THE RESTRUCTURING OF ROMANIAN POWER SECTOR AT THE CROSSROADS: COMPETITIVE MARKETS OR NEO-COLBERTISM?

Abstract

Despite efforts made by European Commission to liberalize electricity markets and foster integration, there are still significant barriers to free competition. Until now, Romania was one of the countries that have been compliant to the European Union’s electricity directives, being ahead of several older member states in this area. However, reforms have not started to pay out, suggesting that the model of combining state-owned non-competing generators with private/privatized distributors and suppliers may not be the best model of market deregulation. As a result, Romanian authorities have started to talk about plans to restructure the sector, by re-consolidating the unbundled generation companies and the state-owned distribution companies into one national energy company, aiming to create a national champion, competitive on the regional markets. However, these proposals are based on questionable economics and their adoption will have negative effects on market competition and, thus, on consumers.

Keywords

• electricity sector
• liberalization
• Romania
• European Union