As of July 1, the price caps for electricity of RON 0.68/kWh, RON 0.80/kWh and RON 1.3/kWh, depending on the level of consumption, are eliminated, with tariffs now being set by the contract with the supplier.
According to offers, the new prices now reach up to RON 1.5/kWh, practically a doubling of bills for those who consumers of less than 100 kWh per month.
A comparative calculation – as seen in the graphs below – shows Romania moving from the group of countries with the lowest prices to the group with very high prices calculated at purchasing power parity (PPP), both for households and for companies.
From the until-now capped price, among the lowest in the EU….
In the case of households, the electricity price cap placed Romania among the European countries with the lowest energy prices: the average price in 2024 was EUR 0.188/kWh for household consumers in Romania, while the EU average was EUR 0.289/kWh.
In Germany, household consumers paid the most expensive kWh in 2024, at almost EUR 0.4/kWh, followed by Denmark with EUR 0.37/kWh.
The situation is different in the case of non-household consumers, Romania being in the first half in terms of electricity price, with an average of EUR 0.1415/kWh in 2024, compared to the EU average of EUR 0.156/kWh.
It is worth noting that, last year, in Germany, the price of electricity paid by economic agents was half of that paid by the population.
…we switch to the highest prices in the EU, calculated at Purchasing Power Parity (PPS): Romania, on par with Germany
After the cap lifting on electricity tariffs, Romania is approaching the most expensive countries in Europe for household consumers.
Subsequently, prices in Romania expressed in PPS (i.e. calculated at purchasing power standard) are almost 0.25 PPS/kWh, almost on par with Germany. Only Ireland and the Czech Republic have higher prices, which exceed 0.3 PSS/kWh.
Purchasing Power Standard (PPS) is the reference currency established at European Union level to express the results of the European Comparison Programme. PPS is a conventional currency unit that excludes the influence of differences in price levels between countries.
Also expressed in PPS, the prices for electricity paid in Hungary are half of those in Romania:
ANRE explains how consumer electricity price is set in Romania
The head of NERA stated on Tuesday that, at the level of the regulatory institution, an analysis was carried out to correctly determine the price of electricity, which highlighted the resulting price between the research and the price published by suppliers in the price comparison tool on the regulatory body’s website.
For example, the final price structure for a tariff of RON 1.5/kWh for an average household consumer consists of:
- Active energy – 52% of the final price – energy purchase cost + supply component + grid introduction tariff
- Distribution tariff – 24% – the cost of transmitting energy to the place of consumption
- Taxes and contributions – 21% – cogeneration, green certificates, excise duties, CfD and VAT
- Transport fee – 2% – the cost of transporting electricity
- System services fee – 1% – the cost of maintaining system stability
From this final price structure, the supply component represents the part that the supplier retains to cover its operating costs (profit, IT systems, billing, investments, call-center, etc.), this being a variable, just like the purchase price of energy.
The variable component, which includes supply, differentiates between the various offers in the free energy market. The head of the National Energy Regulatory Authority (NERA) says that the law forces suppliers to provide in detail all the components of the final price. Moreover, he says that he insisted that suppliers’ profit margins also be set transparently in order to make suppliers trustworthy again. „The analysis that my colleagues conducted had a very large volume of data. Basically, we included all bilateral contracts, all contracts concluded in the markets, we estimated the imbalances, the quantities traded in the DAM (Day-Ahead Market), as well as the price for July. So, we also have estimates. For several of them, we noticed differences between the price that resulted from our analysis and the price published by them in the price comparison tool. The differences in some cases are very, very small, and in some cases, they reach approximately 10%. Then, once all transactions for July are concluded, we will be able to determine the exact quantity of energy traded on the Spot market, as well as the price at which this energy was traded,” mentioned the head of NERA, George Niculescu.
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