Coal-fired power plants vital to avoiding an energy blackout

Our country cannot afford the luxury of shutting down coal-fired power plants overnight without replacing them with other energy production capacities, because that would mean a real risk of a blackout, with devastating effects on the economy and on the daily lives of citizens, said Bogdan Ivan, the Minister of Energy, during a press conference he held on Friday at the PSD headquarters. The official pointed out that, although the authorities in Bucharest have assumed the most aggressive decarbonization target in the European Union through the PNRR, the promises made to the Commission in Brussels cannot be implemented in the absence of solid alternatives.

"If we were to close the coal-fired units at the Oltenia Energy Complex, we would really be at risk of blackout," the minister said, emphasizing that the gas-fired power plant projects that were supposed to replace these capacities exist only on paper, while the pressure of the deadline at the end of 2025 is approaching at an alarming speed.

In order to avoid sanctions from the European Commission, Bogdan Ivan announced that he had already sent arguments and clarifications to officials in Brussels, trying to create the framework through which he could maintain at least three active coal-fired units and two reserve ones.

But the challenges do not stop at the coal issue. The energy price crisis and its impact on the population and the business environment will end up on the agenda of the Supreme Council for National Defense.

Bogdan Ivan stated: "I had a constructive discussion with the President of Romania on this subject and on the main themes, including the area of solutions. During this day, I submitted the draft memorandum proposal to the Government of Romania, because procedurally the Prime Minister proposes that this memorandum be integrated into the CSAT agenda".

The Minister of Energy mentioned that the document, which contains a "very clear" analysis of the energy situation, identifies major scenarios and risks in the event that major investment projects remain blocked due to bureaucracy.

According to the data presented by Mr. Ivan, our country is today in the top of European countries with the highest energy prices, a factor that puts pressure on the population's budget and reduces the competitiveness of companies. "Romania is going through a complicated period from an economic point of view, and a major contribution to this element is the high price of electricity," said the energy minister, pointing out that PSD - the political party to which he belongs - is coming up with a recovery plan focused on increasing domestic production and stimulating investments.

One of the key directions is to provide facilities for companies that use natural gas as a raw material in a proportion of over 30% of the final cost of products.

"Romania has already become the largest producer of natural gas in the European Union, and this means that we automatically have a very varied offer, which will bring additional stimulation for companies that invest in strategic industries," said Bogdan Ivan.

He showed that the huge trade deficit, of over 33 billion euros last year, is based on two-thirds of the energy-intensive and petrochemical industries. Through the fiscal incentives proposed by the Social Democrats, the deficit could be reduced annually by 500-700 million euros, money that would be transformed into taxes to the budget, jobs and economic diversification. "Our goal is to reduce the trade deficit and strengthen the national economy,” said the energy minister, explaining that Romania needs a strategy that transforms natural resources into a competitive advantage.

Another major problem remains the dependence on energy imports. "Romania, in the last 10 years, has transformed itself from a net energy exporter into a net importer, in the context of removing approximately 7,000 MW of capacity from production and replacing only around 1,200 MW. At a time when we import approximately 22% of all Romanian consumption, we are dependent on the price on international exchanges,” Bogdan Ivan specified.

The PSD's proposed solution is to create a fund for strategic investments in production capacities in the band, focused on nuclear projects - reactors 3 and 4 at Cernavoda and SMR technology - as well as new gas-fired plants. The plans aim to add, in the next seven years, 12,000 MW in production and 2,800 MW in storage, which would transform Romania from an importer to a net exporter of energy, which according to Mr. Ivan would ensure cheaper energy for the population and stability for the industry. Bogdan Ivan also showed that the financing solution is not based only on grants, but on modern financial mechanisms that multiply the resources attracted. "The Social Democratic Party comes with a package of financial instruments that combines non-reimbursable European resources, resources from the Modernisation Fund and financial instruments that can bring four or five times more capital in strategic investments," explained the Minister of Energy.

He pointed out that only through strategic investments, through flexibility in negotiations with the European Commission and through concrete measures to stimulate the industry, our country can avoid the energy collapse and can once again become a strong regional actor in the energy field. "The targets are very clear: facilities for companies, reducing the trade deficit and transforming Romania from a net energy importer into a net exporter. All of this translates into an energy price below the European Union average and a more secure future for all Romanians," concluded Bogdan Ivan.