Electricity price peaks in Romania amid cold weather, inelastic production capacity

The electricity price on Romania’s day-ahead market (DAM) hit the two year’s records with the average price for the power to be delivered on January 10 reaching RON 411 (EUR 88) per MWh.

The peak price, of RON 610 (EUR 130.6) per MWh was reported for the 16-18 interval of the day and is the highest hourly price in the last two years as well, local Mediafax reported.

A combination of high consumption due to low temperatures in the country, outdated production capacities and volatile output of wind farms resulted in such high prices. Nonetheless, the DAM has a marginal contribution to the wholesale electricity market that relies on longer-term contracts.

Wind farms delivered some 20% of the electricity in Romania last week, to drop as low as 4% on Tuesday, January 8. Imports accounted in the same day for more than 10% of the consumption, under the circumstances that Romania possesses production capacities in excess of its consumption. However, Ziarul Financiar reported that only 40% of the domestic production capacities were active on January 8. Some of the thermal power plants have not been used for years, but have not been written off the country’s power balance.

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