The company already has three agreements with electricity traders to export power and will attempt to secure a new deal on Tuesday, which could get it up to EUR60 million revenue over one and a half years. Adding the previous deals, CE Oltenia will have ensured sale abroad of about one quarter of the power it will generate in one year.
The company attracted traders by publishing some unusual offers on the OPCOM energy exchange in the past few months, which clearly stated the electricity it would sell was to be exported. Its offers were successful with three electricity traders competing over each of them so it found a market for 2 TWh of power (some 10% of its annual production) worth 400 million lei (EUR90 million).
The deals come as a breath of a fresh air for CE Oltenia, after having lost 10% of its domestic market share, which went from 30.4% in 2012 to 20.8%, according to the energy market watchdog ANRE. The 10% it lost went to hydropower producer Hidroelectrica and wind power producers, which have lower electricity generation costs.
This year looks like it will be just as bad for the lignite-fired power plants. The power price continued to decline on the OPCOM, rendering CE Oltenia unable to get any new contracts before it decided to shift its focus to exports.
“Exporting power is a good thing because we have overcapacity and our producers must remain in operation, so we need to sell the power somewhere,” believes Alexandru Sandulescu, director with the Economy Ministry and governmental representative in the board of directors of nuclear power producer Nuclearelectrica (SNN.RO).
The traders that bought CE Oltenia’s electricity are looking to make a profit from the higher electricity prices in the neighboring countries, especially Hungary.
On Tuesday, CE Oltenia will try to sell 1 TWh to 1.5 TWh on OPCOM, or 5% to 10% of its annual production. Delivery will extend over eighteen months from July 1 through the end of 2015.
(English version by Loredana Fratila-Cristescu)