Romania’s district heating systems, once central to urban energy supply, now face structural decline marked by aging infrastructure, high fuel costs, and growing consumer disconnections. To arrest this trajectory and restore affordability and reliability, several measures must be addressed. These include decarbonisation, with priority for electrification (including the integration of renewable energy sources), energy storage, and improved building efficiency, all calibrated to each city’s specific context.
The case study of Drobeta-Turnu Severin illustrates these challenges clearly. Originally developed to support industrial production and later extended to residents, the system is now characterised by high technical and commercial losses, heavy reliance on subsidies, and recurring fuel insecurity. From 2020 to 2024, connected households fell from over 26,000 to just above 22,000, while annual disconnections reached 1,500 households in 2024. Production and consumption volumes dropped by more than 20% over the same period, with losses in 2024 exceeding 40% of generated heat. The cost burden has grown unsustainable. In 2020, thermal energy production cost was just above 400 RON/MWh; by 2024, it peaked above 650 RON/MWh. Fuel costs rose from 253 RON/MWh in 2020 to 460 RON/MWh in 2024. Municipal subsidies, which more than tripled between 2020 and 2024, now shield households from full exposure but strain local budgets. A scenario where consumers switch entirely to individual gas boilers would demand over €61.5 million in upfront investment, excluding gas network expansion, while exposing households to higher bills under ETS 2 carbon pricing and worsening local air pollution.
In Craiova, on the other hand, the number of connected households declined from nearly 60,000 to 53,000 in 2020–2024. Delivered-to-produced heat ratio slid from about 70% to 65%. Craiova’s heat price rose fast, the subsidy bill increased dramatically, and households were shielded only by heavy local support. Plant-delivered costs climbed from 280 RON/MWh in 2020 to >540 RON/MWh in 2024, while neighbourhood plants1 stayed near 800 RON/MWh, far above end-user tariffs. Households paid about 250 RON/MWh in 2020 and 340 RON/MWh in 2024, the municipality covering the gap. The household cost share of the heat bill jumped above 80% in 2021–2022, fell below 40% in 2023, then recovered slightly in 2024, mirroring price volatility and loss levels. In 2023, the city’s subsidy outlay was over 5.5 times the 2020 level and nearly 3 times in 2024, amounting to over 138 million RON in five years. These trajectories confirm rising structural costs and a mounting fiscal burden without efficiency and fuel-switch measures.
Together with this report, EPG has published two Op-Eds (in Romanian), each focusing on one of the two case study cities:
Read the Op-Ed on Drobeta-Turnu Severin’s district heating system HERE.
Read the Op-Ed on Craiova’s district heating system HERE.
Alexandru Ciocan, EPG Senior Researcher
Alexandru Ciocan become a member of the EPG team at the end of 2023 and started working as a Senior researcher in the Energy System Programme. Previous he has working extensively for almost 10 years in the field of hydrogen-based technologies, renewable energies sources and lithium-ion batteries. Between 2012 and 2021 he held various research positions at the National R&D Institute for Cryogenic and Isotopic Technologies – ICSI Rm. Valcea.
Nevertheless, Alexandru gained experience in the energy policy, following his contribution to the national strategic documents from the position of Senior Advisor within the Energy Policy and Green Deal Department into the Ministry of Energy of Romania between 2021 – 2023.
Since 2017 Alexandru holds a PhD in engineering sciences from the IMT Atlantique as well as the University Politehnica of Bucharest.
Contact: alexandru.ciocan@epg-thinktank.org