Business Arena nr. 108 - Energy outlook 2022

Enjoy the Quality Admire the Value

2022 No. 108

49lei

www.businessarena.ro

magazine

ENERGY2022

OUTLOOK

www.business-arena.ro

L UXURY &L IFESTYLE

TOP BRAND pages 49-71

Energy security concerns are particularly high these days, and Russia’s actions in Ukraine have generated widespread debates on the need to accelerate the implementation of green energy technologies. Meanwhile, the world has already been facing energy chaos, with pandemic disruptions to transport sending energy prices soaring. pages 25 - 43

E D I T O R I A L by

Cristian Cojanu

www.business-arena.ro www.businessarena.ro

OUT OF THE FRYING PAN INTO THE FIRE As the latest wave of the pandemic showed signs of subsiding, markets and businesses started revving their engines, anticipating further relaxation of Covid-19 restrictions. But, the war in Ukraine threw cold water on the business community's hopes for an easier time ahead.

In fact, the International Monetary Fund (IMF) has recently suggested that "while the situation remains highly fluid and the outlook is subject to extraordinary uncertainty, the economic consequences are already very serious". The financial institution notes that "energy and commodity prices - including wheat and other grains - have surged, adding to inflationary pressures from supply chain disruptions and the rebound from the Covid’19 pandemic". In addition, they expect even more economic damage if the the conflict escalates. "In many countries, the crisis is creating an adverse shock to both inflation and activity, amid already elevated price pressures.

Monetary authorities will need to carefully monitor the pass-through of rising international prices to domestic inflation, to calibrate appropriate responses. Fiscal policy will need to support the most vulnerable households, to help offset rising living costs. This crisis will create complex policy tradeoffs, further complicating the policy landscape as the world economy recovers from the pandemic crisis," the IMF concludes.

Meanwhile, Romania's economic growth prospects have somewhat deteriorated, with Erste Group Research revising down its forecast to 3.2% y/y from 4.0%.

Detailing its prediction, the Austrian-based group emphasized that "to reach 3.2% y/y growth this year would imply an average sequential growth of 1.2% q/q which seems quite optimistic". In a separate release, the same group notes that the Economic Sentiment Indicator (ESI) in Romania "was flat at 101.2 in February on rising manufacturing confidence and shrinking sentiment in services, retail trade and construction". Employment Expectations Indicator (EEI) improved marginally to 108.9 in February from 108.4 in January.

"We monitor the economic impact of the military conflict in Ukraine and we will adjust our forecasts accordingly once we have more clarity. Upside risks to our year-end inflation estimate of 9.4% y/y are mitigated by some measures recently announced by the Romanian government.

Price caps and subsidies for energy were announced to be extended," the Erste Group Research release read.

Moreover, Erste Group's research team believes that "2022 could bring a small adjustment of Romania's external imbalance to 6.4% of GDP", while "depreciation pressures on the RON should persist, with the NBR trying to curb the slide of the national currency due to inflationary concerns". Their end-2022 EUR/RON forecast stands at 5.05.

Find more opinions and predictions about domestic and global economic and geopolitical trends in this edition of Business Arena. As always, we continue to keep an eye on all the issues affecting the business community.

FROM ALL OF US HERE AT BUSINESS ARENA, ENJOY THE QUALITY, ADMIRE THE VALUE!

1

2

INTERVIEW

KANAL D CELEBRATES 15 YEARS OF SUCCESS At the 15th anniversary of Kanal D's presence on the media market in Romania, Ugur Yesil, CEO and Executive Board Member of Kanal D, talks about the journey of this station that has stood out as a true trend setter in terms of TV formats, the biggest challenges and how the future is shaping up. Today, Kanal D is in the top three generalist TV stations in Romania and represents a landmark of relevant information and entertainment for millions of viewers.

Kanal D turned 15 on March 1! Did you believe that Kanal D would reach this level of success in such a short time and in such a competitive market?

How do you see this whole journey?

I have been here, at Kanal D, since its launch in the Romanian market, and I am connected to this organization in so many ways: I was part of the management team when the station was launched, and I contributed to the development of this business from scratch in such a challenging and competitive market. Later on, I took over the GM position and developed, together with my team, a whole new business strategy, from redesigning the management team to content approach and station performance, and the progress has been visible from one year to another. We started with changing the content of Kanal D News, introducing a more personal and unique approach when reporting on citizens' agenda and other relevant information. Then we offered a more balanced mix of internal productions, Turkish series in prime time and successful international formats.

Also, there is the emotional component of this journey. My team and I have had many

challenges, difficulties, but also joy and satisfaction. During these years, we have became friends, shared so many memories, supported each other, and we have all had a strong feeling of belonging to an extended family, the Kanal D family.

Of course, I thought success was possible, we set out with this desire to reach the top. But this was possible thanks to an extraordinary team, and most of the people who were there in the early days of Kanal D are still here. We launched Kanal D to be a major player in the TV industry, we entered a fierce competition with the intention of succeeding, with the common goal of performing, of being in the top three most watched television channels in Romania. Years later, we started having a more strategic approach with a clear strategy of differentiation, this being modeled in time, depending on the objectives, but also on the context, on the external challenges. I am proud of all the achievements of my team. Today, Kanal D is in the top three televisions channels in Romania, often in first or second place, both in day time and in prime time. Kanal D ranked second in terms of audience on prime time national target in 2021 (20:00-24:00), and this trend has also been maintained this year.

3

UGUR YESIL What do you think was the biggest challenge in establishing Kanal D's longterm strategy?

From the beginning, the biggest challenge was finding those elements of differentiation, because we always believed that we have to come up with something powerful, with an alternative content, something that would make a difference on the Romanian TV market.

At first, we had a star and program transfer policy, with huge names in the market of those times joining Kanal D. Later on, we found the best option for us and for our audience, we came up with products to differentiate us and to offer our viewers an alternative. This proved to be a winning strategy for us, but it wasn't

easy from the beginning. We tested, we improved and innovated, and many shows have became benchmarks in their category.

I exemplify with a reality show that became a phenomenon at that time, "Nora pentru mama". Also, we introduced in Romania the Turkish series, while the South American soap operas were very popular. Actually, Kanal D has changed the consumption habits. The Turkish series have become trendsetters and they are maintaining that position. Then, we introduced the News with a different approach, one closer to the viewer, launched sports reality shows, such as "Exatlon". That has changed mindsets, bringing back important values such as camaraderie, overcoming boundaries,

4

INTERVIEW

sportsmanship. Moreover, children have begun preferring team play, in front of their homes, instead of a laptop or phone screen, which has made us very happy, as the habits of a generation are changing for the better. I would also like to mention "Bravo, ai stil!", a unique show on the market, whose seventh season has recently ended. It is an inspirational show, which also has an educational value, as style is not just about clothes, but also about attitude and the way you relate with yourself and others.

The marathon interview show "40 de intrebari cu Denise Rifai" is a breath of fresh air in terms of TV formats, being a highly appreciated journalistic endeavor, based on a huge research work, which generates a lot of debates in the press due to the statements made by the show's guests. I believe that such productions have a huge impact on the market, changing consumer habits, generating trends and huge online communities, and they say a lot about the power of Kanal D to innovate and create models.

Another challenge has been keeping up with the dynamism of the industry, to follow content and technological trends, so that we can deliver best quality products to our viewers. Also, we have diversified the ways of interacting with our audience.

We developed our digital portfolio with our websites kanald.ro, wowbiz.ro, Kfetele.ro, stirilekanald.ro, radioimpuls.ro, and then we introduced special talk shows produced specially for our online platforms or the WOWnews Youtube channel. This is how Radio Impuls joined the Dogan Media International Group, three years ago. In 2021, Kanal D expanded its Digital Division by creating video content exclusively dedicated to the online community. TheXclusive productions can be

accessed through any screen (phone, tablet, laptop), and match the preferences of a very diverse audience.

But I would like to mention that, above all, our direct and sincere connection with our public has been important in achieving this success. All these years, we have listened to its voice and stood by it, we have shared common values. This is obvious in our news tone and manner of production, in the stories from "Asta-i Romania!”, in the way we integrate the social component in international formats.

At "Roata Norocului”, the stars play for social cases and all the proceeds go to these vulnerable families. Also, we have always been involved in the life of our society through dedicated campaigns, some raising awareness about issues such as violence against children, or raising funds for various causes.

How has the profile of the Kanal D viewer changed over the years?

Kanal D is a general television station, and we want to be a permanent source of quality entertainment and clean, relevant information for our viewers, young, mature and elderly, women, men and children, from all social backgrounds and geographical areas of Romania and not only. The profile of the Kanal D viewer has become much more complex

www.business-arena.ro www.businessarena.ro

strongly believe in the team power and the responsibly that each of us take in delivering the best results, no matter the department. I work closely with my team every day, I count on their opinions and they trust me to lead them towards achieving our goals. At the same time, I encourage the professional evolution of each individual and performance.

Together we have built a very strong brand, a notable player in the media market. over time. Practically, now we are following the structure of TTV. If in Kanal D's early years the audience was mostly female, mature and elderly, in time, we have managed to attract, on top of the existing audience base, a new public, and now Kanal D has a balanced, socially active and heterogeneous audience. It has also attracted male and young audiences, who have come to us for shows such as "Bravo, ai stil!" and "Exatlon", but also because of the interactivity between digital, radio and TV. This diversity also comes from the specifics of the shows, which respond to various tastes.

There are shows that the whole family can watch, such as "Roata Norocului" or "Teo Show", shows that have a mature target audience, interested in talk shows, debates and news, such as "40 de intrebari cu Denise Rifai". Reality shows such as "Ochii din umbra", "In cautarea adevarului" or "Se striga darul" are very appreciated by those attracted by impactful stories from everyday life.

Certainly, the leader, the one who gives the direction of the team and the one who inspires it, counts in fulfilling these objectives. How would you describe yourself from this point of view?

The leadership model I believe in is the one that nourishes confidence and mutual trust, I

What's next for Kanal D, what are you preparing for your viewers?

We plan to focus on delivering an attractive experience, more information and quality entertainment to those watching our TV programs, listen to Radio Impuls and follow us online, on the official websites (kanald.ro, wowbiz.ro, stirilekanald.ro, kfetele.ro, radioimpuls.ro) or on theXclusive. We are still preparing the launch of new productions, we are already on the home stretch with the morning show "Dimineata cu noi", which will be broadcast from Monday to Friday, from 8:00.

We are casting for the easiest to understand and spectacular quiz show in the history of world television, a show that will be presented

by Dan Negru.

Also in terms of news programs, I would like to mention that we have a new news section, this time in the morning, where Kanal D viewers will be able to keep up with the latest fresh information by watching Kanal D News from 07:00, every day, from Monday to Friday.

We will continue to invest in content, but also in the latest technology, so our audience can have a total show, a real 360 degree information and quality entertaining experience through a complete media package, TV, radio, and online.

5

6

OPINION

FISCAL RULES ARE NOT ENOUGH FOR ECONOMIC STABILITY! Apart from the effects of the pandemic and the brutal rise in energy prices, which have unsettled the entire society, Romania's economic troubles have long been linked to its large budget deficits.

BY DANIEL D|IANU With its structural component, the budget deficit brought us in a situation where we had very limited room for maneuver when the economy was on the verge of deep recession, after the outbreak of the pandemic. The suspension of fiscal rules in the EU during 20202022 has allowed an alleviation of the suffering for people and for the economy, but it did not erase the need for a major fiscal/ budgetary correction in a few years' time - in order to bring the budget deficit below 3% of GDP in a sustainable way, to stabilize public debt.

In a previous article ("Regulile fiscale in UE si Romania," Fiscal Council's website, February 7), EU's common fiscal rules were examined along with the reforms designed to make them more appropriate in the current circumstances. And it was emphasized that, while an adaptation of the fiscal rules is understandable, the need for fiscal/ budgetary correction in Romania remains a priority.

However, there is another aspect that is less present in public debate, and it should not be omitted when judging the relationship between public budget, budgetary policy and economic stability. Although poor budgeting, deep budget deficits, and pro-cyclical policies cause distress in the economy and affect its stability, not everything boils down to the public budget as a crisis generator. Romania's economic history, just like every balance of payments crisis episode in the world, shows that problems can originate in major imbalan-

ces between saving and investing in the private sector, in the excessive expansion of lending to private companies. Let's remember that Romania's headline budget deficits (which do not take into account the cyclical position of the economy) were not sky-high between 2007-2008 (although the 2008 cash deficit was cosmeticized by the revenues obtained from the sale of BCR), while its external (current account) deficits were in double digit territory. External deficits had also exploded in other EU countries. There were years of speculative bubbles in many European economies, including Romania. Something similar happened in the Asian crisis of 1997-1998, and previously in Latin America. And it became obvious that, quite often, it was not the public budgets that were to blame for liquidity/ balance of payments crises, but an excessive indebtedness of the private sector, a major lending expansion (not for production), which invites a crisis of confidence in national currencies, and causes currency crises. The euro area sovereign debt crisis illustrated a mix of public over-indebtedness (eg. Italy and Greece, Spain with hidden provincial debt) and private over-indebtedness - the most notorious example being the grotesquely large private bank debt in Ireland (Iceland experienced something similar outside the euro area).

Appropriate fiscal rules should be accompanied by macro-prudential rules, which should ensure that credit expansion does not jeopardize financial and economic stability.

This is the reason why, after 2009, there have

LEADERS Business Arena is proud to announce the 2022 issue of its annual publication looking at the makings of good leaders, their vital contribution to overall business success and the future talent pipeline in Romana.

2021

Good leadership is essential to business, to government and to groups and organizations that shape the way we live and work. Leadership is also important because it sets a clear vision and commu nicates effectively. The clear vision gives staff members a better understanding of organizational direction and makes them realize their roles and responsibilities.

According to the Bersin by Deloitte report High-Impact Leadership Development, organizations with stronger “leadership maturity” are 11 times more likely to have a high number of leaders who can build talent for competitive advantage. And they’re seven times more likely to have a high number of leaders who can inspire people to follow them.

For more information please contact Cosmin Stangaciu at cosmin.stangaciu@business-arena.ro or phone 0755.274.125

8

OPINION

been more and more discussions about macroprudential rules in the world. New institutions (ESRB / European Systemic Risk Board, ESMA, EIOPA) and instruments have been created in the EU, aiming at monitoring and influencing lending trends, financial stability. In Romania, there is the National Macroprudential Supervisory Committee, which examines systemic risks to financial stability and requires cooperation between the NBR, ASF and the Government.

Along with price stability, EU central banks have placed financial stability at the heart of their policies based on considerations validated by the evolution of economies and the analytical interpretation of crises.

THEREFORE: - Price stability does not automatically ensure economic stability; - Quasi-balanced public budgets can be misleading if external deficits become too large due to an "exuberant" expansion of lending; - Public budgets must take into account "hidden liabilities"; - Corrections of external deficits can be extremely painful if based on market reaction only; - For the international financial organizations, what basically matters is the country's total external indebtedness, which includes public and private debts; - The state is expected to act as a guarantor, if the financial soundness of a country is questioned, including for private sector operations - Systemic risks must be constantly considered - Systemic risks also derive from the increasing complexity of financial markets, from the extension of the "shadow" components (including crypto assets), possible cyber attacks.

It can be argued that 14-15 years ago,

DANIEL DAIANU Romania's current account deficit was in double-digit territory, while in recent years, 2021 included, it has hovered around 5-7% of GDP. But we should not overlook that Romania has large budget deficits (that are unsustainable without a correction), that public debt has increased considerably (tripled since 2008, even if it is still below 50% of GDP), the volume of non-debt financing of the current account deficit has dwindled in recent years (it is below 70%), monetary policies are being tightened around the world due to the persistence of sharply rising inflation, and financial markets increase the cost of financing for economies perceived to be more vulnerable.

And, pay attention, the EU's neighboring economies do not have dangerous external imbalances.

