Romania Energy efficiency report

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1 Romania Energy efficiency report Objectives: o 2.8 Mtoe of end-use energy savings by 216 o 4% decrease in energy intensity between and 215 o 3.4 Mtoe of energy savings in the power sector by 22 Overview - (%/year) Primary intensity (EU=1)¹ % ++ CO2 intensity (EU=1) % ++ CO2 emissions per capita (in tco /cap) % ++ Power generation Efficiency of thermal power plants (in %) % ++ Rate of electricity T&D losses (in %) % - CO2 emissions per kwh generated (in gco /kwh) % - Industry Energy intensity (EU=1) % ++ Share of industrial CHP in industrial consumption (in %) % - Unit consumption of steel (in toe/t) % - * and - for steel ++ Among best countries + Better than the EU average 1 - Below the EU average 1 --Among countries with the lowest performances Latest update: May The European Union, as the best performing region, is used as the benchmark.

2 1. Overview 1.1. Policies: 2.8 Mtoe of energy savings by 216 Romania s National Energy Efficiency Action Plan (NEEAP) sets an energy savings target of 2.8 Mtoe by 216, ie 13.5 percent of the average annual energy consumption between and. The intermediate target of 94 ktoe established in the Plan for was exceeded (2.2 Mtoe). A second NEEAP is currently under preparation. The Romanian Energy Strategy -22 focuses on energy security, sustainable development and energy efficiency. It aims to reduce energy intensity by 41 percent between and 22. Potential primary energy savings are estimated at between 27 percent and 35 percent (2-25 percent in industry, 4-5 percent in buildings and 35-4 percent in transport). Previously, under the National Strategy for Energy Efficiency for - 215, a 4 percent energy intensity reduction target was set for the period between and 215: 41 percent of that decrease should be achieved in buildings, 29 percent in the energy sector, 16 percent in industry and 14 percent in transport. The aim is to make that reduction possible through the implementation of energy efficiency programs (63 percent of the energy intensity decrease) and the promotion of high energy efficiency standards for new installations (37 percent) Energy consumption trends: declining consumption Romania s total energy consumption (primary consumption) per capita is almost twice as low as the EU average, at 1.6 toe. Energy consumption decreased dramatically between and (-5.3 percent/year) and increased slightly until (+1.3 percent/year). In, Romania was hit by the global economic downturn and energy consumption fell by 13 percent. It increased by just 1.3 percent in, reaching nearly 35 Mtoe. Figure 1: Energy consumption trends by sector 7 6 Other Industry Power generation Mtoe The share of industry (including non-energy uses) in primary consumption collapsed between and, from 43 percent in to 25 percent in. That decline is explained by the sharp fall in industrial energy consumption over this period and, to a lesser extent, by the doubling of the share of the transport sector. In addition, the energy consumption of the power sector halved over this period, although its share in energy consumption remained relatively stable, at around 2 percent. At around 2,17 kwh, electricity consumption per capita is 63 percent lower than the EU average. Electricity consumption dropped by 31 percent between and and increased slightly until (+1.9 percent/year). In it fell by 11 percent, following the 2 percent drop in industrial electricity consumption; it recovered in and was close to its pre-crisis level. Industry accounts for 55 percent of electricity consumption in Romania (74 percent in ), and its electricity consumption trends have significantly influenced energy consumption in the country. Romania Country reports 2

3 Figure 2: Electricity consumption trends by sector Industry Others TWh Energy efficiency trends: rapid improvements Primary energy intensity (primary energy consumption per unit of GDP) decreased by 4 percent/year between and. That overall improvement in efficiency is mainly due to the industrial consumers since the energy intensity of industry (energy consumption per unit of industrial value added) fell by 2.3 percent/year over the given period. Efficiency gains in the power sector were smaller: the energy intensity of the power sector declined by just.9 percent/year between and. Figure 3: Energy intensity trends.% - - %/year -.5% -1.% -1.5% -2.% -2.5% -3.% -3.5% -4.% -4.5% Other Industry Power generation 2. Power generation 2.1. Policies: 3.4 Mtoe of energy savings by 22 Romania aims to improve the energy efficiency of its power sector in order to reduce its energy consumption. It aims to achieve total energy savings of 3.4 Mtoe in 22, 1.9 Mtoe of which should be linked to fuel substitutions (renewable energies instead of fossil fuels), 8 ktoe to high-efficiency CHP generation and 6 ktoe to new coal-fired units. Romania Country reports 3

