Transcript ROMANIAN ECONOMY GENERAL PROFILE

ROMANIAN ENERGY SECTOR
Ioan Codrut SERES
Minister
April 2006
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THE OBJECTIVES AND PRIORITIES
FOR THE DEVELOPMENT OF ROMANIA’S ENERGY SECTOR
The general aim of the energy sector is to meet the demand for energy consumption at the
lowest price possible, suited for a modern market economy and for a high life standard under
the requirements of the quality, safety of supply and sustainable development principles.
The main priorities are:
• To preserve the national sovereignty over the primary energy resources and of the
national policies in the energy sector;
• To maintain the dependency for imported primary energy resources at an acceptable
level and to diversify the import resources;
• To support the development of competitive electricity, natural gas and energy markets;
• To decrease the negative environmental pressure generated by the energy sector;
• To improve the energy efficiency on the entire resources, production, transport,
distribution and consumption chain;
• To support the production of energy based on renewable resources;
• To attract strategic investors for sustaining the restructuring and privatization of the energy
sector.
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NECESSARY MEASURES
TO ATTAIN THE PROPOSED OBJECTIVES
• To improve the energy efficiency on the entire production-transport-distribution-final
consumption chain in order to achieve a reduction of the annual energy intensity by 2,5-3%
during 2005-2008 in comparison with 2001;
• To continue the development of regulatory framework regarding the natural monopole
activities on the basis of transparency, non-discriminatory and impartial principles by
independent regulatory authorities;
• To maintain the safety of the energy sector through investments in new technologies and
the fulfillment of the environmental protection directives;
• The transformation of the state owned companies in the energy sector in order to be
important contributors to the state budget and not beneficiaries contrary to the present
situation;
• To ensure the supportability of the electricity, heating and natural gas prices for the
consumers;
• To support the research and development activities in particular for the development of the
technologies aimed at capitalizing the internal primary energy resources including the
renewable energy sources.
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MAIN PROJECTS FOR ENERGY SECTOR
• The accomplishment of Nabucco Project (natural gas transit from Caspian Sea area to
Western Europe, via Romania)
• Interconnection of natural gas network with:
- the Hungarian system in Arad - Szeghed area
- the Ukrainian system in Siret - Cernauti area
- the Bulgarian system in Giurgiu - Ruse area
• The PEOP project (crude pipeline Constanta – Trieste)
• Continuing the civil nuclear program in order to finalize Unit no. 2 (in 2007) and Unit no. 3
(after 2011) of Cernavoda Nuclear Power plant
• Realization of new hydropower capacities and rehabilitation of existing ones
• Realization of Tarnita – Lapustesti pumping station
• Continuing the rehabilitation of electric energy network and increasing the number of
interconnections with the EU countries in Black Sea area
• Participation to the regional energy market implementation, in order to be integrated in the
European Union market
• Supporting the establishment of the regional electric energy stock-exchange in Bucharest
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THE SOCIAL IMPACT
OF ROMANIAN ENERGY POLICY
• Maintaining the electric energy and natural gas prices on a supportable level for
population and companies, by:
- Consolidation the competitive energy market
- Interconnection with the electric energy and natural gas regional markets
- Improvement of price and tariff systems.
• Reducing the energy price for population and companies by increasing the energyefficiency, diminishing of specific consumption and using new and advanced technologies
in energy sector
• Increasing the safety of energy supply
• Transition to a direct social protection system for low income population by replacing the
social tariff for electric energy and the subsidy for thermo energy with social assistance
only for vulnerable consumer categories
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REGIONAL ELECTRICITY MARKET
 Significant benefits in considering
investments on a regional basis in
South East of Europe (SEE);
 Regional Electricity Market needs
the transmission investments to
support the transfer of electricity
between jurisdictions providing
additional benefits from trading
perspective;
 Regional studies have provided a
number of least cost investment
plans, providing an indication of
the potential generation and
transmission options;
 Among the most attractive plant from a regional perspective are new Cernavoda NPP units
(Romania) and the development of Belene NPP (Bulgaria).
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STATUS OF NUCLEAR POWER IN ROMANIA
 The Ministry of Economy and Commerce is responsible for the national strategy in the
energy field, including NPP projects implementation and operation;
 Nuclear power in Romania, based on Western safe technology, represents today 10% of
the electricity production, with excellent safety and economical performances at Cernavoda
NPP – Unit 1;
 Based on the long-term commitment to nuclear power of the Romanian Government, the
commercial operation of Cernavoda Unit 2 NPP is scheduled for the mid of 2007;
 With two units in operation at Cernavoda NPP in 2007, the nuclear power shall
generate around 18% of Romania gross electricity production.
 Cernavoda NPP will have an important role in Romania for energy security, sustainability
and improved environmental protection.
 Positive public and local authorities perception of the nuclear energy.
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FUTURE OF NUCLEAR POWER
 Based on a decision of the Romanian Government the Unit 3 and possibly 4 of Cernavoda
NPP are intended to be completed through a partnership with local or foreign private
investors, without state guarantees.
 Cernavoda Unit 3 project was already presented to the potential investors in 2004 and seven
of them expressed their interest in developing the feasibility study.
 By March 31, 2006 the Feasibility Study will be finalized and the negotiation with investors
will start;
 Tentative schedule is about 64 months with commissioning in 2013 of Unit 3 and in 2014 of
Unit 4.
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UNITS 3 & 4 PROJECT
 The rationale of the Government in undertaking the
Project with third party investors include:
• Bringing foreign expertise and finance into
Romania;
• Bringing major international players into the
Romanian energy market in view of the
liberalization of the sector;
• Implementing the Project more quickly than
would otherwise be possible given the other
financial commitments of SNN and the
Government; and
• The Government’s unwillingness to provide
sovereign guarantee for loans and PPAs
concluded with state entities.
The Project is expected to be funded on a combined basis in a manner similar to other project financed power
plants.
The project will be primarily funded by debt, the debt to equity ratio is expected to be in the region of 70:30.
The debt needs to be secured on the future cash flows and assets of the Project in line with other power plant
project financings as no sovereign guarantees may be provided. Various options for structuring the power
purchase agreements exist.
To enable the Project to proceed on this basis the additional risks inherent in the operation of nuclear power
plants, including waste disposal, risk of nuclear accident and decommissioning of the plant, the Government
would be required to confirm that it is willing to take on risks associated with waste disposal and
decommissioning in excess of the statutory obligations of the PCO.
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NABUCCO GAS PIPE LINE PROJECT
Natural gas reserves around Europe
4,000 bcm
~83 years
47,570 bcm
~80 years
1,770 bcm
~22 years
33,530 bcm
~183 years
4,520 bcm
~43 years
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NABUCCO PIPELINE ROUTE
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NABUCCO PIPELINE ROUTE IN ROMANIA
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PEOP PROJECT DEVELOPMENT COMPANY PROPOSAL
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ROMANIA TURKEY UNDERSEA CABLE
Pasakoy
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THANK YOU!
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