ELECTRICITY managed to have profit growth year after year even in this context, but Nuclearelectrica is a company that can accomplish much more on condition that we create a truly competitive environment and we facilitate the growth of producers by establishing a fair regulatory framework. Given that you produce constant amounts of electric power and you have assumed the maximization of the company’s profit as the goal of your mandate, how have you adapted the management plan from the beginning of your term in office to the market condition of 2016, with a projection towards 2020-2030, in terms of the diversification of services, the purchase of other production capacities, and even the implementation of storage technologies, etc.? In 2013, considering the high price on the competitive market compared with the price on regulated market, the estimates suggested a constant financial growth by increasing the percentage of energy sold on the competitive market. However, given the strong influence of subsidies for renewable energy, competitive market prices started to drop heavily, from an average price of 200 lei/MWh to 158 lei/MWh at the end of 2015. Obviously, this impact was reflected in the financial results. In such a context, we immediately thought how we could diversify. Diversification means identifying opportunities that can create synergies with the primary activity of SNN, but such opportunities are rather few in Romania. The acquisition of some of Enel’s assets in Romania was a diversification project in which we became involved, a project that we wanted to carry through, but, unfortunately, Enel changed its mind about selling its assets in Romania. At present, we are analyzing the possibility of using the supply license. If the findings of these analyses say that there is a potential for growth, for added value, we will use the supply license. Regarding the current projects of SNN, they are defined in the administration plan assumed at the beginning of my term and represent priority investments for improving performance, increasing nuclear security and extending the life of Unit 1 of the nuclear power plant in Cernavoda. 108
Still, in addition to the measure of diversification, we need to correct the dysfunctionalities of the energy market. The fact that a producer decides in favor of diversification does not mean that market problems will disappear, nor is it all right to adopt an alternative solution to camouflage what is not working. Diversification is a managerial decision, adopted because it generates a series of financial advantages and not only, and because it is an additional source of revenue on a functional market. We want to have, above all, a functional and truly competitive market, to ensure the maximum capitalization of the core activity at SNN, and to come up with alternative solutions for this maximum capitalization, instead of seeking solutions for covering some lacks. I believe that, in the future, the supply of various services ranging from electricity to Internet, telephone and cable can become unified, generating a single invoice for customers, SNN being interested in the possibility of gathering together such services under the umbrella of several suppliers. The representatives of Nuclearelectrica SA have expressed, on numerous occasions, their dissatisfaction with the obligation of selling electricity exclusively on OPCOM and not directly. In your opinion, what amendments should be brought to Law 123 and what fiscal barriers should be removed in order for Nuclearelectrica to become a powerful regional player? If these legislative and fiscal barriers were to be removed, how much electricity could be exported by Nuclearelectrica? What potential does Nuclearelectrica have to produce more electricity for export if the two existing units underwent retechnologization? What the representatives of Nuclearelectrica advocated was: the need to correct market dysfunctions, in other words, the creation of a fair regulatory framework for all sources, which can lead to the emergence of real competition on the market. Hence, the current dissatisfaction regarding the obligation to sell only on OPCOM, which entails the limitation of competitiveness and imposes constraints on the possibility of valorizing production in optimal conditions. In another order of ideas, there’s a negative perception of direct bilateral
contracts. From my point of view, today, this not justified. Direct contracts as a market instrument are quite natural. Beyond this perception, this type of contract is a must for large investments projects. Bilateral contracts, most of which are long-term contracts, ensure the predictability of revenue, optimize the amount traded, especially during periods of planned and unplanned shutdowns. On the European common market, this type of contract is a fundamental instrument, and not being able to use it implies a position of discrimination compared to other participants in this market. Moreover, the possibility of diversification for growth is equally present in the company’s strategy and this type of contracts would allow transfers within the newly created group through diversification. We must realize that such contracts are part of a natural mechanism of the market, which can be used, with good faith, to the producers’ advantage. What is also needed is to amend legislation in the sense of allowing direct energy exports. This measure takes into account the optimum valorization of the production obtained after the completion of Units 3 and 4 at the nuclear power plant in Cernavoda. Removing legislative and fiscal barriers (exempting nuclear units from inclusion in the definition WWW.TRANSILVANIABUSINESS.RO