27 essential ideas after Energy Strategy Summit 2016

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Romania has a strong energy system, the largest in the region, it has natural resources and it has extensive experience in each of the energy sectors. This was tha starting point for the debate on national energy strategy, organized by energynomics.ro, where more than 20 top representatives of the companies and the authorities in the energy industry attended as speakers.

We have selected below some of the opinions expressed; and we will soon start to publish the full speeches from the 2016 Energy Strategy Summit.

Panel-deschidere

Victor Grigorescu, Minister of Energy (full speech)

There are two key elements for the new Energy Strategy of Romania: connectivity, broadly speaking, and technological advance. Romania must aim to interconnectivity (physical interconnections, connected markets, transatlantic interconnection) for having a guarantee in terms of security and continuity of supply. Energy security means national security. Technological advance is a precondition for Romania being no longer a simple importer of turbines, panels or equipments, but to develop an industry horizontally connected to the most effective technologies.

Besides the positive things that we do, we have a number of vulnerabilities, historic vulnerabilities, so to say. It is a fact that not all energy sectors today perform the same, that we have difficulties in some areas and I think we should focus on finding solutions. Look at what is happening in the coal sector. Part of the answer to this sector also comes from new technologies, and I have in mind the moment when a gasification or clean coal technology could provide an answer for the future of this type of fossil fuel, one of the most resilient available for us and one that Romania is counting on every winter when temperatures reach extreme levels.

Mihnea Constantinescu, Ambassador for Energy Security at the Ministry of Foreign Affairs

We need to reflect more deeply on what national security means in terms of costs – costs for investment in national security. Thus, not only costs with defensive means are needed for increasing national security, but also, we must understand that by investing in energy security, in fact, we answer somehow to our duty to contribute to strengthening national security.

Therefore, I believe that when we consider the cost of investment in the energy sector we should also think to the costs beyond the tangible assets, and these are the costs entailed by assets that make the national energy sector more competitive. And this means costs for establishing a predictable and stable legal framework, but it also means the costs that sometimes it’s hard for us to accept: costs to encourage companies to come up with investments in the national energy sector and to retain their investment in the naţional energy sector, be it we talk about fiscal regime or other forms of support for investment.

E.S. Richard L. Morningstar, founding director and president of Global Energy Center within the Atlantic Council

As I understand, Romania ia now, at least for the time being, independent, particularly with respect to gas. But I don’t think that Romania should act as an energy island. Romania needs to continue to work regionally and needs to continue to work with like-minded countries in Central and Eastern Europe and in the Baltic states.

I’ve argued now for years – and I can be a little less diplomatic now that I’m out of the Government, that the Central and Eastearn European countries and the Baltic states really ought to form an energy block within the European Union politically, so that what is necessary for the states in the region can be more regularly received from Bruxelles.

Panel-1

Cristian Buşu, State Secretary, Ministry of Energy (full speech)

We intend to identify which are Romania’s specific interests and our strengths on each energy subsector, and to outline for each of them how we can promote those interests at the regional level.

Daniela Lulache, Nuclearelectrica CEO

Nuclear power has the great chance to prove now once again what possibly was not observed or retained over time, namely that it produces affordable, sustainable, predictable, clean, carbon-free electricity and that it may have a very big role in the future strategy of Romania.

Liviu Ilaşi, Conpet CEO

Transportation of liquid energy is currently at least as important as gaseous energy transportation and electricity transmission. Until now it was true that a national carrier was sufficient, without interconnection with neighboring systems. This, I believe, is no longer valid. Romania is a gateway to the European Union, in respect to oil included. But what if, unfortunately, this gate is locked, and Black Sea becomes no longer operable for oil transportation by ships? A proper strategy can not ignore any of the three types of energy transportation: for liquid energy, for gaseous energy and electricity transmission.

Iulian Iancu, President of the Committee for Industries and Services at Romanian Parliament – Chamber of Deputies

Biomass is an advantage for Romania as a country, and thus, the generation of electricity using biomass should be supported. The Parliament is currently working on a new law on the promotion of energy from biomass.

Ciprian Alic, European Funds Accessing and International Relations Division Transgaz

We must be prepared for some big challenges. One. We must be interconnected with neighbors through Undercrossing Danube relationship with Bulgaria and the BRUA project. Two. Another challenge is the Black Sea project, and we must be ready for every development in the offshore sector. Three. Finally, we must be interconnected with Moldova in order to provide an alternative source of gas for this country..

Panel-2

Valeriu Binig, partner EY

We need an, even formalized, inter-institutional cooperation between the legislative, executive and the energy regulator.

Corneliu Bodea, Adrem CEO and CRE President

Romania should take more seriously its positioning on Europe’s energy map as a security provider. We should focus on defining the beneficiaries of energy security and security providers. With an intelligent energy mix, Romania can position itself as a provider of security and can negotiate favorable positions in the context of the Energy Union.

Union Energy and the new energy market design should be more taken into account by Romania and companies should engage in more coordinated fashion related to the representation of their interests.

Radu Dudău, EPG director and Romanian Energy Minister advisor for the energy strategy

Decarbonizing energy sector is one of the main objectives of Romania. However, for 2030 horizon we must not, at the state level, to do a very big effort to reduce the level of carbon compared to 1990.

Romanian state needs to define, at least for the next decade, a minimum lignite-based generation power park to ensure system adequacy, on which negotiations need to be led with Brussels.

