Short introduction in the liberalisation process
In the opening of the here discussion it is important the starting with referring that in its "Second Strategic Energy Review - An EU Energy Security and Solidarity Action Plan" the EC proposes following with the priority regard the North-South Electricity and East-West gas interconnections. In regard, the MC of EnC decide on 6 October 2011 to incorporate the so-called Third Energy Package by the deadline of fully transpose 1 January 2015..
Potential investment in the new power generation
In order to cover the forecasted demand growth, and also aiming at exporting outside the region, the countries of WBs have indicated in their strategies very ambitious investments in new power generation by 2020 and beyond to 2030. According to the own forecasted the new power generation capacity needs represents approximately 21 GW or an increase of capacity approximately 64% from 2009. A total investment cost, for this additional capacity is calculate around EUR 44.6 billion over the period of 2012 through 2020, for those new projects targeted for development and commissioning within this time period. The figure could be even higher taking in consideration the capital expenditures growth required in the latter part of the decade for new planned facilities proposed after 20211.
Boost of the investment in infrastructure
The new investments should be directed predominantly towards new renewable energy generation and natural gas fired power plants, whose potential both in term of enhanced security of supply and contribution to reduced emission remains untapped as of today in the region. The latter is particular important also in light of the role of natural gas can play as back up fuel in a market with high penetration of interruptible energy source as the ambitions on renewables seem to imply.
In regard, the selection of TAP as a project to transport Shah Deniz II gas to Europe have significant consequences on the region as a whole and in particular to the Energy Community Gas Ring. In same time the TAP pipeline, determine the following with the planned Ionian Adriatic Pipeline (IAP). Additional gas interconnectors are also planned between Serbia, Croatia and Bosnia & Herzegovina and a serial of tailored gas infrastructure investment are foreseen by the Gas-to-Power Initiative.
Regard crude oil, a number of projects of regional significance have been discussed for a long period. Here, the objective is to ensure stable on diversified oil supplies serving both market and security of supply interests. In regard, the storage capacities in the region amount to 8.8 mcm. In October 2012, the Ministerial Council further step came with the adopting the oil stocks Directive 2009/119/EC imposing an additional 12.5 mcm required storage capacity.
Implementation of the regulatory framework
The above introduction, permit the reaching of the core considerations of the here topic in discussion i.e. the interdependency between regulation, infrastructure and the flaking policies. The above developments are seen as a good premises for the enabling of the regional market integration with satisfy level of security, competition and sustainability of supply. A real market integration is assured by the contemporary well developments of two levels: the physical interconnection between the different infrastructures systems of the respective market and the commercial market behaviour and business rules applicable on the respective market.
Summering here, the last October Ministerial Council, reviewed the state of play of the implementation of the Treaty welcoming the progress made recognized the importance of the transposition and implementation of the Third Energy Package in the context of providing security of supply and adequate conditions for investments. In specific it was recommend the acquis widen to include additional rules on competition, state aid and public procurement in the energy sector and environmental issues.
Overcame of the challenges to attract institutional and private inflows capitals
Given the capital intensity of energy infrastructure, and due to the pressure of the fiscal space on public funded investments to limited fiscal space, with a public debt of around or above 60% or 65% of GDP, mobilising additional private capital becomes crucial. The attracting investment is the rationale behind many of the measures and actions taken by the EnC.
Notwithstanding, the macroeconomic level signs of recovery, both private and institutional investors still perceive most of the CPs to have a risk profile that discourages significant inflows capital. When asked what are the potential obstacles, many project promoters listed: financing; social acceptance; land acquisition; the need for reorganisation of the company; coordination between countries and companies involved in cross-border infrastructure; high investment costs (mainly for larger power plants), etc.
Pivotal role of the public financial support
Therefore, the energy market is undergoing a period of radical changes that requires significant investment in order to be fully sufficient. In more, it is clear that the regulation alone seem will not be enough. So public support is necessary to enable the implementation of the small, but significant share of projects, which are vital, for example because of the security of supply they provide, but will not happen even with regulatory support.
Conclusive remarks of the Author
In the last meeting of the highest level kept in Kyiv, that see also the presentation of the priorities of the Albanian Presidency for 2015, the Albanian Minister of Energy Mr Gjiknuri, state the focus on reforms of the EnC in line with the recommendations of the HLRG, inter alisas, in the implementation of the Third Energy Package in all CPs; adoption of the new acquis, as i.e. Reg. 347/2013 on energy infrastructure, Reg. 543/2013 on transparency on electricity markets, and the first set of network codes.
In regard, it is clear that the bulk of the reform work remains to be carried out by the CPs, their regulatory authorities and network operators. The success of local and regional market open and integrated efficiently lies in the determination and commitment to fully participate in shaping of the future of the EnC. There is also need of strength will to continue working with the EC to make available additional financial instruments through European and international funds that would support the PECIs. Moreover, important is the continue to follow closely the progress not only for reporting purposes but also to assist them in all possible ways at its disposal.
In this regard, we in ACERC believe that only understanding the situation as it is will allow making suggestions for improvement, both on the level of the Parties and the EnC itself. In regard, the here above section, as others of course similar forum taking part abroad, can help on the stimulate of a crystallisation of a better legal, institutional and procedural set-up for the future that is still faraway for being clear and definitive.
Therefore, with the here above projection, I would like to express the fully convincement that the notices given in there section, spans over regularly Market Highlights, New Regulative Framework and Business Opportunities (notably upcoming Public Procurement and Tenders and Private Investments) will offer a lot of lively discussion and fruitful cooperation that are going to better shape our ideas and enrich our experiences.
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