Spring Paradox: Gas Consumption 4% Above Average and Geopolitical Tensions Keep Electricity Prices at 536 lei/MWh — NRG-IA

Macroeconomic Context: An Atypical Winter and Central Bank Warnings The 2025-2026 cold season has officially ended, bringing to the forefront a statistical reality that contradicts initial expectations of moderating demand. According to data aggregated at the end of March, natural gas consumption in Romania between November 1 and March 31 was 4% higher compared to the average of the last three years. This increase was particularly driven by unusually low temperatures recorded in January, which forced accelerated extraction from storage facilities and constant pressure on the national transmission grid. This high level of domestic consumption does not occur in an economic vacuum but overlaps with an extremely fragile global context. The Governor of the National Bank of Romania (BNR), Mugur Isărescu, issued a clear warning regarding the current macroeconomic environment: the escalation of tensions in the Middle East has already generated visible effects on energy markets. Furthermore, these external shocks continue to amplify the volatility of international financial markets and, critically, overlap with the already known internal vulnerabilities of the Romanian economy. Traditionally, exiting winter should have brought a relaxation of natural gas quotations and, implicitly, electricity prices. However, the current spring equation is being rewritten by geopolitical factors and the inertia of a demand that refuses to drop according to historical patterns. Market Analysis: How Gas Dictates Electricity Prices on the DAM Romania's energy market is experiencing an obvious seasonal anomaly. Logically and historically, March marks the beginning of price decreases on the spot market, amid reduced heating needs and increased production from renewable sources (hydro and solar). In March 2026, however, the average price on the Day-Ahead Market (DAM) managed by OPCOM increased, reaching the threshold of 536 lei/MWh . The fundamental explanation for this increase lies in the price of natural gas, which has remained high. In the electricity price formation mechanism (known as the merit order ), natural gas power plants frequently act as the marginal technology—meaning they are the ones that clear the market and set the final price for all participants. When the cost of the raw material (gas) remains high, due to increased demand (that extra 4%) and external uncertainties, the electricity price immediately reflects this pressure. "The high price of gas is starting to directly affect the price of electricity. The spot market increase in March contradicts seasonal logic, demonstrating the market's vulnerability to marginal production costs." This direct correlation highlights a structural problem: as long as the national energy system relies on gas-fired plants for balancing and covering consumption peaks, electricity bills will remain captive to fluctuations in the gas market. Implications: The Domino Effect on Fuels and External Volatility The natural gas and electricity situation is closely linked to the global hydrocarbon market, where geopolitical tensions dictate new rules. An alarming indicator is the dramatic drop in OPEC oil production in March. According to recent reports, production reached its lowest level since the peak of the COVID-19 pandemic (June 2020). This severe supply contraction is a direct consequence of the war and tensions between the United States, Israel, and Iran. Domestically, the rising cost of a barrel of oil and general volatility have forced legislative interventions. Starting April 1, all major fuel distribution chains in Romania changed their pump prices. This adjustment came primarily as a result of the entry into force of legislation capping commercial markups, a reactive measure aimed at protecting the final consumer from external shocks. For household consumers: State interventions through price caps (on gas, electricity, and fuel markups) temporarily mask real costs, but high spot prices indicate accumulated pressure in the system. For the industrial sector: The cost of 536 lei/MWh on the DAM directly affects the competitiveness of Romanian companies, especially energy-intensive ones exposed to free market prices. Perspectives: Vidraru Modernization and the Need for System Resilience Faced with an unpredictable gas market and heightened external volatility, the only viable long-term solution is to increase production and storage capacity from sources independent of imported fossil fuels. In this regard, a major strategic step was taken this week. Hidroelectrica has started the controlled filling of Lake Vidraru, marking a key moment in the modernization project of the Vidraru Hydropower Development. This massive investment, valued at approximately 188 million euros (excluding VAT) and with an implementation duration of about 7 years, is vital for Romania's energy security. Hydropower plants with storage reservoirs, like Vidraru, represent the main tool for balancing the system. Once…