Abstract

The Romanian energy market suffers from structural flaws, which pre-date the beginning of liberalization. Although the restructuring process by breaking-up vertical monopolies (damaging for competition and for competitiveness at the same time) started off relatively early – 1998 for electricity, 2000 for gas, uncompetitive commercial practices and damaging administrative decisions kept persisting. A brief diagnosis of how the Romanian electricity market runs shows that structural flaws still exist. Over 75% of wholesale electricity trade takes place over-the-counter (outside the specialized trading platform OPCOM), via so-called bilateral contracts, be they negotiated or regulated. In and by themselves, bilateral contracts are important for ensuring trade predictability for large industrial consumers. Although there is a specialized market for bilateral contracts inside OPCOM, only 8% of the entire electricity traded inside OPCOM is represented by this market segment.