2016 – 2030 Energy Strategy draft: Wholesale electricity price in Romania to double; oil production could drop to zero

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The electricity price on the wholesale market will grow from currently EUR 30 per MWh at a medium level between EUR 65 and EUR 85 per MWh in 2030 – 2050, according to Romania’s Energy Strategy draft for 2016 – 2030, with outlook for 2050, launched for public debate by the Ministry of Energy.

Currently, the electricity producers are not profitable, with an average total cost of EUR 114/MWh, compared to a final average price of EUR 94/MWh, a situation that will not continue for long-term, strategy’s authors note.

The final price for industrial consumers could rise by 30 percent from EUR 67 per MWh in 2015 to EUR 87 in 2030 and by 50 percent for households, from EUR 125 per MWh to EUR 195 per MWh.

However, the increase of the electricity prices is in accordance with EU regulations and Romania will remain among the member states with the lowest electricity prices significantly below the average.

According to the same Energy Strategy draft, the oil production will drop slowly during 2030-2050 period and may even reach zero after 2035, in the context of low oil prices, a similar trend being expected in gas production case that could tend to zero by 2045.

“It is estimated that oil production will continue its slow downward trend in 2030 – 2050 from 22 to13 TWh (1.93 to 1.15 million tons oil equivalent – toe). The decarbonation ambitious scenario, combined with lower oil prices, oil production knows a turning point in 2035, followed by a steep drop to zero. Natural gas output will decrease, after reaching a new high of 132 TWh by 2025 as a result of the production in the Black Sea, to 96 TWh in 2030 to 65 TWh and 2050. As with crude oil, the low price scenarios foresee a decrease to zero of gas production as of 2045”, the project reads.

According to it, the total primary energy will show a slight decrease, from 304 TWh (equivalent to 26.2 million toe) in 2030, to 287 TWh in 2050.

The Energy Strategy for the next period also stressed that from 23 percent in 2030, import dependency will increase to 29 percent in 2035 and then will fall back to 21 percent in 2050. Crude oil is still the main form of energy imported in Romania during this period and in all analyzed scenarios.

The same draft reveals that the necessary investment in centralized thermal energy networks in 2016-2030 period, ranges between EUR 1.3 and 2.6 billion, depending on the ability to secure financing sources.

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