In a comprehensive interview, Doru Voicu, Director of Strategy at Renovatio, sheds light on the evolving landscape of Romania’s energy sector and the broader European market. Voicu addresses several critical issues, including the expected rise in energy consumption and prices, the importance of long-term contracts, and the challenges facing energy storage.
Rising Energy Consumption and Prices
Despite the temporary decline in energy consumption due to the pandemic and regional conflicts, Voicu anticipates a significant increase in energy use and prices in the near future. He attributes this to economic recovery and the growing demand for electrification across various sectors, including transportation and industrial production. Voicu emphasizes that Romania must capitalize on its mature renewable energy market to reduce dependency on external energy sources.
The Role of Long-Term Energy Contracts
Voicu underscores the necessity of long-term energy contracts to mitigate market volatility. These contracts provide stability for both producers and consumers by ensuring predictable energy costs and stable revenue streams. In the face of fluctuating prices, long-term agreements are crucial for safeguarding against unexpected financial impacts.
Challenges in Energy Storage
A significant portion of the interview focuses on the barriers to effective energy storage in Romania. Voicu explains that current regulations penalize energy storage rather than incentivize it. For instance, energy used to charge batteries is taxed as if it were consumed, despite being returned to the grid. This discourages investment in storage solutions that are vital for balancing supply and demand and stabilizing the national grid.
Renovatio’s Market Presence
Renovatio is a prominent player in Romania’s energy sector, active in all segments from production to supply, efficiency, and storage. The company is also a leader in electric mobility. Voicu highlights that Renovatio operates as a decentralized brand across various energy-related fields, with Renovatio Trading being a significant entity, boasting over 200 million euros in business and 900 clients.
Regulatory and Market Improvements
Voicu advocates for several regulatory changes to improve market transparency and flexibility. He suggests reintroducing double aggregation for portfolios, which was previously allowed but recently prohibited. He also calls for the establishment of a framework for Virtual Power Plants (VPPs) and a standardized real-time communication system for consumption and production data.
Economic Stimulus through Energy
Voicu believes that stimulating economic growth will inherently boost energy consumption. He suggests that Romania could attract energy-intensive industries, such as IT data centers and industrial production, by creating a favorable regulatory environment. Additionally, the electrification of transport and the development of renewable hydrogen production are expected to drive significant increases in energy demand over the next decade.
Short-Term Measures and Investor Confidence
To generate immediate industrial energy consumption, Voicu recommends reducing taxes on electricity. However, he acknowledges the fiscal challenges facing the Romanian government, making such measures unlikely in the current economic climate. Despite short-term market challenges, serious investors with a long-term vision will continue to implement projects, knowing that current market conditions are temporary.
The Impact of Market Interconnections
Voicu notes that Romania’s energy market, while interconnected with the broader European grid, does not always benefit from its green energy production. For example, there are times when Romania imports energy despite favorable local production conditions. This is due to higher local prices compared to the region, influenced by extensive investments in renewable energy in countries like Germany, which help lower market prices.
Conclusion
In conclusion, Doru Voicu emphasizes that long-term contracts remain the most effective tool against price volatility. Renovatio continues to lead in various energy segments, advocating for regulatory improvements and strategic investments to ensure a stable and sustainable energy future for Romania and Europe.
