Electrica head also says that this year’s price decline was bad news for some, while for others it was a business opportunity, particularly in the region.
Ioan Rosca is analyzing the market and does not rule out regional expansion for Electrica, but the decision will be made following a thorough analysis. This summer’s floatation brought RON1.95 billion into the company’s accounts.
“As regards energy prices, these have fallen constantly since 2008. Given the impact of renewable energy, as well as tendencies, it is hard to believe there will be any radical changes. For 2015, I expect prices to remain flat,” says Ioan Rosca.
It is the price of pure energy the producer cashes in that Rosca speaks about, not the price paid by end consumers, which paradoxically rose during this period amid the higher distribution tariffs or the inclusion in bills of support schemes for renewable energy.
“But for what some is an unfavorable situation, for others is an opportunity. On the high contribution of renewable energy, the falling local consumption and price decline, Romania has become a major player on the energy market in the region”.
In this context, is the regional market an expansion stake for Electrica?
“The question is justified considering Romania has a mix of energy resources allowing it to become even the main power producer and supplier in the company. At this moment, Electrica is the largest power distribution and supply company in Romania. For the time being, we are focusing on the current local operations. Of course, we are open and, depending on opportunities, we do not rule out a scenario regarding possible regional expansion,” says Ioan Rosca.
“However, this can only happen on our business segment. Such a decision will only be made pending extremely detailed analyses”.
Until it makes a decision about regional expansion, Electrica is now having a local opportunity after Italy’s Enel decided to exit Romania.
“I can confirm we have chosen the team of consultants, a consortium made up of JP Morgan, KPMG and CMS Cameron McKenna. I can understand the high interest in this issue, but we are talking about an auction, a very important one, so that I cannot disclose, for the time being, any details about Electrica’s strategy,” says Ioan Rosca.
At market level, while energy demand in 2013 slid below the 2009 level, Rosca says there should be a rebound, particularly taking into account the growth potential in certain areas.
“Generally speaking, energy consumption is closely tied to the economic performances of a country. I want to believe Romania’s economy will grow and so will energy consumption, the more so as we have potential. When I say this I’m thinking, for instance, of agriculture, where the growth and energy consumption potential is high”.
(English version by Catalina Apostoiu)