Czech energy group CEZ said on Tuesday its earnings before interest, taxes, depreciation and amortisation (EBITDA) from power production and trade in Romania dropped by an annual 84% to 300 million Czech crowns ($15 million/11 million euro) in the first quarter of 2014, while EBITDA from power distribution and sales surged 75% to 600 million crowns.
The lower result in the power production and trading segment was influenced by lower output, a fall in the market price of green certificates, which the company receives for the green energy it produces, the postponement of the assignment of the second certificate for wind power generation and the suspension of allocation of certificates to its Fantanele Vest wind park since November 2013 due to notification delay on the part of the European Commission, CEZ said in a report.
Energy distributors in Romania are required to purchase green certificates for every MWh of power they sell. The certificates are issued to wind, hydro and solar power producers who can sell them directly to distributors or trade them on the state-owned power market. Last year, the Romanian government decided to temporarily suspend as of July 1, 2013, the issuance of some of the green certificates for which hydro, wind and solar energy producers are eligible in a bid to reduce the price of electricity for final consumers.
"In Romania, there was a sharp drop in green certificate prices from around RON [Romanian leu] 200/pc in December 2013 (EUR 44/pc) to around RON 131/pc (EUR 29/pc) in March 2014, which is the statutory minimum permissible price of green certificates; at the same time, the quota for electricity generation from RESs [renewable sources] in 2014 dropped to 11.1% (from the previous statutory quota of 15%)," the company said.
The output of the 240 wind turbines at CEZ's Fantanele and Cogealac wind parks in Romania fell 21% on the year to 322 gigawatt hours (GWh) in the first quarter. It also produced 20 GWh at its hydropower plants in the country.
On the distribution and sales segment EBITDA surged mainly due to extraordinary earnings associated with the payment of debts by the Romanian state railways.
The company has been present in Romania since 2005.
(1 euro = 27.4116 Czech crowns)
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