When analyzing what reduces systemic risks, a combination between fiscal and macroprudential rules seems appropriate; together they must prevent episodes of acute financial and foreign currency crisis. There is one more rule to be added, although it's not written in any European/ international good

www.business-arena.ro www.businessarena.ro

practices book: the need to have tax revenues above a critical threshold, which would allow adequate financing of essential public goods, the ability to respond to adverse shocks.

Specifically, it would mean that Romania should reach a tax revenue level (including contributions) in excess of 32% of GDP from the current level of about 27% of GDP (the EU average is 40%, and the emerging economies in the EU reach 33- 34% of GDP).

Fiscal and macro-prudential rules are part of the architecture of macroeconomic policy building, but they are not entirely clear about the economic progress of countries that excel in competitiveness. Good economic performance requires systematic productivity gains and advantageous placement in value chains; there is a need for investments, (targeted) industrial policies to encourage the development of top sectors, intense innovation, valuable human capital.

It must be said that more or less balanced internal and external balances, which can be easily financed, do not always entail a proper use of resources. When balanced balances are accompanied by a massive under-utilization of resources, balances are precarious - they denote a suboptimal allocation of resources.

And this situation can be favored by an overvalued exchange rate, which encourages imports and discourages exports. But what matters most to competitiveness is a favorable placement in cross-border value chains (production), the systematic development of production of exportable goods and services, or which can replace imports - the so-called "tradables." Poor balances also emerge when the distribution of income, of gains in the economy, in society is very asymmetric.

NGEU is industrial policy in the EU, taking into account the big energy issue and geopolitical competition. PNRR has a similar relevance for Romania. However, it has an additional dimension generated by a competiti-

veness deficit. PNRR can significantly increase the economy's competitiveness, it can improve the quality of internal and external balances. The capitalization of PNRR is a "battle for heavy water" in Romania's case.

The fiscal consolidation must reduce external deficits (the twin deficits issue has been visible in recent years - eg.: in 2021, the cash budget deficit reached 6.7% of GDP and the current account deficit was 7% of GDP), but macroprudential rules should not allow an expansion in lending that, instead of favoring productive investments, would support an import-based demand, maintaining dangerous external deficits.

A legitimate question is why we should be concerned about the expansion of lending to private companies when private debt is about 27% of GDP (much lower after the financial crisis, when it stood at almost 40% of GDP), probably the lowest in EU. An analogy can be made here with the issue of the public budget, given that the domestic public debt is still at a reasonable level in the EU context (the public debt of the euro area is about 90% of GDP).

The problem is a debt dynamic that can upset the balance. And here we have to see what loans are financing - it's one thing to finance the production of tradables and quite another to build shopping centers and stores that support a demand for imports. In addition, a current account deficit of 5% of GDP may be more convenient than a 4% deficit if its financing does not generate debt - let alone credit orientation (which is financed with it).

The capitalization of Romania's natural resources must be much more profitable for our economy.

The entire economic policy must try to improve competitiveness, economic productivity, to obtain the most advantageous positions in value chains/ production, which will allow increasing incomes for Romanian citizens.

9

10

OPINION

ABOUT FIGHTING INFLATION "Inflation occurs when people start talking about inflation," says a famous quote by Alan Blinder, former Fed Vice-Chair, between 1994 and 1996. Well, there is a lot of talk about this phenomenon today, and taking a look at Google trends will reveal that the term "inflation" has seen new record levels in Romanians' searches. Moreover, the inflation "fever" seems to have engulfed the entire world. However, inflation can have several triggers, and I'm going to explain that in this article.

BY CRISTIAN POPA Inflation is a devious "tax," because even though we pay it, it is not visible. It is not included in our annual tax liability calculation, and it does not appear on online tax payment platforms either. And when it's low, it's difficult to perceive. The inflation bill is paid as goods and services prices increase. Thus, it is mainly paid by those with fixed incomes, which are not adjusted up quickly enough, and by those with bank savings, with cash saved under the mattress, or invested in instruments with fixed income. And if inflation affects food prices, those with low incomes are the most affected, because they have a bigger share of food in their expenditure pattern. Even if revenues are adjusted up, rising with the rate of inflation, let's

say, inflation remains a tax on savings.

Throughout history, mankind has gone through many social tensions and even revolutions because of rising food or energy prices.

Generally, a transaction involves a product or a service on the one hand and a certain amount of money on the other. Inflation represents a general increase in goods and services prices. So, the inflation generated by shocks on the supply side is not inflation, unless it feeds core inflation, thus becoming generalized. If we refer to money, inflation erodes its value, and more money is needed to buy the same thing. So, goods are not necessarily scarce or more expensive, but the money is "cheaper."

Another important aspect during periods of high inflation is the distortion of economic calculation in the economy, and an increase in investors' appetite for assets that preserve their purchasing power or that can bring real positive

www.business-arena.ro www.businessarena.ro

returns, thus creating the risk of "bubbles."

Inflation appears as a result of economic overstimulation triggered by decision makers, in other words, by state intervention. And over the last year, inflation has resurfaced globally due to the negative impact of the pandemic on the supply side and the positive impact of fiscal and monetary stimulus schemes on the demand side. Expressing his concern, former US Secretary of the Treasury Larry Summers described the situation very vividly, saying that injecting more demand into the economy than there is supply (i.e. actual production) is like filling the tub with hot water: the feeling is wonderful, but if you don't turn off the water in time, the water will "overflow." It is much harder to clean up than to prevent the flooding.

On top of the demand stimulus generated by governments, many services were not available due to mobility restrictions and social distancing regulations, therefore demand focused on goods. In the US, for example, the pandemicinduced supply chain problems and microchip shortage reduced the volume of goods on the shelves and the number of cars produced. So, there was high demand and lower supply. At the same time, the "helicopter money," freshly printed by the Fed and "dropped" onto citizens by the US government in order to stimulate consumption, increased demand. So more money was pursuing fewer goods.

The energy markets, which are responsible for much of this inflation, have also suffered from the pandemic: investment fell in 2020, but demand returned sharply in 2021. Isabel Schnabel, a member of the European Central Bank's Executive Board, recently pointed out that the "green transition" could be inflationary.

The closure of coal-fired power plants (as well as nuclear power plants in some countries), the rise in CO2 certificate prices and the reduction in fossil fuel consumption, following the implementation of "greening" policies, show exactly this: energy costs are rising, sometimes significantly. Reducing pollution and greening the energy system is probably necessary, but it

is expensive. Reducing production when demand stagnates or even increases requires new energy sources, and in their absence there will be imbalances in the market that lead to high prices and shortages. And over-regulation also discourages investment and increases costs.

Inflation can become destructive if it is not kept under control, reaching high levels. Without the right decisions, it can turn a country's economy upside down. A famous example happened in 1922, in the Weimar Republic (interwar Germany): inflation became so high that banknotes were burned in stoves to heat the houses.

According to the latest data, the US inflation has hit a 40-year peak of 7%. In the euro area, inflation has reached a new high of 5% since the creation of the euro. In Romania, the inflation has soared to 8.2%, driven by a hasty energy price liberalization, reaching a level unseen for over a decade. The recent developments clearly illustrated in the graph below.

With such inflation rates, we can confidently say that the price of money is going to increase, as central banks must take measures. But not alone. For an optimal result, several decision makers must join forces: we need to return to fiscal discipline, fiscal policies must be normalized, energy policies such as the greening of energy systems, but not only, need to be

carefully analyzed and revised, as they they have caused this inflationary shock. And, in general, producers of goods and services must be allowed to do their job. We need to remove barriers, bureaucratic or otherwise, raised in the way of aggregate supply.

11

12

OPINION

Central bankers and the tiger's tail Friedrich Hayek referred to widespread inflation as the tiger whose tail central banks hold, ideally from a distance. If the tiger wakes up and the central bankers find themselves clinging to its tail, they have two options: they either keep clinging to the tail, annoying the animal more and more (inflation accelerates, it becomes galloping inflation, an endemic problem), or they release the tail and they are bitten by the tiger (interest rates must increase aggressively, thus creating recession and high economic costs, sedating the tiger). Central bank decisions are not easy, but that is their role. Once they have awakened the tiger, they have a choice to make: the cost of high inflation or the cost of raising interest rates.

The treatment for inflation The good news is that central banks have a treatment for inflation. It involves increasing interest rates, i.e. the cost of money. It is not the only possible remedy, but it's an important one. It works much better if it is supported by tax adjustments and coherent sectoral policies, in the energy sector, for example. The not so good news is that this antidote is not pleasant (because it has side effects), it does not work immediately (takes time to take effect), and, in some cases, like the presence of an exogenous shock to monetary policy (gas and electricity price shocks, for example), it does not work or it's efficiency is extremely low, amid significant economic costs.

That is why it must be used with caution. Thus, increasing interest rates encourages savings, to the detriment of consumption, reducing demand and price pressure. Lending also becomes more expensive, making consumption on borrowed money less attractive, again reducing pressure on prices. Last but not least, inflation expectations are tempered down.

Low interest rates, below the equilibrium level, make the situation worse, allowing inflation to perpetuate, see the case of Turkey. Raising interest rates is the lesser, but necessary evil, because the alternative to it is the (much) greater evil: inflation, whose negative effects we have discussed above. But things are more complicated than that: if it is not quickly dealt with, inflation can

accelerate, feeding on... inflation, through the channel of anticipation, by entering a wage-price spiral. The anticipation channel represents people's perception of the future evolution of prices. If inflation expectations are high, higher prices will be asked when negotiating long-term contracts, and once these contracts are signed, (inflationary) expectations turn into actual price increases. With higher real inflation, future contracts will look for even higher prices, and so on. It's a spiral that doesn't end well. That is why it is very important for central banks to anchor expectations and maintain a high level of credibility. They must convince economic actors that inflation will actually be kept on target, and if it drifts away, banks will quickly take corrective action. Of course, the anticipations are also influenced by fiscal and sectoral perspectives and the expected reaction of the offer.

The wage-price spiral is a clear example of decoupling: if the public no longer believes that the central bank can control inflation, it demands wage adjustments that cover their higher inflation expectations. Once accepted, these wage increases will translate into more expensive products, cost pressures on manufacturers and service providers. These pressures will generate more prices increases, so the fear of inflation will generate… more inflation. Of course, entering such a spiral, as the name suggests, will lead to continued increases, at ever-higher levels, until the measures taken by the central bank will again be convincing enough in the eyes of the public.

In most emerging countries, the "treatment" against inflation has started, but preparations are also being made in developed countries: the Bank of England has begun, the Federal Reserve and the Bank of Canada are considering accelerating the start of the monetary policy tightening process.

Only the European Central Bank is counting on a stabilization of inflation and a gradual decline this year, choosing to wait.

Treatment depends on the decisions of several doctors Relaxed or overly relaxed fiscal policies can be inflationary. While at the beginning of the pandemic, the fiscal policy stimulated the

www.business-arena.ro www.businessarena.ro

aggregate demand by increasing deficits, thus generating more debt, now the opposite is necessary: a withdrawal or reduction of incentives, a return to fiscal discipline and reduction of indebtedness. If indebtedness increases too much, unsustainably, and the payment of the public debt at maturity is weakened, then “perceptions are adjusted accordingly and can generate inflationary expectations of a fiscal nature. In other words, reducing inflation requires a simultaneous strengthening of monetary and fiscal policy," thus, "primary budget deficits need to be reduced more rapidly, so as not to weaken the ability to pay public debt." (Lucian Croitoru, “Cum s\ cre[ti economia când reduci infla]ia [i deficitul bugetar,” 2022, republica.ro, hotnews) Under the current global inflationary conditions, and in the context of very high indebtedness levels, fiscal consolidation is not an option, it's a necessity.

Implementation of treatment in Romania Romania cannot afford to stay out of the global trends without being penalized by the financial markets with exchange rate pressures and generally higher inflationary pressures. In this context, in Romania, the central bank (NBR) has already operated three monetary policy interest rate increases, adding 0.25 percentage points each time. These measures were accompanied by two widenings of the variation band between the deposit facility (offered to commercial banks depositing their surplus local currency with the NBR) and the lending facility (or Lombard, used for banks' borrowings from NBR). Coupled with the tight liquidity control that the NBR has pledged to maintain, the price of money should hover around 3%, 1.25 percentage points higher than during the same period of last year.

The nature of the inflation shock is important: of the 8.2% (December inflation rate), 4.2% is attributed to the direct effects of higher energy prices, so more than half. It must be emphasized that certain prices cannot be controlled by the NBR: for example, the price of gas, electricity or the administered prices (the price of a tram ticket or cigarettes), against which the central bank cannot fight, because its instruments have little or no influence on those prices. But it can't ignore

them either. These factors, which are not under NBR's control, are putting pressure on the costs of other products and services NBR can influence, creating second-round effects, also on expectations, which are already visible. It is precisely these effects that NBR is trying to temper. Thus, a certain dose of treatment is necessary, the risk being the transfer of high energy costs into the basket of consumer products and de-anchoring inflationary expectations. Thus, total inflation measurement, which includes volatile and administered prices, may have small overruns over longer time horizons or large overruns over very short periods of time, without necessarily affecting core inflation - price inflation on which the central bank has control. However, large overruns cannot be tolerated for long periods of time, and require a strong reaction from the central bank. Because, otherwise, the lack of reaction would allow the installation of generalized inflation and would trigger a loss in public confidence, therefore expectations, with the negative effects specified at the beginning of the article.

Last year, many claimed that NBR should reduce interest rates to zero or even to negative levels, but the central bank avoided that trap. The strategy employed this year has focused on a gradual intervention, supplying the treatment in small doses, in the context of a declining economic growth, with a probable economic stagnation in the last quarter of last year, predicted by the high frequency economic data. At both November and January meetings, there was a consensus among all NBR Board members that the interest rate should be raised, the only differences of opinion regarding the proposed pace of change: seven votes supported a gradual action, two votes favored a firmer action. In my view, a firmer approach would have been appropriate. There were solid arguments for both options, but what is important is that action has been taken against inflation, and tougher measures are not excluded.

Treatment has begun and must continue This opinion article is obviously offering a simplified view compared to the detailed, farreaching analyzes that the central bank carries out before making any monetary policy decisions.

13

14

OPINION

PAYING THE PRICE FOR THE LOSS OF CENTRAL BANK INDEPENDENCE In the US, in the UK, in the eurozone, in the EU, the inflation surpasses even the worst-case scenarios. The reasons behind it are presented as “exogenous”, namely they are somehow extrinsic, beyond the central banks’ control. But are they truly exogenous only? And are central banks truly firefighters to the rescue or are they just putting out the fire they started themselves?

BY RADU CR|CIUN “Economics is not an exact science. It’s a combination of an art and elements of science”, said Paul Samuelson, the first American to win the Nobel Prize in Economic Sciences. I cannot but agree with him and, in my opinion, the unpredictability of human behavior is the main issue here. In the end,

RADU CR|CIUN

human decisions dictate the level of supply and demand in any economy, whether we talk labor, capital or attitude towards consumption/saving. The globalization added complexity to all economic processes, which only made it less likely for the accuracy of economic sciences to improve.

Therefore, central banks are, in their decision making process, far from having a toolkit able to provide firm estimates about future economic developments, about the right time for intervening or about the consequences of such interventions. Despite the complex economic modeling they use, in the end, they still make sure to adjust it to an “expert opinion”. Meaning an “educated guess” of market analysts and experts. This may be the “art” part Samuelson was talking about.

Current and expected developments thus form the basis for monetary policy decisions made by central banks. As long as these decisions were kept within the conventional routes, the risks related to the approximations that came with the inaccuracy of economic sciences have not been significant. The effects of the central banks’ measures meant to manage the market liquidity and adjust the reserve requirements or the interest rates fluctuations produced effects in the economy, gradual adjustments, but never shocks.

However, the risks of assessment errors increased significantly once the logic of “conventional” interventions was disregarded, more precisely once they decided to release the “atomic bomb” of quantitative easing. Banning central banks from purchasing the debt of their own country has been,

www.business-arena.ro www.businessarena.ro

until the 2008 crisis, engraved in scarlet letters on the first page of any monetary policy ABC. The reason behind it was the inflationary consequences that such an approach, involving the printing of money, would cause.

