Romanian Energy Market

7/30/2019 Romanian Energy Market

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A Unique Perspective 2012 EnergyQuote JHA. All rights reserved

Romanian Energy Market

Anca MoruzEuropean Relationship Manager


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2012 EnergyQuote JHA. All rights reserved

Agenda

1. European context

2. Power & Gas Markets

- Market size- Market opening- Market players- Future considerations

3. Opportunities

4. Q&A


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European Background

POWER



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Market Size and Generation Mix

POWER

Population: 19 million;

Electricity consumption in 2011: 54 TWh;

Size of the B2B market in 2011: 63%.


0

5

10

15

20

2530

35

40

45

50

Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12

Coal[%]

Gas[%]

Hydro[%]

Nuclear[%]

Wind[%]

Other[%]

40.4

12.2

24.6

19.5

2.21.1

Coal[%]Gas[%]Hydro[%]Nuclear[%]Wind

[%]Other[%]


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Market Opening

POWER

On the 16th of July 2012 the newversion of the Electricity and Naturalgas Law has been published;

Transposing Directives 72/2009 and73/2009, the law includesprocedures for the extinction of theregulated tariffs;

In the power sector the process willstart on the 1st of September 2012and the transitory tariffs will be nolonger applied after 31st of December2013.

Source: ANRE - http://www.anre.ro/
http://www.anre.ro/http://www.anre.ro/http://www.anre.ro/


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Market Players

POWER

ANRE the national Regulatory Authority in Romania - anindependent organization responsible for both electricity and gasmarkets

Transelectrica Romania's only TSO was created in 2000following the unbundling of CONEL - the former national electricitycompany.

DSOs 8 main distribution companies


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Supplier Landscape

POWER

During Q1-12, approximately 83players responsible for the powersupply were active on theRomanian energy market;

Of them, up to 40 are registeredon the wholesale market as well;

13.6%

8.4%

6.4%

5.9%

4.4%

4.0%

3.9%3.6%3.3%

2.8%

2.8%2.4%

2.0%

2.0%

1.9%

1.8%

1.6%

1.1%

0.7%

27.4%

Alro AlpiqElectrica Tinmar IndTransilvania Sud OMV PetromCE Craiova CEZ VanzareE.on Enegie Romania ENEL EnergieElectromagnetica Energy HoldingRenovatio Trading PetprodHidroelectrica Electrica FurnizareENEL Energie Muntenia EGL Gas&Power RomaniaRepower Furnizare Romania Others


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Price structure

POWER

The electricity price applicable onthe free market to industrialconsumers includes 5 components:

Energy only price;

Transport changes;

Distribution charges;

Green taxes;

Other taxes.

Note: The energy prices considered are in line with the current market level November 2012

48%

64%71%

6%

8%

9%37%

15%6%

9% 12% 14%

0% 1% 1%

0%

20%

40%

60%

80%

100%

Low Voltage Medium Voltage High Voltage

Energy Only Transport Distribution Green Taxes Taxes (accize)


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Recent evolution

POWER

The graph below follows the DA price evolution since January 2011.

0

10

20

30

40

50

60

70

80

90

100

RO Power DA Prices[EUR/MWh]


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Future considerations

POWER

OPCOM, along with ANRE and Transelectrica, are currently under negotiations with similar parties fromthe Czech Republic, Slovakia and Hungary for a possible integration of the two markets OPCOM andPXE.

By the end of 2013, the transitory regulated tariffs for power currently applied to industrial consumersshould be extinct.

Nuclearelectrica S.A. (20% of the power production in Romania), is planning to extend their facilities;investors have been invited to participate to the development of 2 additional reactors (besides the 2active ones).


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Case Study Owens Corning Romania

POWER

Company: Owens Corning

Service Provided: Procurement, Energy Management and Reporting

The challenge: Their Romanian plant relied on a power supply agreement negotiated in 2009

which had been automatically renewed in various occasions.

The solution: Our analysts have negotiated a new fixed price agreement.

The result:- Highly competitive price- Extended payment terms

- Cash-flow improvement- No volume tolerance band imposed;

Further improvements


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European Background

NATURAL GAS



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Market Size & Sources

NATURAL GAS

Natural Gas consumption in 2011: 150,810 TWh;

Size of the B2B market in 2011: 79%.



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Market Players

NATURAL GAS

ANRE Market regulator

Transgaz TSO

8 major gas producers (95% of production owned byRomgaz and OMV Petrom)

DSOs 40 distribution companies (2 major onesDistrigaz Sud Retele and E.on Gaz Distributie)

40 active Suppliers


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Price structure

NATURAL GAS

Published by ANRE on a monthly basis;

2 types of mix (Romanian Gas/Imports): Domestic consumers (typically 92% domestic, 8% imports); Industrial consumers;

0%

10%

20%

30%

40%50%

60%

70%

80%

90%

100%

Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12

Mix structure - Industrial consumers

Domestic Imports


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Product availability Industrialconsumers

NATURAL GAS

Regulated Tariff:

- includes all regulated components, except for taxes (accize);- published by ANRE and can be revised on a quarterly basis;

- 11 categories of consumers depending on the annual consumption and connection type;

Liberalized Tariff:

- includes the natural gas price calculated according to the mix established for each month;- influenced by exchange rate Lei/$;- transport and Distribution tariffs are added depending on the supply point address;

- supplier margin;


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Future considerations

NATURAL GAS

The new Electricity and Natural Gas law published by ANRE in Jun-12 has established a calendar for agradual elimination of the regulated tariffs;

Forindustrial consumers, the process will start on the 1st of December 2012 and should be complete bythe end of 2014 (2015 at the latest); After having negotiated a contract on the free market, clients can nolonger return to the regulated tariffs;

Shale Gas: Chevron has won the right to explore various regions close to the Black Sea (decision taken by the

Romanian Government in March 2012); Resources might be also found in the Carpathian Mountains;

Nabucco Project Bulgaria has announced that the pipeline construction will begin in early 2013.


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Thank you


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Questions and Answers

For additional information please contact

Anca Moruz

European Relationship Manager

[email protected]

Documents

Romanian Energy Market