Government Plans To Reorganize Loss Making Electrical Power Sector

The European Commission might flag down Romania if it fails to properly reorganize its coal industry. The fear is the state might couple the National Coal Company with other companies, making it impossible to determine which company incurs what costs.

The president of the National Institute for the Study of Energy Sources Jean Constantinescu the EU might agree with state subsidies given to the coal industry, provided it is deemed to be in the public service and that two conditions are met: 1. a public debate will ensue, and all parties will agree the industry should be saved from bankruptcy; and 2. proofs should be provided that the coal generated power is the cheapest way to go.

So far, the government plans are to integrate horizontally and vertically the industry, meaning coal companies and coal fueled power plants will be couple with hydro-electric power plants, on the one hand, and electric power distribution companies, on the other hand.
Britain has 500 times more coal than Romania does, and yet the industry was closed down for reasons of inefficiency. At the same time, coupling a loss making industry (coal powered electrical power plants) with a profit making industry (water powered electrical power plants) is a crime, Constantinescu added.

The National Coal Company is the biggest sole debtor to the state budget, with debts at 1 billion Euro.