But this fundamental prohibition was wiped out during the 2008 crisis when the exceptional market circumstances called for exceptional interventions from the central banks to prevent the total financial market foreclosure. Yet, the money printing drug, which soothed the pains of the economic crisis at first, has been stubbornly used for a decade to eventually turn addictive.

Governments and financial markets alike became the prisoners of free money printed by the central banks in order to finance national budget deficits and boost the economy.

The tipping point was reached with the

pandemic, when the liquidity injections surpassed even those of the 2008 crisis. If this solution worked without causing inflation back then, it had to work this time, too, right?

The problem is that such an unhealthy connection between central banks, governments and financial markets cost the central banks most of their independence.

An independence that should have given central banks the freedom to intervene as needed so as to reach their primary goal: price stability. But now, reversing the quantitative casing policies became increasingly hard to do, given its impact on the governments’ capacity to finance the deficits or the negative impact on stock market trends.

When you want to use a high-impact bomb in a war to get the expected results with minimum collateral damage, you need precision guidance equipment. And yet, the

15

16

OPINION

central banks decided to guide the ballistic missile of quantitative easing using a compass. At first, the bomb was powerful enough to make believe it reached its target.

But now they see that reaching the target was due to the large-scale shock instead of its precision. Because central banks appear to have forgotten that economics is not an exact science.

Illustrative for this is the mishandling of the inflation which was “transitory” enough to be ignored, then was no longer “transitory” and required decisive interventions from the central banks.

The problem is that, despite the lack of economic models which provide for an accurate assessment of consequences, the central banks used up the money printing

option during the pandemic, concerned with containing the economic recession and supporting the governments. Practically, they underestimated the strong economic recovery they were about to cause hand in hand with the governments that used the free money to pay out subsidies and other economic incentives.

Instead of a gradual economic recovery that would have allowed businesses to adjust their modus operandi through a seamless

transition, the aggregate demand shock induced major tensions to the global supply chains, the energy markets, the labor markets. They all came together under the common denominator of generalized price increases.

It is hard to otherwise explain why the prepandemic economic balances were good enough and put no pressure on prices while, later on, a recovery of the economy to the pre-pandemic levels had such a strong impact on prices worldwide. The explanation can only be the recovery shock caused by an excessive dose of stimuli.

‘Add to this mix the shock of the clean energy transition... Because this transition is a shock in itself.

The transformations that energy industries must undergo are fundamental, require capital and time, above all. Or the last thing you want in such an energy transition is an overlap with an economic boom where energy demand soars. So although the agendas of major central banks and governments affirm in bold, green letters their concern for sustainability criteria, they are now partly responsible for the re-start of coal-fired power plants, due to the demand shock they ‘triggered.

Let’s hope that, after having played with the magic wand long enough, like the sorcerer’s apprentices, the central banks will put it back in the box and stop believing in the magic of long term money printing that causes no inflation.

18

OPINION

THE ROMANIAN MACROECONOMIC PICTURE SHOWS MAJOR VULNERABILITIES.

BUT ALSO AN OPPORTUNITY

The twin deficits are a major macroeconomic vulnerability at this stage.

I'll explain why below.

BY CRISTIAN POPA First of all, the deficits are called twin because they grow together, like twin children, the budget deficit creating a current account deficit of the balance of payments. However, we like children, but we don't like deficits.

Simplifying, the current account shows how much currency enters or leaves the country, in a year, from goods and services trade, and incomes. Romania has the largest account deficit in Europe, while the euro area has a significant surplus. Last year, the external deficit increased by 55% to 16.9 billion euro.

The fiscal deficit (the difference between public revenues and expenditures) is not small either, but it is on an improving trend. There is a crucial need for fiscal consolidation, since an economic model based on government consumption, largely financed by debt, cannot be healthy. But a model based on high and very high taxes cannot be healthy either.

Increasing taxation would affect the economy.

Instead, increasing the efficiency of existing resource spending must be the first step; reducing state spending would reduce the fiscal deficit, without imposing new taxes on the private sector or the population.

At this year's budgeted level, with a fiscal deficit of 5.8% of GDP, the Romanian state gets to spend around one leu from new debt

for every five lei of income. It has to borrow almost double, two lei for every five lei of income, to refinance past debts that reach maturity. And budgeting is easier than the actual execution, especially when revenues must outpace spending. The Fiscal Council has expressed reservations about including in its calculations the estimated additional revenue from increasing the efficiency of revenue collection, for example, and it believes the 2022 budget construction is more in line with a cash deficit of around 7%.

The two deficits, taken together, represent a vulnerability to the Romanian economy, because a large portion of it is financed by international markets. And international markets can be "sentimental." There are times when they are very lenient, however, there are also "risk-off" times, when they prefer to finance low-risk countries only. What would a geostrategic conflict in Eastern Europe entail for the markets and deficit financing? I leave it to you to answer that, but I think nothing good.

In addition, the launch of the monetary policy tightening process by the world's major central banks this year increases the risk of capital flight. Also, markets may take a more favorable view of developed countries and be more skeptical about emerging countries, especially those with significant imbalances.

www.business-arena.ro www.businessarena.ro

M ACR O E CO N O M I C P I CT UR E SH O W S

In 2020, the budget deficit was almost 9%, and the current account deficit was almost 5%. In a simplistic and very rough view, in which we divide Romania into two major sectors, public and private, it can be seen that the public sector spent 9% of GDP more than its revenues, while the private sector saved 4% of GDP. The 5% difference is the external deficit, which was entirely generated by the public sector/ budget deficit. But even though they are called twin deficits, it doesn't mean that they are identical. In fact, the name shows the causal relationship between the two.

Opportunity The opportunity is the National Recovery and Resilience Plan (PNRR): 29.2 billion euro in grants and loans at preferential interest rates, aimed at strengthening our economy so it can become more resilient. I think it's very rare for someone to give you a lot of money to grow your business or expand your home without asking for half of it back. But the money comes with certain conditions: to do what you had to do anyway, to reform and discipline yourself, to clean up your house. Romania can gain on two levels: through PNRR investments and funding, which increase the capital stock and thus the potential GDP, and through carrying out structural reforms, which increase productivity and, again, potential GDP. In the context of more restrictive monetary and fiscal policies, PNRR could be the welcome outlet that the Romanian economy needs.

Are we going to use that opportunity?

19

20

CRYPTOASSETS

TESLA REPORTS ALMOST TWO BILLION USD WORTH OF BITCOIN HOLDINGS IN 2021 It had impairment charges of $101 million related to volatile crypto prices Electric carmaker Tesla, Inc. held almost $2 billion worth of Bitcoin on its balance sheet at the end of 2021, the company reported in an SEC filing on Monday, Feb. 7 That figure represents a healthy gain of 33% from the $1.5 billion it spent on buying the asset earlier that year. The carrying value of Tesla's Bitcoin holdings at the end of 2021 was $1.26 billion, and their market value was $1.99 billion.

sive quarters. It recorded impairment charges of $51 million and $23 million during the third and second quarters of 2021. The recent filing revealed that Tesla had total impairment

Bullish on Bitcoin

charges of $101 million related to Bitcoin in all of 2021. The company may have to report more losses this year. The trajectory of crypto markets has reversed in 2022. The price of Bitcoin fell by almost 50% from its highs last year after investors recalibrated their portfolios to shed risky assets in anticipation of a rise in interest rates.

But Tesla is not backing off from its Bitcoin bet. "We believe in the long-term potential of digital assets both as an investment and also as a liquid alternative to cash," the company stated in its filing. It also said that it would increase or decrease its holdings of digital assets based on its view of "market and environmental conditions."

By RAKESH SHARMA

Tesla is among the few publicly listed companies with Bitcoin on its balance sheet. Its CEO Elon Musk has long been bullish on Bitcoin, an asset whose price breached new price highs during the pandemic. The company also accepts bitcoin for purchases of certain products on its website.

As Bitcoin's price reached stratospheric heights, culminating in a high of almost $68,000 in April 2021, Tesla sold some of its Bitcoin stash for $272 million and collected a profit of $128 million from the transaction. A subsequent drawdown in crypto prices forced the company to record impairment charges— losses in the value of its holdings—in succes-

A B e veevnetnst

our partners

BRAND

CELLENCE EX HALL OF FAME AWARDS 2022 Enjoy the Quality * * * * * Admire the Value

Celebrating achievement, innovation, and a strong brand strategy, the 2022 Brand Excellence Hall of Fame Awards Gala will include categories such as:

The Brand Excellence Hall of Fame Awards is the fourth major gala event in Business Arena’s portfolio, expanding the scope of its annual award ceremonies.

Innovation, resourcefulness, perseverance and a culture of responsible risk-taking have helped many overcome major challenges. Thus, the new awards gala recognizes organizations that have achieved outstanding results through initiatives that demonstrate excellence in brand management.

• Automotive Brand of the Year; • Best Pharmaceutical Brand of the Year; • Brand of the Year in Hospitality; • IT Brand of the Year; • Most Admired Telecom Brand; • Best Real Estate Brand; • Romanian Brand of the Year; • Retail Brand of the Year; • Romanian Banking Brand of the Year; • Best Banking Brand; • Most Admired Banking

For more information please contact Cosmin Stangaciu at cosmin.stangaciu@business-arena.ro or phone 0755.274.125

Product

22

AI

DEEPFAKES THE GOOD, THE BAD & THE UGLY

Over the holidays, millions of us saw The Beatles miraculously restored to living color in the Disney+ documentary Get Back. But how many of them realized that the technology used to bring John, Paul, George, and Ringo to our screens is also being used for much more sinister purposes?

The algorithms used to create “deepfakes” – as artificial intelligence (AI)-generated imitations are known – are widely considered by cyber security experts to be a major challenge society will face in coming years.

Websites already exist that can create pornographic images of real people from any regular images of videos – clearly an invasion of privacy that has the potential to cause huge embarrassment. And in the political sphere, we have seen (and heard) fakers put words into the mouth of Barack Obama. While this was done for educational purposes – and other famous examples like TikTok Tom Cruise are clearly made for entertainment – there’s certainly a potential for misuse.

At the same time, the technology also has the potential to create value. And, much like

Pandora’s box of Greek mythology, now that it’s been opened, it can’t be closed again – over 80 open source deepfake applications exist on Github. As I discussed during a recent conversation with Experian’s Eric Haller, I’ve even used it myself via a service called Overdub created by Descript that lets me put words in the moth of my own virtual avatar.

Haller – who, among other roles, heads up Experian's identity services – told me that in many ways, the creation of deepfakes can be thought of as the latest development in the ever-ongoing war between business and counterfeiting.

“You can think back to old spy movies – and spies trying to figure out if the video they

23

are watching is real or not – all those things still happen today – it’s not a new notion,” he told me.

What is real, however, is that – unlike the Beatles documentary, where AI was just used to touch up and restore missing detail, like color – today’s fraud investigators may need to investigate material that is 100% created by computers.

With technology where it is today, there’s a fairly limited chance that deepfake technology would be successful enough to fool someone who knew the subject of the fake. For example, my own AI-voiced avatar might do a good enough job of putting words in my mouth for the purposes of creating a virtual presentation

or webinar. However, someone who knows me well might be able to pick up small differences in intonation and delivery that give away the fact the content is computer-generated.

Haller points out that even the Tom Cruise deepfakes – perhaps the most widely shared viral examples of the phenomena – involved the work of a skilled actor or impersonator, able to mimic Cruise’s mannerisms to an impressive extent. The AI – using algorithms known as generative adversarial networks (GANs) – then simply “blurs” the audio and visual data to align it even more closely with the Hollywood star.

Even after all of this, I would say the result is a piece of work that is very nearly good enough, though not quite good enough, to fool most

24

AI

people. Indeed, anecdotally, I would say the most common reaction on viewing the footage is "that's a very convincing fake," rather than "That's Tom Cruise!"

The danger, of course, comes from the fact that we are clearly only getting started in terms of what is achievable with AI. In five or ten years' time, it’s highly plausible that technology like this will create fakes that are indistinguishable from reality.

There have already been instances of criminals creating faked voices in order to fool banking systems and transfer money between accounts – in one case, to the tune of $35 million. Creating technological defenses against these attacks is one of the responsibilities of Haller and others in his role.

“It could be someone who’s completely fictitious,” he tells me – “It’s probably a lower bar to create someone who does not exist than to simulate someone that does exist and have an interactive dialogue with them.

“My greatest fear … is the interaction that actually fools somebody that knows the individual they are interacting with – I think we’re a long way from there … that requires a confluence of technologies that all need to develop further from where they are right now.

But the lower bar. That’s very credible today.”

As with other forms of AI-driven fraud detection employed by financial services organizations, those developing the technology have found it more fruitful to focus on examining incidental and circumstantial details of the interaction rather than the interaction itself. So, rather than attempting to determine whether a voice on the phone is computergenerated, an investigation may center on how the communication is being made, where it is coming from, what time it is taking place, and whether the parties involved are at risk of being targets of fraud. In this respect, the technology can be thought of as similar to that used by mobile carriers to flag up potential spam phone calls or phishing texts when they arrive at customers’ phones. The dangers only become

more apparent when we consider the fast pace at which we are moving our lives online and the impending arrival of even deeper integration between our lives and the digital universe heralded by concepts such as the metaverse.

“I’ve heard colleagues saying we’ve probably seen a 10-year acceleration into digital in the last 18 months because of the pandemic – my 95-year-old father-in-law orders his groceries online now, a year and a half ago that would never have happened”, Haller says.

With more interactions taking place via Zoom call – from business meetings to consultations with doctors – the scope for impersonation will clearly only grow, which is why the work of identity professionals like Haller will be increasingly important to society.

At the same time, we shouldn’t overlook the positive benefits that this technology will enable. Beyond bringing beloved movie stars back from the grave, or allowing us to enjoy older stars as they were in their younger days, creative (or generative) AI has the potential to cut down on the amount of boring and repetitive work humans have to do. It’s also very useful for creating “synthetic data," allowing us to train AI and robots to become more accurate using data that may otherwise be difficult or dangerous to come by. This could include training autonomous driving algorithms without the risk involved with real road journeys or conducting medical trials without putting patients or animals in danger.

The potential for AI to simulate (or fake) elements of the real world is clearly one of the most powerful aspects of the transformative impact it can have on society. Ensuring this potential is realized in a safe way, without causing harm, is an important task for those who are developing and deploying this technology. You can watch my fascinating conversation with Eric Haller, EVP and General Manager, Experian DataLabs, where we also cover several other ways that AI is being deployed at Experian.

BY BERNARD MARR

www.business-arena.ro www.businessarena.ro

ENERGY SEEKING THE KEY TO ENERGY TRANSITION

Energy market movements and prospects have received widespread attention in recent months, as spiking prices have affected both businesses and the general public. In this special section, Business Arena presents developments and trends from this crucial sector of the global economy.

PAGES 25-43

25

26

ENERGY

WHAT DOES RUSSIA’S INVASION OF UKRAINE MEAN FOR ENERGY AND CLIMATE CHANGE? Russia’s invasion of Ukraine is inextricably linked to the global energy crisis.

With wholesale gas prices already at extremely high levels, in part due to Russia’s actions, the attack on Ukraine has prompted widespread debate over how to respond.

As a major humanitarian crisis has unfolded, there have also been fears that climate action could be relegated by world leaders to an afterthought.

Concerns over energy security are particularly acute in Europe, which is heavily reliant on Russian exports of coal, oil and gas.

Two major narratives have emerged in response.

Many, including leaders from the European Commission’s Ursula von der Leyen to the UK’s Boris Johnson, have emphasised the need to accelerate the roll out of clean energy technologies.

Some politicians have coupled this with calls to boost domestic fossil fuel supplies, so as to reduce the need for Russian imports.

Meanwhile, climate sceptics have made domestic oil and gas their sole focus, in some cases going so far as attempting to argue that clean energy is part of the problem.

Significantly, in terms of concrete energyrelated responses to the invasion, the German government is now aiming to accelerate a shift to a 100% renewable electricity system by 2035, according to reports.

