Developing gas infrastructure regional approach in the Energy Community

Transcription

1 Developing gas infrastructure regional approach in the Energy Community March 2012, Sofia Infrastructure development for SEE Predrag Grujicic, Energy Community Secretariat - Prepared by ECS - 1

2 Outline of the presentation The Energy Community an overview The Energy Community acquis Regional approach to investments Regional Strategy Regional Gas Market and the Energy Community Gas Ring The Gas-to-Power Initiative - Prepared by ECS - 2

3 The Energy Community an overview - Prepared by ECS - 3

4 Energy Community and EU policy The Energy Community is a success and model for regional cooperation on energy matters Energy Community has grown into a mature organization, which provides a solid institutional framework for cooperation, mutual support and exchange of experiences and therefore serves as a model of cooperation on energy matters European Commission Report on the Energy Community The Energy Community Treaty should be implemented and extended to all those EU neighbours who are willing to adopt the EU market model. [The Treaty]...should be deepened by extending new acquis EU Energy A strategy for competitive, sustainable and secure energy; EU External Energy Policy - Engaging with partners beyond our borders - Prepared by ECS - 4

5 The Energy Community Treaty a history at glance Legally binding instrument creating common regulatory framework Energy Community Treaty, 2006 Now: EU + 9 Contracting Parties Initial Contracting Parties: AL, BH, CR, FYR MK, MNE, SR, UNMIK (+ RO, BG) Enlargement of the Energy Community MD (1 May 2010); UA (1 February 2011) 14 Participants = EU Member States 4 Observers = Georgia; Norway; Turkey; Armenia - Prepared by ECS - 5

6 Institutional framework Institutions established by the Energy Community Treaty Ministerial Council PHLG ECRB Athens and Gas Forum Energy Community Secretariat Institutions established later Social Forum (2008) Oil Forum (2009) CAO Implementation Group Energy Efficiency Task Force Renewable Energy Task Force Environment Task Force Strategy Task Force Security of Supply Coordination Group Assistance to the Contracting Parties in implementing the acquis Monitoring and reporting Dispute settlement New roles under the Third Package - Prepared by ECS - 6

7 Evolution experienced Enlargement of the Energy Community and extension of the acquis Change of the Contracting Parties perception - regionalism vs. nationalism More initiatives from the Contracting Parties More active Business Community (the Investment Advisory Panel, Dispute Settlement) More active Donors Community - streamlining the support, link the support with achieving concrete results - Prepared by ECS - 7

8 The Energy Community acquis - Prepared by ECS - 8

9 The Energy Community Law - The acquis adopted by the Energy Community Treaty Electricity Gas Environment Competition Renewable energy - Evolution of the acquis o Adopted by the Ministerial Council Security of electricity and gas supply (2007) Energy efficiency (2009; 2010) Third package for electricity and gas markets (2011) o Recommendation (2010) RES Directive o Planned for adoption Oil stocks; RES; harmonisation of energy statistics (2012) Regulation on security of gas supply (2013) - Prepared by ECS - 9

10 Gas acquis in the Energy Community The original gas acquis evolved as well starting from the Directive 2003/55/EC adding Regulation (EC) 1775/2005 and Directive 2004/67/EC 9 th Ministerial Council on October 6 th 2011 adopted a Decision on the implementation of the Directive 2009/73/EC and Regulation (EC) 715/2009 ( Third Energy Package ) general deadline is January 1 st Third package Europeanisation of the energy policy Relation to the EU institutions a key Secretariat is given additional tasks f.e. Commission decision ECS opinion (certification, New interconnectors and infrastructure exemptions) - Prepared by ECS - 10

11 Cooperation with the ENTSOG ENTSOG invited the TSOs from Contracting Parties to participate as Observers in the ENTSOG (Gas Forum 2011) ENTSOG is organising a workshop with Plinacro on TYNDP in Zagreb tomorrow on TYNDP Network Codes shall be adopted by the Energy Community before the 3rd Package acquis need for deeper coordination among national TSOs and with ENTSOG - Prepared by ECS - 11

12 Regional approach to investments Regional Strategy - Prepared by ECS - 12

13 Investments - Importance of investments in energy infrastructure in the Treaty Long list of priority projects endorsed by the MC (2007) Short list of more focused projects (2009/2010) - Slow process with many of the investments need for further facilitation - Key challenges for cross-border projects: Incentives for TSOs to develop investments that serve mainly other markets Recognition of TSOs costs incurred beyond its territory, in tariffs of its own customers Project leader/champion Syncronised and firm decisions and timely implementation in all parties involved - Prepared by ECS - 13

14 Energy Community Regional Strategy - The Ministerial Council decided in October 2011 to set up a Task Force and mandated it to prepare the Regional Energy Strategy of the Energy Community. - Link between the Energy Community Strategy and the EU Energy strategy - Time horizon 2020 (view to 2030) - Main objective: the need for a regional approach to facilitating investments and ensuring energy security in the Energy Community - Proposal came from the Contracting Parties (Serbia) - Prepared by ECS - 14

15 The content of the Strategy and future steps -The Strategy aims to achieve the framework criteria which will be used to assess infrastructure projects of regional interest - Integrating national strategies in a regional one, based on an analysis of several scenarios - Support of donors and built on a plethora of previous studies - Regional Objectives, as well as the Actions needed to accomplish them - The final Draft to be presented to the Ministerial Council for adoption (October 2012) - Prepared by ECS - 15

