Trading bodies call for swift action against Romanian power bourse, regulator for breach of fundamental EU rules

Aura Sabadus


LONDON (ICIS)–High-profile European trading and broker associations and the Romanian exchange BRM have called on the EU’s directorates general for competition and energy to impose an immediately enforceable injunction against the state-owned power exchange OPCOM and regulator ANRE amid claims their practices were turning the market into “Europe’s riskiest.”

Speaking exclusively to ICIS, executives of EVIA-LEBA (European Venues & Intermediate Associations/London Energy Brokers’ Association), EFET (European Federation of Energy Traders) and BRM said OPCOM and ANRE were in breach of the EU’s most fundamental principles, namely the freedom of movement for goods, the freedom to provide (trading) services and European competition law.

More specifically, accusations relate to the repeated refusal of ANRE to deregulate access to the provision of electricity trading services, insisting on retaining the monopoly of the state-owned exchange OPCOM as the sole provider of such operations. They also accuse OPCOM of abuse of dominant position in the market.

OPCOM’s monopoly on the Romanian electricity market excludes the possibility of companies to trade bilaterally or through other platforms provided by brokers, or trade on alternative exchanges such as BRM.

In practical terms, this has translated into:

– blocks to regional market integration,

– soaring electricity prices,

– renewable generators struggle to secure bank credit because they have no flexibility in selling volumes on forward markets.

Furthermore, ANRE’s refusal to establish financial instruments has been turning Romania into “Europe’s riskiest market,” as described in notes by EVIA-LEBA and seen by ICIS.

ICIS sent a list of detailed questions to ANRE, DG Comp, DG Energy and OPCOM, requesting them to comment to allegations included in this investigation.

Neither replied by publication time.


Different complaints have been issued independently by BRM, EFET and EVIA-LEBA, representing different interests.

The complaints point to growing discontent and frustrations about the state of the Romanian electricity market.

They focus on key issues:

– Anti-competitive behaviour displayed by OPCOM as the platform continues to remain a monopoly despite an European Court of Justice (ECJ) verdict in September, declaring such a position illegal;

– Discriminatory barriers to trade upheld by ANRE despite repeated complaints lodged by the three organisations since 2017;

– Disregard of European regulations guaranteeing a healthy competition among market operators;

– Disregard of the European Court of Justice ruling, which concluded that “by preventing bilateral trading between electricity producers and their potential clients, the provisions at stake impliedly prohibit direct exports and mean that the electricity is intended more for internal consumption”.

The obligation to trade exclusively on OPCOM is therefore not only an abuse of dominant position by the bourse in the wholesale market, but also upholds protectionist measures of the Romanian market, which are prohibited under EU rules, according to a letter by EFET to DG Comp seen by ICIS.

Speaking to ICIS, Gabriel Purice, BRM president said: “From the point of view of market prices, the monopoly’s inefficiency is demonstrated by the fact that according to statistics presented by the EC reports, Romania has some of the highest prices of electricity in Europe”.

“Romania constantly imports at high prices, and exports at much lower prices. The interdiction on BRM to operate both [spot and forward] components of the [power] market following the grant of a monopolistic position to OPCOM still constitutes the main obstacle in finalising cross-border agreements for both markets.”


Jan Haizmann, chairman of EFET’s legal committee added: “Traders require alternative routes for trading to manage their contract portfolio efficiently. Mandatory trading on OPCOM impacts cross-border trading, and hinders the emergence of regional cross-border markets by creating national fragmentation. “

“The continuation of the OPCOM trading monopoly after the ECJ decision without change constitutes a blunt infringement of EU competition law and requires correction. The use of innovative and flexible products allow for efficient use of infrastructure and is best guaranteed through a mix of bilateral OTC trading and platform-executed trading of standard products.” Haizmann said.

Ludek Horn, chairman of EFET’s TF Central Eastern Europe Electricity and director of trading at CEZ, a Czech company which had been very active in the Romanian electricity market both in terms of trading and generating renewable energy said an increase in the share of renewables required more flexible market places and institutions.


The Romanian government introduced an obligation in 2009 whereby local producers were expected to sell electricity on the exchange. Three years later, this obligation was extended to all national wholesale electricity transactions which were expected to be carried out exclusively on OPCOM.

This meant that brokers such as London-based TFS, currently named Tradition, which was active in the market at the time had to wind down operations and withdraw from the country.

Renewable generators who were expecting to secure credit lines from banks experienced major difficulties because they had to prove they could sell their production on the forward market. However, the platforms operated by OPCOM were not offering sufficient flexibility.

Over the years, OPCOM introduced a multitude of platforms for spot and forward transactions, including an over-the-counter trading outfit.

