Transelectrica Flags Downward Regulation Bids of RON 999/hMW — NRG-IA

The power system must be kept in constant balance: electricity generation must closely match consumption. When an imbalance occurs, Transelectrica purchases specialized balancing services from generators or other qualified participants. Sometimes it requires them to increase output, other times to reduce it. In June 2025, Transelectrica noticed that some bids for the "downward regulation" service spiked abruptly, from approximately RON 15/hMW in previous periods to RON 500, 700, and even 999/hMW. The company states that this sudden shift raises concerns regarding competition in a critical segment of the market. For consumers, the stakes are simple: these costs do not appear directly as a separate line item on their bills, but they are part of the cost of safely operating the power system. If balancing becomes significantly more expensive, the pressure can eventually filter through to the tariffs paid by end-users. The balancing market is the power system's brake and accelerator The power system must operate in constant balance. At any given moment, generation and consumption must be nearly equal. If too much electricity is produced relative to demand, the system requires downward regulation. If too little is produced, it requires upward regulation. The balancing market is where the transmission system operator (TSO) procures these adjustment services. It is not a standard electricity market where power is bought for the next day. It is an intervention market used to keep the grid stable. For the general public, the distinction is essential: RON 999/hMW is not the price of electricity on the spot market . It is a price associated with balancing capacity—meaning a participant's availability to adjust output when the system requires it. What downward regulation means Downward regulation means that a qualified participant is available to decrease generation or grid injection when Transelectrica needs to stabilize the system. In a system with increasingly variable generation, solar peaks during certain hours, and demand that does not always move in tandem with production, this type of service is becoming increasingly important. Sometimes the system needs more energy; other times, it requires a portion of generation to be curtailed. mFRR stands for manual frequency restoration reserve . In simple terms, it is an emergency reserve that the operator can deploy to restore system balance after a deviation. Transelectrica procures this availability to prevent the system from operating on the edge. From RON 15/hMW to RON 999/hMW The element that caught Transelectrica's attention is the price spike. In the document published by the company, bids for downward mFRR in June 2025 reached values between RON 100 and 999/hMW , with recurring prices of RON 500, 700, and 999/hMW . Transelectrica mentions participants such as CE Oltenia, Electrocentrale Craiova, BEPCO, INGKA Investments Renewable Energy România, and True Energy Management . The company points out that in other months, these bidders had submitted prices around RON 15/hMW . This discrepancy completely changes the nature of the issue: it is not a standard market fluctuation, but a leap that raises questions about competition, available supply, and the market power of certain participants in a critical segment. Transelectrica's financial data already showed an increase in costs associated with balancing capacities. In its consolidated statements for 2025, the company indicated an average procurement price for downward mFRR of RON 32.57/hMW in H1 2025 and RON 137.11/hMW in H2 2025 , signaling that the pressure was not merely a one-off event. Why Transelectrica is raising concerns over market distortion Transelectrica asserts that this development was not justified by significant changes in demand, supply, or objective technical factors. The company points to a sudden and unilateral shift in the bidding behavior of a small group of market participants. This phrasing must be interpreted with rigor. Transelectrica is flagging an anomaly and a potential distortion of the competitive mechanism. Based on the analyzed public document, there is no definitive finding of an antitrust violation. This distinction is important: a market signal can be highly concerning without, at that stage, constituting a formal sanctioning decision. The underlying issue is market structure. If only a few participants are capable of providing a critical service, competitive pressure can weaken. And if the system requires that specific service for grid security, the operator cannot treat the procurement as an optional choice. In other words, the balancing market can become vulnerable where the service is essential, supply is limited, and the number of relevant participants is small. The temporary price cap requested by Transelectrica Through address no. 29851/23.07.2025 , Transelectrica requested that ANRE apply a reasonable temporary price cap for downward mFRR for a period of 3 calendar months…