Energy, between supply and demand

The energy crisis is generated by the large gap between supply and demand, an Energy Regulatory Authority official claims

Roxana Vasile, 23.09.2022, 13:50

The crisis on the energy market is the result of a gap
between demand and supply, the latter being a lot lower, the vice-president of
the National Energy Regulatory Authority, Zoltan Nagy-Bege, claims. The
Romanian says there are two solutions to the problem: expanding the supply from
cheap sources that should lead to a drop in prices, or lowering the demand,
which requires energy efficiency measures and eliminating energy waste, both
for businesses and household consumers. Meanwhile, against the soaring prices
for gas and electricity, some Romanians decided to buy wood to heat their homes
this winter. But the price for firewood also went up, exceeding 100 EUR per
cubic meter.

The authorities want to cap the price, as they did for gas and
electricity, but also to ban the export of certain wood products and
derivatives. The Government will take a decision next week, Environment
Minister Tánczos Barna says. Foresters associations have disagreed with the
measure, saying the best solution would be to hand out vouchers to those who
want to buy wood. In many cases, forestry agencies sell firewood under 100 EUR
per cubic meter. If the authorities introduce a cap, this would not help
household consumers. Parliament is also discussing the latest Emergency Decree
in this field. The cap on electricity prices introduced by the Government is
not set depending on monthly consumption, but on the average monthly price of
last year.

Therefore, as no one provided any explanation as to how the price is
calculated, some Romanians ended up receiving high bills they can’t explain.
The government subsidy scheme might undergo a number of changes, hopefully to
the benefit of the population. The ruling coalition also expanded the list of
beneficiaries of the current scheme, although it left out farmers. As a result,
farmers’ associations submitted an open letter calling for lower electricity
prices. They have warned that, otherwise, price hikes will be inevitable, and
the domestic market will become fully reliant on external markets. There is
also a risk that some countries might introduce a ban on exports in the event
of a global food crisis. (VP)