The energy bills could double starting next year for certain categories of Romanians

Starting from next spring, Romanians could face a doubling of their energy bills as the current capping scheme will be eliminated. Authorities are preparing support measures for low-income individuals in collaboration with the Ministry of Finance and the Ministry of Labor. Consequently, approximately 5 million consumers who benefit from reduced rates for consumption below 100 kilowatt-hours per month could bear a significant increase in costs beginning in 2025, according to estimates from energy suppliers.

From 2025, their bills could double.

Starting next spring, energy bills could double for millions of Romanians once the existing capping scheme is eliminated. Authorities promise support measures for low-income individuals, but consumers are concerned about the impact of the anticipated increases.

Currently, Romanians pay between 0.68 RON and 1.3 RON per kilowatt-hour, depending on consumption. Those who consume under 100 kilowatt-hours per month benefit from reduced rates until March 31 of next year, with the majority of consumers, approximately 5 million, taking advantage of this. The Energy Suppliers Association has estimated that from 2025, their bills could double.

“That cap of 0.68 is unsustainable at the moment. It would mean, right now, purchasing energy at about 20 RON per kWh, which is not available on the market,” says Laurențiu Urluescu, president of AFEER.

Thus, consumers could experience at least a 30 RON increase in their bills starting from April next year, according to warnings from suppliers.

What the Authorities Say

The Minister of Energy, Sebastian Burduja, emphasizes that authorities are currently seeking fair solutions:

“We need to have targeted measures for truly vulnerable consumers. We support all consumers based on their level of consumption. So, if someone owns an apartment in Primăverii and consumes less than 100 kilowatt-hours per month, they pay the same rate as a family with five children from Ferentari,” Burduja explains.

While suppliers argue that the maximum cap of 1.3 RON per kilowatt-hour is higher than market prices, authorities are facing increasing consumption due to the heatwave affecting Romania in recent days.

The Ministry of Energy does not deny the possibility of this increase but mentions that they are working on a protection scheme for vulnerable consumers. The rest of the citizens will pay the real market price for energy.

Energy consumption in Romania significantly increases in the evening when people return home and turn on air conditioners or fans. During those hours, the cost of energy exceeds 800 euros per megawatt-hour, averaging 213 euros per megawatt-hour, the highest in Europe.

Romania Imports Energy at Extremely High Prices

Romania is importing energy at extremely high prices, paying 207 euros per megawatt-hour on July 15, which is four times more than France and ten times more than Norway. This situation results from the lack of long-term contracts and reliance on imports during heatwaves when domestic production from renewable sources decreases.

Despite these high costs, the impact on household consumers is currently limited by the tariff cap, with additional costs being borne by the state. However, distributors warn that by 2030, energy costs will significantly increase due to necessary investments to meet environmental targets. Estimates indicate an increase of approximately 0.05 RON per kilowatt-hour, projecting an additional cost of about 8 RON for a monthly consumption of 150 kilowatt-hours by 2030.

Prices on July 15, 2024, in Europe:

– Romania: 207 euros/MWh
– Bulgaria: 191 euros/MWh
– Austria: 71 euros/MWh
– Germany: 77 euros/MWh
– Denmark: 67 euros/MWh
– Belgium: 59 euros/MWh
– Spain: 54 euros/MWh
– France: 50 euros/MWh
– Norway: 23 euros/MWh
– Finland: 22 euros/MWh

Future energy price increases, driven by the need for infrastructure investments, will require consumers to adapt to higher costs, highlighting the importance of diversifying energy sources and improving energy efficiency for long-term sustainability.