ministry of economy and finance - wordpress.comopcom t1 t2 t3 t6 e1 e2 e3 e7 e8 transmission and...

MINISTRY of ECONOMY MINISTRY of ECONOMY andand FINANCEFINANCE

Energy Policy DepartmentEnergyEnergy PolicyPolicy DepartmentDepartment

Alexandru SandulescuAlexandru SandulescuDirector GeneralDirector General

Romanian energy sector Romanian energy sector short presentationshort presentation

Romanian electricity sector

• Companies structure

Nuclearelectrica

Hidroelectrica

Transelectrica

OPCOM

T1 T2 T3 T6

E1 E2 E3 E7 E8

Transmission and system operator

Commercial operator

8 distribution companies (DISCOs)

Producer with hydro power plants

Producers with thermal power plants

Almost 20 municipal cogen producers

Producer with nuclear power plant

More than 120 independent suppliers


•• Electricity generation structureElectricity generation structure

NUCLEAR

13%SOLID

40%

LICHID

2%

GAZOS

17%

HIDRO

28%

HIDRO NUCLEAR SOLID LICHID GAZOS


ElectricityElectricity GenerationGeneration


• Electricity distribution structure

TransilvaniaTransilvaniaNordNord

TransilvaniaTransilvaniaSudSud

EoNEoNMoldovMoldovaa

CEZ CEZ OlteniaOltenia

ENEL ENEL BanatBanat

ENEL ENEL MSMS

ElectricaElectrica36%

E.ONE.ON

18%

EnelEnel

33%

CEZCEZ13%

Electricity Market

• Fully liberalized from July 2007;

• No administrative barriers for imports and exports of energy or energy resources;

• Advanced electricity market compared with other countries in the region;

• Market operator – Opcom operating:

– Day Ahead Market

– Forward market;

– Green Certificates Market.

• Balancing Market operated by the TSO, Transelectrica

Electricity Market

Wholesale vs. Retail electricity market

indep. supplier 1

indep. supplier 2

producer producerproducerproducer

eligible customer

Customer at reg. tariffs

eligible customer

Customer at reg. tariffs

eligible customer

Centralized markets OPCOM

Wholesale Wholesale marketmarket

Retail marketRetail market

indep. supplier 3

Electricity Market

• Wholesale electricity market

Physical Notifications

BILATERAL CONTRACTS DAY AHEAD ON THE DAY SETTLEMENT

TSO

Balancing Market

MP

P

Q

G G

S S

Q

Day Ahead Market

Simple Bids

Simple Bids

Firm Volumes by Company

Simple bids by unit

Metered Volumes

Meter data

Imbalance volumes by

BRP

Adjustments to Day Ahead schedule

BM Volumes

Market Operator

TSO-market operator

G G -- generatorsgenerators

S S -- supplierssuppliers Balancing Responsible Parties

Electricity Market

• Traded volumes on centralized markets as % of total consumption

Electricity Market

Day Ahead spot prices – March 2008

Electricity Market OpeningElectricity Market Opening

• Real market opening vs. legal market opening: January 2004 – March 2008

Romanian gas sector

• Companies structure

Romgaz

Transgaz

EoN Gaz DistrigazSud

PETROM

Transmission and system operator

2 distribution companies

State owned gas producer

Private gas producer (OMV)

Gas importers

Other small gas producers, importers or suppliers

Romanian gas sector

• Gas sources 2007

import 29%

intern71%

import intern

Romanian gas sector

• Gas importers 2007

Romanian gas sector

• Domestic gas producers 2007

Romanian gas sector

• Gas consumption in 2007 in thousand cubic meters

• Total annual consumption: 16 366 105 000 cubic meters

Romanian gas sector

• Real market opening of the retail gas market

Romanian gas sector

• Imported gas price - 2007

EURO/1000cm

Romanian energy sector Romanian energy sector future investmentsfuture investments

Attracting investments in electricity generation

•• HidroHidro unitsunits

– privatization of small hydro power plants from Hidroelectrica;

– possible privatization of some medium sized hydro power plants;

– finishing of 22 hydro power plants by establishing joint ventures between Hidroelectrica and private investors;

– Pump storage power plant Tarnita-Lapustesti of 1000 MW to be built also by Hidroelectrica with private participation;

– Green field projects.

Attracting investments in electricity generation•• Fossil fuel unitsFossil fuel units

– Privatization of Craiova Energy Complex (lignite mines and two power plants);

– Joint ventures under negotiation for new units in:

• Braila (memorandum signed with EoN and ENEL);

• Galati;

• Doicesti;

• Borzesti;

• Bucuresti Sud;

• Bucuresti Grozavesti;

• Constanta;

– Green field projects.


•• Nuclear unitsNuclear units

– Unit 3 and Unit 4 in Cernavoda Nuclear Power Plant – consortium:

• Nuclearelectrica – to have 51 % participation;

• ENEL;

• EoN;

• Electrabel;

• CEZ;

• Iberdrola;

• RWE;

– New Nuclear Power Plant to be built after 2015 –Study for location to be started in 2008.


