December 23 (SeeNews) - Romanian energy regulator ANRE said the largest local hydropower producer Hidroelectrica and Nuclearelectrica [BSE:SNN], the operator of the country's sole nuclear power plant Cernavoda, will be the only energy producers delivering power for the regulated market in 2014.
The decision was taken in order for the electricity to be sold to households at reasonable prices, ANRE said in a statement on Friday, adding that it has decided to keep unchanged the regulated electricity prices for households as of January 1.
"Starting 2014, the regulated market includes only households. The two producers would need to deliver ca. 8.8 TWh [terawatt hours], a quantity similar to the one delivered by the two producers on the regulated market in 2013," Raiffeisen Capital & Investment (RCI) said in a morning note on Monday.
"Overall, the news is negative for the power producers in Fondul Proprietatea portfolio. We note however that the power market stands to be liberalized by the end of 2017 so the quantities delivered to the regulated market would gradually decrease in the medium term," RCI added.
Blue-chip property restitution fund Fondul Proprietatea owns minority stakes in both power producers.
Local financial daily Ziarul Financiar reported on Monday that Hidroelectrica, 80.06% owned by the Romanian state and 19.94% by Proprietatea, sees itself turning to a loss of 30 million euro ($41 million) next year from a profit of 200 million euro this year, affected by the authorities' decision.
"Hidroelectrica would need to contribute with ca. 5.3 TWh [terrawatt hour], up 32% versus the quantity required to be delivered in 2013. The price was set at ca 114 lei [$34.8/25.5 euro] per MWh [megawatt hour], 9.0% lower than the price paid for the power in 2013, as the 2013 price included a correction for the drought of 2012. The news is clearly negative for the power producer, as some 35-40% of its 2014 production stands to be delivered on the regulated market, at a price ca. 25-35% lower than the market price," RCI said.
It added that Nuclearelectrica is expected to deliver 3.5 TWh to the regulated market, around 34% less than in 2013 at a price of 146 lei per megawatt hour (MWh), some 3.0% higher year on year.
"We see thus limited impact on Nuclearelectrica," RCI added.
($=0.7307 euro)
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