In early July we will make a summary report that integrates all the sintethised information resulted in the proces of creating the Energy Strategy, a report that will follow the strategy structure.

It is up to us on how stringent the new Energy Strategy will be; ultimately, the strategy aims to act as an investment guide, not as an instrument of obligation or prohibition. The document aims to provide options, more than anything.

Sorin Gal, General Director of the National Agency for Mineral Resources (full speech)

We notice some reluctance on the part of the Ministry of Environment to support exploration and exploitation activities in the oil sector. We try to change the Petroleum Law, the secondary legislation, but this process is very slow. Now, the only solution for Romania to become a major producer and exporter of oil and gas is to do exploration.

Mark Beacom, Vice-Chairman RBSTA

As a country if you want energy security, you should produce the energy yourself. There is a narrative that the oil and gas industry can take a heavier tax burden and should be taxed heavier. With all the Romanian companies that have gone into receivership and the huge job losses I hope that the Energy Strategy will take a close look at the health of the oil and gas sector in Romania in order to get a true picture of the situation.

There are three reasons why a discovery has been made, but production never started: technological difficulties, regulatory blockages and poor investment grade. Unfortunately, for the Black Sea, all these three are a challenge at the moment.

Artur Stratan, president ROPEPCA

When the state needs to balance the budget, it uses the amount that it needs as a point of departure and starts calculating additional taxes for an industry that always pays on time. Our recommendation for the government was always in favor of not applying the additional levy for petroleum activities. Any additional burden decreases the life of marginal deposits, thousands of wells with low production but high operating costs.

ROPEPCA association, together with RBSTA [Black Sea offshore association – editor note], act to amend and harmonize oil legislation. The second main line is constant dialogue to negotiate the new tax regime. I thought that in July 2016 we will have a final proposal, but now we can not say when the new fiscal framework will become a reality.

Panel-3

Niculae Havrileţ, ANRE President

Sustainability is very much linked to informing the consumer so that it may enter into agreements with the best supplier of energy and natural gas.

All the measures that we take as a regulator must aim the final price; it must be transparent and properly established.

It is our obligation to institute gas market functionality on the model of how the power market operates, a mature market with positive experiences. Regional markets, like Ukraine, calls for cooperation with ANRE to have access to the practice here.

Istvan Jakab, State Secretary, Minister of Environment, president Administration for the Environmental Fund (AFM)

It is important to look at the environmental conditionality of energy projects as opportunities and not as cost issues. In energy efficiency, there are large opportunities. From the Ministry of Environment, energy efficiency is seen as an opportunity to reduce the use of fossil fuels.

If we are to discuss the energy strategy, it is important to note in Romania and the EU increased use of electric cars and charging infrastructure. Also, Casa Verde program run by the AFM in recent years will be relaunched as Casa Verde Plus, focused on energy efficiency, environmentally friendly insulation materials, green roofs and other solutions to optimize consumption. We hope to be well received both by individuals and by companies.

Vasile Iuga, partner PwC România

The situation today is almost exclusively the result of technological developments. They brought to market new resources (shale, offshore deep) but significantly influenced the production of electricity, affecting the abundance of tendered energy tendered. Equally, new technologies have dramatically influenced the energy demand, decoupling it from economic growth.

Silvia Vlăsceanu, executive director ACUE

Electricity and gas market cannot work without competition and lately I have noticed just that among ACUE members (distributors and suppliers of last resort for electricity and gas), a benefit of the customer.

Whether it is residential or industrial customers, the authority should have a greater focus on the rights they should have regardless of vendor. Considering the definition of Universal Service, we believe that supply is not a simple commercial issue, but a right that must accompany any client regardless of supplier.

Frank Hajdinjak,E.ON România CEO

All over the world, not only in Romania or in Germany, energy poverty is a topic right now, and it needs to be addressed. It starts with the support given to the right costumers, and this is something to consider by the policymakers. Also, energy efficiency measures must be taken.

We have to foster energy savings with the help of new technologies such as smart home, technologies that you can control the production and consumption; for these, you need to have the right incentives, because on their own they do not have the proper return on investment.

Bogdan Balaci, Philips Lighting CEO

Technologies labeled as Smart have as common factor connectivity and shared infrastructure. We see traditional players who are thinking to start new businesses in telecom, supply, ESCO services. The technological impact obliges these companies to do more than what traditional business model allows.

Enrico Perini, CEO Romstal

Trying to produce our own energy we consume as a company, we hit a very complicated legislation; after a year and a half, we managed to put into operation none of the projects started, 12 in number. The theoretical idea based on the energy independence perspective cannot be implemented now because of the existing legislation.

On May 31st, at Snagov Palace, near Bucharest, over 150 guests took part at 2016 Energy Strategy Summit, an event organized by energynomics.ro with the support of Adrem, Can&Power, Chivas, Conpet, Enel, Enevo Group, E.On România, Lukoil, Maserati, Nuclearelectrica, OMV Petrom, Philips Lighting, Ridgid, Romgaz, Romstal, SGS România, Transgaz.

The key objective of Energy Strategy Summit was to draw the last essential contributions for the future Romanian national energy strategy. The speeches and all the debates will soon be fully available through energynomics.ro platform (website, Magazine, events), as well as on energynomics.ro youtube channel. Stay tuned!

In the near future, energynomics.ro team will work on drafting the Summit report which will be officially delivered to the Government for taking them into consideration when drafting the national energy strategy.

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