2015

This analysis focuses on the tax applied to the water used by hydroelectric power plants in Romania. This study also includes information on similar water taxes around Europe and a comparison between them and that applied in Romania. Although set in Romania in 2000 as a small tax meant to raise funds for development of hydro projects, this fee has increased significantly over the years, making it even harder for the hydroelectric producers’ activity. In the category of invented-out-of-nothing taxes one can find the fee imposed by NARW – the National Agency "Romanian Waters” (ANAR, in Romanian) for water used by power plants producing electricity from hydro sources (micro or large scale). True, this is not a fee that exists only in Romania, but it is nonetheless a bizarre cost that hydroelectric producers must pay. Actually, more than 40% of the energy produced from hydro sources in the 27 countries analyzed, at European level, incurs different types of water taxation. Out of these countries, 11 (9 of which are EU member states) pay different types of fees for hydro power generation, with Romania paying the most for water expenses, according to Hidroelectrica‟s (the main hydro electricity producer in Romania) special administrator.

Romanian Government’s new approach to the oil and gas fiscal regime has all the features of a rigid framework, with meager chances of remaining stable on the long term. But how should a flexible and stable fiscal framework for upstream O&G look like?

A good deal of the political and media environment in Romania continues to promote or to dwell in confusion when it comes to the Romanian state´s gain from petroleum activities, popularly known as “the regime of oil royalties”.

During the evolution of the Romanian oil industry, the refining sector emerged at the end of the 19th century by way of a massive import of foreign capital and advanced technology. In 1895 the construction of Steaua Română refinery started in Câmpina, one of the largest in Europe of that time, with capital of Deutsche Bank.

The creation of a regional balancing market calls into question the commercial viability of the classical electricity generation capacities which ensure, at the national level, this service.

Nobody can deny the sovereign right of states to charge taxes on any activity including petroleum activities. It is of utmost importance when, why and namely how such fiscal measures are established.

The investment cycle of an oil project is long-term – typically 25-30 years, or longer for offshore projects. In addition, offshore projects in particular require large upfront exploration capital investments. Also, the investment risk for offshore exploration activities is high, and the cost recovery timeframe can be over a decade.

Our case study of worst practices involves two-state owned businesses, Hunedoara Energy Complex and Oltenia Energy Complex. They are both nearly insolvent, while the Government continues to pump money into their rescue, without, however, any real assurance that the effort will be worth it

Photovoltaic is a unique concept, if looked at how fast this technology has been growing. In the next decade, global demand could be significantly fueled by solar power. Today, just 0.5% of the electricity comes from photovoltaics worldwide. It may seem like a small number, but in 1998 this was 0.003% and if the trend continues, in 2028 it will grow to 50%. Therefore, by then half of the energy demand could come from solar-powered plants.

For Romania to increase its biogas production 50-fold, a step change is necessary, even if the level of support is sufficient to make most investments profitable.

2015 will be the year of new gas transport projects, which are to connect at regional level the Southern Gas Corridor to Central Europe´s North South Corridor. Domestically, the Black Sea coast will have to be linked to the National Transport System.

COP21 (The Conference of the Parties to the UN Framework Convention on Climate Change, UNFCCC) will be the event of this fall and end of the year in environmental diplomacy. The intention is to achieve a “universal and legally binding agreement” to reduce emissions of greenhouse gases (GHG) in order to keep global warming below 2° C from pre-industrial levels, beyond which it is presumed that the effects are irreversible.