David, Hidroelectrica: Green energy, next bubble to burst

Mihai David, former general manager of Hidroelectrica, currently a member of the board of directors of the most valuable state-owned company, believes a new bubble is forming, after the financial crisis that broke out more than two years ago, with the peak of the new bubble to be reached during the next five to six years. Whereas the 2007 crisis was triggered by risky loans, exotic financial products and a highly overvalued real estate market, now the trigger could be the energy sector. More specifically green energy.

“The next bubble to burst will be energy, with green energy being first. The value of generation facilities is overrated and in five to six years we could see this bubble burst,” David believes.

The factors that he bases his statement on are primarily the fact that investments in green energy are encouraged through a system of compensation in order to make them attractive, considering that green projects require rather expensive technology.