This Q&A rounds up the best analyses and commentaries on what Russia’s invasion of Ukraine means for energy, commodities and, ultimately, climate action.

How is the invasion affecting energy markets and consumer bills?

Many publications have reported on how the crisis is affecting energy markets and bills.

The Financial Times reported that European gas prices temporarily increased by almost 70%, while crude oil rose above $105 a barrel for the first time since 2014, “after Russia’s invasion of Ukraine triggered fresh worries about global energy supplies”.

News of the invasion briefly sent Brent crude, the benchmark against which most other crude grades are priced, up 9% to $105.79 a barrel, the Financial Times reported.

However, Brent prices settled at $99.08 a barrel after US president Joe Biden announced that his latest sanctions against Russia would focus on the finance sector rather than the energy sector, the newspaper said.

(Reuters reported that US officials were reluctant to target Russia’s energy sector “due to concerns about inflation and the harm it could do to its European allies, global oil markets and US consumers”.)

Amrita Sen from the UK consultancy Energy Aspects told the Financial Times that “the fear of supply disruptions had gone away” after Biden decided not to impose energy related sanctions on Russia. “The west can’t afford energy sanctions given where oil and gas prices

www.business-arena.ro www.businessarena.ro

are,” she added.

A Reuters story on Thursday reported that Greece has urged France, which currently holds the EU presidency, to call an emergency meeting of energy ministers to discuss a collective response to surging energy prices “further exacerbated by Russia’s invasion of Ukraine”.

In a letter, co-signed by Bulgaria and Romania, Greek energy minister Kostas Skrekas said the energy crisis had a “destructive

months following the lifting of Covid restrictions.

With growing tensions over Russia’s threat to Ukraine, there has been speculation about how this will exacerbate the on-going energy crisis and impact consumers in countries around the world.

In the UK, up to 22 million households could already see a 54% spike in energy bills – from £1,277 to £1,971 – on 1 April when the energy price cap is raised.

impact” on the life of European citizens and industries.

His letter to French ecological transition minister Barbara Pompili said: “This is a crisis situation, which requires an EU level responseÖIn this light, we would ask the French presidency to organise an extraordinary meeting of the Council of Energy Ministers as soon as possible.”

Meanwhile, Reuters data showed that UK wholesale gas prices rose by as much as 60%, amid Russia’s invasion, before dropping back to lower levels.

People in much of Europe and North America have already been facing rising energy costs as fuel prices have soared in recent

Following the Russian invasion, many publications quoted figures from Martin Young, an analyst at the banking group Investec, who has stated that the energy price cap could hit £3,238 when it is next revised this autumn, if wholesale prices remain elevated. The publications cited concerns that Russia could “weaponise” its resources by restricting gas flows and driving up wholesale prices.

Simon French, chief economist at the investment bank Panmure Gordon, wrote a Twitter thread critiquing this “breathless reporting”, noting that the data required to calculate the price cap is currently lacking.

However, he noted that, while these initial figures were “little more than educated

27

28

ENERGY

guesswork”, there could still be “considerable cost of living implications” arising from the situation in Ukraine.

Petrol and diesel prices could also be significantly affected, with UK pump prices already at record levels. In the US, where gasoline prices have hit their highest point in eight years, president Joe Biden has made it clear that more price increases are likely on the horizon.

“Defending freedom will have costs for us as well, here at home,” he said.

According to the American Automobile Association, the average cost of petrol in the US has already hit $3.54 a gallon, up from $2.66 a year ago. That price is now set to rise further, with publications citing analyst estimates of $4 or even $5, due to the invasion of Ukraine.

However, this remains speculative, and the US administration is weighing up the option of tapping into the emergency supply kept in the nation’s Strategic Petroleum Reserve, in an attempt to bring down prices. But this would likely only have a limited impact.

What are the options to reduce European reliance on Russian energy?

Broadly speaking, commentators, analysts and politicians have advanced two different narratives around how Europe’s energy system should respond to Russia’s invasion of Ukraine.

Both narratives are, at least outwardly, about reducing Russia’s grip on European energy supplies.

The first emphasises the need to exploit domestic fossil-fuel resources as a means of reducing reliance on Russian exports, while the second argues for accelerating the shift towards more efficient and cleaner energy supplies in order to move away from fossil fuels altogether.

Leaders including the European Commis-

sion’s Ursula von der Leyen and the UK’s Boris Johnson have emphasised both clean energy and alternative fossil fuel supplies. Crucially, however, these alternatives operate over different timescales in terms of how quickly they could cut European demand for the coal, oil and gas imported from Russia.

In the UK, as Carbon Brief reported, the government’s advisory Climate Change Committee recently noted that when new projects in the North Sea are given a development licence, it takes an average of 28 years for them to actually start producing oil and gas.

Similarly, when the UK was seriously considering developing a domestic shale gas industry, it was widely expected that it would take a decade to scale up, as the Guardian reported at the time.

In contrast, Europe could “rapidly reduce its gas dependency” by investing in energy efficiency, the electrification of heat and renewables, said an article in EurActiv by Michaela Holl, senior associate at German thinktank Agora Energiewende, and Jan Rosenow, director of the European programme at the Regulatory Assistance Project (RAP).

Rosenow subsequently tweeted that the UK could end imports of Russian gas by switching to heat pumps, while former government official Tim Lord noted a similar saving would have been possible if the government had not effectively banned onshore wind in 2015.

Snap analysis from the Institute for Energy Economics and Financial Analysis (IEEFA) argued that Europe should focus on diversifying its energy supplies with more clean energy rather than simply repeating its historical focus on diversifying the suppliers of its fossil fuels.

Significantly, the German government is looking to accelerate renewable electricity to meet 100% of power demand by 2035, partly in response to the crisis, Reuters reported. The

www.business-arena.ro www.businessarena.ro

recently-elected coalition has drawn up plans for higher 2030 targets, explained Clean Energy Wire, which said it had seen the draft plans.

EurActiv and Reuters reported that Germany might consider keeping its coal and nuclear plants open for longer to reduce demand for Russian gas. But Clean Energy Wire said economy and climate minister Robert Habeck played down the potential for doing this, noting that Germany imports much of its hard coal from Russia.

Various commentators and analysts discussed if German nuclear plants could remain open or be reopened after recent closures. Alex Gilbert, fellow of the Payne Institute of Public Policy tweeted that it would be “very difficult, bordering on impossible”, due to the need to secure appropriate fuel assemblies and regulatory approvals.

Instead, Gilbert suggested that a more rapid restart of Japan’s mothballed reactors could reduce its demand for gas, freeing up global LNG capacity for import to Europe. In an interview with the Atlantic, Nikos Tsafos, Schlesinger chair at the Center for Security and International Studies (CSIS) said that even if Germany had never shut any of its nuclear plants “the impact would be about 4% on European gas demand”.

In an analysis posted on Twitter, Dave Jones, global programme lead at thinktank Ember, noted that the Netherlands and Spain were able to cut gas demand in their electricity sectors by 22% and 17%, respectively, in just two years between 2019 and 2021, by building more renewables. Speaking to the Independent, Suzana Carp, executive director of NGO Carbon-Free Europe, said: “The alternative to importing fossil fuels is the building up of autonomous energy sources at a national and EU level. I also think it will advance hydrogen projects and other zerocarbon fuels. The mentality has started to shift.

It’s no longer business as usual. We’ll see a move towards renewable, nuclear, and zerocarbon fuels that gives Europe the autonomy it needs.”

Writing on Twitter, Tsafos argued that there is “no doubt” the war in Ukraine “will reshape Europe’s tolerance for relying on Russian energy”.

Similarly, while analysis of the near-term options from consultancy Timera Energy said it was “delusional” to suggest Europe could survive now without Russian gas, the firm concluded that high gas prices were accelerating the momentum behind energy transition in Europe: “The reality is Europe will depend on gas as a transition fuel until enough flexible lowcarbon replacement energy can be deployed But there is no doubt that high and volatile gas prices are accelerating the public and political momentum behind energy transition in Europe.”

Tsafos made the case for “thinking big” in response to the crisis, suggesting ideas including an effort to make and install 100m heat pumps across Europe. Rosenow explained on Twitter how replacing gas boilers with heat pumps would cut gas demand, even if the electricity driving them was generated using gas. An article for New Statesman is titled: “Net-zero is the energy answer to Russian aggression.” It argued that “green energy, not gas, is the future”. For UnHerd, an article argued: “In the longer-term, the environmental agenda is perfectly aligned with the security agenda.”

Similarly, BusinessGreen editor James Murray wrote: “Clean technologies are peacekeeping and patriotic. Putin hates them. As such they need to be deployed at a pace and scale that is completely unprecedented in the entire sweep of human history. Our climate security, our energy security, and our national security depends upon it.”

29

30

ENERGY

WILL RUSSIA’S INVASION OF UKRAINE PUSH EUROPE TOWARDS ENERGY INDEPENDENCE AND FASTER DECARBONISATION? In 1973, the world’s post-war boom hit the rocks. Oil producers restricted supply, sending prices soaring. In the aftermath of this oil shock, nations like America began seeking energy independence.

In 2022, we may well see history repeat, as the Russian invasion of Ukraine unfolds.

Why? Major European nations like Germany have turned to Russian gas to fill the gap between coal plants retiring, the move away from nuclear power after the Fukushima disaster, and the point where zero emissions renewables and storage can act as full replacement.

With around 40% of the EU’s gas coming from Russia, the invasion will focus the minds of European leaders on the question of whether they can rely on these supplies. The war in Ukraine comes as much of the world is already reeling from energy chaos, with pandemic disruptions to transport sending energy prices soaring.

To add still more complexity, the invasion came just days before the Intergovernmental Panel on Climate Change released a report on regional climate impacts and adaptation, which underscored efforts to reduce damage from fossil-fuel caused climate change.

So how will this play out?

Why Russia matters to world energy consumers The export of fossil fuels is central to the Russian economy. The nation of 145 million is one of the world’s largest energy exporters.

Russia is the leading exporter of gas, the second largest of crude oil, and third largest coal exporter.

But Russia is well aware of its vulnerability in

selling fossil fuels to Europe, which is committed to decarbonisation.

The coal lobby in Russia has been actively seeking to expand its Asian markets for years now, due to the risk to exports posed by European climate driven restrictions.

While Europe remains the largest export market for gas, Russia wants to diversify here too by increasing supplies to China.

In 2019, the Power of Siberia pipeline began transporting gas from Siberia directly to China.

Only weeks before the invasion of Ukraine, Russia announced a deal for a new pipeline to China. We are likely to see Russia’s pivot towards Asia intensify in the current climate.

Will this speed up the shift to renewables?

It was only in January that Germany’s new climate and economy minister announced major new measures to accelerate his nation’s slowing renewable roll-out and power industry with clean energy. And now? We believe the crisis has the potential to accelerate Europe’s trend toward renewables, as it seeks to reduce its reliance on Russian gas.

We may see increased efforts to shift to interdependent renewable generation, such as the proposed offshore windfarms intended to be shared by multiple European nations.

But this is not guaranteed. In the near term, there is a huge risk that the crisis in Ukraine focuses attention on energy security at the expense of decarbonisation.

32

ENERGY

TOP ENERGY & POWER TRENDS TO WATCH IN 2022 1. Challenges Continue for Global Supply Chains

Global supply chains will continue to be disrupted in 2022, resulting in delays in the commissioning of new power & energy projects, with the booming wind and solar PV sectors worst affected. China’s zero-Covid lockdown policy will see periodic disruptions in manufacturing for many key components. Significant constraints on global port capacity will continue to delay shipping. Concerns over USChina relations will continue to drive nearshoring of some manufacturing capacity and also encourage OEMs to look for alternatives to China for at least part of their supply chains – the so-called China+1 policy.

Jonathan Robinson, Director, Power & Energy

2. More Volatility for Gas Prices After a prolonged period of relative calm, volatility returned to the natural gas market in the second half of 2021. This is set to continue into 2022 with strong demand setting a floor for prices and geopolitical tension between Russia and the EU and the US amongst several factors making traders nervous. Higher prices are likely to translate into higher investment in LNG capacity, as US players look to boost exports, and importers invest to diversify gas supply options. Higher prices will be bad news for suppliers of gas power equipment – the depressed state of the North American and European markets will continue. Finally, higher prices for households and businesses will

make energy a hot political issue in many country markets.

Lucrecia Gomez, Director, Power & Energy

3. Greater Decentralisation & Decarbonisation Focus in the Commercial and Industrial Space Net zero and sustainability will both continue to be key drivers behind greater investment in clean and efficient solutions for power generation and energy efficiency. However,

www.business-arena.ro www.businessarena.ro

this trend will accelerate in 2022, as higher energy costs further improve the business case for reducing the use of fossil fuels. This momentum will be particularly strong for the industrial segment where 80% of energy currently comes from fossil fuels. 70% of global fossil furnaces are due to be replaced in the

operations extremely difficult for utilities. In response, utilities have started leveraging innovative grid management practices like virtual power plants (VPPs) to increase grid reliability and resiliency. Post-2021, VPPs are set to leapfrog and emerge as a crucial measure for stable grid operations, limiting the need for new peak-period generating capacity.

Many utilities across the US, Japan, South Korea, Germany, the UK and Australia have already started adopting VPP solutions as part of their clean energy transformation. Frost & Sullivan forecasts that the global market for Virtual Power Plants will increase $565 million USD in 2021 to reach $3.3 billion by 2030.

Swagath Manohar, Senior Analyst, Power & Energy

5. The Rise of Energy Services

next decade – failure to act threatens locking in a generation of carbon emissions.

Jonathan Robinson, Director, Power & Energy

4. Virtual Power Plants Increasing the Bedrock of Decentralisation The increasing share of electricity from renewable energy sources (RES), distributed energy resources (DERs) and increasing penetration of EVs and their charging infrastructure makes grid load management

Gone are the days of regarding electricity as a commodity. As EV sales, residential storage, and distributed generation continue to rise, more utilities and energy retailers are launching new services to capture the full value of DERs in terms of load management, customer preference, and new revenue streams. A growing number of companies worldwide are venturing into solar-plus-storage and smart heating energy-related services, while the most innovative retailers in deregulated markets are focusing on 100% carbon-neutral energy propositions, smart EV home chargers, and V2G offerings. To develop and scale these new digitally-enabled energy services, Frost & Sullivan estimates electric utilities and energy retailers will spend over $4 billion in digital solutions in 2022.

Maria Benintende, Principal Analyst, Power & Energy

6. More M&A Activity in the Digital Grids Space Last year, we saw some software and data analytics companies being acquired by grid

33

34

ENERGY

equipment suppliers and energy companies, including the acquisitions of Smarter Grid Solutions by Mitsubishi Electric, envelio GmbH

by E.ON, and Opus One Solutions by GE Digital. As the share of utilities’ budget for digital solutions continues to increase to support grid modernization and grid-hardening initiatives, so does the interest of ecosystem players to develop robust interoperable digital platforms to advance in the energy transition.

For 2022, we expect further consolidation in the digital grids market with more acquisitions taking place around DER integration; grid planning; cybersecurity; and asset, distribution, and outages management.

Maria Benintende, Principal Analyst, Power & Energy

trend of oil & gas companies rebranding as energy companies and continuing to invest in the power sector. European-headquartered companies are currently leading the energy transition in terms of technology and initiatives, but 2022 will see companies in other regions making moves to close the gap. Power generation, particularly larger renewable projects, will continue to be the standout area for new investment, but significant volumes of investment will also go into green hydrogen production, battery and home energy storage solutions, electric mobility and grid flexibility services.

Maria Agustina de Sarriera, Analyst, Oil & Gas.

7. No End in Sight for the Growth of Hydrogen

The CCUS market is expected to grow exponentially in 2022, as more than 50 projects globally are in advanced stages of development. High-emission industries like cement, iron and steel, chemicals and fertilizers, are significant contributors to economic growth and job creation. There is no alternative to these industries, so CCUS will help transform these high-emitting industries to near-zero emission industries, while maintaining economic prosperity. In 2022, 18.6 MTPA of CCUS capacity will be added and total investment will be $1.8 billion. The US will continue to lead the project table, followed by Europe and China.

