Electricity distribution operators are prepared to significantly increase annual investments in the development and adaptation of electrical networks until 2030, provided there is an attractive regulatory framework, states ACUE – Federation of Associations of Energy Utilities Companies in a press release.
According to the latest evaluations by ACUE member companies, in addition to European funds available for electrical networks, distribution operators will need to finance at least 6 billion euros from their own sources for necessary investments over the next 5 years. To mobilize and encourage these resources, it is essential that the regulatory framework allows the recovery of financing costs through distribution tariffs. Regulations must be clear and adapted to economic realities, so that investors have confidence that they will recover financing costs and that the return on investment will be competitive compared to other market options, supports ACUE.
Ensuring the recovery of costs through tariffs based on clear and predictable rules encourages investors to finance electrical network infrastructure projects, considering that their investments will be amortized over the long term, between 25 and 30 years. A gradual approach provides greater predictability for both distributors and consumers, thus facilitating budgetary and financial planning. In the spirit of transparency, the ACUE Federation has developed several scenarios and, in the most optimistic case, for a triple level of investments, the impact on tariffs would gradually increase to approximately 5 cents/kWh by 2030. For example, for a monthly consumption of 150 kWh, this estimated additional cost for the year 2030 would be about 8 lei.
In the spirit of transparency, the ACUE Federation has developed several scenarios, and in the most optimistic of these, a triple level of investments would lead to a progressive increase in tariffs over the next 5 years, reaching approximately 5 cents/kWh by 2030. For example, for a monthly consumption of 150 kWh, this estimated additional cost for the year 2030 would be around 8 lei.
“For ACUE Federation members, significantly improving the electricity distribution infrastructure to ensure the capacity to meet future demand is a priority, and our commitment is based on national-level goals. We hope that decision-makers will responsibly address the priorities of the field, in terms of adopting a regulatory framework favorable to investments,” said Daniela Dărăban, Executive Director of ACUE.
Smart and resilient networks will allow doubling the production capacity from renewable sources connected to the grid, achieving an installed capacity of 2.5 GW for prosumers, developing new technologies such as charging stations for 850,000 electric vehicles, and implementing storage solutions. Additionally, these networks will support accelerated electrification, with 25.1% of final gross energy consumption in the heating and cooling sector provided by heat pumps, network flexibility, and energy efficiency.
The regulatory framework for the coming period will influence the pace and scale of investments, as well as the ability to attract necessary funding. Without a motivating signal for investors through the recovery of financing costs and ensuring adequate returns, investments will not surpass the current annual rate, emphasized in the press release. According to ACUE, the medium and long-term impact on consumers will be significant, depriving them of the benefits of transitioning to a new production and consumption model, access to new distribution service functionalities, and active participation in the energy market. This also raises a serious issue of competitiveness for the Romanian economy.
ACUE – Federation of Associations of Energy Utilities Companies is a representative federation in the electricity, oil, gas, and energy mining sector, representing the interests of major companies in the production, distribution, and supply of electricity and natural gas, as well as related services. ACUE includes 25 companies in the energy sector, totaling over 23,000 employees and an annual turnover of over 5.5 billion euros. The total value of investments in networks made by ACUE members from 2018-2022 exceeded 13.5 billion lei.
