The Energy Community strategy focuses on regional co-operation and supply security.
By Linda Karadaku for Southeast European Times in Pristina -- 28/01/13
After the Russian-Ukrainian gas crisis in January 2009 the EU sought a more co-ordinated approach to provide a stable and secure energy supply. [AFP]
The energy markets in the western Balkan countries are small and fragmented, too vulnerable and outdated to attract international investors.
But the Energy Community, which was established in 2006 between the EU and several regional countries to extend the Union's internal energy market to Southeast Europe, believes a regional approach, backed by a harmonised legal framework, would substantially increase the chances of luring investors.
The community's strategy focuses on the need for meeting the region's increasing energy needs while reducing the carbon footprint of the member states, which include Albania, Bosnia and Herzegovina (BiH), Croatia, Macedonia, Montenegro and Serbia.
Regional co-operation stands at the core of the community, promoting not only cross-border trade, but also several regional-level measures to secure the energy supply, safeguard measures and mutual assistance in times of sudden crises.
After the Russian-Ukrainian gas crisis in January 2009 that resulted in supply disruptions in many European nations, with 18 countries reporting major drops in or complete cutoff of their gas supplies transported through Ukraine from Russia, the EU sought a more co-ordinated approach to provide stable and secure energy supply.
"There has been concrete action to increase gas storages facilities across the region. After the January 2009 crisis, it was understood that the storage plays a vital role in guaranteeing security of supply," Janez Kopac, the director of the Energy Community, told SETimes in an exclusive interview.
"There has been concrete action to increase gas storages facilities across the region," Janez Kopac, the director of the Energy Community, told SETimes. [Linda Karadaku/SETimes]
The actions taken include a gas interconnector between Croatia and Hungary that became operational in August 2011. It runs through Poland, Czech Republic, Slovakia and Hungary to Croatia. It has an annual capacity of 6.5 billion cubic metres, and was co-financed by the EU as part of the European Economic Recovery Plan.
"This is equally important for both countries from the point of view of economy and energy security," Hungarian President János Áder said after a meeting on the project in November 2012.
The project was constructed to further integrate the EU gas market and provide gas transit capacity from Hungary to Croatia, BiH and Italy of up to 7.5 Bcm/a, and in reverse mode, gas transit capacity from Croatia to Hungary of up to 5.5 Bcm/a, according to Pipelines International.
Other cross-regional projects that will diversify gas supply in the region include a planned gas interconnector between Serbia, Croatia and Republika Srpska.
Petar Skundric, energy advisor to Serbia's president, said that the country was also ready to start talks with Albania on the construction of a gas pipeline to be linked to the South Stream pipeline.
Skundric said that Serbia plans to develop a number of projects utilising natural gas.
"This year we continue the construction of the second stage of Banatski Dvor underground storage facility, whose capacity will be between 800 million and one billion cubic metres of gas," Skundric said, adding that there is also a plan to construct another underground gas storage in Itebej, with similar capacity.
Skundric said that once the construction of these two storage facilities is completed, "the supply of gas to Serbia and the region will be secured."
Another energy project is the 120 million-euro, 18-kilometre gas pipeline between Serbia and Bulgaria -- the first interconnection between the two countries' gas transport systems. The project is financed by the European Bank for Reconstruction and Development, and the pipeline is expected to be operational by 2015.
Under their agreement, members of the community have a legal commitment to increase the share of renewable energy in their energy mix by 2020.
The demand for energy is expected to rise significantly by 2020. [AFP]
"This is truly a big challenge for the region. The bulk of the region's power plants were built in the 1960s and 1970s using standard Eastern European technology. Their age, the type of technology, and their inadequate maintenance raise serious policy challenges at present," Kopac told SETimes.
"This complex and costly transition will have to take place in time of an economic crisis when the available public and private capital is limited and difficult to obtain," he said.
Kopac said that hydropower is the most commonly used type of renewable energy, which has further growth potential across the entire region.
"But we believe that biomass and wind will play an important role in the future," Kopac said, adding that the Western Balkans are mainly dependent on fossil fuels, which are predominantly imported from the East.
"Serbia should seek ways to make up its energy deficit from renewable energy sources, because it has great potential in biomass and hydropower potential," former Environment and Spatial Planning Minister Oliver Dulic said.
He added that the environment ministry will oppose the use of nuclear energy until all renewable energy sources are exhausted.
The Energy Community energy strategy, endorsed in October 2012, documents the significance of the domestic coal/lignite in the region's energy mix. The share of coal/lignite of the national energy supply amounts to 52 percent in Serbia, 50 percent in Macedonia, 48 percent in Kosovo and Montenegro and to 33 percent in BiH.
"Apart from coal, no significant fossil fuel reserves have been explored in the Western Balkans," Kopac said.
The Energy Community is inviting project promoters in the area of electricity, gas or oil to submit candidate projects to be assessed. The key conditions are that the project is located in at least one member state, and, that it will impact at least two members, or a member and an EU member state.