The clustering of CCUS projects will act as a significant driver in growth; globally, more than 20 CCUS cluster projects are in advanced stages of development, with some of them expected to become operational by late 2022.

Mahesh Radhakrishnan, Senior Analyst, Oil & Gas

Investment in green hydrogen will accelerate in 2022, as 2021’s hottest industry topic continues to gain momentum. Expect to see further announcements from the likes of Siemens and MHI on their latest hydrogen solutions, as the race to offer larger, cheaper and more efficient electrolysers continues. The increase in natural gas prices is a further boost to green hydrogen, as the cost differential between green and grey has declined significantly in 2021 – technology innovation will erode that further in 2022. Governments will continue to look favourably on hydrogen initiatives as a way of turbocharging post-Covid economic recovery and as a medium-term play to limit increases in carbon emissions.

Jonathan Robinson, Director, Power & Energy

8. Embrace of the Power Sector

by Oil & Gas to Continue Commodity prices may have rallied in the second half of 2021 but this will not stop the

9. CCUS

www.business-arena.ro www.businessarena.ro

PLATTS ANALYTICS' TOP ENERGY TRANSITION TRENDS TO WATCH Events in 2021 exposed significant hurdles governments and markets still need to overcome during the energy transition journey, but there were also signs of progress.

The rapid return of global energy demand to near or above pre-pandemic levels in 2021 caught markets off guard, which resulted in record-high energy prices in major markets.

Despite the historic decline in CO2 emissions in 2020, 2021 showed that energy demand is still structurally outpacing the growth of clean energy supply, requiring the use of more fossil fuels, which means more greenhouse gas emissions. According to S&P Global Platts Analytics, 2022 will be a record year for CO2 emissions despite the COVID-19 pandemic and the world's energy transition efforts.

BY ANNE ROBBA & DAN KLEIN Despite the rise in emissions, 2021 marked several instances of progress such as electric vehicle sales reaching a new record and a surge of announced hydrogen projects. However, 2022 will serve as a litmus test for environmental policy as politicians balance keeping energy prices in check without increasing fossil fuel demand all while setting the road to lower carbon economies. It will also be important to monitor if the momentum from 2021 carries into this year for electric vehicles and hydrogen, and how technological innovation evolves. Platts Analytics has identified five top trends to gauge the progress of the energy transition in 2022.

CO2 emissions to hit record high in 2022 despite greater focus on climate; emissions policy is on the ballot in key markets Despite the focus on emissions reductions and a lengthening list of countries that have made net-zero targets, Platts Analytics expects that CO2 emissions from energy combustion

will increase by 2.5% in 2022 to new record levels, as some economies recover more fully while others push for growth.

While leaders at COP26 pledged to strengthen 2030 emissions targets by the end of 2022 rather than waiting for the formal “stock taking” process, there are significant

risks to domestic environmental policy agendas from elections in 2022.

During COP26 100 countries committed to 30% reduction in methane emissions by 2030 (with some notable exceptions), which will

35

36

ENERGY

likely bolster interest in better understanding fossil fuels and their associated upstream carbon intensities.

Record high carbon prices in Europe have triggered market intervention reviews.

Midterm elections in the US have the potential to affect significantly the Biden Administration’s environmental agenda. In Australia, focus is on the opposition party and whether a prioritization of more aggressive environmental targets will win political and popular support. Such elections are reminders that “all politics are local” and the fate of global agreements often get determined by domestic elections, local public sentiment, and local policy shifts.

Strong power prices boost incentives for renewables installations, but can they deliver?

Input costs and policy risks still loom Strong power prices have pushed renewable power margins to historically high levels across major markets and boosted prospects for faster installation growth in 2022. The irony here is that the underperformance of renewables was a key factor behind the surge in global gas and power prices in the first place.

Despite an ~10% increase in commissioning costs due to record high raw materials prices and labor issues, solar PV capacity additions are set to increase by 4% in 2022, while onshore wind installations increase by 1%, according to Platts Analytics. However, the forecast calls for capacity growth declines for offshore wind, which will contract by 25% in 2022 after a strong 2021 due to China’s phaseout of subsidies.

Platts Analytics sees the need for policies that better balance the need to add zero-carbon electricity supply with the cost of the dispatchability/availability of oftentimes-intermittent renewable power. There are risks that renewables uptake will be increasingly associated with energy shortfalls and resulting high prices. The question will be how policymakers

view the tradeoff between prioritization of energy transition or reliable supply.

Carmakers’ shifting preference for EVs to become more apparent; light duty EV sales to a new record high of over nine million in 2022 The automotive sector struggled with supply chain issues in 2021, primarily a shortage of semiconductor chips, a key element in electric vehicles. However, it appears that automakers did not constrain the manufacturing of electric vehicles as much as internal combustion engine vehicles, which supported a 108% yearover-year growth in EV sales.

In addition to government-backed regulations, high fuel costs and financial incentives supported strong growth in EV sales in 2021, especially in China and the European Union.

While prevailing drivers of EV growth in 2021 will continue in 2022, Platts Analytics expects an acceleration in EV sales growth this year, advanced by actions taken by automakers themselves.

Automakers continue to increase investments in EV manufacturing and battery technology, offering a broader range of EV models and greater buildout of charging stations. EV adoption will increasingly shift from policy/subsidies to producer and consumer choice. Platts Analytics forecasts EV sales will grow more than 40% year over year in 2022.

Gap between hydrogen production ambition and reality will be tested Ambition surrounding hydrogen development was in the spotlight last year, with announced projects of low-carbon hydrogen production capacity in Platts Analytics’ Hydrogen Production Assets Database swelling to 29 million mt by the end of 2021. Project announcements have been underpinned by a growing list of national hydrogen strategies worldwide, which provided ambitious targets and incentive structures for new production capacity.

www.business-arena.ro www.businessarena.ro

While the achievability of even near-term hydrogen production targets (example: the EU’s target of 6 GW of green hydrogen production capacity by 2024) will not be determined fully in 2022 alone, developers would benefit if they can show that projects can be completed on time and on budget in 2022. Production capacity across several different hydrogen production pathways is slated to become operational in 2022, ranging from a larger-scale project using biogas and landfill gas, to small scale electrolyzers paired with renewables.

However, Platts Analytics does not expect large-scale blue hydrogen (natural gas + carbon capture) projects to become operational in 2022, but it will closely monitor, as a key signpost of the viability of blue hydrogen projects, the development and policy support of carbon capture projects that are not associated with hydrogen production this year.

greater use of sustainable aviation fuels (SAF), driven by government mandates (e.g., France’s mandate of 1% SAF usage beginning in 2022) and commercial airlines looking to test higher SAF blend rates (following the lead of United Airlines which achieved the feat on a commercial flight in December 2021).

The change to the size of the orderbooks of ships and planes designed to use alternative fuels will be a key factor to watch in 2022.

The year ahead will once again be a mixed bag for the energy transition The spillover of high energy prices in 2022 is causing public scrutiny towards energy transition ambitions, which may lead to some backsliding in momentum in some areas. While high oil, gas, and electricity prices will make renewables more attractive, the development of other alternative fuels could be stunted

Technology milestones in 2022 to point the way forward in the energy transition Perhaps the greatest challenge of the energy transition is moving beyond the increase of wind and solar generation and electric vehicles, to reducing emissions in sectors that are more difficult to decarbonize, such as aviation and marine transport.

While needle-moving technologies in these sectors are essentially still in the demonstration phase, several milestones look to be achieved over the next 12 months, including a pair of hydrogen-fueled maritime vessels hitting the water, and eight ships that will be “ammonia ready” as an alternative fuel if/when the supply and infrastructure is available.

While not powered by hydrogen itself, the first large liquefied hydrogen (LH2) carrier will load its first cargo of hydrogen in Australia in early 2022, an early indication that international hydrogen trade can be viable.

In aviation, Platts Analytics anticipates

somewhat as natural gas and electricity are vital feedstocks for many of them.

At the same time, progress is being made in lowering the carbon footprint of the marine and transportation sectors through the deployment of low carbon fuel-powered vessels, SAF, and support of low carbon hydrogen and growth in electric vehicles.

Stabilizing energy prices will be a key focus in 2022, which will have a ripple effect throughout the energy system, including the momentum of the energy transition in 2022 and beyond.

37

38

ENERGY

ENERGY PRICES AND THE DIMENSIONS OF THE CURRENT MARKET DESIGN Highlights from the debate: Electricity prices and market design This #FSRDebate aimed at discussing the dimensions of the current market design which might need to be enhanced or supplemented to improve its performance in the context of the energy transition. ▲ EU gas and electricity prices have increased rapidly over the last few months: by 400% since April 2021 in the case of gas, by 200% in the case of electricity over the same period. ▲ There seem to be many causes for the sharp increase in world gas prices, but the main ones appear to be a faster economic recovery after the pandemic, boosting a strong growth in demand in many regions, and a tight global LNG market. While being the largest buyer of internationally traded gas (accounting for almost half of the volumes), Europe has little leverage on the global LNG market, where it is often a price taker. ▲ Instead, electricity prices in Europe reflect demand and supply conditions in the Continent. These are clearly affected by international fuel prices, but also by other, more local factors, such as weather conditions and renewables-based electricity generation, as well as the market design. ▲ A number of EU Member States have taken or are considering taking national uncoordinated actions to mitigate the impact of higher energy prices on consumers. Some of these

measures are likely to affect – and possibly distort – cross-border trading. To tackle rising energy prices, while preventing damage to the Internal Energy Market, the European Commission has proposed a “toolbox for action and support”, outlining a set of measures which the Commission itself and the Member States could adopt to deal with the current high-price situation. Many of these measures are aimed at mitigating the impact of higher energy prices on industry, businesses and households, especially the vulnerable ones. However, and interestingly, the Commission also intends to “task ACER to study the benefits and drawbacks of the existing electricity market design and propose recommendations for assessment by the Commission by April 2022”. ▲ The Debate was hosted by Leigh Hancher (FSR), who also moderated the panel debate. ▲ After an introduction to the Debate by Alberto Pototschnig (FSR), opening contributions were provided by Carlos Batlle (FSR), offering the academic perspective, and Rafael Muruais-Garcia (ACER), presenting the initial

www.business-arena.ro www.businessarena.ro

assessment of ACER of the benefits and drawbacks of the existing electricity market design. ▲ In particular, prof. Batlle started by referring to the position recently taken by a number of EU countries, including Spain, suggesting that prices in the electricity market should be linked to average costs. This is contrary to basic regulatory economic principles, he claimed.

There is clearly some misunderstanding on some of these principles, such as the difference between average costs and marginal costs or locational prices. Prof. Batlle then referred to the need to choose whether to allow markets to handle the forthcoming energy transition or whether to revert to a centralised average costbased approach. A half-away approach would be the worst solution. He also indicated that the proposals which have been put on the table to handle the current price increases have not been properly spelt out and therefore it is difficult to assess them. It is clear that, at the moment, short-term markets should be strengthened, and the exposure of consumers to hourly prices, as it is the case in Spain, is a

good practice in this respect. He then congratulated ACER for the note just published, which provides an excellent outline of good regulatory principles. Beyond that, Prof. Batlle commented that any expropriation of profits coming from market-based investment decisions is to be avoided, while there is clearly the need to deal with long-term uncertainty on market conditions, which could be dealt with using long-term contracting, regulated (such as capacity markets) or not, but always trying to respect the short-term signals. Finally, prof.

Batlle expressed the hope that the discussion on the market design could return to a normal path on the basis of the documents recently published by ACER and the Commission. ▲ In presenting the results of ACER’s initial assessment, Mr Muruais-Garcia, after sharing some data on the recent energy price dynamics, referred to the contributing factors to gas price increases: strong global demand for LNG and a generally tight supply situation. He then presented some of the possible measures that ACER will consider in its assessment related to the sheltering of consumers from the impact of

39

40

ENERGY

higher prices and price volatility, including adapting taxes and levies, and intervention with social security measures (outside energy). He also highlighted the usual dilemma between maintaining price signals to drive desired behaviour (e.g. greater efficiency, new investment, demand-response, etc.) and protecting consumers, especially the most vulnerable ones, from the impact of sudden price changes. The upcoming ACER’s analysis will focus on two technical issues: the key benefits and weaknesses of the current electricity wholesale market design and whether the current market design can provide sufficient revenue certainty in view of the future investment needs. Finally, Mr Muruais-Garcia provided examples of possible market design options that ACER could analyse to increase long-term price certainty and to extend the opportunities for shorter-term hedging. These options will be assessed by ACER against the objectives of short-term efficient use of resources, providing welfare benefits from electricity market integration, promoting the role of demand and energy efficiency and preventing market abuse. ▲ Yvan Hachez (Vice-Chair of Market & Investment Committee, Eurelectric) and Inger Kristin Holm (Chair, Electricity Working Party, IFIEC) animated the ensuing panel debate. ▲ In the introductory statement, Mr Hachez stressed the importance of the short-term market delivering the pricing for an efficient dispatch of resources, including storage. But it is also important to mitigate the impact of price volatility on consumers and protect the vulnerable ones. He also highlighted the importance of avoiding taking decisions on market design without proper assessment of their consequences, which might end up harming the market. The short-sighted measures which have been put forward recently do not bring benefits, but are likely to be detrimental to the confidence of consumers and investors. Instead, the use of hedging tools

over different timeframes should be promoted.

Finally, there will be investment to enable the transition, and it is important that there is an enabling framework for long-term hedging tools. Eurelectric looks forward to ACER assessment in April 2022. ▲ In her introductory statement, Ms Inger Kristin Holm stressed the fact that electricity represents a substantial part of energyintensive industries’ production costs and the recent energy price increases have led to production cut-backs and closures in Europe.

While energy prices increased worldwide, production costs in Europe have been hit also by other factors (such as the increase in carbon allowance costs). She also congratulated ACER for its publication and welcomed its forthcoming assessment. IFIEC also supports the marginal (pay-as-cleared) pricing rule, to optimise dispatching and flexibility. This approach should remain at the core of market design. In this respect, IFIEC does not favour price caps, but rather see benefits in expanding the role of long-term instruments and the flexibility market, in which all technologies should be able to offer on a voluntary basis.

Capacity mechanisms should be only introduced when absolutely needed to promote adequacy. The issue of super-profits for renewables should be addressed through the tax system, but producers should be left with profits sufficient to ensure the economic and financial viability of their plants. Renewable technologies are capital intensive and they should be allowed to recover their capital costs from revenues in excess of their variable costs.

Most importantly, investments in decarbonised power supply and infrastructure should keep pace with demand. In this context, barriers to investment and to renewable PPAs should be removed. However, given the variable profiles of renewable generation, renewable PPAs do not offer a suitable hedging for energy-intensive consumers with a baseload profile, and this is an area where improvements are needed.

www.business-arena.ro www.businessarena.ro

RENEWABLE ENERGY SHOULDN’T BE BLAMED FOR SPIKING ENERGY PRICES - IT'S THE SOLUTION Electricity, natural gas and oil prices have risen globally in recent months, causing hardship for many people around the world. Europe is at the center of the crisis, with natural gas prices increasing 400% last year, raising household bills and putting multiple energy companies out of business.

BY JOEL JAEGER, TATSATOM GONÇALVES, ARYA HARSONO AND LORI BIRD Other countries like China, Brazil and the United States have also experienced higherthan-normal energy prices. Global oil prices are at the highest level in seven years. Here, we unpack the causes and the effects of the energy crisis and what that means for the future of clean energy.

COVID-19: A Historic Energy Supply and Demand Shock The energy crisis has been caused by multiple overlapping factors on both the sup-

ply and demand sides, driven by the pandemic. The pandemic caused a market disruption larger than the world has ever seen before.

Energy demand dropped sharply in 2020 during various lockdowns around the world.

Prices fell, so fossil fuel production and investment in fossil fuels decreased. In China and elsewhere in the Northern Hemisphere last winter was especially cold, depleting coal and gas stockpiles.

