Towards a South East Europe Agenda for Regional Energy Policy Cooperation

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1 Unlocking South East European Energy Potential Through Regional Energy Policy Cooperation Towards a South East Europe Agenda for Regional Energy Policy Cooperation Proposals for Effective South East Europe Energy Cooperation Christian Egenhofer, Director, Energy Climate House (ECH) Sofia, 3&4 June 2015

2 Why regional energy policy co-operation? European Energy Security Strategy (May 2014): calls for mechanisms that allow member states to inform each other of important decisions related to their energy mix prior to their adoption European Council (26/27 June 2014): importance of regional approach; further implementing and integrating the European energy market based on a regional approach. Energy Union Package (February 2015): regional action plans for cross-border electricity and gas flows. energy policies integration at regional level as a step towards full EU-wide market integration 2

3 Why in South East Europe? Energy Union Package (February 2015): stresses the importance of improving cooperation, solidarity and trust particularly in South East Europe. European Council (19 March 2015): confirms that developing a more effective, flexible market design which should go together with enhanced regional cooperation, including with neighboring countries. 3

4 Why South East Europe? Beyond the EU rhetoric Energy Union Package (February 2015): brings together security of supply, sustainability and competitiveness in all member states and regions Big potential for renewables but little incentives South East Europe is well interconnected but needs some additional infrastructure (electricity, gas reverse flows) and a Master Plan (common concept) Huge un-tapped energy efficiency potential: learning and best practice 4

5 Opportunities Example of Baltic Energy Market Integration Plan (BEMIP) shows that regional co-operation can speed up modernisation: regional plan is still missing! South East Europe is more than gas corridor 5

6 Obstacles Regulated prices State ownership Lack of competition High energy intensity Lack of efficient framework for energy poverty (despite low energy prices) 6

7 Regional Co-operation Models Simple information sharing, Joint information and knowledge creation in selected areas, Common policies in selected areas and, Joint instruments. 7

8 The Way Forward: A Few Proposals for a Regional Cooperation Initiative in South East Europe 1: Geographical definition One common framework (for EU, Energy Community, non-eu countries): SEE Energy Union Sub-Unions or thematic groups operate across legal : Different legal and regulatory spheres come into play when concrete actions are undertaken: e.g. gas corridors, electricity markets, electricity interconnections, renewables energy integration, nuclear generation, subsidies or regional energy-efficiency cooperation. 8

9 The Way Forward: A Few Proposals for a Regional Cooperation Initiative in South East Europe 2: Exchange of information and best-practice All members of the SEE Energy Union participate in exchange of information and best-practice. 9

10 The Way Forward: A Few Proposals for a Regional Cooperation Initiative in South East Europe 3: Opt-in Members of SEE Energy Union can opt-in to thematic groups, e.g. gas corridors, electricity markets, electricity interconnections, renewables energy integration, nuclear generation, subsidies or regional energy-efficiency cooperation, etc. Need to fulfill minimum requirements (to be defined) 10

11 The Way Forward: A Few Proposals for a Regional Cooperation Initiative in South East Europe 4: Infrastructure Planning and Investment Co-ordinated approach to grid planning ( top-down instead of national wish lists) unlocks small interconnector investment integrates renewables unlocks investment 11

12 The Way Forward: A Few Proposals for a Regional Cooperation Initiative in South East Europe 5: Finance Streamlining of EU finance programmes and instruments (for EU, Energy Community and non-eu countries) 12

13 The Way Forward: A Few Proposals for a Regional Cooperation Initiative in South East Europe 6: Governance Current governance: market integration, TSO co-operation and some political co-operation Future: example of Baltic Energy Market Integration Plan mixing topdown (EU-led) and bottom-up (regional political co-operation) processes Within EU s Macro-Regional Strategies 13

14 Making it Work Requires Trust Address regional conflicts Establish trust by citizens and stakeholders (e.g. in markets) Create transparency Regional energy co-operation to become backbone of Energy Charter Treaty, Energy Community, ENTSOE, ACER etc. 14

15 Questions 1. How should the region be defined geographically? 2. What kind of governance structure is most relevant? 3. Should the SEE Energy Union include a legally binding clause? 4. What level of cooperation in electricity infrastructure planning and operation? 5. Should the creation of regional power exchanges and gas hubs be politically supported? 6. How can trust within the regions be best built? 7. What role and fora for non-governmental stakeholders? 15