PRESS RELEASE January 10th, 2008

2007 - The Centralized Markets operated by OPCOM

(Bucharest, 10.01.2008) The final evaluation of the results of 2007 confirms the positive trend of the entire year: the increase in volume of traded electricity and of the related market share due to the growing interest for transactions confirmed by the number of the new comers and the volume of the offers for all the administered products. The conclusion of the last transactions in 2007 has permitted the precise calculation of the liquidity indicators on the spot market over this period of time: the volume of traded electricity and the adequate share from the net consume. Both indicators registered, as expected, a substantial growth, thus strengthening OPCOM`s position as the most liquid marketplace in Eastern Europe.
By the end of the year there were indications on increased interest of the active players on European markets to involve in trading on the centralized markets operated by OPCOM. Correlated with the interest expressed by the neighboring countries (Hungary, Bulgaria) to create similar markets, these inputs confirm the correctness of political decisions as also of the regulatory ones determining the emergence of the spot market as early as the beginning of liberalization (2000) and the present pattern of it (2005), the launching of the other centralized markets (2005, 2007) but also the quality of their operation by OPCOM (2000-2007).
The Day-Ahead Market, along with the other products, make up viable and exemplary references within the framework of the Athens Forum meetings, which makes a favorable premise for the endeavor towards  the market enlargement through cooperation with the countries adherent to the regional treaty.

Day-Ahead Market

In 2007 there were 5.1TWh traded, increasing the traded volume since the launch of the new platform to 10.9 TWh (June 30th, 2005). The 5.1 TWh represent on average 576 MWh/h, almost 23% more than the 2006 average.
Related to the consumption, the volume of transactions in 2007 represents a share of 9.33%, 21% more than for 2006 (7.74%), while the growth from 2005 to 2006 was of 15%.
With a 2007 average price of 47.89 euro/MWh, only 0.84% higher than 2006, the increase of transactions’ volume determined a related amount of 252 million euro, 23% more than 2006.
The traded volume reflects the consumption’s extent, the size of the wholesale market and of its competitive segment. The increase of this volume and of the participants’ interest (75 participants have traded in 2007; the average number of daily active participants was 52; the daily participation level has reached a peak of 58 in December) represent the mechanisms’ efficiency evidence. Active participation in transactions makes possible the adjustment of the positions in the wholesale market and thus balancing most of the commitments with availabilities/necessities even since the day prior to the delivery date. 
   
Centralized Market for Bilateral Contracts (public auctions)

Year 2007 ends with excellent results for the Centralized Market for Bilateral Contracts awarded through public auction. This mechanism, which allows the centralized trading of electricity for periods of time larger than one month, has met all the expectations:

• It was provided the increase of the transparency in trading of bilateral contracts for electricity on the competitive segment of the wholesale market (we refer here to the trading mechanism as well as to the information offered to the public and to the participants: the information related to the trades concluded in the centralized market and the average price for each month). This increase was reflected by the number of contracts concluded through public auction organized by the Romanian Power Market Operator – OPCOM. Thus, the number of contracts concluded in the Centralized Bilateral Contracts Market (with deliveries in 2007 and 2008) is 5 times larger than the number concluded in 2006, reaching 158 contracts with a total volume of 11.9 TWh). 
• The relevance of the prices on the Centralized Market for Bilateral Contracts – on average 48.35 euro/MWh - is demonstrated by the traded volume and by the number of active participants, 47 – the average number of participants/auction being 6.
• During 2007 there were already concluded contracts for delivery during 2008. The total quantity related to these contracts is of 7.6 TWh, representing a market share of 14.24 % from the net consumption of 2007. The weighted average price of these contracts was 50 euro/MWh, including the injection tariff component.

Centralized Market for Bilateral Contracts with Continuous Negotiation (forward with physical delivery)

On the trading system of the Centralized Market for Bilateral Contracts with Continuous Negotiation (CMBC-CN), commercially launched on the 15th of March 2007, a number of 82 contracts for 1 MWh, representing a total quantity of 22,208 MWh, were traded, as result to standard offers meaning standardized conditions for electricity delivery with delivery periods longer than one week.

Centralized Green Certificates Market

Even though the trading period for the year 2007 has not yet ended, February 2008 being the last month in which the mandatory quota for green certificates established for the suppliers for the end consumers must be fulfilled, until now 17,709 certificates were traded, representing 53 % of the issued green certificates.

After the auction held in December on the Centralized Green Certificates Market 4,304 certificates were traded, at an average price of 42 euro/certificate.

The regulatory framework for E-RES promotion and the marketplace offered by OPCOM have attracted monthly new participants, more and more producers and suppliers of electricity have expressing interest in contributing to the establishment of the trading value for green certificates through the specific competitive mechanism of the centralized market provided by OPCOM.

Settlement activity

The settlement activity, which was done strictly according to the in force legislation, included the determination of quantities and collection rights/payment obligations for:

• regulated energy contracts between producers and captive consumers or between producers and system operators for their own technological consumption in distribution/transmission networks,
• regulated contracts regarding transmission service,  tariff component for injection into the transmission network,  ancillary services, transmission services (tariff component for extraction from transmission network), operational services and services performed by the system operator for the wholesale electricity market participants, distribution services,
• transactions concluded on Day Ahead Market and Green Certificates Market administered by OPCOM,
• transactions on the balancing market administered by Transelectrica,
• the imbalances of the balance responsible parties and the notification imbalances.

The additional costs or earnings resulting from the system balancing have been determined and redistributed.
The quantities for the bilateral contracts on the competitive market concluded on the centralized markets administered by OPCOM (CBCM and CBCM-CN) or directly negotiated outside of the centralized markets and for the import/export contracts have been determined.
This activity supposed the processing of data related about 2,500 contracts.

Trough the products that OPCOM is offering, a quantity of 11.6 TWh delivered during 2007 and representing 22 % from the forecasted national consumption was transparently traded. At the same time, a quantity of 7.6 TWh, to be delivered during 2008, already representing over 14 % from 2008 forecasted consumption, was traded. OPCOM had correctly informed the public and the market participants on how the transactions were concluded and published the related prices.
The shares of centralized trades, for deliveries during 2007 and 2008 is ensuring a consistent price signal for the Romanian wholesale electricity market, according with the political will  expressed through the Energy Law and the National Strategy, enacted during 2007, strengthening the position of OPCOM at European market level, as a liquid, equidistant and fairly marketplace.

PRESS RELEASE 10.01.2008