The pandemic also caused energy producers to postpone maintenance and repair work, slowing everything down.

Then, in 2021, as demand rebounded

41

42

ENERGY

strongly, energy supply was unable to ramp up fast enough, causing the price increases.

In normal times, these market forces would have re-balanced themselves toward a price equilibrium, but with COVID supply chain disruptions, shipping delays and protectionism, global trade was inadequate to balance the supply and demand fluctuations and shortages.

On top of all this, and perhaps most crucially, oil and gas producers like Russia and Saudi Arabia reportedly restricted gas and oil production for export to keep prices high and maximize their profits and strategic position.

Clean Energy is Not the Problem. It’s the Solution.

Some commentators have claimed that renewables are the cause of the energy crisis Europe is experiencing. They point out that the biggest spike in European electricity prices coincided with lower-than-average wind generation, but in reality this only temporarily added some pressure on electricity markets.

Wind generation in Europe has resumed adequate production; in fact there were record amounts of wind power at the end of the year while energy prices continue to be high.

Based on our analysis, the amount that electricity prices have spiked in a given country does not seem to have a strong correlation to its level of wind and solar energy production.

China, which has about 10% wind and solar electricity, experienced a major electricity crisis. The U.S., at 12% wind and solar, has largely avoided it. Less than 1% of Singapore’s electricity comes from wind and solar, yet Singapore’s wholesale electricity prices spiked by six times in November of last year.

As International Energy Agency (IEA) Director Fatih Birol puts it, the problem is not that there is too much clean energy — it’s that

there is too little. The world has been chronically underinvesting in energy supply and transmission infrastructure. Global energy demand has been increasing over the past five years but total spending on energy has been flat.

The mismatch between energy supply and demand is not a sign to slow down the lowcarbon transition. In fact, it is a call to ramp up clean energy, energy efficiency, and infrastructure investments to ensure continued reliable and resilient supplies. This would make countries in Europe and elsewhere less vulnerable to geopolitical or economic choices by suppliers.

The Advantages of Renewable Energy One advantage of renewable energy is that the power prices are generally stable.

Once the solar and wind farms are built, all

www.business-arena.ro www.businessarena.ro

by the crisis, only expected to see a 6% increase in their bills compared to last year, while households heated with natural gas are expected to spend 30% more.

Increased investment in renewable energy will increase supply and reduce prices.

According to the IEA, if the world invests enough in clean energy to reach net-zero emissions, average household energy bills in advanced economies will be lower in 2030 and 2050 than they are today.

This is not to mention that renewable energy creates more jobs than fossil fuels.

Challenges Renewable Energy Must Overcome

they need is the sun or the wind. In contrast, electricity from gas or coal requires continuous fuel supply, which is vulnerable to disruptions in production and transport.

Fossil fuel price spikes like this have happened before and will happen again.

Meanwhile, the costs of solar have dropped 85% since 2010 and the costs of both onshore and offshore wind have dropped about 50%.

For residential or commercial energy users, investing in renewable energy, energy efficiency or other climate-friendly technologies can be a buffer against the market forces that affect fossil fuels. European households equipped with solar panels are saving an average of 60% on their monthly electricity bills during this crisis.

Meanwhile, in the U.S., households heated with electricity will be largely unaffected

None of this is to say that the transition to clean energy will always be smooth and easy.

As renewable penetration grows, it will be important to invest in solutions that can address weather related variability, such as long-duration energy storage solutions.

Governments also need to expand and modernize transmission and distribution grids to increase reliability, efficiency and accessibility. It will be essential to bolster energy systems with protections against severe weather-related events, such as fires, hurricanes and heat and cold waves.

In the short-term, governments of countries affected by the energy price hikes will need to take measures to assist vulnerable households. This can be done by directly providing money to these households to help with their bills and investing in energy efficiency to reduce the energy burden that consumers shoulder.

Then in the longer term, governments should ramp up investment in clean energy generation and storage.

This is the best way to avoid future energy price spikes and address energy poverty challenges.

43

F LEADERS’2022 INANCIAL

Hall of Fame

AWARDS in partnership with

Business Arena Magazine is proud to announce the 2022 edition of its annual event dedicated to the leaders in the financial market:

FINANCIAL LEADERS’ HALL OF FAME 2022

Business leaders from the financial and baking sectors, directors of investment funds and representatives of some of the largest companies in Romania, together with representatives of the local authorities, high government officials and diplomats are invited to take part in this exclusive event.

Digitalization and online access to banking and financial products and services shape the future of the industry, while the coronavirus pandemic has had a significant contribution to speeding up the process.

Operating in a highly competitive environment, banks and financial institutions have made outstanding progress in introducing new and innovative products and cutting-edge technologies in order to adapt their business model to the requirements of the new millennium.

Speaking in the opening of last year's gala, Cristian Sporis, Head of Corporate Banking Division, Raiffeisen Bank Romania, noted that Romania's banks are on a par with their European Union peers

in terms of digitalization, but the competition is strong. "There are other players in the market who are creating certain trends and accelerating this transformation," he said, mentioning fintechs and marketplace platforms for small businesses. "These things are possible due to digitalization, and they are going to put pressure on the banking system. We need to find a way and reinvent ourselves so that we can remain an integral part of this value chain, financing production from end to end," Sporis added.

As always, Business Arena Magazine is proud to recognize the achievements and successes of banks, financial institutions and business leaders that find the winning strategies in spite of the challenging economic background.

Business Arena Magazine is proud to recognize the achievements and successes of banks, financial institutions and business leaders that find the winning strategies in spite of the challenging economic background.

For more information please contact Cosmin Stangaciu at cosmin.stangaciu@business-arena.ro or phone 0755.274.125

46

HYDROGEN COMBUSTION ENGINES ARE A LOUSY AND DESPERATE ATTEMPT TO KEEP THEM ALIVE Toyota has insisted on this for quite a while already. Renault seems to have jumped on the same train with its latest concept car. It does not matter who proposes to burn hydrogen on a combustion engine: rest assured this is a desperate measure to keep combustion engines alive – in the worst way possible.

If you have not seen the news lately, Renault promised to present a concept car in May that will burn hydrogen in a conventional internal combustion engine. Toyota and Yamaha introduced a 5-liter V8 powered by hydrogen in November 2021. More recently, the Japanese companies said the V8 delivers 450 hp (335.6 kW) at 6,800 rpm and 540 Nm (398.3 poundfeet) at 3,600 rpm. Would burning hydrogen make them carbon neutral? Not necessarily. And they would still pollute the air.

Most of the hydrogen produced nowadays comes from decomposing natural gas. If it just separates hydrogen from carbon and releases the latter into the atmosphere, it is called grey hydrogen. If the carbon is captured, it is named blue hydrogen. Hydrogen made from electrolysis – converting water into hydrogen and oxygen – is called green, and it is the only kind of this gas that is carbon neutral. Mind you: that is only the case if the energy for electrolysis comes from renewable sources.

Hydrogen production is one of the reasons its critics think it is a ridiculous option. If you need electricity to produce the gas, why not just put it in batteries and get going? The reasons are simple: current battery packs are expensive, heavy, and take a long time to recharge. That extra weight charges a toll in commercial vehicles, reducing the payload. Hydrogen can make them lighter and faster to top up. However,

burning that gas is preposterous.

Basic chemistry explains why that is the case.

Although hydrogen is the most abundant element in the universe, it has curious properties.

One kilogram (2.21 pounds) has an energy density of 120 MJ (megajoules). Gasoline has an energy density of 45.8 MJ/kg – or a little more than one-third of what the fossil fuel offers.

The issue is that one liter of liquid hydrogen weighs just 71 grams (0.16 lb). Consequently, it has a very low energy density: 8.5 MJ/l. A liter of gasoline weighs around 770 g or 0.77 kg (1.7 lb).

That means that a liter of gas offers about 35 MJ/l – or a little more than four times what hydrogen presents. On top of that, hydrogen only remains in its liquid state if it is kept under 252.87°C (-423.17°F).

Besides providing way less energy than gasoline, hydrogen in a combustion engine has another handicap. To be fair, it is a combustion engine handicap: how inefficient they are to convert chemical energy into movement.

Most ICEs have a thermal efficiency of 20%, which means they waste 80% of the fuel energy.

The most efficient ones reach 40% of thermal efficiency. For every $100 you spend, only $40 moves the wheels of your car. The other $60 becomes fumes and heat. Mazda vowed to reach an efficiency of 56%. If it manages to deliver that, you’ll only waste $44 of each $100 you spend on fuel. That’s still too much.

www.business-arena.ro www.businessarena.ro

An electric motor turns 90% of electricity into movement. If a fuel cell generates electricity with the same hydrogen, the vehicle will travel much further with it. All that with no emissions, something you can’t say about an engine burning hydrogen.

Although it does not generate carbon directly, any oil used to lubricate the moving parts in an engine will also burn, even if in small quantities. The nitrogen in the air will generate nitrogen oxides. We can also have ozone coming from the oxygen, and the lubricant may also generate particulates. Summing up, the combustion engine is an inefficient and polluting machine, regardless of what feeds it.

BMW already tried burning hydrogen from 2005 up to 2007 with the Hydrogen 7, an E65 with the 6-liter V12 that could use gasoline or hydrogen. One hundred units were built. A V12 is undoubtedly not the most frugal example of an engine, but neither is a 5-liter V8.

The BMW V12 got 16.9 MPG (13.9 l/100 km) with gasoline. When that engine burned hydrogen, it returned 4.7 MPG (50 l/100 km). It had two fuel tanks: one for gasoline, with 73.8 liters (19.5 gallons), and one for hydrogen, with 170 liters (45 gallons). While the car could run 480 kilometers (298 miles) on the fossil fuel, hydrogen made it run only 201 km (125 mi).

Compare that with what the Toyota Mirai offers:

74 MPGe (3.2 l/100 km) and 645 km (402 mi) of range with two hydrogen tanks that together hold 122 liters (32,2 gallons) of hydrogen. Even the Hyundai Nexo Blue goes further with its worse aerodynamics and large frontal area: 61 MPGe and 612 km (380 km) for the three tanks with a combined capacity of 156 l (41.2 gallons).

If that was not enough to prove that burning hydrogen is a terrible idea, the BMW Hydrogen 7 used liquid hydrogen, which had to be kept below -253°C (20.1K or -423.4°F). When the car was not in use, hydrogen warmed up, and pressure increased.

Whenever it was above 87 psi (6 bar), the tank would release hydrogen to prevent higher pressures. After 10 to 12 days without use, the tank would get completely empty. That’s something that does not happen with hydrogen stored as a gas under high pressures.

If the combustion engine is to be saved, hydrogen is not the option. Renewable fuels offer a better alternative. Considering they capture carbon that is already in the atmosphere instead of releasing the one that was under the ground for millions of years – as fossil fuels do – they are carbon-neutral elements. However, there are several other complications involved with them.

Ethanol is already used in Brazil on a large scale. People argue that sugar cane robs space from other crops, which farmers who are specialized in them deny. Second-generation ethanol – produced from biomass – would be a better alternative, but it is still expensive.

Porsche is investing in synthetic fuels to keep its classic cars running when fossil fuels are not allowed anymore. None of these solutions address the other pollutants the combustion engine inherently produces nor its inefficiencies.

Considering how well it has served mankind in the last one hundred years, it deserves an honorable retirement instead of these embarrassing attempts to keep it working. Admit it, guys: the combustion engine is already smoked.

47

48

A B magazine

AWARDS for

EXCELLENCE

2022

Enjoy the Quality ***** Admire the Value in partnership with

With its strong tradition in creating new opportunities for the business community to express fresh views and ideas, and in recognizing business success and outstanding achievements, Business Arena is pleased to announce the upcoming Awards for Excellence.

Guests gather to celebrate excellence in business, sports, culture, and community, enjoying the company of friends and industry peers.

Innovation, resourcefulness, perseverance and a culture of responsible risktaking have helped many overcome major challenges. Thus, this edition of our awards gala brings recognition to individuals and organizations that recorded outstanding results and achievements during a challenging year.

For more information please contact Cosmin Stangaciu at cosmin.stangaciu@business-arena.ro or phone 0755.274.125

www.business-arena.ro www.businessarena.ro

49

TOP BRAND Luxury maintains its trendsetting status and aspirational image with consumers. At the same time, the industry's evolution and rapid growth generates a democratization of luxury.

The democratization of luxury can be seen in two ways: one in which luxury goods feel more attainable to a larger population, and another in which luxury brands have more accessible channels with which to reach new customers.

In spite of recent difficulties, market experts show an enduring optimism about the industry’s resilience. The current hurdles are seen as an opportunity for businesses to re-invent themselves and adapt to a changing world.

PAGES 49-71

50

FASHION

GROOMS TRENDS 2022 HOW TO GET DRESSED FOR SUCCESS!

When it comes to ceremony attire, every man on Earth thinks of that black tuxedo and white shirt suit mostly seen on red carpet events. It’s true that this combo is the epitome of elegance and good taste, but, as a groom, you need to be a little more creative and original regarding your style.

OUTFIT: TRENDS BY ADINA BUZATU PHOTOS BY VALI BARBULESCU

The world needs more colour, especially after the pandemic, and this year seems to be full of events. This desire for a different approach to life itself led us to choose clothes that are able to create a positive impact on our state of mind. And this means more colour and comfort. Even when we speak about the ceremony attire, especially for grooms, the sober black dinner jacket can be replaced with a coloured version. And 2022 trends have proven it!

Starting with micro prints textiles and oversized checks, to statement waistcoats and powerful colour combos, this year speaks of originality and a certain way to get dressed for success that expresses the joy of life.

How to replace sobriety will a more colourful style The classic black and white combo take a step back. It’s definitely not wrong to go for the classic tuxedo for an ultra-elegant look, but at your wedding ceremony maybe you should think twice.

The sober dark tuxedo is the perfect choice for more sophisticated events, like Oscars, not for a wedding with friends and family. Try to think a little out of the box and invite your guests to a less rigid atmosphere.

Navy and blue are still staple colours you can opt for if you don’t want to go too far from black.

But a menswear aficionado would try burgundy and black combo, at least for a wedding in the cold season. Pairing black trousers with a dinner jacket in the deep colour of the wine will give that luxury touch to a groom’s attire. Of course, there are also options like indigo, olive, beige or pastels appro-

www.business-arena.ro www.businessarena.ro

51

priate for spring and summer events. You can find a wide variety of ceremony suits in TRENDS by Adina Buzatu shop, where you can also create your own special combo together with our stylists.

Statements waistcoats for more creative looks

A waistcoat can add personality to a simple look, and instead of choosing the matching items, you can go for a contrast of colours. This simple, yet elegant piece of clothing will add an extra dose of style to your groom’s attire. For example, you can opt for a burgundy waistcoat with a black tuxedo, a checked version under a neutral shade suit or a contrasting navy waistcoat with a beige coat.

Micro prints we love

The tiny patterns are having their moment in the ceremony look trends. You can choose a jacket, waistcoat or even an accessory like a tie or a bow-tie in micro prints and create a contrast with the other pieces in simple solid colours.

When we speak about summer weddings, held in the open – at the seaside, in the forest or in a garden – grooms should choose light suits in linen and silk. For example, you can pair a coloured blazer with white or beige trousers. You can also give up on the bow tie and wear just an elegant pocket square to get that touch of elegance.

Tweed for a rustic feel

Tweed is a creative option for both, summer and winter weddings. For autumn and winter events, tweed is still a trend that many grooms love to wear. A tweed coat or waistcoat with dark matching trousers will create a sophisticated contrast for a wedding held in a castle or in a country house. But you can also choose a light tweed suit for a summer wedding somewhere in an idyllic countryside setting.

Oversized Checks, checked!

Even if the micro prints are on top, the oversized checks seem to keep their place in the fashion trends history. This classic turned modern pattern is so versatile that you can see it from business to ceremony suits. It’s very classy in dark navy and light blue combos, as well as it can be amazing in beige and chocolate for summer. Speaking about beige, you should try to pair a beige blazer with navy trousers or a waistcoat. This combo is equally safe and amazing, due to its powerful, yet stylish contrast.

