EFT ENERGONEWS

Transcription

1 EFT ENERGONEWS INTERNAL PRESS 1.1. A. Electricity Taxes, Distribution, and Transportation - Over 70% of the Electricity Bill A lot of consumers only see the final value of the bill paid for electricity, but they do not know in detail what they are paying for. Also, a lot of consumers confuse the price of the energy as merchandise with the total they pay on the monthly bill. This explains why the energy producers are so often pointed at, together with the providers, when the consumers see their energy costs going up. Actually, the energy as merchandise is just a little part of the sum we are paying on a monthly basis. A third of the bill represents taxes and another 40% are the costs for transportation, distribution, and system services. The crisis during these last few years has increased awareness about the utility bills. All of these years the consumers, from population to companies, has been complaining about the bills paid for electricity. Therefore, the energy producers have always been in the eye of the public, together with the providers, for several reasons: on one hand, the population is imagining that the money from the bills goes to those who generate the energy, and on the other hand, the large consumers are carrying a hard bargain for the necessary energy with the large providers which are also producers. In reality, only 27% of the final regulated price we are paying represents the energy as merchandise. This money goes to the energy producers. The electricity production basket reserved for the regulated market is covered by Nuclearelectrica (34.6%), Hidroelectrica (25.9%), Oltenia Energy Complex (16%), Petrom (9.8%), Hunedoara Energy Complex (2%), and cogeneration producers (11%). According to the data from ANRE (the energy market regulator), 40% represents the cost for the transportation service, the system service, the service provided by the electrical energy market operator, and the distribution service (40%). The money for the transportation service, the system service, and the service for the energy market operator (OPCOM) is collected by Transelectrica, and the rest by distributors and providers (Enel, E.ON, CEZ, Electrica). A third of the bill represents the value of the taxes (excises, bonus for cogeneration, green certificates, VAT). The excise is of 0.5 Euro/MWh for the energy used for commercial purposes, and of 1 Euro/MWh for the energy used for non-commercial purposes. The consumption used for non-commercial purposes corresponds to the household consumers and the consumers assimilated to them, and to the budgetary institutions, and the one used for commercial purposes is the consumption corresponding to the industrial consumers and the ones assimilated to them, to the consumers from the trading/services sector and the ones assimilated to them, to the consumers which are providers of public services, and to seasonal and third party consumers.

2 As of January 1, 2013, for the entire current year, the exchange rate for the calculation of excises if is the one on October 1, 2012, respectively Lei/Euro. The mandatory quota of green certificates (system through which we support the production of clean energy, namely of wind, solar, hydro, and biomass energy) is established by ANRE on an annual basis and is calculated according to consumption. Presently, the quota is of certificates/mwh. The value of a green certificate fluctuates according to the transactions on the free market, and is not established by ANRE. The invoicing of green certificates to the consumers started in Each energy consumer in our country has been paying, as of 2011, an additional tax called bonus for high efficiency cogeneration. The tax also applies to electricity exporters. The value of this tax on invoices varies according to the energy consumption and its role is to support the high efficiency cogeneration energy production and not necessarily to support investments in the field. The value of the contribution for high efficiency cogeneration in force as of January 1, 2013, is of Lei/ kwh, without the VAT. The specific methodologies for establishing regulated prices/tariffs for the activities for producing, distributing, and transporting electrical energy do not specify any value for the profit as the profit is the difference between the revenues and justified costs of the operators in question. The regulated rate of profitability is taken into account for the justified costs. The electrical energy bills for July, which the consumers receive in August, shall be 5-7% lower, as the president of the National Authority for Energy Regulation (ANRE), Niculae Havrileţ, has recently announced. It is about the cut down by 1.3% operated as of July 1 for the electrical energy price, and the rest of the cut down in prices comes pursuant to the cut down in the number of green certificates granted to clean energy producers. The value of the green certificates received by the producers of energy from renewable sources is specified separately on the invoice and, until July 1, it was about 10% of the total amount paid by the household electricity consumers. The representatives of ANRE declared, on July 11, 2013, that for consumers, the effect generated by the postponement of the trading as of July 1 of a number of green certificates, according to the provisions of Urgency Ordinance 57/2013, would be seen starting with the invoices to be received in August. The middle-sized and large consumers of electrical energy have a different structure of costs, according to several providers we have consulted. For example, large consumers are connected directly to the transportation network, they do not pay distribution taxes, and they have a better tariff for the energy consumed due to the large volume contracted. In exchange, these large industrial companies support the highest taxes for green certificates and the cogeneration bonus, taxes which are calculated according to consumption. Also, the companies supplied from the high and medium voltage mains are paying distribution tariffs which are a lot smaller (even 30% smaller) than the tariffs paid by household consumers, who are supplied from the low voltage mains. Services provided by Transelectrica 7.2% of the Final Bill of the Household Consumer 2

