At the proposal of the Ministry of Energy, the Romanian Government adopted on Wednesday a Draft Emergency Ordinance, stating that the power plants of the Hunedoara Energy Complex (CEH) will have to provide 400 MW-system services in the next two years (by 2020), hotnews.ro informs.
Transelectrica will have to establish monthly the capacity of these services, as a press release informs.
For Hundoara EC this emergency ordinance is of great help, given that it will receive monthly significant sums of money for system services. Thus, the energy complex will have revenues for energy production that can not be sold on the free market due to very high prices.
The energy produced by Hunedoara EC is the most expensive.
The normative act approved by the Gov’t is motivated by the fact that “it is necessary to ensure the stability of the National Electricity System and the security of the energy supply of households and industrial consumers”.
This comes in less than a month since the European Commission has opened an in-depth investigation to assess whether various public support measures from Romania in favour of energy producer in Hunedoara are in line with EU rules on state aid to companies in difficulty.
On 21 April 2015, the Commission approved temporary rescue aid of EUR 37.7 million (RON 167 million) to the Romanian energy producer, which has been in financial difficulty since 2013. In the context of this decision, Romania committed to submit a restructuring plan aimed at ensuring the future viability of Hunedoara EC, if the company were unable to pay back the rescue aid in six months’ time. In addition, in a separate decision dated 20 April 2015, the Commission concluded that CEH had to repay around EUR 6 million of incompatible state aid.
EU state aid rules only allow a state intervention for a company in financial difficulty under specific conditions, requiring in particular that the company is subject to a sound restructuring plan to ensure its return to long-term viability, that the company contributes to the cost of its restructuring and that any competition distortions are limited.
At this stage, the Commission has doubts whether the proposed restructuring plan could restore the long-term viability of the company without continued state aid.