Corneliu Bodea
CEO
ADREM

12 August 2019

Aadrem was founded in 1992 and expanded into the energy sector in 1998. The company is divided between Adrem Invest, which provides services for utility networks, Adrem Engineering, that provides turn key energy infrastructure solutions and Adrem Link, providing solutions for energy efficiency and meter reading.

 

In its 27 years of existence, ADREM kept evolving and capturing new market opportunities. Which areas do you expect to drive business going forward?

We believe that the power generation field bears the highest potential in the immediate future. Although Romania has traditionally benefited from a production capacity much higher than its consumption, due to the lack of new investments and the aging of the facilities this capacity has become insufficient. The prospect until 2030 reveals the need to replace some of the production capacities that will become obsolete; for example, charcoal-based power generation centers, like Hunedoara Energy Complex and Oltenia Power Plant as well as others, will require modernization or they will need to be shut down and rebuilt altogether.

There is also great potential still in terms of transmission and distribution networks, which were originally developed way back in the 1960s and have seen few developments since.  These networks must first be automated to ensure that they are used as efficiently as possible, and also to establish a high degree of control over their operation. A SCADA type system enables you to bring information from all the elements of the system and allows for a deep understanding of its characteristics. Starting from such an analysis, you can then identify critical areas that are in most need of action, then calculate and design the increase in efficiency. 

 

The existing infrastructure was not designed with the connectivity that modern technology offers. How challenging is it to bring it to a level of automation in accordance with the times we live in?

It is not simple but we hold the necessary knowledge and technology to do it. Many countries have faced this situation in various forms, whether we are talking about countries similar to Romania where industrialization has been forced and done very fast, or countries that have developed more naturally like the Western European countries. Such an upgrade would involve for example replacing or enhancing existing equipment, provisioning switches with modern command and control systems or replacing them with completely new mechanisms.

The real challenge, however, is to properly manage the high volumes of information that such systems accumulate. We paid particular attention to this as a company and developed expertise that enabled us to become market leaders in this segment, and take on strategic projects for the country - for example, we are handling the automation aspects for BRUA project during stage one, and our specialists have designed and automated the entire electricity distribution system for Electrica Transilvania Sud in the six counties where it operates. We are also keeping an eye on new, disruptive trends like that of “prosumer” - as production becomes more and more scattered, the classic transmission and distribution systems will be challenged and we will need to figure out new solutions to manage the amount of energy that will be generated, to a certain extent, uncontrolled.

 

Smart metering is another trend that has emerged in Romania. How do you see this unfolding, also bearing in mind the broader concept of smart cities?

There are things in the industry about which we can say with certainty will happen, and smart metering is one of them. In fact, this metering system is the cornerstone of smart grids and demand control systems because it makes the connection between the distribution system and the consumer. We can, however, ask a legitimate question about how and when to best make this transition. Adoption in Romania will be influenced by various factors, one of them being the ability of consumers to assimilate this investment. A distribution operator in Romania generally manages about 1 million consumers, and the investment required amounts to approximately EUR 100 million, that consumers in that area will they have to pay through tariffs over a period of time. The installation of smart metering systems must therefore be done in a rational way, aligned with the consumer absorption capacity.  

Looking at things more broadly, the industry in Romania is already reasonably automated and we are now stepping further into Industry 4.0. This level typically presents difficulties especially in the communications area - to have very modern systems like virtual power plants you need extremely solid communications. Romania has a very fast internet connection and Romanians are early adopters, glad to get acquainted with new technologies, which makes me think that the transition will be relatively easy. As for smart grids and smart cities, they are further into the future, we will have to wait another 10-20 years.

 

What are your views on the local business environment and the ease of doing business?

Things can always be better and there are issues in Romania that need to be acknowledged - one of the biggest weaknesses in my view is the transport infrastructure (particularly railways and highways), a matter that needs to be addressed with priority.

But there are many positives as well, if we consider for instance the spectacular GDP growth, one of the most remarkable evolutions in Europe. From a healthcare perspective Romania managed, throughout all this time, to provide free assistance for the entire population, an effort that few countries were able to sustain. Recent government policies that led to wage increases have also proven valuable and have brought about many benefits. Although I believe there was a need provide relief for businesses, it was absolutely necessary for Romania to increase minimum wage, to allow the population to invest money and generate consumption, and also to fight the black market and open the possibility of increasing the tax base. It is because of realities like this that I encourage investors to believe in Romania. 

 

What are ADREM’s strategic goals for the next 2-3 years?

The focus is on a strategically controlled growth, both in terms of turnover and staff members, and on increasing the operational efficiency.  We are also planning to expand our range of services to all potential customers in the energy distribution area - we are already working with CEZ, E.ON, Enel, and we want to bring Electrica in our service portfolio as well. 

At a broader level, the company's strategy is directly related to human resources, the most difficult and precious resource to obtain at present. The fact that in recent years we managed to maintain and develop our staff has helped us remain indispensable for some of our customers. We are the largest service provider in Romania as per number of employees and the stability of our human resources places us in a strategic position, though we have no intention to rest on our laurels.

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