What Is the Price of Romania’s Energy Support?

Cristian RUSSU

Amid the mass dissatisfaction of Moldovan citizens with their utility bills, Romanian energy companies, who offered a “helping hand” to Moldova last year, announce record profits

During his first official visit, certainly to Bucharest, Prime Minister Dorin Recean solemnly announced that Romania has secured the status of the first trade partner of Moldova: the mutual trade turnover in 2022 soared by 50%, up to $3.6 billion. Moreover, Recean thanked the neighbors for their aid in overcoming the energy crisis. Of course, this was not a gratuitous assistance, and, as it is not difficult to guess, it made a major contribution to the record trade figures between the countries. Most of our citizens, who have faced constant increases in their electricity, gas and heating bills, can hardly share the new prime minister's enthusiasm about the results of energy cooperation between the two banks of the Prut River. Even if one considers the protests organized by the Shor party with demands to pay these bills as purely opportunistic, public opinion is in any case dominated by the belief that it is people who have paid and continue to pay an excessive price for the state's energy policy. Recent sociological surveys confirm this. And while Moldovans’ wallets are emptying, Romania is tallying profits: local energy companies, engaged in “helping” Moldova, have published data on record profits. Thus, Nuclearelectrica, the only company in the neighboring country which manages nuclear power facilities, reported a doubling of revenues compared to 2021. This is despite the fact that the nuclear power output was even slightly lower than the year before last. An interesting fact to note is that the main shareholder of the company (over 80%) is the state. In the meantime, Hidroelectrica, the largest electricity producer behind the Prut, had revenues of 9.1 billion lei in 2022, 40% more than a year earlier. The $4 billion profit was also recorded amid a decline in electricity production. By the way, 20% of the company’s shares are owned by the state. The national electricity transmission company Transelectrica announced a net profit of 529 million lei, and total operating revenues from January through December 2022 showed a 67% increase (6.286 billion lei versus 3.756 billion lei). And in this case, the volume of electricity dispatched was lower than in the past. Curiously, the revenues from emergency supplies of electricity to Moldova and Ukraine only last year amounted to 45.3 million Romanian lei. The growth of revenues from cross-border flows was largely due to a twofold increase in the tariff for such transfers from September 1, 2022. Meanwhile, the national Romgaz company also reported higher revenues, with a net profit of 2.544 billion lei, almost a third more than last year. The indicators of electricity sales alone are also surprising: up by 313% (!). According to the financial results, OMV Petrom Group, controlled by the Austrian company OMV, recorded a net profit of 10.3 billion lei in 2022 - 260% higher than the previous year. This is the biggest profit ever made by a Romanian company. Its sales reached a record 61 billion lei, or 2.3 times more than in 2021. Even the national boycott of the Austrian concern's products was not an obstacle to the company's financial success. Last year, the share of electricity produced by OMV Petrom amounted to 10% of the total production in Romania. All the mentioned energy companies stood out in supplying electric energy to Moldova: either through daily contracts from OPCOM Romanian exchange, or through monthly contracts. In November alone, electricity worth 51.6 million euros was sold to Moldova from the OPCOM exchange. Based on figures from our Bureau of Statistics, last year electricity accounted for the largest increase in imports into our country. Just imagine: in dollar terms, we imported almost 20 times more electricity than the year before. That’s more than $152 million. This amount is roughly comparable to the cost of electricity received from the Cuciurgan thermal power plant for the entire year. And it was this plant that provided the country’s major need last year, except for November. The whole array of numbers above is quite illustrative and does not need any special explanations. Against this background, it is obvious that Dorin Recean’s enthusiasm in Bucharest about “contribution to aiding Moldova” was directed mainly to the Romanian audience, to show how our country actively facilitates the well-being of the economy across the Prut and is ready to do that further, even at the expense of its own economic interests. The Prime Minister’s appeals to Romanian entrepreneurs to “use Moldova’s economic potential” and his assurances about the feasibility of long-term energy supply contracts can also be viewed in the same vein. Another political pressure on the Moldovan-Russian company Moldovagaz, which is about to face a financial claim of 3.3 billion lei after the Chamber of Auditors’ recent audit, are part of this chain. Such official decisions suggest that the steps to ultimately sever energy cooperation with Russia are almost inevitable in the near future, something that will be to the advantage of the Romanian energy companies that will continue to make profit at the expense of the Moldovan citizens.