AFEER urges ANRE to expedite analysis to identify the causes of distortions in energy prices

The Association of Electricity Suppliers in Romania - AFEER expresses concern about the current situation on the energy market, namely the very large increases in electricity prices on the spot market exchange OPCOM.

"The price of energy on the Day Ahead Market - PZU is very high even though it was evident that there were reasons to that effect: cold weather, high consumption, water shortages and high prices on the other markets in the region. However, energy prices rose in January to values completely unusual, in my opinion unbearable by Romanian market ", said Mr. Ion Lungu, President AFEER. Meanwhile, AFEER notes that "alarmist information creates panic in the market, are completely useless and is recommended to be avoided in these critical moments, especially when they come from the authorities."

AFEER considers it is necessary to conduct an analysis by the National Authority for Energy Regulation - ANRE to identify if there were distortions created deliberately by certain participants in the energy market - traders, suppliers, manufacturers. "Do not blame an entire category of market participants without first having all the information. We ask ANRE to expedite an analysis to identify the causes and to inform the public as required by law, if any players have created distortions in the market, "said Mr. Ion Lungu.

AFEER considers it necessary to analyze the reasons for the PZU offer is in many dayparts, with 1500-2000 MW lower than the demand although there are resources covering consumption in the balancing market.

One of the largers trader and electricity supplier, Transenergo, has applied for insolvency in January and other participants in the energy market are in a difficult situation.

According to AFEER one of the reasons that led to the current situation in the market is the difference between the wholesale energy market regulations, very rigid, and the retail, very flexible.

"From our point of view, the retail market is the most competitive area in the Romanian economy. It's a competitive solid market. It is essential to maintain these high standards of competitiveness, to ensure predictability and stability of the legal framework ", highlighted Mr. Lungu, exemplifying that in most cases, the auctions are no more bids, the winner is designated the differences as a lion to the runner. "Everything happens amid very low margins in the supply of energy. We find a very tough competition in the field and at the end of the day you do not have enough spread to keep your margins, "says the AFEER representative.

Meanwhile, on the wholesale energy market all products that are traded are standardized, which encouraged a migration of suppliers on the spot market (PZU) and the balancing market (PE), two markets which have recorded very high volumes of trading during this period.

The association presented some proposals to thorities in order to create a visible optimization of the wholesale market.

• Reintroduction of directly negotiated bilateral contracts, which will solve the problem of flexibility;
• Introducing the possibility to refuse certain counterparties under PCCB - NC, within 15 minutes, which would help eliminate those market participants who had a history of inappropriate behavior;
• Revaluation of bank guarantees necessary for the trading system with the aim of preserving and strengthening discipline in trading;
• Revaluation of PCSU contracts to contain clear trading conditions and penalties.