Slim Fit tailoring Regarding the groom’s suit cut, there is definitely a desire to keep it simple and slim. Forget about relaxed fit trousers and a blazer! In 2022 we speak about sharpcut in well-defined silhouettes to make you feel comfortable, elegant and confident.

We are waiting for you in our TRENDS by Adina Buzatu shop in Baneasa Shopping City, Road Bucharest-Ploiesti no. 42 D, ground floor and on www.adinabuzatu.ro

52

CONCEPT CARS

FERRARI F12 TDF-BASED VELOQX FANGIO OFFICIALLY UNVEILED, RUNS ON EVERYTHING BUT DIESEL What’s a Veloqx? Good question! We will answer you. It’s what happens when you take traditional Italian supercars and turn them into hypercars.

This is not an easy thing to do, so here’s the story.

If you’re not into exclusive real estate, then you have never heard about Veloqx, or more precisely Veloqx Holding. This company owns some of the most expensive com-

with Audi R8 prototypes. But they stopped.

The heir of this entire empire has a passion for cars, and he announced last year that he intends to return to Le Mans, but not

mercial properties around the world. Banks work closely with the entity. They also have a racing pedigree. Almost 20 years ago, Veloqx was participating at the 24 Hours of Le Mans

with Audis. He presented his own car in 2021 – called the Fangio – and it showed a lot of promise as its design surely attracted enough interest. Fast forward one year, and here we

www.business-arena.ro www.businessarena.ro

are: all 12 models built are already sold.

The Veloqx Fangio is based on Ferrari’s F12 TDF. The V12 remained but now it also runs on biofuels or hydrogen.

Race gas is also an option. The Tifosi might recognize some shapes of this car, as the rear looks similar to the F12 TRS – a made-to-order Ferrari based on the F12 Berlinetta that took design ques from the 250 Testa Rossa.

The new Fangio aims at becoming a sustainable Le Mans racer, since the team behind the car wants to go back to racing in 2025. The 800 HP this impressive machine boasts doesn't necessarily scream green technology, but they tuned to engine to run on hydrogen or biofuels. The sound alone is impressive, as you can see the car doing a full run of the Yas Marina Circuit in the video below. The mildly changed Ferrari interior design doesn’t hurt either.

It’s not yet clear if Ferrari agreed with this entirely, but brands like Michelin are already involved with Veloqx. We might witness a late start for keeping the V12 alive and the birth of another coachbuilder that’s keen on performance and real exclusivity.

53

54

CONCEPT CARS

FIVE EV CONCEPTS FROM CES 2022 PREVIEW BIG CHANGES COMING SOON CES 2022 reveals exciting electric concept cars from Mercedes-Benz, Sony, BMW, Cadillac and Chrysler that preview big changes for tomorrow’s transport ▲ As previously predicted, major car makers are deserting traditional auto shows in droves in favour of more direct means of engagement. One industry showcase that still sees a reliable spike of interest is the annual Consumer Electronics Showcase (CES) in Las Vegas, a January jaunt that invokes equal levels of anticipation and dread from tech veterans and commentators. CES 2022 saw another raft of concept cars making their first showing in the city, where they stood out against the usual chattering backdrop. ▲ As well as major players like Mercedes and BMW, there was a new kid on the block. Sony is no stranger to CES, of course, but the Japanese electronics giant surprised everyone by revealing its second concept car and hinting broadly that it might be getting into autos. Cadillac and Chrysler, two all-American brands feeling their influence on the wane, came up with interesting new ideas, while BMW broke out the (monochrome) bling with an E Ink concept and a renewed focus on incar entertainment. Read on for the transportation technology of tomorrow.

Mercedes-Benz Vision EQXX Concept

The Vision EQXX is a Mercedes for a more minimalist future. Designed to do everything possible to maximise its range, this ultraaerodynamic four-door sedan is notable for its rejection of most contemporary Mercedes

www.business-arena.ro www.businessarena.ro

design cues, from the grille onwards. The company describes it as the first ever EV to break the magical 1,000km (621 mile) barrier, helped by the ultra-slippery bodywork culminating in a chopped ‘Kamm’ tail. The

EQXX also continues Mercedes’ obsession with massive display screens and has AIgenerated expressive voice models by UKbased Sonantic. Cars of the future will have a personality baked in.

55

56

CONCEPTS CAR 2022

Sony Vision S-02 Concept New EV companies are relatively commonplace, but this one comes with 76 years of history. Sony Mobility is a new Sony division set up to put the elegant Vision-S and new Vision-S 02 into production at some point in the future. The former was built back in 2020, but this year saw the debut of the crossovershaped 02 model, based on the same basic architecture but with a seven-seater body above. The company is putting its considerable experience into two key areas, entertainment, and autonomy, with the latter driven by a fast 5G communications network. The attention to technical detail on this concept implies that production is a strong possibility.

BMW iX Flow Concept BMW rather bullishly focused its attention on the surface application of technology, with the E Ink-equipped iX taking centre stage. The iX Flow is a proof of concept with a specially developed body wrap made of ‘electrophoretic’ material. Using the same principle as e-readers like the Kindle Paperwhite, the surface responds to electrical signals, transforming the iX into a vast canvas, albeit in greyscale.

Practical applications include switching to light colours in hot climates and vice versa, whereas the artistic potential for geometric dazzle patterns is limitless. Another tech debut was BMW’s ‘Theatre Screen’, an 8K ultra-wide rear screen that descends from the car’s headliner accompanied by a Hans Zimmercomposed ‘sound experience’ to keep backseat audiences enthralled.

www.business-arena.ro www.businessarena.ro

57

Cadillac InnerSpace Concept The home team was represented by Cadillac’s enormous InnerSpace autonomous concept vehicle. This dramatic design envisions a fully autonomous, twoperson electric luxury car of the future, part of a suite of far-sighted design visions that includes the PersonalSpace and SocialSpace Concepts. Cadillac’s ‘Halo Concept’ portfolio attempts to reposition America’s only home-grown luxury car maker as a creator of avant-garde statements. The InnerSpace’s party trick is that it’s a self-driving space for just two passengers. It joins the box-like six-seater SocialSpace and the one-person PersonalSpace flying machine, with yet another concept, the OpenSpace, coming soon. The first real world Cadillac EV is the somewhat conventional Lyriq SUV, due on sale in the States in a few months.

Whether the Halo portfolio will have any bearing on future products remains to be seen.

Chrysler Airflow Concept Chrysler revived a historic name for its new EV concept, the Airflow. The 1934 original was strikingly modern, one of the first cars to be shaped by the new science of streamlining. Its namesake makes a decent fist of the near ubiquitous crossover body shape, but it’s not quite the same kind of trailblazer (compare the Airflow with Sony’s Vision S-02, for example, to see how similarly styled vehicles are becoming ubiquitous).

The Chrysler brand, part of Stellantis, will launch an EV in 2025, hopefully carrying over some of the Airflow’s design. By 2028, it’ll be an all-electric company.

58

JEWELRY

THE DE BEERS CULLINAN BLUE DIAMOND IS EXPECTED TO FETCH $48 MILLION AT AUCTION. HERE’S WHAT TO KNOW ABOUT IT Here are the five surprising details about the 15.10carat stone you need to know.

When the De Beers Cullinan Blue, a 15.10-carat step-cut fancy vivid blue diamond, goes on the block at Sotheby’s Hong Kong at the end of April, it will carry an estimated price tag of $48 million, the highest dollar amount ever placed on a blue diamond at auction.

“Before we get into comparisons with other stones, one important point to mention is that this estimate puts the stone alongside

some of the greatest, finest works by the titans of art history, such as the Botticelli that we sold in January for $45 million, and other great works by Monet, Picasso, Richter, Warhol,” Wenhao Yu, the Hong Kong-based chairman of jewelry and watches for Sotheby’s Asia.

Art credentials aside, let’s not forget that the De Beers Cullinan Blue is the largest vivid blue diamond to ever appear at auction. And when compared with recent sales of vivid blues—including the 14.62-carat Oppenheimer Blue, which sold for $57.5 million, or $3.9 million per carat, at Christie’s Geneva in May 2016, or the 12.03-carat Blue Moon of Josephine, which sold for $48.5 million, or about $4 million per carat, at Sotheby’s Geneva in November 2015—“the potential price per carat here is pretty attractive, relatively speaking,” Yu adds.

Below, we share five surprising details about the diamond, the single-lot sale where it will be offered and the market for fancy vivid blues, which owe their sea-and-sky hues to trace amounts of the rare element boron.

www.business-arena.ro www.businessarena.ro

The De Beers Cullinan Blue Diamond

The De Beers Cullinan Blue embodies the term “fresh to market.”

Discovered at South Africa’s Cullinan Mine in 2021, the blue diamond is taking an extremely short route to market. When it is sold at a standalone, single-lot auction tentatively scheduled for April 27, it will have made just two pitstops along the way: at Diacore, a De Beers partner whose master cutters cut and polished the gem, and at the Gemological Institute of America, where it was found to be the largest internally flawless step-cut vivid blue diamond its lab had ever graded.

“Given the continued and escalating interest in colored diamonds driven by

increasingly limited supplies, the consignors felt that this spring would be the best time to introduce this stone to the market, with the auction format offering the best opportunity for the diamond to be seen by the widest possible pool of potential buyers,” Yu says.

Sotheby’s has a track record of selling multimillion-dollar blues.

When it comes to selling fancy vivid blue diamonds, Sotheby’s has the edge. While Christie’s holds the current record for the sale of a vivid blue thanks to the $57.5 million it achieved for the Oppenheimer Blue, Sotheby’s has realized four of the past five highest prices for these rarefied treasures.

59

60

HAUTE HORLOGERIE

CHRONOMÈTRE FB RSM: AN ORIGINAL COMPLICATION DEVELOPED IN THE GRAND TRADITION OF WATCHMAKING APPRENTICESHIP

The FB-T.FC-RSM calibre, a tourbillon regulator with fusee-and-chain transmission, for the first time incorporates two complications appreciated by discerning collectors: independent deadbeat seconds visible on the dial side and a stop-seconds mechanism.

www.business-arena.ro www.businessarena.ro

The historical source: Marine Clock No. 8 The Chronomètre FB RSM stands at the crossroads of the paths once trodden by Ferdinand Berthoud: between exploration and transmission, as well as between precision and innovation. Its design is inspired by the Marine Clock No. 8, known as H.M.8.

This is a very unusual clock. Dated 1768, it has a regulator-type display, meaning the indication of the hours, minutes and seconds is not coaxial. This type of display made it possible to improve the reading of time and thus to serve as a reference for seaborne navigation measurements: this is the role of a ‘time-keeper’ instrument in the truest sense of the term. The hours are indicated on a disc at 2 o'clock. The minutes are also off-centred, with a dedicated counter at 12 o’clock. The seconds hand reigns supreme, occupying the central part of the watch face and advancing in one-second jumps (based on the ‘deadbeat’ seconds principle).

All these functions are driven by a vertical movement, regulated by a thermo-compensated balance-spring equipped with inertia blocks.

Unique architecture The FB-T.FC-RSM calibre features a pillar-type architecture, in which both the barrel and the inverted fusee are suspended and patented. This fusee-and-chain mechanism is inspired by that of Ferdinand Berthoud's marine chronometers. It ensures the distribution of energy by delivering ‘constant force’ to the patented tourbillon with direct-drive seconds.

This construction reduces the thickness of the movement – which at just 9.89 mm remains very thin for its category despite the regulator-type display and the integration of an independent deadbeat seconds mechanism.

An exclusive horological complication, created during an apprenticeship In terms of both display and operation, the Chronomètre FB RSM offers a present-day take on the regulator-type principle. The hours are read off via a rotating disc at 2 o'clock; the minutes are indicated by a facetted and skeletonised hand on

the subdial at 12 o'clock; and, as a symbol of precision, the seconds hand occupies a central position on the watch face. The “SM” letters added to the calibre reference pertain to the deadbeat seconds mechanism (seconde morte in French), while a balance-stop device enables the tourbillon to be stopped when setting the time to the exact second.

In keeping with the tradition cherished by Ferdinand Berthoud, this complication was developed with a young apprentice watchmaker who devoted his graduation project to it. His work combined the history of deadbeat seconds clocks, the identification of related patents, and the development of the complication for the Tourbillon Régulateur à Force Constante (constant-force tourbillon regulator) calibre which was to house it.

Chronométrie Ferdinand Berthoud also wanted this complication to fit into the movement’s existing dimensions, while guaranteeing precision-timing

61

62

HAUTE HORLOGERIE

performance duly attested by the COSC chronometer certification.

Deadbeat seconds and balance-stop device: the challenges of chronometry The creation of a deadbeat seconds mechanism is a major challenge for any watch that claims to earn chronometer certification. This is because stopping and restarting the central hand in onesecond jumps involves three steps: stopping the gear train concerned; storing the torque it continues to produce during this pause; and then releasing it all at once after one second. Since the regularity of the torque is the essence of a constant-force calibre, interrupting its flow 60 times a minute without compromising its linearity is a true technical feat – which is why the majority of deadbeat seconds movements fail to achieve COSC certification. The Chronomètre FB RSM has been awarded this certification and is therefore a true timekeeper, like the Marine Clocks by the Master Watchmaker himself.

The 18-carat gold dial is handengraved and bears the "No. 8" inscription like the original No. 8 Marine Clock, the inspiration for the FB RSM model. The deadbeat seconds mechanism is visible through a special symbolically figure-eight-shaped aperture at 9 o'clock Only 20 movements will be produced, and several key exterior elements can be chosen by the collector. They may be fitted inside a round or octagonal case.

The 18-carat gold dial may retain its natural colour or receive a PVD treatment, giving it a glimmering metallic sheen. The 53-hour power reserve is visible from the back, close to the three key components of the FB-T.FC.RSM suspended movement: the fusee, the barrel and the tourbillon with direct-drive seconds.

CASE Round case in 18-carat rose gold, fitted with a transparent sapphire ‘porthole’ Total diameter - 44 mm Thickness - 14.30 mm Water resistance - 30 metres Crown diameter - 9 mm • 18-carat rose gold dynamometric crown (decoupling system) • 18-carat rose gold screw-in case-back with a glare-proofed sapphire crystal • Domed “chevee” sapphire crystal, glareproofed on both sides DIAL • Openworked regulator plate (dial) in sandblasted and hand-engraved 18-carat rose gold • Hours indication on sapphire disc at 2 o’clock • Openworked, sandblasted and silver-toned minutes subdial at 12 o'clock with black Arabic numerals • Flat inner bezel ring bearing the seconds graduation, in sandblasted silver-toned brass • Deadbeat seconds mechanism visible at 9 o'clock HANDS • Facetted and skeletonised dagger-shaped minutes hand in 18-carat gold with blue CVD treatment • Steel fixed hours pointer with blue CVD treatment • Central seconds hand in titanium with blue CVD treatment • Arrow-type power-reserve hand in 18-carat gold with blue CVD treatment on the back of the movement STRAP AND BUCKLE • Hand-sewn rolled-edge strap crafted from a single piece of alligator leather (125 x 70 mm, with a 20 mm buckle) – Various sizes available on request • 18-carat rose gold pin buckle – Folding clasp available on request

JEWELRY

www.business-arena.ro www.businessarena.ro

ROLEX GEM-SET TIMEPIECES:

EXQUISITE EXPRESSIONS OF DECADENCE Nothing says joie de vivre like diamonds, as Rolex demonstrates with four timepieces of unparalleled resplendence.

For an object of such diminutive stature, the wristwatch often has an outsized presence. The bon vivant will absolutely love these four outstanding Rolex watches — while the captivating shine of their diamonds and precious materials will draw in everyone else.

The Oyster Perpetual Lady-Datejust, Oyster Perpetual Pearlmaster 39, and two Oyster Perpetual Day-Date 36 watches all demonstrate the wondrous pairing of diamonds and precious metals found in the finest of watches

by Rolex.

