The challenges , investment opportunities and the necessary changes across the energy sector were discussed yesterday on the first day of the «6th South East Europe Energy Dialogue» (6th SEEED), organized by the Institute of Energy for South East Europe (IENE), in cooperation the World Energy Council.
At the opening of this year's Dialogue “Redefining SE Europe’s Energy Map”, Mr. Slav Slavov (Regional Manager for Europe and Central Asia, World Energy Council) and Costis Stambolis (Deputy Chairman and Executive Director of IENE) pointed out the radical changes and reforms already underway and others that are under development that would enable the region to meet new challenges.
At his opening speech, the Chairman of IENE and Director, Regulatory Affairs, Mytilineos S.A., Dr. John Desypris, stressed the need for regional consensus on major infrastructure projects. "Policy proposals and good ideas are important," he said, "but equally important are the financial tools necessary to realize the projects." He also noted that the EU policy leans toward stopping subsidies to large projects and to identify new financial tools to finance investments.
The Chairman of IENE added that public funding under the current economic crisis is becoming limited. For this reason, private investments are channeled to well-planned projects, which utilize the synergies between two or more countries and/or sectors, have a sound financial framework and show commercial viability. Thus, he proposed a European cost-benefit analysis that takes into account both the economic and social/environmental dimensions, to make sure that those who will benefit will also be required to pay for specific projects.
The representative of the Turkish – German consortium “Borusan Enbw Energy AS” Mr. Yurdakul Yigitguden stressed that high oil prices hinder economic growth. That's because, as he said, “the development of new field needs time to deliver and high investment, while the global demand is increasing. In addition Global gas demand is growing fast, 1.7 – 2% on a yearly average until 2035 led by China, Middle East and India”. He noted, in fact, that “even traditional exporters of pipe-gas like Canada or Russia seek to become more flexible with LNG investments”. In Europe on the other hand, the debt crisis has the highest priority on the political agenda, and high fuel prices are a big threat to European economies. Greek and Turkish refineries suffer due to the sanctions on Iranian oil and s uccessful hydrocarbon exploration results in the eastern Mediterranean region create new opportunities and threats.
The U.S. attitude toward Iran will be clarified after the U.S. elections in November, said Mr. Marc Seris, Senior Director of PFC Energy. “There won’t be any move by the U.S. at least until the end of the year as this is an election year” he said. However, giving a glimpse of what might follow Mr. Seris noted that the US and EU policy gives Iran little incentive to compromise.
Referring to developments in North Africa and the Middle East, the speaker said that the area is undergoing some potentially highly disruptive political changes and conflicts based not on political differences, but to "parochial" divisions (racial, religious, etc).
The representative of IEA, Mrs. Thea Khitarishvili, estimated that the global energy demand will increase by 1/3 in 2035, with natural gas and renewables to gain significant share in the energy mix. She stressed that emerging economies will continue to determine the global demand for oil, however, she estimated that natural gas and renewables will account for 2/3 of world demand in 2035.
The first session of the 6th SEEED, “Towards a Regional Electricity Market” moderated by Mr. Nenad Stefanovic, Senior Expert on electricity issues of the Energy Regulator of Serbia (AERS) discussed t he necessary reforms and investments for the development of an integrated regional electricity market in Southeast Europe. Mr. Simon Uzunov, Head of Electricity Unit of the Energy Community Secreteriat in Vienna, stressed the p rogress in the procedures of the energy integration "acquis communautaire" both in the Western Balkan’s regulatory framework and the practice field.
The Chairman of ADMIE, George Koutzoukos, pointed out the need to address energy issues at regional and not national level. For this reason, Mr. Koutzoukos stressed the importance of creating CAO [Coordinated Auctions Office] as manager of the auction for electricity connections, based in Montenegro, which is currently at the final stage or realization. The Chairman of ADMIE noted the need to remove existing restrictions on cross-border infrastructure and the need to develop a coordinated investment strategy giving emphasis on regional criteria for infrastructure development.
Mr. Serhat Metin, Assistant Manager of the National Dispatching Center (TEIAS) in Turkey, referred to the Turkish electricity system, stressing that the installed capacity in the country has reached the 63.225 MW, consumption has increased in 2011 by 9 % and demand for electricity is growing by 8-10% annually.
