What is happening to the Romanian electricity market?
Much like any other European market, the Romanian electricity market has been subjected to the same price volatility as its European peers during the current energy crisis. On top of that, government intervention in the power market has wreaked havoc on transactions and prices offered to final consumers.
How can NRGI.ai help?
At NRGI.ai, we are building the first European marketplace that allows medium and large consumers to get electricity at fair prices by providing them with the same kind of knowledge and expertise as the most astute professionals in the field. All at a fraction of the costs and using artificial intelligence algorithms to forecast power prices and to estimate fair prices.
What we found out?
We were mandated by a large electricity consumer in Romania to help them acquire electricity at fair prices, as we claim to be able to do. The results of our research are most interesting and speak volumes of the current dire situation on the power market.
First of all, out of 7 suppliers able to acquire such clients, only two were willing to take on new customers. The current price cap established by the government which is below market cleared prices does not allow most of suppliers to take on new and large customers. Most of consumers, industrials or not, end up serviced by designated suppliers of last resort that cannot refuse clients.
Secondly, and the most interesting result is that there is a significant difference in quoted prices among different suppliers, mainly due to the volatility on the market, difficulty to hedge and unwillingness to take new customers under the current government intervention. The difference in the price per MWh offered by the willing suppliers was an astonishing 4X, in line with what one can expect under severe volatility and misguided government intervention.
Figure 1: Index with baseline 1 for the difference among quoted prices for power in Romania
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