Videanu concerned with energy strategy and arrears

The restructuring of the local energy system will result in two new companies which will have balanced production costs of some €44 per megawatt, each with a market share of 42-44 percent and an electricity production mix, Economy Minister Adriean Videanu told Business Standard.

According to the official, the restructuring of the energy system is absolutely necessary because no country in the region has this type of production source separation which exists in Romania and that prevents free competition among producers. Videanu said that, once the restructuring strategy is finalized and discussed with the investors, it will be again forwarded to the Supreme Defense Council (CSAT), for approval. "It is a matter of national security, it is only natural that it be approved by CSAT," the Minister said.

The mining sector is one of the most delicate issues in the midst of discussions for the new energy strategy. Videanu said that solutions are being looked for to rapidly solve the increasing number of arrears in the energy sector. Moreover, Videanu is seeking the support of Poland in the matter of coal subsidies. He added that Romania, with the support of Poland, will recommend that the European Union extend the coal subsidy granting period to 2015 from the present 2010. "Poland, which faces a similar situation, will help us to jointly request that the Union allows the coal subsidy after 2010," the Minister said. The Minister added that the situation in which Societatea Nationala a Lignitului Oltenia (SNLO) and Compania Nationala a Huilei (CNH) coal producers find themselves is rather difficult financially, with the problems being worsened by the crisis and the decline in electricity consumption.

"I have just (Ed.n. - Friday) come from a talk where we have been trying to come up with a way of helping these companies that have arrears and create a very complicated chain situation with debts and receivables. We need to find solutions fast," Videanu said. The Minister added that the cut in electricity consumption by over 10 percent made southern Romania-based energy complexes to restructure their energy production and also the coal consumption, so mining companies are sharply affected. "Beyond the limited resources at governmental level, there are European resources which must be brought in the Jiului Valley. I refer to a problem that Germany and Poland succeeded to solve, that of raising the coal subsidy and extending the subsidizing period. This is vital for us. We believe this to be a decisive matter for the future of mining," said the head of the Social-Democratic Party, Mircea Geoana, quoted the Mediafax news agency.

Business Standard