McGuireWoods Romania Director Speaks on the Future of Energy Consumption

October 6, 2014

Pardon Our Dust

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The “Energy Consumption Decline – Threat or Opportunity?” conference was held in Bucharest, with the support of the National Energy Regulatory Agency and World Energy Council. Panelists included government officials, major players in sectors such as renewable energy, oil & gas, electricity, as well as specialized business and public affairs consultants.
Danut touched upon the different positions that actors in the energy market have: “As a result of consumption decline, competition between producers/suppliers has increased and prices went down, creating an opportunity for consumers. Both industrial consumers and households, already under pressure on costs, received a small period of relief. The only challenge is that such an opportunity is not sustainable on the long run.
Based on the analysis performed by the system operator, the Romanian electricity system needs further investments both in the grid (including maintenance, upgrading and interconnectors with neighboring countries) and new production facilities able to improve the system’s balance. But any new investment project requires a market and in a declining consumption stage, the potential investor is asking us, the consultants, and the Government:
The current energy market in Romania is not fully functional yet, has high regulatory costs and is still undergoing changes with various degrees of uncertainty. In order to improve its conditions, Danut Nicolae indicated the focus needs to be on:
  • Strategy – a long term vision which will improve the stability and predictability of the environment, based on input from all stakeholders
  • Balance – a balanced approach that will consider both social costs and industrial consumer needs for competitiveness, the costs for maintaining the system’s performance in the long run but also the companies’ need for returns on investment
  • EU integration - Romania’s position as EU member, the need for further integration towards the unique market (especially in the gas sector).