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R O M a N I A R O M A N I A Regular Review of Energy Effi ciency Policies 2006 PEEREA Energy Charter Protocol on Energy Effi ciency and Related Environmental Aspects Aspects Environmental Related and ciency Effi Energy on Protocol Charter Energy Energy Charter Protocol on Energy Efficiency and Related Environmental Aspects PEEREA Romania REGULAR REVIEW 2006 Part I: Trends in energy and energy efficiency policies, instruments and actors TABLE OF CONTENTS 0. EXECUTIVE SUMMARY......................................................................... 1 1. INTRODUCTION ..................................................................................... 6 2. BACKGROUND: ENERGY POLICIES AND PRICES ............................ 8 2.1. Energy Policy - General Trends and Objectives .......................................................................8 2.2. Energy Policy Implementation..................................................................................................12 2.3. Energy Prices..............................................................................................................................14 3. END-USE SECTORS ............................................................................ 17 3.1. Residential Sector.......................................................................................................................19 3.2. Industrial Sector.........................................................................................................................22 3.3. Services Sector............................................................................................................................24 3.4. Transport Sector ........................................................................................................................25 4. ENERGY EFFICIENCY POLICIES........................................................ 27 4.1. Energy Efficiency Policy............................................................................................................27 4.2. Legal Framework.......................................................................................................................28 4.3. Energy Efficiency Targets .........................................................................................................31 4.4. Energy Efficiency Priorities ......................................................................................................32 4.5. Energy Efficiency Financing .....................................................................................................32 4.6. International Co-operation .......................................................................................................36 4.7. Energy Efficiency Institutions...................................................................................................39 4.8. Energy Efficiency Monitoring...................................................................................................42 5. ENERGY EFFICIENCY INSTRUMENTS AND MEASURES................. 45 5.1. Cross-sectoral Instruments and Measures...............................................................................45 5.2. Instruments and Measures in the Residential Sector .............................................................46 5.3. Instruments and Measures in the Industrial Sector ...............................................................47 5.4. Instruments and Measures in the Services Sector...................................................................47 5.5. Instruments and Measures in the Transport Sector...............................................................48 6. ACTORS IN ENERGY EFFICIENCY..................................................... 49 7. RENEWABLE ENERGY ....................................................................... 52 7.1. Renewable Energy Potential and Supply.................................................................................52 7.2. National Policy for Renewable Deployment – Policy Instruments ........................................53 7.3. Renewables Policy Implementation..........................................................................................53 8. ENERGY AND ENVIRONMENT ........................................................... 54 8.1. General Trends and Objectives ................................................................................................54 8.2. Environmental Policy Implementation ....................................................................................57 8.3. Environmental Levies and Taxes..............................................................................................57 9. ASSESSMENT AND FUTURE PLANS................................................. 58 9.1. Successful Instruments ..............................................................................................................58 9.2. Barriers .......................................................................................................................................58 9.3. Improvements.............................................................................................................................59 9.4. Recommendations ......................................................................................................................60 10. CONSULTED SOURCES...................................................................... 60 TABLES Table 5.1. Cross-sectoral instruments and measures...................................................... 45 Table 5.2. Instruments and measures in the residential sector ....................................... 46 Table 5.3. Instruments and measures in the industrial sector......................................... 47 Table 5.4. Instruments and measures in the services sector........................................... 47 Table 5.5. Instruments and measures in the transport sector.......................................... 48 Table 6.1. Intermediary organisations in the residential sector...................................... 49 Table 6.2. End users in the residential sector ................................................................. 49 Table 6.3. Intermediary organisations in the industrial sector ....................................... 50 Table 6.4. End users in the industrial sector................................................................... 50 Table 6.5. Intermediary organisations in the services sector ......................................... 50 Table 6.6. End users in the services sector..................................................................... 51 Table 6.7. Intermediary organisations in the transport sector ........................................ 51 Table 6.8. End users in the transport sector ................................................................... 51 SUMMARY TABLES Summary Table I Priority of Policy Objectives .......................................................... 12 Summary Table II Energy Prices ................................................................................ 16 Summary Table III: Energy Efficiency Policies ......................................................... 43 Summary Table IV: Instruments and Measures .......................................................... 48 0. EXECUTIVE SUMMARY The energy sector represents a strategic infrastructure of the national economy on which the overall development of the country depends. The safe, reliable and efficient functioning of the energy sector is crucial for the Romanian economy. In addition, energy is a public utility with an important social impact. This is why a coherent and economically viable strategy for the energy sector is a fundamental prerequisite for the fulfillment of the national objectives of sustainable growth and eradication of poverty. Against this background, the Romanian energy policy aims to introduce more commercial mechanisms and a more competitive environment, where the prices be formed in free competition between a diversity of suppliers and customers. The latter should gradually be free to purchase energy from suppliers of their choice. Furthermore, a transparent and stable market mechanisms surveyed by independent regulating authorities and market operators is needed. In developing a competitive domestic energy market, Romania is closely observing the energy policy of the European Union with a view to establishing an integrated European market. The oil and gas sub-sector of Romania contribute approximately 11 % to GDP, while the domestic demand for coal decreased amid the turnaround in output of hydroelectric power plants. While Romania has traditionally been an oil producing country, reserves have been declining during the past decades and Romania has become a net importer. In addition to domestic oil and gas production, Romania has also an important coal mining industry (hard coal, lignite and brown coal). Electricity is mainly produced from thermal power plants, hydro power plants and the Cernavoda nuclear power station. Main primary energy inputs in 2000 were natural gas and oil, followed by coal, renewable and waste, nuclear power and hydroelectricity. The energy sector is under the supervision of the Ministry of Economy and Commerce, which formulates policy and strategy. Both the electricity and natural gas sectors have been restructured in recent years. The electricity sector comprises separate companies for power transmission (Transelectrica), electricity and district heat production from thermal power plants (Termoelectrica),
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