Romania is still the 13th most attractive country in the world for renewable energy investments, according to a recent report from consultancy firm Ernst & Young. But the local energy sector in general faces a number of tough challenges over the next few years, with political pressure to keep energy prices down, demands of billions of euros in investments and falling demand from the eurozone and flat or only slight increases in consumption at home.
According to Ernst & Young, Romania’s politicians are going to continue to face calls from the public to keep energy prices low. Paying monthly utilities bills is already difficult for many Romanian households, particularly during the winter months when heating bills rise. “It is also more important than ever to keep a close eye on government policy: the pressure to keep energy prices affordable is stronger than ever”, said Saulius Adomaitis, Partner and Advisory Leader at Ernst & Young Romania.
Across Europe, taxes and regulations on energy companies are changing. This makes investments more uncertain: essentially what is a good investment today could be a bad one tomorrow if a new government policy is imposed. According to Ernst & Young, success in Romania’s post recession energy market will depend on immediate action and opportunities beyond Europe should be pursued. The report mentions India and China as big potential investors and urges moves to make the Romanian market as attractive as possible to investment.
Putting money into new technologies is also recommended and the development of low carbon energy production given as an opportunity for growth and job creation. “For the future, it is critical for Romania to reposition itself in terms of country’s potential towards utility companies, showing how the sector can positively contribute to the recovery of the existing economic gaps. It is necessary to develop a clear energy strategy that would set priorities for the development of the most competitive electricity generation sources and provide adequate market mechanisms to facilitate financing of the long term projects,” concludes Saulius Adomaitis.
Liam Lever, liam@romania-insider.com
(photo source: sxc.hu)