Economic Aspects of the Energy Sector in CIS Countries

Transcription

1 EC Delegation in Russia/Moscow 27 June 2008 Economic Aspects of the Energy Sector in CIS Countries Sixth Session: Strategies and Policy Options for the Energy Sector Development in the CIS Region Energy Reforms: Issues, Lessons and Perspectives Emmanuel Bergasse Energy Economist CASE

2 1. Main issues and challenges facing CIS energy sectors Soviet legacy of energy infrastructure and a significant decline in energy demand Public perception of energy as an entitlement rather than as a service Vertically integrated monopolies retain power and influence beyond the energy sector High-energy and pollutant intensities

3 Main issues (2) Governments cumulate functions of policy-making, regulation enforcement and ownership control of state-owned companies conflicts of interest and political interference Structural under-investment in energy infrastructure, international price increase and economic rebound since 2000 energy supply reliability and quality of services Intra-CIS political conflicts, lack of effective international co-operation and transportation infrastructure (e.g. regional water-gas-electricity interdependence among Central Asian countries)

4 2. Reform Lessons CEEC EU membership e.g. Bulgaria 2001/2007, IEA reviews CIS IEA policy reviews in Russia, Ukraine, Central Asia and South Caucasus

5 Government Role Separate the government s energy policy-making functions from Regulation enforcement (by independent and empowered regulators) Ownership of state-owned energy companies.

6 Foundation of Strategy A medium/long-term energy reform plan/strategy By central ministry and/or think tank/institute In broad and open consultation/aarhus Convention Action plan & calendar with clear responsibilities and adequate means for public administrations Reliable energy data systems, economic tools (demand forecasts and least cost supply plans) Policy mix tools: regulation (inc. tarification), tax policy In synergy with public policies for environment, transport, regional development

7 Regulation Establish/reinforce a clear and stable market-based regulatory framework for energy investment and operations Effectively and independently enforced under the rule of law Compatible with international agreements (ECT, EITI, WTO) Introduce a profit-sensitive fiscal regime and best practices for investment in upstream oil and gas balancing public interests and investors

8 Regulation (2) Gradually implement energy price and tax reforms Aims: to cover all costs and externalities By replacing energy subsidies and social (cross-subsidised) tariffs by Full-cost recovery tariffs ( cost plus fees or cap system) by regulator Direct and targeted support to the most vulnerable households (energy efficiency of buildings and appliances)

9 Investment regime Ensure fair and open access for all licensed operators to Energy resources exploitation National transmission systems (under regulated third party access) Domestic and export markets under the control and rule of a regulator

10 Sector restructuring Restructure the state-owned companies to Improve corporate governance (IAS), overall performance and accountability Unbundle natural monopoly activities (electricity and gas transmission and distribution, and gas storage) from commercial activities Ensure State control as shareholder (Treasury)

11 Sustainability Reduce energy and pollutant intensities Develop and enforce robust energy efficiency action plans in energy sectors and end-use sectors, backed by strong agencies Develop energy efficiency investment financing (ESCo) Develop synergies with environmental policies, notably on Kyoto flexibility mechanisms and economic use of renewable energy (small hydropower and biomass)

12 3. Perspectives CIS countries and sectors at various stages of reforms Sectors Electricity: clear progress (e.g. Russia since 2001: unbundling, price reforms and preparation for competition) Gas downstream: slow process as stateowned vertically integrated gas monopolies combine commercial and regulatory functions, and maintain tight control over infrastructure CIS Strategies in Russia, Ukraine with institutional reinforcement Energy laws and regulators in most CIS Energy efficiency prioritised

13 Perspectives (2) Donor initial assistance to assist CIS administrations to autonomously develop and enforce energy strategies for Sustainable integrated policies Efficient market-based legal and regulatory frameworks Restructuring of state-owned energy companies

14 Key Policy Items State function separation with coordinated administrations Strong policy and institutional multidimension framework and action plan backed by Opened discussion on policy options Regular evaluation and monitoring