What effect will the obligation to pay 30% of the energy purchased at the time of transaction have on energy suppliers?
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The advance payment for future delivery contracts, which is to be imposed by ANRE. could lead suppliers to stop making such contracts.
“The draft published by ANRE has some good provisions, which make the activity easier. Unfortunately, the proposal for advance payment of 30% of the value of contracts longer than 3 months, we believe, will lead to both their elimination and difficulties in fulfilling the sales/purchase obligations stipulated in the energy law”, told us Laurențiu Urluescu, president of the Romanian Energy Suppliers Association (AFEER), who wanted to clarify that he was speaking on his own behalf, not on behalf of AFEER.
Also, as his own opinion, he believes that it will be increasingly difficult for suppliers to make offers with long-term firm prices to consumers.
The Romanian Energy Regulatory Authority (ANRE) put into public debate on Thursday a draft order whereby electricity transactions on forward markets will only be concluded with an advance payment of 30% of the contract value.
ANRE speaks in the substantiation of the draft Order about “the introduction of the obligation of an advance payment, at the time of concluding transactions on the forward electricity markets, for contracts with a delivery period of more than 3 months and a delivery start time of more than one month”
“In the context of market volatility and financial risks associated with non-payment of contractual obligations, it is necessary to strengthen the mechanisms for guaranteeing transactions on the forward markets. Current regulations provide for the use of financial guarantees in various forms, but these are not always sufficient to prevent the risks of non-payment. Also, another context for introducing an advance payment is the increased risk of concluding transactions on the forward markets, for speculative purposes, by purchasing significant quantities of electricity, without using it”, ANRE also shows.
