Ondrej Safar, CEZ Romania: “We will continue the process of digitization at group level in 2022”
“Digitization is the key for the Romanian energy sector, alongside urbanization which must come with innovation in street lighting, electric cars, supporting prosumers, identifying electricity storage solutions and most importantly energy efficiency. Intelligent systems are needed to control increasingly complex energy flows. Also, new business models will be needed, corresponding to the new decentralized and digitized world,” Ondrej Safar, Country Manager, CEZ Group Romania told The Diplomat-Bucharest.
“We will continue the process of digitization at Group level. The distribution operator will continue to carry out important investments in the electricity grid, access European funds, implement smart metering projects, create platforms dedicated to consumers to provide them with access to information and quality services (short connection time network, maintaining the quality of distributed energy, implementing integrated Smart Grid Connect systems and more).”
What should be Romania’s priorities in the medium- and long-term energy strategy?
The energy market will go through a significant change, even a revolution, driven by the sector’s aim for zero emissions and the need for distribution networks to become digital with real-time management.
I think digitization, research and innovation should be at the top of the priority list in any field, especially in the energy sector, on the medium and long term.
Romania should be able to count on a predictable regulatory framework concerning renewables and energy storage solutions, a functional strategy that tackles the vulnerable consumer, focus on the concept of energy poverty and the solutions to it, while energy efficiency and efficient consumptions are strong pillars to be intensely promoted.
Also, as Fit for 55 and the decarbonization plan are valid for all European countries, investments and an attractive investment framework are needed. It is very important to prepare the networks for this change. Starting from existing capacities and to the transmission network and distribution network that need to accumulate and absorb new capacities. It will take the implementation of many systems that can operate the system and manage the flow of energy in real time, something that is very different from what is being done now at country level.
CEZ takes seriously all these aspects and has already made important steps towards digitization, innovation, helping consumers that face energy poverty, building a better equipped distribution grid able to take on prosumers and always searching for better ways/ projects on behalf of the local community.
What are the most important directions of action that Romania should follow?
As I’ve already mentioned digitization is the key for the Romanian energy sector, alongside urbanization which must come with innovation in street lighting, electric cars, supporting prosumers, identifying electricity storage solutions and most importantly energy efficiency.
Intelligent systems are needed to control increasingly complex energy flows. Also, new business models will be needed, corresponding to the new decentralized and digitized world.
A first step would be to identify a minimum energy consumption requirement, established according to a clear set of parameters that may include the type of construction, urban / rural, specific needs, etc.
Measures to reduce energy poverty (renovation of buildings, replacement of high-consumption receivers, other measures to increase energy efficiency) could reduce the financial impact of aid to vulnerable consumers in the medium and long term.
Also, I think that a more dedicated approach concerning the lack of professionals and the degree of retirement in the energy sector would make smoother the transition toward a digitized grid and activity.
We have started a more direct focused project on the topic via the distribution operator’s Electrician Apprentice that is being developed since 2016 and is currently supporting the development and careers of young electricians in all DEO’s 7 counties.
We started from scratch, from the professional school years via partnerships with local high schools in Arges, Dolj, Gorj, Mehedinti, Olt, Teleorman and Valcea counties where we built state of the art electrical laboratories and tailored benefits for future electricians (scholarships, self-development training, dedicated technical competitions, digital tools for the online schools, regular practice sessions in our installations, the Practice Club, etc.).
Moreover, all high schools in the program have benefited from a photovoltaic plant so that students can learn directly from the roof about current technologies and thus, schools can use their energy bill savings for other extracurricular activities.
Distributie Oltenia has invested more than 450 000 euros in the Electrician Apprentice project so far, has roughly 300 students subscribed in the current school year (of which 32 are girls) with 440 scholarships offered in 2020 – 2021, 43 interns (Junior Electricians) who benefited so far from paid internships during 2019 – 2020 and 16 young electricians employed with the company or at our partners during or after the internship.
What are the CEZ plans for improving the energy distribution networks in Romania?
Within Distributie Oltenia (the Group’s energy distributor), we will continue our path towards a digitized company via the various projects we took on in our SMART Transformation process. We also are constantly striving to attract European funds for our initiatives.
We have 10 projects cumulating 73 million euro submitted to EU funds opportunities for new projects with positive impact in network modernization and development, out of which 21,4 million euro, own contribution, that is approximately 29.3 percent.
Our next steps include 7 project proposals totaling 64 million euro, submitted by Distributie Oltenia for modernization purposes, the implementation of cohesion policy between 2021 – 2027 with a list of project proposals of approximately 514,5 million euro, *35 projects on PODD program – estimated at 200 million euro and **15 projects on POTJ program – estimated at 314,5 million euro.
In addition, we remain interested in attracting Norwegian Grants Financial Mechanism 2014 – 2021 and are currently preparing a grant application offered by Iceland, Liechtenstein and Norway through the EEA and Norwegian financial mechanisms 2014-2021, for the installation of photovoltaic panels in 2 transformer stations of Distributie Oltenia, in Gorj county.
