June
2008
BUSINESS LEADER
 
Vol. 4 No.5  
 

Getting real with green energy

Better legislation and pragmatic views on what the country can deliver will help Romania’s green energy credentials. Peter Simon, ABB country manager talks to Ana Maria Nitoi
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Peter Simon, Romanian country manager of Swiss-Swedish engineering
company ABB, is talking realistic perspectives on green energy.
He says the wind energy business in Romania is tougher to kick-start than
in most western countries, because the laws establish no set price for the production of green energy.
When an energy company wants to draw up a business plan for using alternative resources, this is hard because the energy price is not clear and it cannot make accurate profi t forecasts. “In Romania, one has to fi rst trade the energy in order to have a price and that is why it is diffi cult to obtain fi nancing for such a project,” Simon adds.
There is also no Government subsidy for green energy, as in Germany.
“Considering all these impediments, I don’t believe that we will see in Romania
any small-scale business in wind energy, because only big companies such
as Enel or Iberdrola can afford [to risk] these unknown factors,” Simon adds.
The climate in Romania is not that suitable for wind energy, which needs a
constant wind speed to produce electricity, argues Simon. In heavy storms and low wind speeds, turbines have to stop.
Biomass and geothermal energy could be more profi table, considering the terrain and vegetation in this country, believes the ABB country manager. Geothermal energy, using energy from the heat of the earth, is a more sustainable option than traditional fossil fuel due to the reduced amount of CO2 emissions.
The process does not depend on changing weather conditions, such as wind.
Such plants exist in countries including USA, Turkey, Iceland, Germany and
France and a large geothermal plant can power entire cities while smaller power plants can supply remote sites.
“We cannot be sure that the Earth’s oil reserves are limited,” says Simon.
“It is just a matter of price. This is good because it forces the market to turn towards renewable energy.”
ABB provides power and automation technologies to use electricity effectively
and to increase industrial productivity. Transelectrica, OMV and Mittal Steel Galati are among its customers in Romania and more than 50 per cent of this activity focuses on stateowned companies. In 2007 ABB had a 45 per cent growth in turnover and increased its number of employees by 60 per cent to 100. Peter Simon expects the company will continue to grow. “If the market has a ten to 15 per cent development, we expect around a 23 per cent growth,” he says.
Simon started this job in 1997 and last year took over ABB’s Bulgarian subsidiary and is now overseeing operations in the Republic of Moldova. In
Bulgaria, ABB has its own production facilities and 450 employees. Last year,
when the Swiss-Swedish group decided to invest more in production, Romania
lost out in favour of Poland and Bulgaria.
The lack of workforce compared to Poland and the expensive manpower
compared to Bulgaria were the main reasons for the decision. Transportation
costs for the company in Poland are lower than in Romania and the Governments of these two countries also offered ABB fi nancial incentives.
“We chose Bulgaria because we already have a similar kind of production
in this country,” Simon says. This new factory will produce small components
and 60 per cent of the employees need to be women. While Bulgarian workers
are fair and disciplined, Romanians are fast and innovative, he adds. Bulgarians are considered the ‘Germans’ of eastern Europe in their work mentality.
But he is not without his criticisms. As a co-author of the ‘Management Guide in Romania’, Simon argues that Romania has no leadership culture.
“The legitimacy of leadership has not come from the way the staff cknowledge
the manager’s expertise, but from the position itself,” he believes.
The country manager also says that Romanian employees are reluctant to assume responsibility, but once they have worked under foreign management, they rarely accept the previous methodology.
“Nevertheless Romanian employees, once promoted, will quickly adopt the traditional Romanian management style, even if they have studied abroad,” he adds.

Who is Peter Simon?

“In 1996 when I first came to Romania, I went on a motorbike tour of the country and on my way back I tried to take a short-cut to Bucharest and drove through a forest,” says Peter Simon. “I found myself at a lake with a hydro-power plant and I did not know which way to go. I saw a little house with a man guarding the plant and who was living there on top of the mountains in the middle of a forest. I went to him and I started gesturing in sign language to get some help. After a few seconds the guy said: ‘Do you speak English?’
That was the moment when I realised I should not bother learning Romanian.”
Though he fell for the beauty of the Romanian landscape and the openness of its people, Simon has seen a recent transformation not to his liking. “What I hate about this country is that people have changed for the worse in the last 15 years and [many] have became arrogant and selfish,” he says.
Born in Speyer near the Rhine in 1950, Simon studied mechanical engineering in Karlsruhe, southwest Germany before signing up with work for ABB. Starting out as a mechanical engineer, he developed through the ranks with postings in Saudi Arabia, Libya, Iran and India, to country manager in Romania in 1997. Simon is also president of the German Business Club in Romania.
In ten years Simon has seen a drastic improvement in the evolution of legislation and the fiscal system in the energy field.
“Bureaucracy is a big problem compared to Germany, but everyone has to play on the local market with the local rules and we have to get used to it,” he says.
He adds that a Romanian may feel the same way about the German system. “For a Romanian working in Germany it would be catastrophic,” says Simon. “Because he or she would say the system has too many rules and regulations.”


 
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