16 Regional Gas Market and the Energy Community Gas Ring - Prepared by ECS - 16

17 Gas supply in EU and EnC 2009 EU Natural Gas Supplies Supplies in Contracting Parties Libya 2% Nigeria 2% Gulf Countries 3% Egypt 2% Algeria 10% Trinidad Tobago 1% Others (nonidentified) 3% Indigenous production 36% Indigenous production 32% Russia 22% Imports 68% Norway 19% Source: IEA Natural Gas Information Prepared by ECS - 17

18 Gas markets Gas represents ~ 35% of primary energy mix (on average) in 6 Contracting Parties with gas market Total consumption in SEE part: ~9 Bcm/y Ukraine alone bcm/year Import routes from Russia (except Croatia) The availability of interconnection capacities still remains a bottleneck for further development of Contracting Parties gas markets and creation of a sustainable regional gas market. - Prepared by ECS - 18

19 Priority corridors In the Energy Infrastructure Package, the EC defined priority corridors for the transport of energy to 2020 and beyond - Prepared by ECS - 19

20 The Energy Community Gas Ring concept Russian or Caspian gas via Hungary LNG? Mix of gas via Croatia LNG? Offshore? LNG? Caspian gas via Romania (Nabucco) Caspian gas via Romania (White Stream & PEGP & AGRI) Russian gas via Bulgaria (Blue Stream or South Stream/ North ) or LNG Revithoussa or Caspian gas (Nabucco) SOURCES : WINGas ECA, SEE Regional Gasification Study World Bank and KfW - Prepared by ECS - 20

21 Progress in 2011 SOURCES : WINGas ECA, SEE Regional Gasification Study World Bank and KfW - Prepared by ECS - 21

22 Gas consumption forecast in the region up to 2030 SOURCE : Plinacro, EIHP Total in bcm - Prepared by ECS - 22

23 The Gas-to-Power Initiative - Prepared by ECS - 23

24 Electricity production in the EU and Energy Community In the production of electricity, coal is the dominant energy source, accounting for 73 %, followed by hydropower with a share of 14% Energy Community Petroleum Products 7,0% EU-27 Coal 36,9% Petroleum Products 3,7% Coal 72,8% Gas 6,4% Combust.Re new. Waste 4,0% Gas 18,6% Hydro 13,8% Hydro 3,4% Nuclear 32,9% SOURCE : Plinacro, EIHP - Prepared by ECS - 24

25 Environmental concerns / RES targets - Significant CO2 emission intensity - high level of lignite for electricity production - The average weighted operation time for 65 TPP units by the end of 2010 is 30 years. The majority of units are close to retirement - The power and heat generation facilities located in the Energy Community region are in a bad condition - maintenance delay and chronically lack of investment over the last two decades - RES Directive 2009/28, if adopted this autumn, would increase significantly share of RES within FEC in the CPs - These sources need flexible generation support - Prepared by ECS - 25

26 Low-carbon fossil fuel Equivalent to emission of one million cars none none Source: Environmental licences plants and Eurogas Source: environmental licences plants - Prepared by ECS - 26

27 Gas to Power Initiative (1) - Energy Community faces increasing energy security and environmental challenges - Gas power can help the region improve energy security and the environment - New approach to attract the private sector to develop gas power plants - a Consortium sharing risks among investors and with countries in public private partnerships (PPPs) - Develop a regional Gas Ring when developing gas infrastructure for gas power stations - Regional action by the Energy Community - Prepared by ECS - 27

28 Gas to Power Initiative (2) While individual demand in each CP in SEE is small, together the region can establish gas-fired combined cycle power stations (CCGTs) as anchor loads initial anchor loads for the Gas Ring (cca 2000 MW) Estimated gas demand cca 2-3 billion cm - Taking advantage of the Azeri offer to sell 3 bcm to the Energy Community. - Several other gas supply options also available - Russia, Caspian, Middle East, LNG and volume does not have to reach 3 bcm in one step - Prepared by ECS - 28

29 Consortium for Implementing Gas Power Several investors in a consortium Countries/State utilities can join the consortium and/or contract power in addition to opening their electricity markets Energy Community (cooperation & coordination) Consortium Electricity Traders Power Generation Companies Gas Companies Other investors Contracting Countries in SEE Public Private Partnerships National PPP Companies Anchor Loads and Gas Pipeline 29 - Prepared by ECS - 29

30 Endorsing the Initiative Gas-to Power Initiative was promoted in several Energy Community meetings (MC, PHLG, ECRB, Gas Forum in autumn of 2011) The Contracting Parties expressed their readiness to participate in a coordinated development of new gas to power capacities at the regional level The Secretariat is providing a coordinating role in this process, assisting to the Contracting Parties in fulfilling their commitments Promotion of the Initiative in each CPs capital (workshops on this Initiative are already planned with AL, MNE, BH, (dates, agenda sent), with the others pending as well as at other EnC events Targets: companies which could be potential candidates for investing in CCGTs (either via a PPP consortium or under long term PPA) - Prepared by ECS - 30

31 A study for the Initiative -The Secretariat, in cooperation with the Contracting Parties, the EC, the World Bank as lead IFI, applied for the regional Study on the Consortium approach to developing the Gas to power initiative and the Energy Community gas ring - Practically all Western Balkan CPs sent the letter of support. - The Study will be needed to prepare the ground for investments in both power plants and gas network, from the regional perspective. -This is a very complex projects leading to investments across the Western Balkans: - US$3 billion (about 3,000 MW) in CCGT - US$1 billion in Energy Community Gas Ring - Later: US$1.7 billion in Gas Distribution (up to 20 cities) - Prepared by ECS - 31

32 Further reports and presentations on European Commission Representation in Austria, Monday, 19 May Prepared by ECS - 32