“Bulgaria intends to participate in the CAO”, said Ms. Victoria Popovska, Head of Electricity Market Division at the National Dispatching Center ESO, from the Conference’s podium. She referred to the efforts undertaken by Bulgaria for adopting with the new market model and converging with the single energy market, based on the European legislation. She further announced that in late June, a new institutional framework for RES will be put in place in the country.
Investment planning in the electricity sector and opportunities opened in the Southeaster Europe region were analyzed by the speakers of the next Session, under the coordination of Mr. Gus Papamichalopoulos , Partner of the KGDI Law Firm.
Ms. Ekaterinaris, Deputy CEO of Greek PPC stressed the importance of new investments in electricity and thermal RES, currently undertaken by the company. She explained that PPC considers multiple alternatives for financing the Ptolemais -5 project and the two large PV projects in Megalopolis and Kozani , amid a difficult economic period.
Speaking on behalf of Prenos AD, Mr. Aleksandar Mijuskovic said that the CAO, that is expected to be fully operational by 2013 or early 2014, along with the submarine cable project of electrical interconnection of the country with Italy, which is scheduled to be constructed by 2015, are the two most important developments in the energy sector in the country, and, taken together, are the two major factors of upgrading the country in the energy map of Southeastern Europe.
Mr. Mirsad Sabanovic (Executive Director for Supply and Trading of Electricity of Bosnian JP Elektroprivreda BiH), reported on the problems and challenges that Bosnia - Herzegovina faces, while Professor Osman Sevaioglu, of the Middle East Technical University of Turkey, reported to the works out in the field of electricity in his country , as well as the regulatory framework. As he mentioned, it would take $ 46 billion for projects in power generation by 2020, while the goal is to reach 60 GW in total capacity by 2020 .
The role of the European system of greenhouse gas emissions was noted by Mr. Pantelis Manis, Head of Marketing to Issuers Department, Thessaloniki Stock Exchange Center. He stressed that this year, the revenues from auctioning 2 million emissions allowances [EUAs] in Greece, amounted to €13.3 million, which, as he noted , shows the prospects of the procedure.
At the next session, “Oil Market Opportunities in SE Europe”, Mr. Hans Huttta , General Manager of the Petroleum Management Academy in Vienna, presented the outlook for new hydrocarbon discoveries in the Black Sea, stressing that it is a largely unexplored area .
Mr. Costis Economopoulos, petroleum geologist and IENE associate, continued with a detailed presentation of the efforts undertaken in each country of the SE Europe’s region in oil and gas, providing figures on production , stocks, etc.
Dr. Constantinos Nikolaou, Petroleum Geologist, General Director of Kanergy and Member of IENE’s Board of Directors, addressed the critical questions associated with the issue of hydrocarbon investigations in Greece.
The crucial matter is whether there are proven or possible petroleum systems in Greece, and the answer is that in some areas active systems exist, but more work is needed in order to have safe conclusions. Also, there are similar examples in neighboring regions such as Eastern Thrace, Italy and Albania, which support the likelihood of recoverable quantities at the western Greece basins.
Mr. Panos Benos, Chief Financial Officer of “Energean Oil & Gas”, talked about the company’s €150 million investment program already implemented, aiming at increasing production. He also referred to the “Open Door process” currently taking place in three areas of the country, discussing chances of success and costs for each case. He stressed that despite the difficulties, investment opportunities in Greece for oil companies, exist.
Mr. Mark Seris, Senior Director of PFC Energy, talked about international trends in production and refining of oil, with emphasis on U.S., Russia, the Balkans and the Black Sea.
Finally, Mr. Zahariadis, Thessaloniki Refinery Operations Director of “Hellenic Petroleum S.A.”, referred to the refinery market in the Southeastern Europe. He said that sales for the company in 2011 were €9.3 billion and emphasized that the company’s target is to double EBITDA through its new investment program. According to Mr. Zahariadis, the goal for the company is to become the leader in the region.