• Promotion of renewable energy sources - Green certificates market

Gre

en c

ertif

icat

e m

arke

tG

reen

cer

tific

ate

mar

ket

Ele

ctri

city

mar

ket

Electricity

Coal

Electricitymicro hidro

Green certificatesmicro hidro

Electricity

Nuclear

Producer on hydro

Producer using fossil fuels

Producer with nuclearunits

Competition

Competition

SupplierProducers

Label


• Promotion of renewable energy sources - Green certificates market

mandatory quotas for suppliers:2005 - 0,7% 2006 - 1,4% 2007 - 3,74% 2008 - 5,26% 2009 - 6,78% 2010 - 8.3% 2011 - 8.3%2012 - 8.3%

minimum and maximum price levels established by the regulator:minimum value 24 Euro / MWhmaximum value 42 Euro / MWh

Romanian energy sector facing the Romanian energy sector facing the new challengesnew challenges

Challenges facing the energy Challenges facing the energy sectorsector

• The environmental impact of using primary energy sources and of energy conversion technologies, especially the CO2 emissions;

• The finite world reserves of fossil fuels;

• The increase dependency on imports of primary energy sources;

• The increases in energy demand.

Romanian energy sources potentialRomanian energy sources potential

The national fossil fuel

reserves

Geological reserves

Concessioned areas

New areas

Mil. ton1)

Mil. tep Mil. ton1)

Mil. tep Mil. tep Mil. ton 1) years years years

1 2 3 4 5 6 7 8 9 = 2 / 8 10 = 4 / 8 11 = 6 / 8Coal hard coal 755 422 105 38,8 3,3 229 32 lignite 1490 276 445 82,4 1045 133 32 47 14 33Oil 74 72 5,2 14Natural gas 185 159 12,5 15

Uranium2)

1) excluding natural gas expressed in mld. Mc2) data not public

Sour

ce Geological reserves

Concessioned areas

Estimated annual

production

Forecasted depletionReserves

New areas

Romanian energy sources Romanian energy sources potentialpotential• The national renewable

energy sources potential

Source Annual potential

To be used

for:

Solar 60 PJ/an1,2 TWh

Heat

Electricity

Wind 23 TWh Electricity

Hydro of which under 10 MW

36 TWh

3,6 TWh

Electricity

Biomass and biogas

318 PJ Heat

Electricity

Geothermal 7 PJ Heat

NOTE : these are theoretical potentials, real usable potentials are much lower due to technological, economical and environmental limitations or restrictions

Romanian energy strategy 2007 Romanian energy strategy 2007 –– 2020 2020

Answers to challengesAnswers to challenges

• Reducing CO2 emissions by:

• promoting renewable energy sources

– energy target of 11 % in total energy mix of 2010

– electricity targets of 33 % in total gross electricity consumption of 2010, 35 % in 2015 and 38 % in 2020

• promoting nuclear energy

– unit 2 Cernavoda of 600 MW commissioned in 2007

– unit 3 and 4 to be completed by 2014 - 2015



Reducing energy dependency on imported fossil fuels by using a balanced energy mix and by:

• promoting renewable energy sources;

• promoting the use of indigenous coal, but using clean coal technologies, preferable with carbon capture and storage facilities;

• promoting nuclear energy (from 2017 imports of uranium might be needed).


Answers to challengesAnswers to challengesDiversifying energy supply sources and routes by:

• promoting the Nabucco Project on natural gas;

• promoting the PEOP Project on oil;

• studying the fesability of a LNG / LPG terminal in Constantza harbour;

• increasing the interconnection capacity on natural gas with Hungary and Bulgaria;

• increasing the interconnection capacity on electricity with Turkey (submarine cable), Moldova, Serbia and Hungary.



• Increasing energy sources storage capacity by:

• increasing the gas storage capacity from 2550 mil. CM in 2007 to 3935 mil. CM in 2012;

• increasing the oil storage capacity to fulfill 67.5 days of consumption in 2011;

• construction of a 1000 MW pump – storage hydropower plant (mainly for daily, short term security of supply).



Limiting energy consumption increase by energy efficiency measures:

• energy audits are mandatory for big industrial consumers;

• National Plan for Energy Efficiency was drafted in 2007;

• National programme for building insulation;

• Structural Funds to be used for energy efficiency projects.

• On an estimated 6 % yearly GDP increase, we expect a 3 % yearly energy consumption increase.

Conclusions Conclusions -- Answers to challengesAnswers to challenges

Romanian energy strategy basic answers to the new challenges are:

• Promotion of renewable energy sources;

• Promotion of nuclear energy;

• Promotion of indigenous coal with clean technologies;

• Diversifying both the sources and routes of primary energy sources supply;

• Increase interconnection capacity (electricity, gas) and storage capacity (gas, oil);

• increase energy efficiency.

Thank you for your attention !Thank you for your attention !

www.minind.rowww.minind.rowww.mfinante.rowww.mfinante.ro

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