Romanian Government Unveils Five Measures to Reduce Electricity Prices

Government Targets High Energy Costs

The Romanian government has announced a series of measures aimed at significantly reducing electricity prices for consumers across the country. Energy Minister Bogdan Ivan confirmed on September 2, 2025, that the governing coalition has agreed on five key initiatives to be adopted via a memorandum. This move comes as taxes and tariffs currently account for a substantial portion of the final energy bill, with official statements indicating that 49% of the price paid by consumers is comprised of transmission and distribution tariffs, taxes, and excise duties, leaving only 51% for the actual active electricity price.

Minister Ivan highlighted that Romania faces some of the highest electricity prices in Europe relative to the population's purchasing power. In the first quarter of 2025, the average energy price in Bucharest stood at 27.5 euro cents/kWh, surpassing the EU average of 25.4 euro cents/kWh. Wholesale prices also recorded a high average of 148.3 €/MWh in Romania during the same period, significantly above the European average of 100 €/MWh.

Key Measures for Price Reduction

The proposed package of reforms is designed to foster a more stable and competitive energy market. The five measures include:

• Operationalization of a Market Maker Mechanism: This involves selecting an operator to enhance liquidity in the energy market by stimulating demand and supply, facilitating long-term transactions, and thereby contributing to a steady decline in prices. The Energy Regulatory Authority (ANRE) has already established the legal framework for this mechanism.
• Increased Transparency and Risk Reduction in Energy Transactions: New regulations will require firm guarantees for all energy transactions to curb speculation. Buyers will now need to provide a 10% guarantee for purchases extending over six months and 5% for shorter contracts. Additionally, a Central Counterparty (CCP) will be established to further reduce speculative risk.
• Introduction of Dynamic and Differentiated Tariffs: This system will base tariffs on consumption intervals, rewarding consumers who utilize energy during off-peak or cheaper periods with lower prices. International examples cited by Minister Ivan suggest such measures could reduce consumer bills by up to 24%. ANRE will mandate electricity suppliers with over 200,000 consumers to offer digital solutions for real-time monitoring of dynamic tariffs.
• Single Purchasing Mechanism for Distribution Operators' Own Consumption: This measure aims to lower the purchase prices of energy for distribution operators' internal use. This cost currently represents nearly 25% of the total energy cost for consumers, and its reduction is expected to lead to lower distribution tariffs for all. This mechanism is anticipated to be enacted within three months.
• Integration and Coordination of Energy Efficiency Programs: Approximately 40 funding lines currently spread across various ministries will be centralized under the Ministry of Energy. A new inter-ministerial task force will be established to ensure efficient coordination and monitoring of these programs.

Implementation and Broader Context

The implementation of these measures is projected to take between two weeks and six months, with the first visible effects on consumer prices expected within approximately one year. The Market Maker mechanism, in particular, has a three-month deadline for full implementation.

In a related development, Minister Ivan has also initiated negotiations at the European level to extend the deadline for closing coal-fired power plants from 2026 to 2030. This extension aims to alleviate immediate price pressures by maintaining a portion of the country's baseload production capacity, providing Romania with more time to develop new strategic energy projects and ensure a balanced energy transition. The country has faced challenges due to the removal of 7,000 MW of gas and coal capacity over the last decade without adequate replacement, contributing to a current deficit of 1,500 - 2,500 MW hourly.