3 The transportation and system services provided on our energy market by Transelectrica SA represent about 7.2% of the final bill of the household consumers, stated yesterday the representatives of the company, as a reaction to the statements in the article Taxes, Distribution, and Transportation over 70% of the Electricity Bill, published in yesterday s edition of BURSA newspaper. Officials at Transelectrica have told us that they collected Lei/MWh for the services for the transportation of electrical energy. Transelectrica collects Lei/MWh more for the system services representing a non-profit activity carried out by the company at a national level for maintaining the security of the energy system and of the electrical energy supply. The amounts collected for the system services are transferred in full to third parties. In addition to these, there is also 0.37 Lei/MWh, the tariff collected and paid to the operator of OPCOM centralized markets. In total, Transelectrica collects from the consumers Lei/MWh, of which it retains Lei/MWh, stated the representatives of the national energy transporter. The officials of Transelectrica specified: The analysis performed in the article is correct in terms of the tariff applicable to the household consumers connected to low voltage, namely to 220V or 380V, so to most of them. The commercial circuit of electrical energy to the household consumer is Production Transportation Distribution Supply Consumption. Each of these links or branches of a complex production and trading process has a well established technical and economic role, regulated through procedures and methodologies by the National Authority for Energy Regulation (ANRE). The transportation and system tariffs approved for the National Company Transelectrica must reflect the role and specific functions of national transportation and system operator. These tariffs represent the revenues of Transelectrica for the correct and safe operation of the Romanian electrical and energy system, being designed to cover the investments in the development, modernization, and maintenance of the national system for the transportation of electrical energy, ensuring at the same time the dispatching of the electrical energy and the productionconsumption balance, as well as the connection with the European electrical and energy systems. In yesterday s article we showed that, according to ANRE data, only 27% of the final regulated price we paid represents the energy as merchandise, and that money was going to the energy producers. The rest of 40% is divided between Transelectrica (7.2%) and the distribution firms (32.8%). Another third of the invoice accounts for taxes (excises, bonus for cogeneration, green certificates, VAT). New Regulations for Reverse Charge and VAT Government Ordinance no. 16/2013 was published in the Official Gazette of Romania, Part I, no. 490/ , and it brings a series of changes and additions to the Fiscal Code approved by law no. 571/2003, with its subsequent amendments and additions, informs fiscalitatea.ro. Therefore we shall specify the main changes regulated by the regulatory document mentioned above regarding the reduced value added tax (VAT) and the excises for other categories of products, provisions which are to be enforced as of September 1, Main Changes 3