4 A further 1 ktoe of savings should be achieved through the renovation of existing thermal power plants (retrofitting of four large thermal power complexes totaling 2.5 GW) and 2 ktoe through other measures. Up to 5.5 GW of old thermal power plants, including 2.3 GW of CHP facilities, will be shut down by 22 (11 GW, including 3.9 GW of CHP groups, by 235). Retrofitting measures are also expected to extend the lifetime of thermal units and to raise their efficiency Efficiency of the power sector: rising efficiency rate Between and the average efficiency of the power sector increased noticeably, from 23 percent to 39 percent. That improvement was partly achieved through the rising share of hydropower (higher efficiency) in the electricity mix (from 18 percent to 34 percent) but also through the growing efficiency rate of thermal power plants (from 19 percent to 29 percent over the - period). Indeed, since, old power plants have been replaced by gas-fired facilities with a higher level of efficiency. However, this rate remains lower than the EU average, as there are no combined-cycle power plants in operation in the country. Figure 4: Efficiency of power generation and thermal power plants Figure 5: Thermal electricity capacity, by technology % Total power generation Thermal power plants GW 2 18 Steam Gas turbines Combined cycles Romania s average rate of T&D losses is twice as high as the EU average, at 13 percent in, and has been increasing since (9 percent). Figure 6: Electric T&D losses % Romania Country reports 4

5 3. Industry 3.1. Policies: long-term agreements and investment subsidies Romania s National Energy Efficiency Action Plan aims to improve industrial energy efficiency and includes voluntary agreements, financial instruments and regulations. Industrial operators can sign long-term agreements under which they adopt energy savings measures (modernization of technological processes or efficient use of energy). Large consumers have to carry out energy audits and energy efficiency improvement programs, and produce an energy balance every year (for those consuming over 1, toe/year) or every two years (for those consuming 2-1, toe/year). Those energy balances make energy consumption monitoring possible and pave the way for improvements in the production process. The Romanian Fund for Energy Efficiency, created in, offers investment subsidies to industrial companies and other large consumers for energy efficiency and renewable projects. To date, 26 companies have benefitted from those subsidies, which amount to 13.7 billion dollars and which should permit substantial energy savings (39.2 ktoe/year). Industrial companies can also benefit from loans from Structural Funds to finance investments in energy-efficient equipment. In, Romania adopted a law on the promotion of CHP, including guarantees of origin of electricity from high-efficiency cogeneration Energy consumption trends: sinking consumption between and Energy consumption in Romanian industry decreased by 65 percent between and ; it then declined by.5 percent/year until and fell dramatically in (-27 percent), due to the global economic crisis. In, the Romanian industrial energy consumption grew by 5.5 percent, but remained far below its pre-crisis level. Figure 7: Trends in industrial energy consumption Mtoe Gas is the most consumed fuel in Romanian industry (42 percent in, compared with 65 percent in ). The share of electricity in industrial consumption has doubled since, from 13 percent to 26 percent. The shares of other energies remained relatively stable, at around 15 percent for coal and 9 percent for oil. The share of energy-intensive branches in industrial energy consumption is high, at 8 percent (). The steel industry accounts for 37 percent of industrial energy consumption, followed by chemicals (34 percent). The nonmetallic minerals and paper industries account for just 8 percent and 1 percent, respectively. The share of energy-intensive industries in industrial energy consumption rose from 62 percent in to 8 percent in Romania Country reports 5

6 since their energy consumption decreased more slowly than the energy consumption of non-energy-intensive industries. 1% 9% 8% 7% 6% 5% 4% 3% 2% 1% Figure 8: Energy consumption of industry, by source % Biomass Heat Electricity Gas Oil Coal/Lignite 1% Figure 9: Energy consumption of industry, by branch 9% 8% 7% 6% 5% 4% 3% 2% 1% % Other Paper Non metallic minerals Chemical Steel 3.3. Energy intensity trends: rapid efficiency gains in industry Between and Romania achieved significant energy efficiency gains in industry: the specific energy consumption (energy consumed per ton produced) in the paper and cement industries dropped by 9.4 percent/year and 6.4 percent/year, respectively. There were no significant efficiency gains in the largest industrial consumers, ie the chemical and steel sectors, over the period. Overall, industrial energy intensity decreased by 8 percent/year between and. Over the recent period (-), efficiency gains in the cement and paper sectors were even higher (unit consumption fell by 7.8 percent/year and 13 percent/year, respectively), although the energy intensity in the steel and chemical industries remained stable. Figure 2: Trends in the energy intensity of industrial branches % -2% % %/year -6% -8% -1% -12% -14% Total* Steel Chemical Cement Paper *Including construction and mining, Odyssee The share of industrial CHP in the electricity consumption of Romania s industrial sector has followed an upward trend since, climbing from 4 percent to 11 percent in (8 percent in ); nevertheless, that level remains below the EU average. Romania Country reports 6

7 Figure 3: Share of industrial CHP in industrial consumption 12% 1% 8% 6% 4% 2% % The energy intensity of the manufacturing industry, ie excluding mining and construction, fell by 6.9 percent/year between and. About 2 percent of that improvement is explained by efficiency gains in industrial branches and 8 percent by structural changes, namely a structural shift toward less energy-intensive industrial branches. Between and, the share of the equipment branch in the industrial value added in Romania grew by more than 8 percentage points. Figure 4: Trends in the energy intensity of manufacturing and structural effect % -1% % -3% %/year -4% -5% -6% -7% -8%, Odyssee Real variation Change at constant structure Structural effect Romania Country reports 7