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EXCLUSIVE: Romania ranks last in Europe on the energy consumption. The market is on the rise, though

Interview with Christian Hagmann, general manager EVA Energy.

 

“Romania has great chances to position as a European energy elite”.

 

EVA Energy is an authorized electricity supplier, being the first 100 pc Romanian company that provides electricity subscriptions.

 

How long does EVA Energy exist on the energy market? If you can make a brief presentation of the company in terms of employees, customers, investments…

We started to work in the energy field 11 years ago on various sectors: designing, construction, photovoltaic parks and other investments.

In 2012 we started to contemplate the supplying component, while in 2014 we entered this market. We address both to physical persons, but also to legal persons. The most important thing that we provide is the electricity based on subscriptions, this is what is actually differentiating us from other actors in the market. Today we have 9,000 customers countrywide, 80 pc of them being domestic customers and the rest are legal bodies. However, the market is on the rise.

We reached a total of 100 employees in all the companies from the portfolio and we also have around 500 partners in various regions of the country.

 

 

What is the turnover estimated for this year, on the even of 1-year celebration?

We’ll have a RON 25 million turnover.

 

 

How did the energy market liberalization begin in Romania and how are things standing at this point? As there some people who probably don’t know they have access to other energy services…

The market liberalization is more to some people but also less for others. A free market means we have the right to choose an electricity, gas or water supplier, without having to be captive, in a way or another.

The market liberalization was in fact promoted by the European Union in 2003-2004, in the attempt to divide the distribution from delivery, as they had been altogether until then. And they divided them to prevent the existing monopoly, thus creating a chain with new actors: the producer, the hauler, the distributor and the supplier, each of them having separate objects of activity.

The price list is regularized by the National Energy Authority on transport and distribution, while on delivery there is an energy negotiated price that is settled by agreement with the producers.

For each customer, regardless he is domestic or business, changing the electricity supplier is very easy. A notification is filed and the shift process is concluded in 21 days.

Once the supplier is changed, there are no changes on the equipment, but the customer only proactively reacts and chooses his supplier.

Usually, the energy market liberalization process must be concluded by 2017. That means that all energy consumers must seal a contract with a certain supplier, not matter who it is, and this contract should enable him to have a negotiated price.

Unless some customers are doing that, they would be distributed to the last instance supplier (FUI) since 2017.

The difference is quite big, as if you have a contract you can benefit of a price depending on the market moves.

This thing is usually happening on the market for not all people are familiar with this contract or some others are not yet decided to make the shift. Things are different here, depending on the urban or rural environment. There is a public information campaign on this topic, but most probably the perception of the ordinary customer is not up to the expectations yet. There are differences of education, information or it’s just a matter of holdback.

Of course, the big issue is Romania’s energy poverty. The energy consumption has always been a barometer of the economy. If there are industries on the rise, the energy consumption will also increase.

I am giving you just one example. We rank last in Europe on the energy consumption among households customers. If 54 kilowatts per square meter is consumed in Switzerland, there are only 16 kilowatts in Romania.

But at this moment there are more suppliers, also many on renewable energy, the market is on the rise, so there will be probably more production units. I believe that step-by-step the ongoing activities will lead to the population’s education and to a better understanding of the field’s particularities.

 

 

So, the energy new trends issue, such as the classic energies preservation or the energy prosumer or the smart consumer concepts have any chances to have some feedback in Romania? Considering that we still have primary things to solve like the market liberalization.

Energy prosumer is when a domestic consumer is also consumer and producer, but this concept only targets the small customers.

But for that to happen, the legislation should firstly stipulate the feeding price list. There are some attempts on ministry’s and authority’s level, but we don’t know yet if they will enter the market. We see that it hardly works in Germany and Austria.

From my point of view, there won’t be any major impact unless the feeding price list is activated. It will have an impact, let’s say, on the industry level where the cost can be anticipated, where the tax collection could be identified. So the feeding part has a larger impact both on infrastructure and finances.

 

 

Energy is a strategic field in Romania, but there were also serious sideslips reported, corruption cases, the smart guys in energy, the strategic privatization file…. Ordinary consumer constantly complaining of being cheated on the invoices… How do you envisage the current look of the field? How would you counter these rebukes, as an energy investor?

 

 

There are some aspects happening in the past that had a negative impact on the general field, like you said due to some sideslips and to the ‘energy smart guys’. Now, some were made voluntarily, other involuntarily and were just interpreted as owing to somebody.

We have to remember that the Romanian energy consumption has very much decreased during a certain period of time. Now is somehow up, but not enough. So, the consumption level increased but not enough to cover the expected production in Romania.

There will definitely be some other sideslips, as we won’t succeed in solving all problems at such a short notice. But we are waiting to see the Energy strategy to be launched by the Energy Ministry and then we’ll see how can we join the growth pace and register a success and not a throwback.

 

 

Is green energy an alternative?

You cannot count 100 percent on green energy. Green energy is a clean energy that has no negative effects in the environment and that will definitely have a huge impact on our day-to-day life. Of course, we would like to provide most part of the energy to our customers only from green energy, but it’s not possible all the time. For instance, green energy can be produced only at certain hours of the day. We are trying that a minimum of 50-60 % of the produced energy to be based on renewable energies.

Regarding the viability of the green energy for the producer, the level of investment amortization, the producer has a return of investment. In the energy field, the incomes and trade markups are not as high as in other fields, but they are safe for a certain period of time and an amortization is possible.

Of course, if I have a business plan on a certain number of green certificates and that number decreased, of course this will impact on my business plan. But it doesn’t mean I am not earning, but I will only have a small return or the investment will be recovered on long term.

So, investments in energy will keep coming, as the energy is the foundation of society. Energy consumption will increase in Romania as the more we have our industries developing the more the energy consumption will be up.

What Corporate Social Responsibility actions have you in view at the moment? Is CSR a faster way to get to your clients?

Not necessarily, as the business channels are already settled, but we consider this cultural and social fields are also very important and it’s vital for us to support this type of activities.

It’s ok to do that, particularly that we are a company with Romanian capital and we are interested in thriving here in the country, and not to take the capital elsewhere. On one hand we try to provide energy and on the other hand to offer information to our customers and for this, the cultural and social channels are extremely important.

 

You kicked off the “In the energy backstage” TV show in spring. Why did the project was cancelled?

 

We wanted by this show to inform the audience on the market liberalization topic on one hand, and on the other, to assure the consumer he has some rights. We tried to explain what energy system mean, to empower any possible spring. It was an informative show. We wanted to inform that energy is an extremely complex activity, having many components, that is considered a strategic field and has a strong impact on our day-to-day life. We did not abandon the project. The show was running at a certain hour, and then the summer came up and the traffic was lower. We will certainly start a new show, maybe in spring. Initially we wanted it resumed in autumn but we decided to wait for the Energy Strategy release.

 

Is energy independence is our future?

I believe Romania has great chances to position as a European energy elite. We have an energy system in train, we have many energy experts who also have the expertize learnt abroad. The correct exploitation of the energy resources in Romania could increase the industry investments, for the fact we are close to a energy independence allows us to peg the economy and I consider it’s up to each of us to bring a share in this respect.

No matter they are small or major investment, they need energy stability, that’s why I strongly believe the foreign investments will be on the rise once the market is settled.

I wouldn’t venture to give recommendations and what share the state must have to achieve this target of the energy independence, we don’t have all information available, so that we cannot say what is good or not. We can only do our job, each in our ‘courtyard’.

 

 

 

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