Precious metals such as gold and platinum come to us from the stars, literally. They were born in the hearts of giant stars that exploded and scattered the particles across the universe. Diamonds, by way of contrast are born in the depths of the Earth over the course of a billion years. Through their unique brilliance and the extreme care taken in their setting, the high-quality precious stones selected by Rolex endow gem-set watches with unbridled prestige.

Using only the highest quality gemstones, Rolex own in-house gemmologists and gemsetters work in perfect harmony to reveal the diamond’s radiance. The process begins by sourcing the most striking stones, and then deciding how best to showcase them. As the art of gem-setting lies in ensuring that the sparkle and beauty of each stone is fully revealed, the Rolex gem-setter expertly sets each stone, one by one, taking care to ensure symmetry in size and placement — Rolex tolerates variances of no more than 2 hundredths of a millimetre, which is around a quarter of the diameter of a human hair. A final polish makes the tiny metal settings shine, intensifying the watch’s splendour.

Rolex Oyster Perpetual Lady-Datejust The classic Rolex feminine watch, the LadyDatejust benefits from all the attributes of the Datejust, the emblematic Rolex watch that has been a byword for style and technical perfor-

63

6464 J E W E L R Y mance ever since its launch in 1945.

The feminine version of the iconic chronometer, the Oyster Perpetual LadyDatejust first appeared in 1957, showcasing the elegance of the Datejust in a small 28 mm size perfectly suited to a slender wrist, and it has retained its iconic size since that time.

Available in Oystersteel, in 18 ct yellow or Everose gold, or in Rolesor versions that combine both Oystersteel and 18 ct gold, the Lady-Datejust comes in a wealth of versions to perfectly reflect the different personalities of its wearers. The range of materials of the LadyDatejust is equalled only by a stunning range of

bracelets and subtle dials that enhance its style.

A fluted, domed or diamond-set bezel?

Exclusive, shimmering dials paved with diamonds or the fascinating hues of mother-of-pearl?

Simple or gem-set hour markers, or even Roman numerals? The many faces of the Lady-Datejust make this model one of the most varied in the Oyster Perpetual collection.

Rolex Oyster Perpetual Lady-Datejust in 18 ct yellow gold fitted with a diamond-paved dial and a diamond-set President bracelet A showstopper of a wristwatch unveiled this year, the Lady-Datejust is paved with sparkling diamonds, with its 18 ct yellow gold case and President bracelet just peeking out between the prongs. The case sides and lugs of the new LadyDatejust are set with 158 brilliant-cut diamonds as well as 44 brilliant-cut diamonds on the bezel.

The President bracelet sparkles with a further 596 brilliant-cut diamonds. Showcasing the captivating shine of the diamonds that adorn every surface, the dial is fully paved with 291 diamonds. For an added touch of splendour, the dial also features 18 ct yellow gold Roman numerals that bear a lustrous black finish.

The function of timekeeping itself is uncompromised in the Lady-Datejust, with the watch carrying the Superlative Chronometer certification. This new version of the Lady-Datejust is equipped with calibre 2236, a movement at the forefront of watchmaking technology, entirely developed and manufactured by Rolex.

It boasts several patents and offers outstanding performance in terms of precision (+/-2 seconds per day), power reserve (approximately 55 hours), resistance to shocks and magnetic fields, convenience and reliability. Especially notable here is the fact that calibre 2236 uses the Syloxi hairspring, which was patented and produced by Rolex. This silicon hairspring remains up to 10 times more precise than a traditional hairspring in case of shocks, and its patented geometry ensures the calibre’s regularity in any position.

AUGUSTIN WATCHES

Time becomes art Augustin Matei deserves to be famous,

as he is an endangered species: an artisan.

The idea is simple: you come with your wish or desire and he turns it into a watch.

The limit can only be the availability of components, because for his imagination – the sky is the limit.

And one more thing - it's affordable...

OLD SHIP A classic approach, but not entirely, its dial sends you thinking of ships and old sea charts.

OLD SHIP

ASCLEPIUS - THE GOD OF MEDICINE

METALLICA METALLICA A chronograph watch about Metallica, based on a SW-500 automatic movement in a 42 mm case.

ASCLEPIUS - THE GOD OF MEDICINE A handmade watch, using engraving and color techniques, with an automatic Swiss-made movement, ETA 2824/2 caliber.

VIKING This watch now belongs to a Danish person, with a clear lineage. He comes from the old Vikings, and the watch is dedicated to his ancestors.

VIKING

THE TABLE OF SILENCE THE ABDUCTION FROM THE SERAGLIO An iconic image of a bygone era in Romania, often bordering on kitsch. Now, this classic representation has been approached in an artistic and daring manner. This audacity has the role of conveying a message: "it doesn't matter what we look at, or what we say, but how we look at it, and what we say."

THE TABLE OF SILENCE Inspired by Brancusi, this watch tries to revive the synthesis concept and the philosophy behind the sculpture.

The watch comes with a 42 mm steel case, sapphire crystal, and an automatic Swiss-made movement.

66

THIS QUIRKY WATCH FROM H. MOSER & CIE EXPLAINS ITS FUNCTIONS RIGHT ON ITS DIAL The 42 mm piece displays notes and drawings that highlight the features of its movement.

In the world of haute horologerie, timepieces are prized for highly complicated movements and designs. But with H. Moser & Cie’s new “perpetual calendar for dummies” on your wrist, you’ll spend much less time on Google searching its configurations.

Dubbed the Endeavor Perpetual Calendar Tutorial, the 42 mm watch features notes that resemble a “cheat sheet” and drawings that highlight its movement—and for connoisseurs of the brand, this sense of quirky humor is one of its defining characteristics (more on that in a moment). The piece has an 18-karat white gold case and contrasting “funky blue” fumé dial with a sunburst pattern. Limited to just 20 examples it was created to commemorate the launch of an updated version of the brand’s former Funky Blue edition from 2015. Sporting

H. Moser and Cie’s logo in a stealthy new transparent lacquer, that reimagined timepiece is also now available.

As you’d expect, most of the specs for the Tutorial model aren’t that far off the original. It features the same leaf-shaped hands, date display and small arrow-shaped center hand that indicates the month. Both editions come with a curved transparent sapphire-crystal case back. The piece differs, for starters, with its quirky written explainers that provide insight on the watch’s calendar settings, power reserve, month pointer, cleaning the dial and more. A bold yellow stripe that alludes to a “very rare” date also accents the piece, alongside a smallseconds display without markers.

Both models come equipped with the watchmaker’s manual-winding HMC 800

www.business-arena.ro www.businessarena.ro

The front and back of the limited-edition Endeavor Perpetual Calendar Tutorial watch.

movement. The double-barrel function includes an Original Straumann hairspring and an interchangeable Moser escapement. Its pallet fork and escapement wheel are both made of gold. The piece also has a hacking seconds feature that will stop the seconds when you pull its “M” adorned crown. With a frequency of 18,000 vph, the figure provides a lengthy power reserve of 168 hours, or seven days. A leap-year cycle indicator can also be found on its caseback, where all the components have been finished and decorated by hand.

H. Moser & Cie’s perpetual calendars have been around since 2005 and are best known for being able to adjust forwards and backwards at any time of the day (a rarity in this rarified world). The release of the Endeavour Perpetual Calendar Funky Blue model “contributed to the brand’s revival while establishing its new aesthetic codes—a bold blend of the traditional and modern,” the brand shares in a statement. In addition to updating the timepiece, a “cheat sheet” alternative was created to “aid those who may still wonder

how their perpetual calendar works.”

To fans of the watchwaker, the Tutorial timepiece will simply represent its latest form of creative expression following a string of unique releases over the past year. One of those designs includes the Endeavour Centre Seconds Concept X seconde/seconde/, which is similar in design to the new perpetual calendar models featuring a brightly colored fume dial with a cartoonish rubber eraser at its center.

Also, let’s not forget the Swiss Alp Watch Final Upgrade which was released as a middle finger to smartwatches. It resembles an Apple watch with a digital update disk on its dial, but unlike the world’s best-selling watch, it’s 100 percent mechanical.

The Endeavor Perpetual Calendar Tutorial and reimagined Funky Blue edition are available now for $65,000 and $60,000, respectively.

Each comes with a hand-stitched kudu leather strap. Visit the H. Moser & Cie website for more details.

The special-edition and updated Endeavor Perpetual Calendar Funky Blue models.

67

68

THIS $100 MILLION PRIVATE ISLAND IN THE BAHAMAS COMES FULLY FURNISHED AND MOVE-IN READY

The over-the-top isle returns to the market with an even loftier price tag than before.

Why own a vacation home when you can have a whole island? Those looking to really get away from it all this winter are in luck, as Little Pipe Cay, a private island in the Bahamas, has hit the market once again for $100 million. No small price, and $15 million more than the property was going for when it was first listed in 2018.

What justifies the uptick in price? Simply put, owning an island is now more appealing than ever. Many left major cities behind for more far-flung locales last year during the height of the Covid-19 pandemic, and that interest doesn’t seem to be slowing down any

time soon. Little Pipe Cay has some geographical advantages compared to other isles too, as it’s located in the 350-island Exumas archipelago. So it’s not far from Miami, should you ever want to hop over to the city for a long weekend.

The 40-acre island is more built out than most others on the market, too, instead of just being an undeveloped piece of land: Six of the structures come fully furnished and are movein ready. The main residence, for instance, is 5,300 square feet and has a primary bedroom with dual bathrooms and walk-in closets.

Nearby is a separate structure for entertaining,

www.business-arena.ro www.businessarena.ro

which features a dining area, a pub, a spa and a gym. There are four guest houses on the property, plus storehouses and staff quarters. The island’s current infrastructure can be credited to investor and businessman Michael Dingman, who previously owned the property.

Of course, as incredible as a property like this one is, upkeep doesn’t come cheap. Running costs total about $1.5 million, though there’s room to turn it into a money-making venture. The future owner could transform the place into a resort, similar to Sir Richard Branson’s Necker Island, and turn a profit.

Or you can keep it to yourself. The area’s crystalline waters and scenic vistas are certainly

69

70 Nemo was designed for simple operation, so the first buyers all plan to pilot their own mini-subs

FORGET YACHTS,

THIS MINI-SUB CAN BE TOWED BEHIND YOUR TRUCK LIKE A JET SKI It can reportedly reach a toNemo's lower price, advanced tech and compact design—the same size as two jet skis—makes it accessible to more than just superyacht owners.

In the small but exclusive world of personal submarines, there are two brands: U-Boat Worx and Triton. The two go mano a mano for the most part, offering a range of subs for different missions, numbers of passengers and seat layouts. Both brands have their fans, unique selling points and recognizable looks.

They also both share the James-Bond-cool factor of being able to take you way below the ocean’s surface to experience what was previously accessible only to professional submariners.

But the price tags, size and weight of the underwater craft have kept most potential buyers away from ownership. You have to be a billionaire and own a very large superyacht.

Until now. U-Boat Worx’s new Nemo is creating a fresh niche, first by designing a smaller sub that’s owner operated, and secondly by dropping the price to just over a million dollars—or at least half the price of any other personal submersible on the water.

Nemo made its media debut last week in Curacao, where the Dutch manufacturer has a training and service facility for the Caribbean.

“This will be the first series production of a

submersible,” U-Boat Worx’s Roy Heijdra, told Robb Report. “The first 10 of the line have already been sold.” The builder is ramping up production to fulfill what it expects to be healthy demand for Nemo, which will be available in one- or two-seat models.

Nemo will be compact, with roughly the same footprint as two jet skis. Heijdra says that the lower price and smaller size make it accessible to more than “the rich and famous,” because it’ll fit on smaller yachts, say above 100 feet in length, and its 5,500-pound weight can be towed, though you’ll need a serious truck.

U-Boat Worx came up with the concept to build a sub-compact sub 15 years ago to “make the ocean accessible to everyone,” but Heijdra says the world wasn’t ready for the idea. “Yacht owners wanted subs that could go much deeper than anything on the market at the time,” he says. “But now we’ve developed to the point now where we can make a relatively affordable submersible for a much broader audience.”

“Relatively affordable” is the key phrase here. The one-seat Nemo retails for about

www.business-arena.ro www.businessarena.ro

$1.02 million, while the two-seater is closer to $1.1 million. That’s obviously not cheap, but it’s a lot less expensive than anything else

on the water. White is the standard exterior, but owners can custom-color their own subs for about $35,000. Other options include sonar, a manipulator arm, and a navigation package, which provides GPS coordinates to the helm console. The standard package includes two spotlights and floodlights, but owners can add extras for cutting through

71

murky waters. The Nemo in Curacao looked cute and techy from the exterior, with its large acrylic sphere and two seats. It’s capable of diving to 330 feet, maneuvered by four electric thrusters—two vertical and two horizontal—with an average speed of 3 knots.

That’s not super fast, but who wants to be in a hurry when you’re exploring a wreck or coral reef?

Even though U-Boat Worx simplified Nemo to keep costs down, the interior retains a luxurious look, with black trim and leather seats, and small LCD screens for navigation. “We streamlined the engineering to make it super easy to operate,” says Heijdra. “We followed the helicopter world when it comes to maintenance, with digital logs that are sent directly to a server so we know when it’s time to service it.”

With room for two, Nemo by U-Boat Worx aims to open up a new personal submarine category for owners.

A B e veevnetnst

MOST ADMIRED BUSINESS

A W ARDS Gala2022 Enjoy the Quality

WOMEN

* * * * *

Admire the Value

in partnership with

Business Arena recognizes the creativity and leadership of women in the workplace and their vital contribution to the success of business and banking activities throughout Romania.

The event recognizes the efforts and achievements of the ladies who have gained prominent roles in various sectors of the economy and contributed to the development of Romania’s economy throughout the years.

An increasing number of women manage industrial facilities, major companies and build their own successful businesses in Romania nowadays.

Therefore Business Arena Magazine proudly announces the upcoming special awards gala dedicated to the ladies that make a difference in business.

Experts agree that Romania has seen some improvement in gender equality in recent years, but efforts must still be made to ensure equal opportunities for men and women in the workplace.

In this context, Business Arena continues its tradition, celebrating women’s achievements and their vital contribution to the success of business and banking activities throughout Romania.

The Most Admired Business Women Awards Gala 2022 will bring together entrepreneurs, investors, business leaders, diplomats, and professionals from a wide range of sectors to celebrate the successes of women in business.

For more information please contact Cosmin Stangaciu at cosmin.stangaciu@business-arena.ro or phone 0755.274.125

A B magazine

ENJOY the QUALITY

*******

ADMIRE the VALUE

Business Arena operates with a combination of permanent and freelance staff and has a wide network of writers, salespeople, conference moderators and digital experts with experience in many different markets which it calls upon when required.

Business Arena Magazine is a monthly English-language business magazine published

by Business Arena Publishing Group SRL. The magazine was launched in October 2009, and, since then, it has gained reputation as a valuable source of information and analyses for business people and professionals, offering a wide range of exclusive interviews, feature stories and reports, market analyses and special columns.

With over 20 years of experience in the business media segment, Business Arena Magazine’s team of dedicated journalists, graphic design artists, sales and marketing professionals count on innovation, responsibility and product quality as long-term strategies for development.

PUBLISHER: MADRIO PAUL }IC| & COSMIN STÂNGACIU COSMIN STÂNGACIU, GENERAL MANAGER tel: 0755.274.125 - cosmin.stangaciu@business-arena.ro.

news@business-arena.ro, cristian.cojanu@business-arena.ro, paul.madrio@business-arena.ro Reproducerea sau folosirea, f\r\ permisiune, a con]inutului grafic [i editorial sunt interzise.

Not\: Prestige Page = Advertorial “Editorul Revistei BAM [i Colectivul redac]ional al acesteia, nu sunt r\spunz\tori pentru con]inutul articolelor redactate de catre jurnalisti independen]i (free-lanceri) [i publicate `n spa]iul pus la dispozi]ie `n paginile revistei, `n aceste cazuri r\spunderea revenind `n exclusivitate autorului articolului.”

CIRCULATION 10000

ISSN 2069 - 1807