Article published on www.investenergy.ro

The energy market before, during and after the pandemic. How do you see/feel the energy sector/energy market in this period when a state of emergency is declared in Romania? What about after the pandemic?

Before this health crisis, the energy market was already in a difficult moment when it was trying to recover after the impact of GEO 114/2018. At the beginning of the year, many players started optimistically with well-developed strategies, but they were once again faced with a complicated situation that forced them to start over. During the state of emergency, priorities were changed and other objectives were set, the most important things being the protection of employees, customers and involvement in the fight against the virus with all possible resources. I am glad that many companies have joined in this joint action, have shown unprecedented solidarity and have thought first about combating the effects of the epidemic and then about the economy.

On the other hand, we are already seeing some of the consequences of the pandemic on the local energy market – the decrease or freezing of the activities of some suppliers, the decrease in production and consumption, the decrease in investments – which we will feel in the post-pandemic phase. Here I foresee an extremely difficult period for energy producers, transporters, but also distributors, who will be forced to adjust both their costs and investment plans, and suppliers to rethink their business models again, review budgets and identify new development opportunities.

Post-pandemic, we will have to adapt our energy market to much greater flexibility, including by adopting the latest European regulations in the field and urgently amending the Energy Law 123.

Have you identified any problems/malfunctions during this period? What are the risks and how can they be avoided?

At the moment I think there is a lack of communication between the government and the business environment regarding concrete measures to support companies, and this causes uncertainty and unpredictability that is further reflected in decision-making.

What are you worried about at the moment?

The fact that a deep crisis awaits us, not only economic but perhaps even a social one, in which many people will lose confidence in the future. We will live in uncertain times again, but I am convinced that if we fight together we will be able to get through this period as well.

What do you recommend to market players to be able to overcome this period well and how to prepare for what is to come? What should they not do?

Leadership is the mandatory shield with which to move forward during this period because people need strong leaders to follow, who make firm decisions, protect them, direct them and encourage them. I believe that leaders need to adopt measures that could make businesses more flexible, redesign the business, analyze and see where it can be modified so that the company is ready to face a period that is expected to be long-lasting, full of economic difficulties. Next, we will have to understand that we are only inhabitants of this planet along with other life forms and that we will have to rely only on what has made us so strong: love and solidarity!

Changes are needed in the strategies of companies, in public administrations… Your opinion

Any crisis situation brings with it the need to review strategies to counteract its effects, to restart the business and to identify new beneficial opportunities for companies, people and society in general.

How important is digitalization and at what level should it be implemented?

A valuable lesson that this pandemic has taught us is the importance of automation and digitalization. Let’s imagine what it would be like if our national energy system had SCADA solutions, Asset Management solutions, smart grids and smart metering throughout this crisis! We had the opportunity in the mid-90s to be among the first to bring automation solutions to the industry, with a new SCADA solutions department in Adrem Invest, a department that later developed into a stand-alone company: Adrem Engineering. All these tools would have provided wonderful support for continuing activities without being physically on the ground, thus also eliminating direct contact with customers, while respecting social distancing rules. In my opinion, after this crisis is over, the state should learn a number of lessons and support investment projects, continue with the digitization of the national energy system and provide the necessary financing, so that the next crisis that will hit – not if it does, but when – will not find us in such a vulnerable place.

Within the Romanian Energy Center, we have prepared a series of measures for the energy sector that we will submit to government institutions, which include ANRE’s support for the digitalization of the energy system (through smart grids and smart metering technologies) and the relaunch of investments in energy infrastructure, such as the expansion of the gas network.

Is Adrem’s strategy changing after the crisis?

During this period, we will review the Adrem strategy so as to reduce as much as possible the effects of the health crisis on our people and the company. Going forward, the main priority will remain the protection of employees, customers and their families, we will align the activity plans with those of our partners, we will adapt the services we offer to the new economic context and we will look for new development opportunities.

Have you prepared a return-to-work plan? If so, what does it consist of?

In the next period, we will continue to focus on keeping our employees and customers safe and healthy; the danger will not disappear after May 15 when the state of emergency will be lifted. In the short term, we are working on a plan for a gradual return to our workspaces and a list of measures regarding the way activities are carried out, new office rules, as well as tools that will support our activity after May 15, both in the office and in the field. In terms of business, we are working on a recovery plan that is in line with the new economic and social realities shaped by the pandemic, we need to be flexible, adapt and secure our business. Now comes our real resilience test. I also think it is a time for modesty, in which we should all introspect. In the past, we have taken the gifts of the Earth, but nature shows us in full force what it can do. We are not untouchable and we are not above.

