Fixing, capping or freezing the energy prices decrease competition, and that usually is a source of revenues for the incumbent companies in energy system, said Anna Colucci, Head of Unit for Retail Markets at DG ENER, in the European Commission, commenting on the measures adopted in recent months in several member states. She made a direct reference to Romania, after a question from energynomics.ro, but the situation is similar in Poland, for example, while Bulgaria delays the fully liberalization of the energy prices.
In a conference dedicated to a just energy transition in Central and Eastern Europe, organized in Bruxelles by the European Policy Centre and Central Europe Energy Partners, the EU official reminded the Clean energy for all Europeans package agreed in December and almost ready to be adopted.
“That package was intended to make sure that the market is adapted for the renewables, but also that renewables are adapted for the market”, she said, and then explained: “Because renewables are becoming more and more competitive we shouldn’t continue to subsidize them. This should also reduce the bills for the consumer. We have also introduced quite a number of measures in order to make sure that competition is increased, because competition will also keep prices at check. We also worked to ensure that networks are used in a flexible way, so that we avoid that we build to much networks, because this would also increase the bill. There are also other measures, but the idea was to make possible a cost efficient transition.”
Anna Colucci then answered an energynomics.ro question on how to make sure to help in having a just transition for the vulnerable consumers. “The idea is not by fixing, or capping or freezing the prices, because this will decrease competition. Usually, what happens is that such measures are a source of revenues for the incumbent. What the ‘Clean energy for all Europeans’ package has been trying to do is that, indeed, member states define vulnerable consumer, define energy-poor consumers and put in place a certain number of measures to help them directly through social policy, through energy efficiency, but not by stopping competition. I am sorry to say that what has happened recently in Romania, by the freezing of prices on the whole sale, on the industry, and on the households – that is just going contrary to the ‘Clean Energy for All Europeans’ package. It is tackled by the short term, by stopping competition, and not actually dealing with structural and long-term issues.”
The comments from Anna Colucci, Head of Unit for Retail Markets at DG ENER, European Commission came in the same day when the EC sent a letter of formal notice to Romania for failing to correctly implement certain requirements of the Gas Directive and of the Security of Gas Supply Regulation, mentioning the measures introduced by the GEO 114/2018. Among others, GEO 114/2018 freezes the prices on electricity for households and forces two of the largest power generators to sell much of their production at arbitrary defined and under evaluated prices. It also freezes the prices of the domestic natural gas, and forces the local producers to sell their production first for covering households consumption.