4 The reduced VAT rate of 9% shall be applied to the delivery of goods like: all kinds of bread, as well as to the following bakery products: rolls, buns, bars, bagels, mini-bars, small breads, and braided products, classified under the category of bakery products with code CAEN/CPSA 1071; white wheat flour, semi-white wheat flour, whole flour and rye flour, classified under code CAEN/CPSA 1061; triticum spelta, regular wheat and meslin, classified under code NC , and rye, classified under code NC The simplification (reverse charge) measures specified in Article 160 of the Fiscal Code shall also apply to the delivery of electrical energy to a taxable trading entity. The taxable trading entity represents the taxable entity whose main activity in what concerns the gas, electrical energy, and thermal energy, or refrigerating agent purchases represent the resale of such products and whose own consumption of such products is insignificant. For the reverse charge to be applied, the electrical energy provider must obtain from the purchaser the proof that it is a taxable trading entity, namely: the license for the provision of electrical energy, issued by the National Authority For Energy Regulation, which attests the status of trader of electrical energy of the purchaser; statement on own liability specifying that its main activity, in what concerns the purchases of electrical energy, is represented by the resale thereof, and its own consumption of electrical energy purchased is insignificant; the transfer of green certificates. According to Article 2, letter h), of Law no. 220/2008 on establishing the system for producing energy from renewable sources, restated, with its subsequent amendments and additions, the green certificate represents the title certifying the production from renewable sources of a certain quantity of electrical energy. The provisions regarding the application of the reverse charge for the delivery of cereal and technical plants, the delivery of electrical energy, and the transfer of green certificates, shall apply until December 31, 2018, inclusively. Wind Parks Lay Down the Law Even though it is expensive, from a certain point of view, the wind energy is very cheap, from another point of view. More specific, when the wind blows, the price goes down on the spot market (Market for the Next Day - PZU), and when the wind turbines are static, the price increases rapidly on the PZU. For example, according to Transelectrica, yesterday, at 10:48, exactly one megawatt was produced from wind sources. There was no wind all day yesterday and the highest production was recorded at 17: MWh. A lot better did the photovoltaic plants, which produced almost 150 MWh. We remind you that in Romania about 2,200 MW in wind parks and 380 MW in photovoltaic plants are installed. The consequence of this low production of green energy is seen in the prices on the PZU: yesterday, the prices for energy were even of 305 Lei/MWh. On August 20, the wind blew harder at 17:50, and about 8.5% of the production came from wind plants. What is obvious and can also be seen in the prices: on the PZU, the highest trading price was of lei/mwh. Also, it must be noted that, for example, in April the prices were even smaller and that was because the wind blew even harder and the production got to 1,700 MWh sometimes. Therefore, the average price on the PZU went very low (for example, the average price on April 21 was of 4

5 lei/mwh). Wind energy, as well as solar energy, are basically the cheapest: once the investment is done, a lot of the other things must not be paid for anymore as the wind and the sun are for free! On the other hand, the costs with the raw materials of the other producers (coal, gas, fuel oil, water) are rather high, sometimes representing even 70% of the costs (like for the power production based on lignite or coal). Not even Hidroelectrica is very well in this area: the water costs over Euro 100 million each year. However, energy from renewable sources has other additional costs: the green certificates, which are traded with prices between Euro 27 and 55. Therefore, in addition to the price of electricity, the green certificates must also be paid for. Nevertheless, it seems that when the wind blows, the largest losses are recorded by Hidroelectrica! On August 19 it produced approximately 28% of the country s electricity, but on August 20 august, it produced only about 20%! Thus, on August 19, it produced approximately 2000 MWh, but on August 20, it produced only 1,500 MWh. With an absolutely empiric calculation, the 500 MWh lost at a price of 180 Lei/MWh for 24 hours means a loss of approximately Euro 500,000 per day! Government Gives Up the Idea of Exempting Large Consumers for Paying for Some of the Green Certificates The Department for Energy shall request the approval of the European Commission for a future Government resolution through which some of the energy consumers shall be partially exempted from their obligations to purchase green certificates, stated the representatives of the institution, according to Agerpres. A reduction by 50% of the number of green certificates large consumers must purchase has been included in the draft for Urgency Ordinance 57/2013, which changes the support scheme for renewable energies and which became in force as of July 1. The ministry has since excluded this provision from the ordinance, since this measure needs the approval of the competition authorities within the European Commission, as it could represent help from the state. The Department for Energy has not given up yet on this measure, which shall be introduced in the future through a Government resolution. The scheme for the partial exemption of certain consumer shall be notified separately for approval to the EC, before the legislative initiative (Government Resolution), said the representatives of the department. The large energy consumers have requested the ministry to be exempted from the payment of the tax for renewable energy for their entire consumption and to pay maximum 0.5 Euro/MWh for green certificates. Fight Over Green Subventions Gets More Intense CEZ went to the European Commission. On the other side of the barricade is the metallurgy of iron and steel, which asks for lower energy prices. CEZ, the strongest investor in the green energy field in Romania, has submitted a complaint to the European Commission after the changing of the support scheme on which this sector has been developed; other companies which have bet almost Euro 4 billion in the field are joining the Czechs. 5