Many of the projects we invest in and implement are aimed at developing new innovative ways in which we can increase the quality of our business. Among such projects, we can mention: MDM + MDC (Meter Data Management System), GIS, ADMS, Digital DEO project, E-Analytics, many of them being financed or co-financed from European funds.
In fact, we have started to use more and more digital tools, robots to help us streamline the activity, but also digital equipment, such as drones, video cameras, sensors, etc., which help considerably to ease the staff’s activity.
Our strategy includes also a close cooperation with the local public administrations. Together with them, we implement solutions that reduce the waiting time of final consumers in their relationship with us.
We support local public authorities in identifying the optimal solutions for connecting the objectives to the electricity distribution network. Plus, Distribuție Oltenia offers free of charge the placement of video surveillance and monitoring systems of the localities on its own infrastructure, in order to increase the security of the local community.
The most recent success in digitization projects, with an investment of approximately 4 million euros is the completion of the digital map of Distribuție Oltenia’s low voltage distribution network, or the GIS project – https://bit.ly/3mM0slV.
GIS provides all those interested with up-to-date and detailed information about the location and nature of the electrical networks, the benefits of consumers, public authorities and builders being immediate and direct: informed decisions on land acquisition or construction, reduced time for issuing approvals by the authorities, reduced effort to identify the characteristics of a site, etc.
The capital expenditures made by Distributie Oltenia in the period 2005-2020 rises to 572 million euro and the volume of investments planned in 2021 is of 43,4 million euro.
The PIF expenses forecasted in 2021 are of 42,6 million euro, while the total PIF expenses, in the period 2005-2020, rises to 563,2 million euro.
What are your goals regarding green energy and energy storage facilities?
In terms of renewables, we want to increase the capacity of current assets and also invest in storage systems.
Also, we will continue to nourish the know-how hub we already developed for several years now, around wind turbines.
We have a strong incentive in the recent Patent issued to 2 of the employees of CEZ wind farm, by the United States Patent and Trademark Office, for a technical solution that can improve by up to 4 percent the annual green energy production of a wind turbine. I am certain that such opportunities will continue to emerge for us as we have created the proper environment for our employees to grow their technical abilities and thrive in their activity.
We also will keep a close eye on the newest technology for energy storage solutions.
How would you describe the latest developments regarding the local energy market?
As we all see, the local energy and gas markets are currently very volatile and reflecting the overall European context. Regarding the current electricity and gas prices crisis most of Europe is going through, there are several factors that have caused it.
The price of carbon (CO2) emissions is the main cause of the increase in the price of electricity. From a price of 20-30 euros / CO2 in 2020 we are now talking about prices of 60-80 euros / CO2. This increase is the automatic reaction to the decarbonization goals assumed by the European Union. This mechanism has the role of making the polluting producers (especially those on coal, but also those on gas) to invest in renewable energy and to eliminate the production groups that use fossil fuels. In Romania, the production of energy from fossil fuels represents about 40percent – 50percent of consumption (about 20 – 25percent of coal, and the rest of gas).
The rising natural gas prices also has a direct impact on the price of electricity, as a result of the production of electricity using this fuel.
At the same time, an important factor is the price of oil, which registers historical increases, that are directly reflected in the price of gas. A small part of the price of electricity is generated by the price of oil.
The increase of the electricity price is also generated by the increase of the electricity consumption by about 8percent compared to the previous year. This has led to an exponential increase in spot market prices which represents about 40percent of national electricity consumption.
What are your plans for 2022 in Romania?
We will continue the process of digitization at Group level. The distribution operator will continue to carry out important investments in the electricity grid, access European funds, implement smart metering projects, create platforms dedicated to consumers to provide them with access to information and quality services (short connection time network, maintaining the quality of distributed energy, implementing integrated Smart Grid Connect systems and more).
The energy and gas supplier CEZ Vanzare will remain close to its customers and faithful to its dedicated offers and services, its green products (CEZ Verde) and initiatives as well as, it will remain involved in initiatives that promote energy efficiency and help decrease energy poverty/ the vulnerable consumers.
From the renewable part of our operations, as I mentioned above, we are committed to increase the capacity of current assets. Two important strategy pillars for us in 2022 are to maintain the safety of our employees while offering them consolidated career opportunities and to keep up spreading the #energythatcomesfrompeople in the local community via traditional and new CSR projects (Oltenia Marathon, Electrician Apprentice, Generators of Wellbeing, Energy Shelter and so on and so forth).
CEZ will continue to advocate for an integrated energy system where consumers and investors should be able to choose the option that best matches their need, based on prices that reflect the true cost and efficiency, a system that should ensure equal treatment for all energy carriers, making electricity and gas markets fit for decarbonization.