Q: As a major player in the energy infrastructure industry, how does EnergoBit see the prospects for 2016-2017?
Carmen Neagu: If I had answered this question in the beginning of the year, I would have told you that 2016-2017 should be better compared to the previous years in terms of investments, as the infrastructure needs to be modernized and that most of the companies have money for that. But, as the first half of the year is nearly ending, I would say that this prediction was not true, and I just hope that the second half of the year will be better. There is a lot to be done in the energy industry related to the infrastructure supporting this field, but also in the generation field and at the consumer level to improve energy efficiency. It would be ideal to do as much as possible in these years, but there are a lot of large scale projects for which the development works will take longer.
However, I will name some of the projects that instantly come to mind for the future period: cross-border interconnectivity in order to be better prepared to export the excess energy, improve security of supply in generation deficit areas, grid reinforcement for RES integration and relief associated congestion, renewal of existing, old asset base with focus on generation. The introduction of the smart metering equipment for the end user has started, and hopefully this will go large scale. There are still tens of thousands of houses in Romania with no access to the National Power Grid (SEN), where the infrastructure in the area should be built from zero.
Of course, there are discussions regarding the profitability of such projects and the return of investment timeframe, but it is the decision makers’ responsibility to find or create funding solutions, as access to electricity in the 21st century is an indicator of the life quality.
Q: Worldwide in the energy sector, we see a growing consumer demand and world class innovation, combined with a supply chain capable of building, installing and servicing all energy technologies. How does EnergoBit fit into this environment?
Carmen Neagu: Within all our activity, at EnergoBit, we always have in mind quality, efficiency, innovation and answer the customers’ needs/ demands.
When speaking about equipment production, the need to innovate is mandatory in order to be competitive and, in our case, we always wanted to have state of the art technology and to produce the best equipment. For example, the EnergoBit distribution transformer, which we started producing from 2013, has gone through two updates since then, in terms of design, technology, losses reduction. Each new version of the transformer diminished the power losses by 10 to 15%. As we speak, we are working on developing the fourth version of the equipment, which will continue to decrease the losses.
Besides our production facilities which are directed towards increased efficiency and innovation, in order to offer complete solutions, in accordance with the latest technological development, we have partnerships with world class innovators with tradition in setting the market trends. As a brief example, one of the projects we made last year, the photovoltaic park in Miroslava, Iasi, is the first unit in Romania having a double axel tracking system. This technology allows the movement of the photovoltaic panels according to the sun’s position, maximizing the power production.
Q: We also talk about competitiveness in your sector and we know EnergoBit has projects not just in Romania. What helps the competitiveness in your sector? What does inhibit it?
Carmen Neagu: No matter the sector, or the country in which we operate, when we speak about competitiveness we refer to quality, trust, honesty, efficiency, customer orientation, experience, passion. Within EnergoBit, we’ve tried to sum this up into: power, performance, innovation, the pillars which support our activity.
In order to have results on any market, a company needs to gain experience in dealing with complex projects, needs to be trustworthy and have financial power in order to support the involvement in works for which the financing could be delayed. In short, if a company is trustworthy and is determined to be competitive, it will find the way to succeed.
If the companies operate in a well-balanced legal framework which pays attention to all the aspects of an industry and has in mind the best interest of the consumers, there will be nothing to inhibit the competitiveness.
Q: We want to ask you know about the energy efficiency knowing that at the world level, the market for achieving greater energy efficiency is large and growing. How is this market in Romania?
Carmen Neagu: Everybody wants to be energy efficient, as this translates into smaller production costs. The problems that we are facing are related to the costs needed to achieve this energy efficiency, the funding for such investments and the legislation which should encourage such projects.
A more reliable and transparent support for energy efficiency projects, especially for a consistent mechanism for finding investment resources to achieve them, is required. At European level there are numerous regulations regarding this aspect, but, in Romania, the implementation of the Energy Efficiency Directive stopped at the level of solutions to provide the necessary funds and, without such solutions, it is hard to find financing for such projects and have ESCO companies developed.
Q: How do you see the prospects for financing and investments in building, industrial and supply side energy efficiency in Romania?
Carmen Neagu: As long as the legislation does not offer solutions for financing, it is hard to relay investments just on penalties worth being considered in case certain levels of energy efficiency are not attained. So, from the local companies’ point of view, the energy efficiency questions are: do the savings generated by the energy efficiency projects cover or at least equal the needed investment on the short/ medium term, or, are investments not worth the savings, and the fines for not complying with the regulations are acceptable?
Thus, the investments in energy efficiency projects are made mainly by the subsidiaries of international companies which have a group strategy in this respect. However, there are also exceptions, like the one we had in Tulcea, where we built a biogas cogeneration plant.
Q: How much have the investments in the modernization of Romania’s electricity infrastructure increased since the crisis? How does EnergoBit see this dynamics?
Carmen Neagu: During the peak of the economic crisis, the energy sector attracted impressive investments, but these were generated by the legislation encouraging the renewable segment. Moreover, during those years, the national energy consumption level decreased, as many industrial consumers decreased production or closed their doors. So, the investments in the modernization of the power infrastructure were also at a relatively low level. With the renewable investments development, the network stared to be reinforced.
The consumption level increases, but we are talking about small figures, of just a few percentages, so the investments in the modernization of the infrastructure are moderated.
Besides the low demand, the investments were also affected by the political changes that took place in the last years, with the energy segment playing a major part in many sensitive situations. A more stable political system, with a predictable legal framework will definitely support the modernization of the infrastructure and the investments in this direction.
Q: How do you see the renewable energy trajectory in the context of the low oil price?
Carmen Neagu: The trajectory of the renewable energy was dictated by the financial facilities offered to the investors, which brought significant investment. At this moment, more than 20% of the local energy is produced from renewable sources: hydro, wind and solar.
Until the legislation changes, it is hard to consider that we will still see important investments in the renewable field. Moreover, the current players in this field announce important financial losses from the Romanian projects. Having these in mind, I can say that there are no encouragements for major projects in this segment.
EnergoBit contributed a lot in the development of the renewable sector, by participating in the most important wind and photovoltaic projects from the country. We are using this experience in projects we are involved in abroad, where the renewable sector is now developing.
Q: What can you tell us about the smart grid technologies and services in Romania regarding both of its components (electric grid equipment and services required for the modernization of the distribution and transmission system and the IT technology involved for supporting a fully network grid)? What are the obstacles for deploying the smart meters in Romania?
Carmen Neagu: Smart meters will not solve infrastructure issues and the lack of electrification in the remote areas. From the technological point of view, there are solutions available for a smart city, but we are lacking the financing. There are far more urgent matters to be addressed in the energy field and the investment needed in this regard might get further postponed. Looking at the more advanced economies in Europe we see that, not even there, the smart city didn’t become everyday reality for the common people.
The deploying of the smart metering system at a large scale may change the consumption habits of the users, and would identify the areas where the investment is most needed, but without financing it will be hard to see this in place.
Q: From an executive point of view, regarding ‘the new economic equation’, what are the most important variables in the industry of energy infrastructure in Romania? Please detail.
Carmen Neagu: One of the most important variables in the development of the power infrastructure is the precise strategy within the predictable legal framework. The second most important variable I consider it to be the determination, the will to do what you want and transpose a strategy in real actions.
I think this applies to everything, not only to the energy industry. If you know what you want, the strategy, and you have the will, the determination to do it, you will find financing, opportunities, resources, technologies and all you need to reach the goal you have set.