6 On the other side of the barricade are the large industrial consumers, like Alro or ArcelorMittal Galaţi, foreign investors in their turn, who threaten to move the production in areas where the burden of the energy bills is easier to bear. Caught in the middle, the European Commission says that starting this autumn it is to establish a set of rules for the support schemes so as they are cost efficient and do not cause deficiencies on the energy markets of the member states. The Commission says that it has been receiving complaints since March, and in the autumn it is to draft a regulation for the operation of the European support schemes. The battle of the investors in wind and solar plants is carried on for about Euro billion, money which should have gone to the producers who have been postponed for the period , without currently having established any exact mechanism for recovering said amounts. The Commission knows that CEZ has a number of projects for producing energy in Romania and enjoys the support scheme. Several complaint from actual or future beneficiaries of the support scheme are under investigation as of March, this year, says Marlene Holzner, spokeswoman of the European Commissioner for Energy, Günther Oettinger. CEZ has not commented until the closing of this edition. The group has invested in Romania Euro 1.1 billion in the largest wind park on dry land in Europe. The project is located in two communes in Dobrogea, Fântânele and Cogealac, and includes 240 turbines and has a capacity of 600 MW, close to the capacity of a reactor at Cernavodă. What was the starting point of the scandal? Green energy is rewarded in Romania with a variable number of certificates, according to technology. These certificates have by law a value between Euro 27 and 55, and are purchased by the energy providers who must comply with certain quotas regarding the weight of the renewable energy in the basket delivered to the clients. 2. Useful Information ANRE, Transelectrica, OPCOM ANRE Last 5 Orders 2213 / Decision for the preliminary certification of CN Transelectrica SA as transport and system operator of SEN 2121 / AI BIOMASS COGENERATION PLANT, BIOENERGY SUCEAVA 2122 / AI CF ARICESTI RAHTIVARI 4, FORT GREEN ENERGY 2123 / AI CF ARICESTI RAHTIVARI 5, SOLAR FUTURE ENERGY 2124 / AI CF ARICESTI RAHTIVARI 6, CASA CRANG Last 5 Orders 6

7 55 / Order on the amendments and completion of the Regulation for the accreditation of energy producers for the application of the promotional system with green certificates, approved by ANRE Order no. 42/ / Order on the amendment of ANRE Order no. 52/2012 on the approval of the average tariff for the transportation service, of the tariff for the system service, of the tariff requested by the electrical energy market operator, and of the regional tariffs for transportation services requested by the economic agents in the electrical energy sector 59 / Order for the approval of the Regulation on the connection of the users to the public interest electrical mains 60 / Order on the approval of the enforcement of certain rules on the balancing market 54 / Order on the approval of the Framework Agreement for the provision of transportation services, system services, and services provided by the electrical energy market operator to the participants, between the National Electrical Energy Transportation Company Transelectrica SA and the beneficiary OPCOM Green Certificate Market The Weighted Average Price of GC for the last 3 of trading of PCCV concluded, (March May 2013), calculated according to the provisions of Law 134/2012, is of Lei/GC. Prices on PZU Prices and volumes Average price [Lei/MWh] 184,91 192,22 203,71 170,06 135,64 223,78 223,58 Balancing Market Price (Lei PZU price) 634,91 642,22 653,71 620,06 585,64 678,78 673,58 Total daily volume traded PZU ROPEX_FM_M Markets at term (PCCB) [lei/mwh] Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec ROPEX_FM_ ,82 210,23 216,25 216,44 214,36 215,45 215,19 212,94 217,15 220,40 222,46 223,00 223,13 ROPEX_FM_ ,56 232,39 230,82 224,97 217,35 213,30 211,42 211,44 209,35 205,02 202,86 202,36 202,39 TRANSELECTRICA Production Consumption/Production Daily average Consumption Production Coal Gas Water Nuclear External balance Wind Photo Biofuel

8 Comparative values on the same day in different years On Tuesday Tuesday Power Consumption Average Maximum Export/Import 68(import) 25(import) Average power produced TOTAL (Pmed) Of which: Coal Hydrocarbons Nuclear Wind Hydro Bio-fuels 21 - Photovoltaic 63 - Graphics, Map 8

9 Prognosis of flows and levels between , hrs , hrs Flow when entering the country (Bazias section) shall increase to values between m3/s, being below the multiannual average of August (4300 m3/s) and September (3800 m3/s). Downstream from Portile de Fier, the flows shall be increasing, except for the first part of the interval, Bechet Braila sector, where they shall be decreasing, and in the second part of the interval in the Isaccea Tulcea sector they shall stall. 9

10 This information is for the customers of EFT Romania and is for informational purposes only. It is taken from different public sources and EFT Romania cannot be held liable, in any way, for any damages or issues which may occur pursuant to the use thereof. For any other information please contact EFT Romania at the phone number