Romania Faces Overlapping Crises Amid Energy Price Worries

Romania is facing multiple crises that could overlap and worsen each other in the coming year, according to the Intelligent Energy Association (AEI). The association warns of a high likelihood of price crises for energy and fuel, as well as physical shortages. Romania's installed capacity is sufficient, but the country faces periods where controllable generation is insufficient due to ageing coal-fired capacity, delayed or insufficient gas-fired generation, hydroelectricity's dependence on water reserves, planned or unplanned nuclear outages, and grid congestion.

The association does not consider a nationwide blackout as its base-case scenario, but warns that Romania could face very high electricity prices during certain periods, imports close to technical limits, administrative intervention, weather-related local outages, and reduced industrial consumption if several adverse factors coincide. The risk of physical shortages for natural gas would depend on temperatures and other supply-side factors.

The association also identifies risks to the broader economy through diesel, affecting agriculture, construction, freight transport, food distribution, public services, and industry. On the fiscal side, Romania's budget deficit is estimated at around 6.2% of GDP in 2026, with public debt potentially reaching 63.3% of GDP in 2027.

The association argues that the government will have to manage pressures from energy prices, fuel taxation, agricultural support, defence spending, interest payments, and the co-financing of EU-funded investments while simultaneously reducing the deficit. The organisation also points to Romania's sovereign rating as an additional vulnerability, with a downgrade not considered inevitable but a deterioration in risk perception increasing borrowing costs for the state, companies, and households.