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Iulian Ernst
Senior Editor

Iulian studied physics at the University of Bucharest, and he sees himself as a physicist in the broadest sense of the word. He also studied economics at Charles University in Prague and Central European University in Budapest, after a master’s program in business administration at Bucharest Academy of Economic Studies. Since recently, he’s been exploring coding and data analysis for business and economics. As a freelancer, he worked for nearly two decades as an analyst for ISI Emerging Markets, Euromonitor International, Business New Europe, but also as a consultant for OMV Petrom and UkrAgroConsult. Iulian was part of the founding team of Ziarul Financiar. At Romania Insider, which he joined in 2018, he is reviewing the latest economic developments for the premium bulletins and newsletters. He would gladly discuss topics such as macroeconomics, emerging markets, Prague, energy sector including renewable, Led Zeppelin, financial services, as well as tech start-ups and innovative technologies. Email him at iulian@romania-insider.com. 

 

Enel to downsize investment in Romania after Govt. endorses 'cap and subsidy' plan

Italian utility group Enel had planned to invest EUR 2 bln in Romania but is now reconsidering its plans after the Government decided to cap energy prices and levy a windfall revenue tax, including in the segment of renewable energy generation.

The Italian group warns that the volume of investments will be downsized if the measures remain in place.

"We believe that the measures imposed by the authorities in Romania are incorrect, discourage investors, create instability, do not solve structural problems and need to be changed, as happened with the measures taken by other governments in Europe," said Enel Group CEO, Francesco Starace, speaking at the annual Enel Capital Markets Day event, Economica.net reported.

"When we made the business plan, Romania was an attractive country, and we planned to invest more than EUR 2 bln to massively develop renewable energy projects and networks. Obviously, if these measures remain in force, the yields will decrease, so we will have to revise our investments in Romania downwards," Alberto de Paoli, CFO of Enel, said on the same topic.

Romania's Government enacted, in line with the European Union's recommendations on this topic, a set of measures to be enforced over this winter (until March 2022) with the aim of helping households weather the high energy prices.

Thus, an 80% windfall tax is levied on the revenues derived by energy generators that sell their output at prices above RON 450 (EUR 90) per MWh. The money will be used to pay subsidies to households with small consumption and compensate the suppliers that purchase electricity at the market price that may be higher than the capped prices charged to households.

So far, the criticism against this scheme relates mainly to the timing of the payments and the concerns about the size of the compensations that are calculated based on market price - as opposed to the prices effectively paid by energy suppliers. 

iulian@romania-insider.com

(Photo source: the company)
 

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Profile picture for user iuliane
Iulian Ernst
Senior Editor

Iulian studied physics at the University of Bucharest, and he sees himself as a physicist in the broadest sense of the word. He also studied economics at Charles University in Prague and Central European University in Budapest, after a master’s program in business administration at Bucharest Academy of Economic Studies. Since recently, he’s been exploring coding and data analysis for business and economics. As a freelancer, he worked for nearly two decades as an analyst for ISI Emerging Markets, Euromonitor International, Business New Europe, but also as a consultant for OMV Petrom and UkrAgroConsult. Iulian was part of the founding team of Ziarul Financiar. At Romania Insider, which he joined in 2018, he is reviewing the latest economic developments for the premium bulletins and newsletters. He would gladly discuss topics such as macroeconomics, emerging markets, Prague, energy sector including renewable, Led Zeppelin, financial services, as well as tech start-ups and innovative technologies. Email him at iulian@romania-insider.com. 

 

Enel to downsize investment in Romania after Govt. endorses 'cap and subsidy' plan

Italian utility group Enel had planned to invest EUR 2 bln in Romania but is now reconsidering its plans after the Government decided to cap energy prices and levy a windfall revenue tax, including in the segment of renewable energy generation.

The Italian group warns that the volume of investments will be downsized if the measures remain in place.

"We believe that the measures imposed by the authorities in Romania are incorrect, discourage investors, create instability, do not solve structural problems and need to be changed, as happened with the measures taken by other governments in Europe," said Enel Group CEO, Francesco Starace, speaking at the annual Enel Capital Markets Day event, Economica.net reported.

"When we made the business plan, Romania was an attractive country, and we planned to invest more than EUR 2 bln to massively develop renewable energy projects and networks. Obviously, if these measures remain in force, the yields will decrease, so we will have to revise our investments in Romania downwards," Alberto de Paoli, CFO of Enel, said on the same topic.

Romania's Government enacted, in line with the European Union's recommendations on this topic, a set of measures to be enforced over this winter (until March 2022) with the aim of helping households weather the high energy prices.

Thus, an 80% windfall tax is levied on the revenues derived by energy generators that sell their output at prices above RON 450 (EUR 90) per MWh. The money will be used to pay subsidies to households with small consumption and compensate the suppliers that purchase electricity at the market price that may be higher than the capped prices charged to households.

So far, the criticism against this scheme relates mainly to the timing of the payments and the concerns about the size of the compensations that are calculated based on market price - as opposed to the prices effectively paid by energy suppliers. 

iulian@romania-insider.com

(Photo source: the company)
 

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