Romania: Who are losers and who are the winners after last year’s explosion price at OPCOM?

21. January 2018. / SEE Energy News

The era of superb good deals in the electricity market in Romania seems to have been completed. The proof is that the National Defense University Karol Prvi has not only not renewed with RCS & RDS the supply contract that has expired, but has not even received an offer in the tender procedure for the purchase of electricity in the EPPS system (electronic public procurement system).

The university was forced to claim from ANRE that its supply from January 1st, 2018 is taken over from the supplier in the last instance according to the place of consumption, Enel Energie Muntenia.

RCS & RDS was one of the most aggressive suppliers that entered the market after liberalization. According to ANRE, the RCS & RDS share in the competitive market in the first nine months of 2016 was 3.58%. Based on the contract, RCS & RDS has provided 883 GWh for the given period.

The high price jump in OPCOM stock exchanges, on futures markets, and especially on the spot market, (where the price reached a level of 140 euros per MWh in January last year) reduced the incentive for suppliers, including RCS & RDS, offering lower prices to provide greater market share.

Thus, the share of RCS & RDS in the first nine months of last year was 2.04% and provided only 546 GWh on the basis of the contract, a decrease of 38% compared to the same period of the previous year, despite the fact that the consumption of customers in the competitive market in 2017 increased by 8.5%, from 24,690 GWh in the first nine months of 2016 to 26,790 GWh in the same period of 2017.

Several large suppliers have faced even more serious problems after events during the past year.

An example is Transenergo, which in the first nine months of 2016 had a market share of 5.29% (1,300 GWh of delivered energy) or Axpo Energy, with a 4% share (1,000 GWh). As Transenergo went bankrupt, Axpo was hit, as a creditor, by acquiring another significant supplier, Arelco Power, which in the first nine months of 2016 had a market share of 3.56% (delivered more than 880 GWh).

Consequences were also felt by suppliers in the last instance. That is how Elektrika supplier lost a 1 GWh delivery contract in the first nine months of last year. In the period January-September 2016, Elektrika had a market share of 15.98% (it delivered 3.923 GWh) and in the same period last year its share fell to 11.74% (3,100 GWh delivered). That means Elektrika delivered 20.5% less electricity in a competitive market.

However, in this situation there are also winners, which is particularly relevant to Enel. Thus Enel Energie Muntenia increased its stake from 3.49% in the first nine months of 2016 to 8.8% in the same period of 2017. Enel Energie also recorded growth from 4.37% to 7.68%.

If the results of the two branches of Enela are viewed collectively, it is clear that they exceeded the company Elektrika, the only supplier in which the state continues to be the majority owner.

Enel managed to increase sales in the competitive market by as much as 128%, from 1,940 GWh in the first nine months of 2016 to 4,441 GWh in the same period last year.

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