Romania reduces electricity export tariff by minimum 20%

Sophie Udubasceanu

02-Jan-2014

The Romanian electricity export tariff has been cut by a minimum of 20% after the country’s government reduced the cogeneration fee, the tariff’s largest component, from 1 January.

The new cogeneration fee now stands at New Lei 18.383/MWh (€4.07/MWh), down from New Lei 23.10/MWh, according to information from the government’s “Official Monitor” published on Tuesday.

The fee was introduced as a support scheme for the combined heat and power (CHP) plants in 2011.

Additionally, some traders believed that the market administration fee, the other export tariff’s component, which last stood at New Lei 0.37/MWh, has also been scrapped.

This would mean that the new cogeneration fee is the last remaining component of Romania’s electricity export tariff. However, ICIS could not confirm this information with energy regulator ANRE at the time of writing.

Bullish market signals

Sources agreed that the lower tariff would boost electricity exports into Hungary, sending bullish signals to the Romanian wholesale electricity market.

However, some traders said the impact would be short-lived, since the capacity on the interconnector between the two countries is not expected to be increased any time soon.

Another source said that the decrease of the export tariff might actually lead to a rise in the cross-border capacity price on the Romanian-Hungarian border, as more buyers would be encouraged to compete for capacity.

“We’ll either see the [Romanian] market prices go up, narrowing the spread to Hungary, or it will be reflected in the [cross-border] capacity price,” he noted.

ICIS assessed the Hungarian January ’14 contract, on the last day before expiry, at €51.50/MWh with a €11.14/MWh premium to its Romanian equivalent.

Market participants have previously expected a 10% cut of the cogeneration fee from 1 January 2014, followed by a further 35% cut from 1 June 2014 ( see EDEM 01 November 2013 ).

Even though there is currently no information from the Romanian authorities pointing to a further cut later this year, sources remained hopeful.

One trader said that given the fact that Romania is expected to join the market coupling project with Hungary, Czech Republic and Slovakia in Q4 ‘14, further reductions of the export tariff are still needed.

The tariff was reduced on 1 August 2013, after ANRE scrapped the export and import transmission tariffs ( see EDEM 22 July 2013 ). Sophie Udubasceanu

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