"Romania Power Report Q3 2012" Published

New Energy research report from Business Monitor International is now available from Fast Market Research

by Bill Thompson

(WireNews+Co) - Boston, MA - 15 October 2012

BMI View: While Romania's plans to greatly expand its nuclear generation capacity are in disarray, there is growing support for the country's wind power programme. Low electricity prices threaten investment in generating capacity and transmission infrastructure. This leaves consumers facing the prospect of sustained price increases over the medium term as Romanian pricing moves closer to the EU average and international involvement in power investment grows.

Romania's plans to deregulate the power sector were halted when the centrist government, led by Mihai- Razvan Ungureanu, fell to a no confidence vote at the end of April 2012. As a result, Romania's opposition alliance, the Social-Liberal Union (USL), formed an interim government. Even if the USL does prioritise the country's relationship with the International Monetary Fund (IMF), the deregulation timetable is likely to suffer delays in the short term. Deregulation is deemed necessary to attract private investment into the power sector. A US$6.54bn aid deal awarded by the IMF and European Commission aims to kick-start the process and align Romanian power prices with the rest of Europe.

View Full Report Details and Table of Contents (http://www.fastmr.com/prod/451364_romania_power_report_q3_2012.aspx) (http://www.fastmr.com/prod/451364_romania_power_report_q3_2012.aspx)

Key trends and recent developments in the Romanian electricity market include:

- During the 2012-2021 period, Romania's overall power generation is expected to increase to 79.3 terawatt hours (TWh). Driving this growth is an annual 7.8% rise in nuclear generation and an 10.7% average increase in non-hydro renewables-based supply, offsetting a 0.5% average annual decline in oil-fired electricity.
- Following an assumed 1.0% increase in 2012 real GDP, BMI forecasts average annual growth of 3.0% between 2012 and 2021. The population is expected to fall slightly from 21.4mn in 2012 to 20.9 in 2021, but net power consumption looks set to increase from an estimated 50.9TWh in 2012 to 65.2TWh by 2021. During the 2012-2021 period, the average annual growth rate for electricity demand is forecast at 2.8%.
- In November 2011, according to data from the European Energy Portal, the average household electricity price (3,500kWh per annum consumption) in Romania was EUR0.1207 per kWh, well below that of most European rivals. In the Czech Republic, for example, the price was EUR0.1541/kWh, compared with EUR0.1600/kWh in Poland, EUR0.1787/kWh in Hungary, EUR0.2164/kWh in Italy and EUR0.1676/kWh in the UK. Romanian power prices were scheduled for a 5% increase from June 30 2012.
- Thanks largely to the forecast rise in net generation, which outpaces the underlying demand trend, Romania's power supply surplus may increase over the next ten years. A falling percentage of transmission and distribution losses - from around 12.7% to less than 11.6% - will help protect the export trade. The net export capability by 2021 is put at 4.9TWh.

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