The imbalance between the demand for energy within a nation, and the EU as a whole, and access to affordable energy is the primary energy security risk. Over the last few years, there has been a decrease in energy consumption coupled with high energy production in the region, which explains the current excess in electricity production over capacity. However, without investment in capacity expansion, there will be a production deficit after 2025.
Experts predict that Romania's internal energy consumption will rise, even though the tendency is to separate economic growth from energy consumption. The increased interdependence of energy markets will put competitive pressure on Romanian electricity producers and their inefficient assets, such as those that have reached their average life span. It is extremely challenging to coordinate our regional energy production market with neighbouring countries because only Bulgaria, Hungary and Romania observe the EU environmental rules regarding energy production. This imposes considerable constraints on electricity producers and, as a result, domestic production of hydrocarbon and coal-based electricity will, in all likelihood, diminish. Currently, Romania's day-ahead electricity market is connected with those of Hungary, Slovakia and the Czech Republic.
As far as natural gas is concerned, connections with neighbouring countries diminishes supply security risks. However, the lack of investment in transport networks and the low pressure in over-sized pipelines prevent Romania from complying with EU standards, and make Romania an economic, financial and technological outlier circumvented by energy flows. As a result, in the medium and long term, the implementation of bi-directional flow connectors and regional LNG terminals will provide alternative sources of gas for Romania.
Experts also predict that traditional fuels will remain a part of the energy mix in Romania, with hydro-electricity continuing as the backbone of the national energy system, together with a small contribution from renewable sources. The on-shore and Black Sea offshore gas reserves will satisfy internal demand, while coal will come under increasing pressure due to the environmental cost of greenhouse gas emissions. Biomass will become central to the heating of households in rural areas and co-generation will continue to play a key role, with investments planned in the modernisation and re-fitting of centralised heating systems, new power plants and energy efficiency projects.