Centralized heating system is ’underfunded’

Less than 20 percent of Romanians still have their homes connected to the central heating system, estimates one of the most important consulting firm in Romania, PricewaterhouseCoopers, which presented on Wednesday the data of a study concerning the situation on heat energy.

The report draws attention to the potential of the centralized system and suggests a stronger involvement of the private sector.

At present, the centralized heating system is controlled by local authorities that annually invest around 30 million euros for its maintenance, an insufficient amount of money.

The report presented on Tuesday demonstrates the need for an investment of five billion euros in the next ten years for the rehabilitation of the obsolete production facilities and distribution or transport which produce very high losses.

Public-private partnerships or private sector investment especially in those cogeneration power plants, which simultaneously produce electricity and heat are tangible solutions for streamlining the system that could reduce heat costs by up to 40 percent.

Price at Gcal, 20 percent higher than in other EU countries

At present, the population pays 20 percent more per Gcal than other EU countries due to huge energy losses in distribution and transport.

The average value of national subsidies amounts to 40 percent of the approved price for operators on Gcal, which is costing the public budget up to500 million euros annually.

Despite the high level of subsidy, operators in the field reported a high level of debt that prevents them from investing in the rehabilitation system.

Most people connected to the centralized heating system are in Bucharest.

Their numbers covers nearly 40 percent of the country.

The system could have a huge potential if the mentioned investment will be made and could lead people to choosing again the solution of connecting to the centralized heating system, shows the conclusions of the PricewaterhouseCoopers report.

Translated by: Denisse-Meda Bucura

MA Student, MTTLC, Bucharest University