The electricity and gas distribution networks need over 10 billion Euro investments in the long term, says ACUE

The electricity and gas distribution networks need investments over EUR 10 billion in the long term in order to replace the old infrastructure, according to the members of the Federation of Associations of Energy Utility Companies (ACUE).

2018-05-11 12:14:24

The total value of the investments realized by ACUE's members in the last 10 years (2008-2017), for the extension, rehabilitation and modernization of the electricity distribution networks is about 3 billion Euro. In the gas distribution network, over 1 billion Euro of investments were dedicated to the modernization and extension of the network.

For electricity distribution, the average duration of interruptions decreased by 60 per cent and their frequency dropped with 50 per cent in 2016 compared to 2008, according to the latest data published by ANRE.

The increased efficiency due to investment is also reflected in the evolution of the technological consumption (CPT) of the network, which has diminished in the recent years. According to the latest data published by ANRE, in 2016, the losses in the electricity distribution network were on average 11 per cent, compared to the level of 12.5 per cent - the national average registered in 2007.

Also, the operational costs of the network operators are highly efficient, being around 72 per cent below the average of Central and Eastern Europe (CEE), according to the consultant's analysis.

Compared to the other EU countries, the final electricity price for households in Romania was among the lowest in the first semester of 2017, being about 13 per cent below CEE average and 48 per cent below the Western Europe average. For industrial consumers, the price was on CEE average and 26 per cent below Western Europe's average.

The analysis shows that the final electricity prices for households and industrial consumers increased by a third between 2008 and 2016, close to the cumulated inflation for this period (36 per cent).

The network tariffs for households decreased by 18 per cent in 2017 compared to 2014 and by 34 per cent for industrial customers compared to 2015.

The yield per km of network for the distribution companies in Romania is among the lowest in Central and Eastern Europe; this is due to the fact that Romania has one of the lowest consumption densities in Europe; a higher consumption density typically allows for lower tariffs per customer due to increased specific use of the network.

Gas prices for households were also significantly lower, as at the middle of last year, compared to other European countries: about 21 per cent below the average for Central and Eastern Europe (CEE) and 49 per cent less than Western Europe. For non-household consumers, gas prices were similar to CEE average and 8 per cent lower than Western Europe, the study mentioned.

Final prices for households are among the lowest in Europe, but household income is also among the lowest of all EU member countries (with 62 per cent below the European average in 2016), energy costs corrected with purchasing power being 8 per cent above the European average for electricity and 7 per cent below the European average for natural gas.

The continuation of sustained investments in the modernization of electricity and gas distribution networks is the most important challenge faced by the state authorities and the energy companies in the future, and there is an urgent requirement to harmonize the need for electricity and gas prices affordability and for security of energy supply. ACUE considers that it is essential to have a regulatory framework that further stimulates investments and innovation in the electricity and gas distribution.