Romanian OTC electricity trading in limbo after controversial law is published

Over-the-counter electricity trading in Romania may be discontinued from next week after controversial amendments to the country’s Energy Law were published in the Official Gazette on Monday.

The changes stipulate that electricity trading will be carried out in a “centralised manner”. However, the legislation fails to define the exact meaning of centralised trading, leaving room to several possible interpretations.

Some participants have argued that under the new requirements, all trading activities will be moved to a central platform, possibly the OPCOM exchange. This may mean that OTC could be discontinued, although there are no official clarifications in that respect.

Generally, once a law is published in the Official Gazette, it is enforced within three days. However, in an interview with ICIS, president of the Association of Electricity Suppliers in Romania (AFEER), Ion Lungu, said the organisation was expecting to discuss with regulator ANRE whether the deadline may be extended until the watchdog draws up a series of clarifications to the main legislation.

“At the moment, we are in limbo,” he said. “We are looking to discuss matters with ANRE to ensure there are no blockages in the trading activity.”

Further confusion

A trader active on the Romanian market said there was further confusion regarding the actual counterparties that may be affected by the new law.

“We still don’t know whether the amendments will affect only state-owned producers or private producers and traders,” he said.

Another source wondered whether companies which have OTC trading licences may have them removed under the new law.

However, he pointed out: “Since Romania is an EU member, EU law will prevail, which means that trading companies can still close bilateral deals outside a central platform.”

Some participants interviewed on Wednesday said trading screens were blank because of the heightened uncertainty, but one source said bilateral deals had been closed over the phone. AS