Nevertheless, traders polled by ICIS for this investigation said there was a pressing need for bilateral contracts concluded outside OPCOM and conceded that companies should be given the freedom to trade on platforms of their choice.

Romanian producers which had obtained trading licences in other member states and whose markets were coupled with Romania have been deprived of the opportunity to trade bilaterally and, if needed, to export electricity to those markets.

Conversely, by introducing mandatory trading on OPCOM, foreign companies find it difficult to source electricity in Romania.

OPCOM does not offer counterparty clearing in the market which means that buyers and sellers must exchange signed contracts, collaterals to execute deals.

The absence of an efficient central counterparty operating a clearing house increases transaction costs.

All these factors bring insecurity, undermine the efficient management of transactions on the platform and increase the associated financial risks, EVIA-LEBA said.


The negative effects of ANRE and OPCOM’s mandatory trading led to several independent actions initiated by BRM, EFET and EVIA-LEBA.

BRM sent its initial claim to the European Commission (DG Energy) in 2017, highlighting the OPCOM monopoly imposed by the Romanian legislation in place. The claim was not immediately resolved but last year, the European Parliament passed regulation 2019/943 which entered into force on 1 January 2020.

The regulation imposed an obligation on member states, including Romania, to ensure competition among electricity market operators.

BRM took advantage of the new regulation to apply for a licence to operate a centralised electricity market in August 2020, but ANRE rejected it a month later.

Last month, it submitted a claim to the Romanian Court of Appeal, stressing ANRE’s obligation to issue a licence for the organisation and administration of centralised electricity markets.

In parallel, BRM has also launched natural gas futures contracts, with physical delivery and central counterparty mechanism offered by BRM.

Despite its recognised advantages, BRM’s futures market was restricted by ANRE, which refused to recognise gas futures contracts as standardised contracts, BRM said.

ANRE accepted them to be traded and reported only on the BRM’s over-the-counter market. This creates a disadvantage to market participants who will not be able to report them as standardised contracts, BRM added.

Parallel actions were taken by EVIA-LEBA which sent letters of complaint to DG Comp in April 2020 and further to the Cabinet of the Energy Commissioner Kadri Simson in October 2020.

EFET has also sent multiple complaints concerning Romania over the years, the most recent complaint concerning OPCOM was addressed to DG Comp in November 2020.

Furthermore on 17 September 2020, the European Court of Justice ruled in a landmark ANRE v Hidroelectrica court case that OPCOM’s monopoly was in breach of the EU’s fundamental Treaty principles, namely the free movement of goods (in this case, electricity) and the freedom to provide trading services.

The Court also found that ANRE was fully aware of the market-distorting effects of the OPCOM monopoly and considered them desirable.


In its 17-page letter to Kadri Simson, EVIA-LEBA dismantles all ANRE arguments justifying its decision to uphold mandatory trading on OPCOM.

More specifically:

1. It shows that although ANRE had used an EC regulation of 2015, which stipulates that a member state’s national law may expressly provide that no more than one entity can carry out day-ahead and intraday trading services, to declare OPCOM as nominated electricity market operator (NEMO), this provision cannot be extended to medium and long-term electricity trading and derivative services.

2. It stresses that OPCOM’s monopoly does not lie in the legitimate public interest, as argued by ANRE, as its existence does not benefit from any of the overriding justifications.

EVIA-LEBA points out that ANRE had justified the decision to introduce the OPCOM trading obligation by concerns related to security of supply.

Nevertheless, EVIA-LEBA shows that a more plausible concern may be that related to supply at the best price.

However, EVIA-LEBA shows that even that is disproved by the fact that according to reports by the EU’s Agency for the Cooperation of Energy Regulators (ACER) covering the period 2017-2020, Romania has among the highest electricity prices in the EU.

“This is at least in part due to the very limited products offered on OPCOM, which deprives market players of the possibilities to hedge risks that they have in other markets,” EVIA-LEBA said.

3. EVIA-LEBA disproves ANRE’s claims that mandatory trading on OPCOM ensures effective market supervision. It shows that market supervision was at the core of EU regulation 1227/2011 on wholesale market integrity and transparency (REMIT), which pursues the exact same objectives as those allegedly pursued by the Romanian government – preventing market manipulation and abuse.

It points out that if ANRE was really interested in clamping down on corrupt practices, it would do so by improving its supervision activities not by imposing discriminatory mandatory trading.

4. Since it may be suggested that ANRE’s refusal to remove trading barriers and OPCOM’s monopolistic behaviour have led to an increase in electricity prices, there is no compelling argument to show that such measures help consumer protection.

To the contrary, such measures lead to protectionism and ultimately harm consumer interests, EVIA-LEBA and EFET concluded.


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