“The ban on directly negotiated bilateral contracts (…) place Romanian electricity producers and suppliers in a discriminatory position compared to other participants on foreign markets,” the association said in a press release Thursday.
The most notorious case involving bilateral energy contracts is that of state-owned power producer Hidroelectrica, which sold electricity directly to several beneficiaries, under bilateral contracts, at prices below market value, incurring massive losses that led to insolvency in 2012.
AFEER said the ban on bilateral contracts on the power exchange, instated a year and a half ago, has led to a migration of long term transactions to very short term transactions, which distorts the reference price on the wholesale market and has negative consequences on offering a fair price for electricity delivered to consumers.
The association added the ban will affect investments in energy production on the medium and long terms, raising questions on the country’s electricity supply at reasonable prices.
“Project developers cannot sign long term contracts with suppliers, which are required bank guarantees for these developers to get loans to invest in energy production,” the association said.
AFEER includes Alpiq, Alro, CEZ, Axpo, E.ON, Enel, Electrica, CE Oltenia, GDF SUEZ Energy Romania, Grivco, Hidroelectrica, OMV Petrom, Tinmar and Rudnap.
This is the third time this year the association has called on authorities to lift the ban on bilateral energy contracts.