ensure a long term partnership with our customers. For example, we deliver concrete saving solutions that can be implemented on the long term by customers in all categories, negotiated payment terms depending on customer needs and a personalized and flexible billing method, payment and reporting, which gives the client a real control over the costs of the energy bill.

How do you see the process of switching the energy supplier? Are there any barriers? What about risks?

In the process of switching the energy supplier, a consumer should take into consideration both advantages and disadvantages.

In a best-case scenario, consumers are provided with the necessary information to take the right decisions depending on their commodity profiles and demands. In the worst-case scenario, they take into account only the energy price which is actually is only a part from the total amount of energy invoice.

Regarding the risks, the consumer should pay great attention to the details of the offers they receive. It’s important for them to read carefully the contract terms; they should check if the offer being presented to them contains the mandatory elements like Green Certificates, distribution tariffs, etc.

Also, they should also keep in mind that starting 2018, everything will be competitive.

How do you characterize the final consumer market in Romania?

The final customer starts to feel the need to be in charge to understand what he consumes; he demands more attention from the utility providers and better solutions for his needs, including tools and systems that would give him full control of his commodity installations. The market is already scratching the surface of concepts like smart homes and cities, prosumer and commodity interconnectivity. Most likely, the high pressure on the end price, especially in the energy sector, together with the development of the new technologies and the increasing demands of the clients will lead to new business models of the energy companies within the next decade.