UPDATE: Court of Auditors report reveals EUR 2 bn losses on the energy market

The Court of Auditors has found many irregularities that took place during 2010-2014, in the electricity sector, from suspicious transactions with green certificates to unjustified hikes of the distribution tariffs made by the National Regulatory Authority for Energy (ANRE).

All these irregularities are borne by the final consumers through bills that were abusively increased, Court of Auditors notes in a recent report. Energy distributors and national carrier have not made the necessary investments, huge losses in the network being recorded in four years, estimated at nearly EUR 2 billion, but benefited from increases in tariffs, which were paid further by consumers. The main distributors are Electrica, ENEL, CEZ and E.ON, and the carrier is Transelectrica.

The impact of green certificates on the bills has increased 11 times in three years, the report of Court of Auditors notes.

Although for the renewable energy sector were provided grants through the Sectoral Operational Programme “Increase of Economic Competitiveness” (POS CCE) – Priority Axis 4 of nearly EUR 550 million, which would have meant a significant financial support, the grant level were only about EUR 140 million, this mainly due to the large number of canceled financing contracts and the low level of projects implementing.

As the investment projects on energy efficiency, their achievement degree was 25 – 65 percent, given that the deadline was end-2015.

Regarding the State aid scheme to promote high efficiency cogeneration until end-2014 compared to the support scheme budget, the quantity of energy produced in high efficiency cogeneration, which received support was of only 10 percent and with an achievement degree of 21 percent.

Concerning how the electricity transactions were concluded and implemented in the market, there was found that some bilateral contracts were negotiated directly (contracts between suppliers, contracts for processing coal), given that these contracts exceeded the legal framework. Through these contracts, the energy suppliers have traded in non-transparency and noncompetitive ways energy quantities that in 2011 reached to 25.326 GWh, representing 47 percent of domestic electricity consumption.

The Court of Auditors found that ANRE agreed to index the value of annual amortization of the assets with inflation index registered during this period, given that the current legislation does not provide such thing.

In reply, ANRE claims that the Court of Auditors report does not show updated and objective conclusions, posting mixed data from two regulatory periods. In this context, the Authority has objected against this audit report.

Also, ANRE representatives mentioned that some of Court’s recommendations have already been implemented, an example being the completion of the regulatory framework, with provisions on the development and approval of the investment plans of the economic operators.

achievement degreebilateral contractsCEZcourt of auditorsE.ONefficiency cogenerationelectricaelectricity transactionsEnelenergy distributorsenergy efficiencyenergy marketenergy suppliersgrantsgreen certificatesinvestment projectsirregularitieslossesNational Regulatory Authority for Energy (ANRE)renewable energy sectorState aid schemesupport scheme budgetTranselectrica
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