ROMANIA; Gas produces only 10% of electricity in Romania, but sets its price 75% of the time. what to do
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Although the share of natural gas in electricity production has been decreasing, the price of gas has a decisive influence on the price of electricity in Romania, says Răzvan Nicolescu, former Minister of Energy and consultant. Beyond expanding storage for renewable energy, a first solution is to increase electricity generation in gas-fired plants.
Răzvan Nicolescu says that, last year, the share of natural gas in electricity production was below 10%, but the price of gas influenced the closing price of the electricity market 75% of the time. In these conditions, Niculescu says that it is necessary to increase the production of electricity from gas – he also mentions the delayed projects – along with the solution to increase the storage for energy produced from renewable sources, especially the installation of batteries to store the energy produced in the photovoltaic parks.
Here is Răzvan Nicolescu’s full post:
“In 2023, the share of natural gas in electricity production was below 10% of the total electricity production in Romania.
In the same year, natural gas influenced the closing price of the electricity market in approximately 75% of the days.
Conclusion: although small in terms of importance in terms of generation, gas had a huge impact from a financial point of view, greatly influencing the price of electricity.
What is there to do? Either you have more gas in the production of electricity (see Iernut delays), stimulating competition between those on gas, or you have no gas at all in the electricity mix at the closing of the market when the marginal price is established.
I think that the first option is the one that can be implemented.
Another solution to lower prices is to encourage storage in batteries, possibly alongside PV projects. Although there are many discussions, we have far too few such projects. Such projects can generate gas competition at the closing of the market, especially since they have become very competitive as well as Capex.
The electricity market in Romania needs a new market design. I hope that ANRE will get out of the hibernation and slumber it is in as soon as possible, because under the current rules we are losing competitiveness and economic attractiveness.
The market must be left free in a design (framework) established by the regulator”
How are the gas plants under construction?
After a meeting of the Energy Command that took place on Friday, the Minister of Energy, Sebastian Burduja, spoke about the status of work on two gas power plant projects that he would like to build on this winter: that of Romgaz from Iernut and that of Rompetrol from Midia.
“At Iernut, we are waiting for a plan to accelerate the works from Duro Felguera. We were supposed to get it this week. We are waiting for him urgently, this was the message for Romgaz and, of course, for the Spanish entrepreneur. At least half, they assured us, could be commissioned this year, somewhere around 200 MW,” said Burduja. The new combined cycle gas plant has a capacity of 430 MW and, if the December 2024 deadline is met, will be commissioned after four years of delay.
″Also, we received assurances that another advanced investment will be put into operation this year, namely the 70 MW gas cogeneration plant from Midia″. A project carried out by Rompetrol Energy, a company controlled by the Kazakh-Romanian Energy Investment Fund (FIEKR), whose shareholders are KMG International, Rompetrol’s parent company (80%), and the Energy Participation Administration Society (SAPE – 20%), fully owned by the Ministry of Energy. The project was originally supposed to be completed in the summer of 2023, but disagreements arose with Turkey’s Calik Eenerji, which is the project’s EPC contractor.