What measures should the authorities take to stabilize the market and a recovery of companies?

Providing state-subsidized and guaranteed loans to ensure the cashflow of the affected companies plus taking over the costs for the technical unemployment that is already happening and which I consider a good idea. Regarding the energy industry, I believe that the government will have to support the relaunch of investments, with investments in state-supported energy infrastructure, in order to bring back workers and strengthen activity in the energy system. It is time for large infrastructure projects – strategic projects that may not have met the criteria for recovery in the short term and that are now necessary to restart the economy.

Another measure is ANRE’s main support for investments aimed at computerization and digitization of the energy system. Together with several associations, we have developed a series of measures that we will propose to the government and that we consider necessary to preserve the balance in the national energy system.

Opportunities after the crisis?

From this crisis, we have learned that we must first win, then learn and correct what we have not done well before. The opportunities I see in the future are related to “work from home” which will become “remote work” and will fundamentally change the way we will work in the future (from home, by the sea, from another country, etc.). I also believe that the dawn of a different type of working relationship between companies and people is beginning and that we will gradually move away from the classic employment contract and employment at a single company. This will bring with it a series of new opportunities such as development opportunities in which we will learn to organize ourselves better, to be more efficient, more productive and better managers – to prioritize and manage time better for our benefit. Also, I think vigilance is another quality that people should develop given the unpredictable situations to which we will be exposed more and more in order to be able to take rapid, lucid and panic-free preventive measures.

Another opportunity I see is the rethinking of certain organizational structures in the sense of outsourcing activities, as we experienced after the 2008 crisis, but also an increased attention to what the flexibility and agility of a business really means.

What investments are now required as urgent? What projects can be done/completed this year?

It is time to design major investments and the role of states will increase in providing the framework for them. A rethinking of supply and production chains to reduce dependence on Asia could also create investment opportunities. But this year and perhaps part of the next will be dedicated to rebuilding the economy and the value chains that are breaking at the moment. It is time for Romania, in the effort to rebuild and recover, to rethink its production structure and increase its flexibility, networks and even consumption.

What is the right and functional energy mix for Romania?

Romania is a rich country in terms of energy resources, so I believe that the right energy mix includes all forms of energy. And with a smart energy mix, such as nuclear energy and renewable sources (large hydro, solar, wind, biomass, etc.) I believe that our country could assert itself as an energy security provider in the area and in this regard negotiate a favorable position in the context of the Energy Union. The use of our hydropower capacity on a regional scale in ensuring stability and regulation can be the best example of this.

Are you optimistic about the future of energy in Romania? On whom and on what does the success of the energy transition depend?

I am grateful that we still have the chance to learn and rebuild by eliminating mistakes. The chance to recover through a more efficient and pragmatic way of reviewing future plans through relevant investments in technology, such as digitalization, the exploitation of our energy resources in the country and the creation of a predictable legislative framework by the competent authorities. The success of the energy transition depends on our ability to understand the mistakes made and take a course to correct them.

How prepared is Romania for the challenges of the future? Are we in the right direction? What are we missing?

Romania is unfortunately not as well prepared for the challenges of the future as it should! This is why we urgently need a new vision and a strategy adapted to it. For this we need leadership, that is, exactly what we have lacked in recent years. It is not well prepared because we have a weak and underfunded educational system, because extremely important resources have chosen the path of exile and are producing today for other states, because we have not been able to replace the typical Byzantine clientelistic and arrogant system of the state and many other reasons why we are not well prepared. However, I am optimistic! I am optimistic because God loves Romania and Romanians.

At the end of the interview, I would like to discuss the importance of communication in this period and after the pandemic…

Given that this period of unpredictability has strongly affected both financially and especially emotionally most people, companies and industries, we need intense, multi-directional communication with everyone around us – partners, authorities, colleagues, family, friends – in order to all act together with a common goal, namely the good of us all. Therefore, in order to get through this crisis together, it is very important to discuss openly with each other, to look for solutions, to consult and to be good allies. Only in this way will we be able to learn, win and grow together.