Price Dynamics on the OPCOM Market: The Impact of Grid Permit Speculators and Coal Capacity Closures on Energy Supply — NRG-IA

Macroeconomic Context: External Pressures and Internal Vulnerabilities The Romanian electricity market is going through a period of profound reconfiguration, influenced by both internal energy policy decisions and an extremely tense international context. While the European Union is evaluating crisis scenarios, including fuel rationing and releasing oil from strategic reserves to cope with a lasting energy shock caused by the Middle East conflict, according to information published by Economica.net , domestic attention is turning to the security of electricity production. The CEOs of major global oil companies have compared the recent crisis to the 1973 Arab embargo (according to Digi24 ), a warning that highlights the risk of contagion to all energy markets, including electricity. Any increase in hydrocarbon prices automatically puts pressure on the production costs of gas-fired power plants, which often dictate the marginal price on the OPCOM (Romanian Gas and Electricity Market Operator) spot market. OPCOM Spot Market Analysis: Internal Volatility Factors The evolution of prices on the Day-Ahead Market (DAM) administered by OPCOM directly reflects the balance between supply and demand. Currently, this balance is disrupted by two major structural factors that limit Romania's ability to provide cheap and constant energy to the grid. 1. The Accelerated Withdrawal of Coal Capacities A primary pressure factor on spot prices is the reduction of base-load production. Former President Traian Băsescu recently highlighted on Digi24 that, although Romania can avoid a fuel shortage amid the external crisis, a major vulnerability lies in electricity production, specifically through the "closure of groups that operated on coal." On the OPCOM exchange, coal-fired energy has historically acted as a price stabilizer during periods when renewable energy production (wind and solar) experienced declines. The removal of these capacities from the energy mix, without being replaced at an equivalent pace by new dispatchable units (such as gas-fired plants or large-scale storage), exposes the spot market to extreme volatility. During peak consumption hours, the absence of this "buffer" forces suppliers to bid at higher prices or rely on imports, which raises the market clearing price. 2. Speculative Bottlenecks in the National Grid The second factor, with a direct impact on medium and short-term supply, is the artificial blocking of the development of new production capacities. Prime Minister Ilie Bolojan publicly denounced the existence of the "new smart guys in energy," referring to entities that obtain technical grid connection approvals (ATR) without having the intention or resources to actually build wind or solar parks. According to the Prime Minister's statements cited by Digi24 , these actors "block capacities [...] and sell papers and sell only ideas." From the perspective of the OPCOM market, this phenomenon is devastating: cheap energy from renewable sources, which should flood the market and lower spot prices through the merit-order effect, no longer reaches the system. Real investors, who could build and deliver energy to the market, are kept waiting because the capacity of the transmission and distribution network is technically listed as exhausted by these speculators. Implications for Trading Prices The combined effect of these two factors creates a conducive environment for high prices on OPCOM. The operating mechanism of the spot market means that the final price is set by the most expensive production unit needed to cover the demand in a given hour. Decrease in cheap supply: Due to grid bottlenecks, the volume of renewable energy (with near-zero marginal cost) entering OPCOM is growing much slower than Romania's true potential would allow. Increased reliance on expensive sources: With the reduction of coal production, during hours without wind or sun, the market relies on gas plants or imports. If gas becomes more expensive due to Middle East tensions, the price of electricity on OPCOM will inevitably follow the same upward trajectory. Perspectives: New Regulations and Unblocking Investments To correct these distortions in the energy market, the Government is preparing legislative interventions. PM Bolojan announced a new regulation aimed at declassifying the names of those blocking the grid and, implicitly, freeing up unused connection capacities. In the short and medium term, the success of this regulation will be crucial for the evolution of prices on OPCOM. Clearing the connection permits would allow mature projects to start quickly. Once these new capacities are commissioned and begin bidding on the spot market, price pressure will ease, partially compensating for the deficit left by the withdrawal of coal-fired plants. Until these investments materialize, the OPCOM market will remain highly sensitive to external shocks and weather conditions, maintaining a high degree of uncertainty for large industrial…