| ©THE HEREN REPORTS - Romania’s OPCOM bilateral contracts market receives government boost |
| 2010-04-06 |
| Romania’s minister of economy and commerce has mandated all supply contracts from state-owned generators to contract supply through OPCOM, which operates the Day-ahead market, to avoid any corruption. Transparency in Romania for power tenders has previously been a problem, so OPCOM suggested a similar platform to those already used in the Nordpool region and Poland. According to Lucian Palade, director of electricity market surveillance and development for OPCOM, the exchange will list all state-generated power for sale on its website with general conditions of sale, and bidders will approach the exchange with their bids. The best price offered will win the tender, and if two potential buyers offer the same best price, a second tender will be held between them. Once the tender is won, then specific negotiations within an agreed timescale are started. A similar process for tenders to purchase will also be possible. The contracts already in existence will continue, and some are not due to expire until 2013, but as these come to an end, renewal will take place through OPCOM’s portal. As forward contracts, these will be regulated by the Romanian regulator, ANRE rather than the financial authority, and this approval is awaited before the system becomes operational. However, as a government mandate, this is not in question. There is no obligation for power from privatized generation capacity to be tendered through OPCOM, but as most of Romania’s generation remains state-owned, this means an expanded role for the exchange’s centralized bilateral market, which began in December 2005. Almost all the generation in Romania remains state-owned, although there is talk of privatising power complexes Turceni and Rovinari, as well as tendering for construction of units three and four of the Cernavoda nuclear plant. However, even with privatisation, Palade was confident that generation companies would continue to use OPCOM as the most transparent system for tenders. On paper, around 83% of the Romanian power market is open, but the reality is that around 50% operates with wholesale unregulated pricing. Of this, 10% of market consumption is traded on OPCOM, with 7% of forecast net consumption changing hands on the Day-ahead market (DAM) during the first year of trading under its revised trading arrangements, and 3% on its centralised bilateral contract market. Volumes on its spot market reached 3,642.8 GWh during the first year, with 76 members, 49 of which are active on a daily basis. OPCOM expansion OPCOM is currently working to become a counterparty on the spot market by the end of the year, and a clearing house before the end of 2007. While state-owned generators have not shown much enthusiasm for this guarantee, foreign traders are very keen. Palade commented that there was interest from trading parties such as EdF Trading, OstElektra and Merrill Lynch, stating: “If they are not trading today, it’s only because they’re waiting to have this counterparty assurance to trade in the spot market safely.” OPCOM also intends to offer an emissions trading platform and a futures market by 2009-10. Romania is liberalising its energy sector for EU accession, and gradually privatising sections of its state-owned power monopoly. The transmission system operator is already unbundled, and it intends to privatise the remaining three of its eight distribution companies shortly. The most recent transaction was the IPO of TSO Transelectrica. The market is due to be fully liberalised by the end of 2007. According to OPCOM, Romania is the only owner of a spot market and a functioning balancing market in the south-east Europe region. The country generated 54.8 TWh in 2005, with 54% of this thermal (from state-owned Termoelectrica), 36% from hydro power from Hidroelectrica and 9% from Cernavoda, operated by Nuclearelectrica. (THE HEREN REPORTS - EDEM 10204 / 20 October 2006) |
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