Then, a panel discussion on the business and investment climate in the region’s energy markets took place, with the participation of Mr. Henrikh Yeremyan (Principal Banker – Energy and Infrastructure, Black Sea Trade & Development Bank, Greece), Mr. Christos Dimas (Chairman, Greek – Russian Chamber of Commerce, Greece),Mr. Marc Seris (Senior Director, PFC ENERGY, France), Mr. Miltos Aslanoglou (Deputy Chairman, Regulatory Authority of Energy, Greece),Mr. Miroslav Kukobat (Senior Expert on Energy and Infrastructure, Regional Cooperation Council, Bosnia and Herzegovina) and Mr. Aleksandar Mijuskovic (Department Director, PRENOS AD, Montenegro).
“Reaching the target for RES by 2020 is impossible for Greece”, said the Executive Director of Protergia S.A., of Mytilineos Company Group, Dinos Benrubi, while he also stated that “feed-in tariffs in photovoltaics are not viable”, speaking at the next session that focused on the Promotion of RES, energy efficiency and cogeneration in SE Europe, under the coordination of Dr. Mustafa Tiris (General Manager, T-Dinamik Energy Co., Turkey).
"No one invests, there is no credibility or trust, no one is sure if there will still be, if they will get paid ", said Mr. Benrubi. "It doesn’t matter if they are lower, as long as they are being paid," he added. Especially in solar panels, he said, the tariffs are unsustainable.
Mr. Benrubi said that the program “Helios” won’t be materialized. He also said that Mytilinaios group currently runs 1,2 GW of thermal units, and 54 MW of RES in power. 1,4 GW of renewables are currently in the phase of licensing. The group’s target is to have a total production of 400 MW in operation by 2015 [mainly wind power], that would account for 10-15% of total production in Greece.
The vice president of Vestas Hellas, Mr. Yanos Michopoulos, noted that the biggest problem renewable energy projects are facing is the difficulty in financing. There are projects of cumulative power of 20 GW with production license , that cannot get funding for implementation .
The president of the Hellenic Association for the Cogeneration of Heat and Power and Member of IENE’s Executive Committee, Mr. Costas Theofylaktos, talked about the role of cogeneration as a key pillar for saving primary energy. He said that c urrently in Europe, there is great potential for cogeneration projects until 2020 , with a capacity of about 122 GW. The new Directive promoted by the European Parliament on the energy performance attributes , pays great importance to co-production . The Association has the goal of promoting micro cogeneration to 50 KV, for the tertiary and residential sectors . According to Mr. Theofylaktos, s ome related works have already started (residential , sports centers , hotels).
Finally, Mr. Vassil Petev, Member of the Board of the Bulgarian Photovoltaic Association, and Dr. Sotiris Douklias, Associate of KGDI Law Firm, Greece, focused on regulatory subjects in RES sectors of Bulgaria and Greece respectively.
The session ended with a panel discussion on development of RES, energy efficiency and cogeneration, moderated by Mr. John Chadjivasiliadis (Consulting Engineer, Secretary General Of IENE, Greece). The participants were Mr. Dimitris Kiriakidis, (Member of the BoD, Hellenic Association of Photovoltaic Companies,
Greece), Mr. Vassil Petev (Bulgarian Photovoltaic Association, Bulgaria), Mr. Dinos Benroubi (Protergia S.A., Greece) and Mr. Kostas Theofylaktos, (Hellenic Association for the Cogeneration of Heat and Power).
In the evening, the official Conference Dinner of IENE “6th SEEED” took place with Mr. Alexander Lykourezos, (Managing Partner of Lykourezos Law Offices, Greece) as invited Speaker. The organizers of the Conference bestowed on Mr. Lykourezos a commemorative plaque in recognition of his lifelong achievement in the legal profession and his contribution to energy law.
The lead sponsor of “6th South East Europe Energy Dialogue” was Greece’s Public Gas Corporation (DEPA). The “6th SEEED” was also sponsored by Protergia SA, and Terna Energy S.A. Supporting companies also included the Hellenic Gas Transmission System Operator (DESFA S.A.), Siemens, the KDGI and Lykourezos Law Offices. The Conference’s media partners included the “Kathimerini’, “International Herald Tribune” and “New Europe” newspapers, as well as the Energia.gr website.