The expected scrapping of a fee to export electricity from Romania is shrouded in doubt as the government had not published the official document by Monday evening, just hours before the bill was expected to come into force on 1 July.
The government said earlier this month the last remaining component of the export tariff, the cogeneration fee, will be abolished from 1 July ( see EDEM 11 June 2014 ). The move would make Romanian wholesale electricity prices some of the most competitive markets in the region at a stroke, with around €4.00/MWh taken off the export costs.
Uncertainty now surrounds the change with the energy regulator ANRE having published a bill on Monday which halved the cogeneration tax to New Lei 9.96/MWh (€2.18/MWh), but made no mention of the fee for electricity that is exported. The news was met with an outcry from the market as traders feared a delay in the measure. A draft bill on the website of the government’s department of energy, dated 24 March, indicates the cogeneration fee would not apply to exports.
A board member at ANRE, Zoltan Nagy-Bege, told ICIS on Monday that the government had approved the decision to scrap the cogeneration fee for exported energy and said the bill was expected to come into force from 1 July.
Meanwhile the head of the Romanian Association of Electricity Suppliers (AFEER), Ion Lungu, also said the energy minister, Razvan Nicolescu, previously announced that the decision was accepted in a governmental assembly. Lungu noted the ANRE bill referred to the actual value of the cogeneration fee and would not state to what it applies. “It is surprising that despite being approved, the [bill] was not published, and according to the technical legislation it would only be implemented after publication,” he noted.
He also mentioned that since the cogeneration fee for exports was introduced through a governmental bill, the government is the one that can abolish it.
ANRE and the government’s department of energy were unavailable to confirm the fate of the change by Monday evening.
With the July ’14 contract expiring on Monday, most traders have already taken positions for the next month, in line with expectations that the export tariff will be scrapped.
Taking a hit
Most market participants now anticipate the export fee to stay at New Lei 9.96/MWh.
One trader said that if the cogeneration fee is reduced instead of completely eliminated, traders would need a fairly profitable spread to get their money back. “They paid around €3.40/MWh for cross-border capacity [on the Hungarian link]. The spread needs to be at least €6.50/MWh for them to get their money back,” one trader said.
According to the latest ICIS assessments, the Hungarian July ‘14 closed at a €6.20/MWh premium to the Romanian counterpart.
Expectations that the change will come into force from 1 July boosted demand for cross-border capacity in July at the monthly auctions on the Romanian-Hungarian interconnector, and consequently the price ( see EDEM 11 June 2014 ) Romanian electricity flows usually head into more expensive Hungary. On Monday, the Romanian Day-ahead outturn on the OPCOM exchange settled at a €1.91/MWh premium over the Hungarian equivalent on the HUPX exchange.
Public statements from the country’s prime minister, Victor Ponta, indicated also that the fee will be abolished from 1 July 2014 ( see EDEM 12 May 2014 ). Sophie Udubasceanu