Romanian government ready to help large industrial energy consumers

By bne IntelliNews March 20, 2014

Romania’s government will help large industrial electricity and natural gas users in the country, PM Victor Ponta announced. The executive plans to endorse an ordinance in this regard next week, he said.

Specifically, large electricity users will pay a smaller number of tradable green certificates per MWh of electricity used. The amendments to law 220/2010, recently promulgated by President Traian Basescu, allows the government to cut the green energy requirements for large industrial users by up to 85%.

Nonetheless, the government can do this only after a preliminary notification of the EC, under the law’s provisions – while PM Ponta stressed that the allowances would be given immediately.

It is unclear how the government wants to help natural gas industrial users. Romania agreed with the IMF to raise the regulated price of domestically produced natural gas, under a calendar. The price would converge to the price of the imported Russian gas. Consequently, the end-users will have to pay more for the basket of domestic/foreign natural gas.

A recent Deloitte Romania report estimates that the planned 143% rise in the domestic gas price over the next two years, reflected in a 72% higher price paid by industrial consumers, would have a major negative impact on the country’s GDP and employment.

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