Romania has the 21st most expensive electricity in the world, according to a statistic compiled by the International Energy Agency (IEA), which compares electricity prices for households in 144 countries.
Romania’s electricity is 70 times more expensive than the cheapest electricity in the world, which is sold to households in Iran, and 58 times cheaper than the most expensive one, the one in Bermuda.
Among the causes of the high electricity price in Romania are both internal factors, such as insufficient production capacities leading to expensive imports, and external ones, such as the massive increase in energy demand in the Southeast European region due to the deterioration of Ukraine’s energy infrastructure and limited interconnection capacities with Western markets.
According to Dumitru Chisăliţă, president of the Intelligent Energy Association, there are periods in Romania when domestic production does not cover demand, leading to expensive imports, while losses in transmission and distribution systems are very high, nearly 20% in some areas. Added to this is the fact that Romania imports energy when there is high demand, and exports it when demand is low.
According to the official, cited by News.ro, the cost of CO₂ emission certificates (“EU Emissions Trading System”) has increased, which raises the cost of producing energy from fossil sources. Last but not least, the “excessive” increase in taxes and excise duties in recent years also contributes to the high electricity price in Romania.
Meanwhile, the transition to renewables involves significant investments, and some renewable technologies are harder to balance because they are strongly weather-dependent, the AEI president said.
According to the AEI president, recent estimates show that in Romania, between 32% and 45% of the population would be affected by energy poverty due to high electricity prices, and approximately 20% of households have “consumption below half the national average,” especially in less developed regions, where over 30% of households could not afford to meet their energy needs.
“Low-income households that spend a large share of income on energy have less to spend on other needs, which reduces domestic demand, consumption, and slows the economy. Businesses and industry in areas with high energy costs, as in Romania, are less competitive. If the energy cost for firms is high, they must include this in costs, which reduces investment, development, or profitability, up to bankruptcy,” the AEI president further states.
(Photo source: Prudencio Alvarez | Dreamstime.com)
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