Florin Frunză: Energy transition must be a national priority because it affects all consumer categories

2021. 05. 25.

MET Romania Energy, one of the largest local energy suppliers, part of MET Group, says green energy projects are in its long-term development plan. Last year, however, local business suffered from the health crisis which had a direct impact on the energy consumption.

Source: Ziarul Financiar

"MET Group is looking to diversify its portfolio geographically, both in power generation and infrastructure, with renewable assets to feature prominently. In Romania we are also interested in identifying assets with potential for further development, especially in photovoltaic or wind projects," says Florin Frunză, CEO of MET Romania Energy. Frunză took over as the company's general manager at the beginning of September last year, after holding several positions within OMV Petrom since 2007, including the administrator of OMV Petrom Gas.

"We see an opportunity in the partnership between suppliers and consumers to find solutions to produce energy from renewable sources and increase energy efficiency. These solutions involve cost and implementation efforts. Suppliers that can engage their customers in finding mutually beneficial solutions will be successful in the long run."

 

The effect of the health crisis

Through a series of acquisitions, MET has become one of the most important local energy suppliers, according to data from the National Energy Regulatory Authority's (ANRE) 2020 report showing that the company has almost 3% of the competitive market.

"The company recorded a turnover of 953 million lei at the end of 2020 (equivalent to 197 million euros). It is important that we managed to strengthen our position in the natural gas supply segment, becoming one of the leading private suppliers in the market."

The figures are down from 2019 when, according to data from the Ministry of Finance, the company had 1.5 billion lei (about €321 million).

"The results were influenced by the evolution of energy consumption in the context of the Covid-19 pandemic. MET's large customers include big companies in important industries such as chemicals, automotive, bakery and building materials," explains Frunză. However, some of the sectors mentioned were among the hardest hit by the health crisis, which was further reflected in the evolution of the company's business.

 

Sales strategy

Currently, MET Romania Energy's main activity is the supply of electricity and natural gas to non-household consumers, but with the liberalization of both markets for household consumers, it is not excluded to address this segment in the future.

"We obviously want to see a consolidated growth in our customer portfolio. We want our offer to be a competitive one."

This year, one of the major challenges for energy suppliers and consumers is price increase, a trend that is particularly visible in spot transactions.

"Most of the consumers in MET Romania Energy's portfolio have contracts signed with a fixed price, guaranteed for the entire contractual period. They have benefited from the contractual price maintenance and stability of the collaboration with MET. In order to maintain the price and ensure the supply of electricity under the same contractual conditions, we have relied on a strategy based on purchasing energy once the supply contract is signed." Purchases are made on trading platforms managed by the OPCOM energy exchange.

Frunză says there are several factors that have generated the spectacular price increases in energy trading.

"I would like to mention the increase in consumption during periods of low temperatures, diminished hydro resources during certain periods, unavailability of dispatchable groups, suppliers' strategy to trade significant quantities on the PZU, the bidding strategies of renewable generators, the deficient physical notifications of market participants compared to recorded consumption or the trend in European markets."

 

A transition for all

Apart from energy price challenges, in the long term the main phenomenon reshaping the market is the energy transition.

"In 2020 we have reached a crossroad. On the one hand we have the goal of decarbonising energy systems and reducing greenhouse gas emissions by promoting renewables. On the other hand, we need to ensure national electricity supply at an affordable cost for the end-consumer."

Seen this way, the energy transition should become a national priority, says the CEO of MET Romania Energy.

"Replacing the current park of power generation units and strengthening the transportation infrastructure can be both a problem and an opportunity. This issue must be a national priority as it affects both consumer groups and energy security."

Frunză says that the development of the National Integrated Energy and Climate Change Plan 2021-2030 (NIIECP) is one of the most important steps Romania has taken on the path to energy transition.

"The plan is being updated. Romania has high ambitions for the share of renewable energy in the gross final consumption, at a level of 30.7% by 2030. The plan also foresees that additional renewable energy capacity of around 7 GW will be installed as a priority by 2030," Frunză adds.

MET Group is 80% employee-owned, with the remaining part being controlled by Keppel Corporation, a Singapore-based business focused on developing sustainable urbanization solutions, including energy. MET is registered in Switzerland and reported consolidated revenues of €11.2 billion last year, according to public disclosures.