Electricity distribution operators are set to commit a significantly increased level of annual investment in the development and adaptation of electricity networks until 2030, the ACUE Federation announces.

According to the latest evaluations of ACUE member companies, in addition to the European funds available for electricity networks, at least 6 billion euros for the necessary investments in the next 5 years will have to be financed from the distribution operators’ own sources.

In order to be able to mobilize and encourage these resources, the key element for attracting investments is the regulatory framework that should allow the recovery through distribution tariffs of the current financing costs, from the capital market, ACUE says.

“It is essential that the regulations are clear and aligned with the realities of the economy, so that investors have confidence that they can recover their financing costs and the rate of return is at a reasonable level, competitive with other options available on the market.

Ensuring the recovery of these costs through rates determined on the basis of stable and predictable rules encourages investors to finance electricity network infrastructure projects, given that their investments will be amortized over the long term, in this case 25-30 years. At the same time, a phased approach provides greater predictability for both distributors and consumers, facilitating budget and financial planning,” a release shows.

The ACUE Federation made a series of scenarios and, in the most optimistic case, for a triple level of investment, the impact on the tariff would increase progressively, over the next 5 years, up to approximately 5 bani/kWh in 2030. For example, for a monthly consumption of 150 kWh, this additional cost estimated at the level of 2030 is about 8 lei.

“For the members of the ACUE Federation, the significant improvement of the electricity distribution infrastructure, ensuring the ability to meet future demand, is a priority and our commitment is based on the objectives assumed at the national level. We hope that the decision-makers will deal responsibly with the priorities of the field, in the sense of adopting a regulatory framework favourable to investments,” explains Daniela Dărăban, ACUE Executive Director.

ACUE underlines that the regulatory framework for the coming period will determine the pace and size of investments and the ability to attract, or not, the necessary financing.

“In the absence of a motivating signal for investors, through the recovery of financing costs and adequate remunerations ensured by the new regulations, investments cannot exceed the current annual pace.

The medium and long-term impact on consumers will be significant by depriving them of the benefits of the transition to a new production and consumption model, of access to new functions of the distribution service through which they could play an active role in the energy market and, not lastly, it would raise a serious problem of competitiveness of the Romanian economy,” the release concludes.