1. ANRE AUTORITATEA NAŢIONALĂ DE REGLEMENTARE ÎN DOMENIUL ENERGIEI Liberalization of the electricity market in Romania- results and perspectives for integration of energy markets on regional level

2. ANRE Liberalization of the electricity market in Romania- results and perspectives for integration of energy markets on regional level  The net power available  18,8 GW in 2012  8% higher than the previous year  Due to a generous support scheme  renewable sources in the period 2010-2012 (from 560 MW to 2300 MW)  electricity consumtion  54 TWh in 2012  Romania is an electricity exporter in the region (except last year: severe draught and Hidroelectrica’s insolvency)

3. ANRE Liberalization of the electricity market in Romania- results and perspectives for integration of energy markets on regional level  Production structure in the first quarter of 2013  42% from fossil fuels  29% from hydro  21% from nuclear and  8% from wind  Two support schemes for generation power plants-approved by the EC  a green certificates scheme – for renewable  a bonus type scheme – for high efficiency cogeneration

4. ANRE Liberalization of the electricity market in Romania- results and perspectives for integration of energy markets on regional level  Electricity market structure  regulated market and  competitive market  wholesale market and  retail market  bilateral contracts market  day-ahead market  intra-day market and  balancing market  ancillary services market  capacities allocation market wholesale electricity market capacities market

5. ANRE Liberalization of the electricity market in Romania- results and perspectives for integration of energy markets on regional level  The Electricity and Natural Gas Law no. 123/2012 - commercial transactions (for electricity and ancillary services also) are performed in a manner:  transparent  public  centralized and  non-discriminatory  The electricity retail market  competitive retail market around of 55%  regulated market around of 45%

6. ANRE Liberalization of the electricity market in Romania- results and perspectives for integration of energy markets on regional level  Memorandum of Understanding –EC and and Letters of Intent with the IMF  a gradual approach to the process of deregulation:  end of 2013 – 100% competitive M for non-households  end of 2017 – 100% competitive M for households  Unbundling model for system operator was adopted ISO  the Government Emergency Ordinance no.18/2013  This model allows the certification:  in compliance with European provisions  maintaining the existing ownership  an effective unbundling of transmission activities from production and supply.

7. ANRE Liberalization of the electricity market in Romania- results and perspectives for integration of energy markets on regional level  Transmission service tariff  using the revenue cap methodology  differ by nodes (zones) - impact of the injection or extraction of electricity (nodal marginal cost)  approved annually by ANRE  Distribution tariffs  monomial (lei/MWh) (“tariff cap basket” )  differentiated by three voltage levels: high voltage (110 kV), medium voltage, low voltage  differentiated by distribution operators  regulation periods are set for 5 years

8. ANRE Liberalization of the electricity market in Romania- results and perspectives for integration of energy markets on regional level  Capacity allocation  bilateral coordinated  explicit allocation  long-term (annual and monthly) and  short-term (daily and intra-daily)  participation on the CAO project  The implicit allocation and market coupling  Romania-Bulgaria Working Group on project - February and October 2012  Cooperation should continue to comply with the 2014 target regarding the European market integration.

9. ANRE Liberalization of the electricity market in Romania- results and perspectives for integration of energy markets on regional level  The implicit allocation and market coupling  On 11th of July 2013 representatives of :  national regulatory authorities (ERU, URSO, Mekhi, URE and ANRE)  transmission and system operators (CEPS, SEPS, MAVIR, PSE and Transelectrica) and  the market operators /energy exchanges (OTE, OKTE, HUPX, TGE and OPCOM) from the Czech Republic, Slovakia, Hungary, Poland and Romania  have signed a Memorandum of Understanding regarding accession of Romania and Poland to MC- CZ,SK and HU

10. ANRE Liberalization of the electricity market in Romania- results and perspectives for integration of energy markets on regional level  The implicit allocation and market coupling  In this process PXs faced two major challenges:  implementation of PCR solution to be compatible with NWE project and  decision on Market Gate Closure Time (11h00 or 12h00)  Based on survey results all five NRAs commonly concluded that:  MC project will start with 11h00 GCT  involve the day-ahead electricity markets of the Czech Republic, Slovakia, Hungary, and Romania  coupling with Polish market will be implemented in the context of CEE FBMC

11. ANRE Liberalization of the electricity market in Romania- results and perspectives for integration of energy markets on regional level  The future developments of the electricity sector  Full implementation of the third package provisions  Gradually phasing-out the regulated tariffs for final customers and development of competitive electricity market  the principle of „non-reversibility” of regulated tariffs, once a customer has opted for the competitive market;  Ensuring customers’ protection  identification of the vulnerable customers and measures to protect them  Consolidation of competitive markets for electricity  increased transparency and centralizing transactions

12. ANRE Liberalization of the electricity market in Romania- results and perspectives for integration of energy markets on regional level  The future developments of the electricity sector  ANRE has the power of investigation of electricity markets functioning, decides and imposes any necessary and proportionate measures to promote effective competition  ANRE has the power to cooperate with the Competition Council and with financial market regulators or with European Commission for investigations in the field of competition law;  Monitoring the operation of the electricity market  Attract new investments in the sector

13. ANRE AUTORITATEA NAŢIONALĂ DE REGLEMENTARE ÎN DOMENIUL ENERGIEI-ANRE Tel.: (+ 40 21) 311 22 44 Fax : (+ 40 21) 312 43 65 Email: anre@anre.ro; info@anre.roanre@anre.roinfo@anre.ro www.anre.ro Contact