The Institute of Energy for SE Europe (IENE) staged
today a special event to present its recently completed major study «South East
Europe Energy Outlook 2016 - 2017» (SEEEO 2016-2017). The presentation took
place at the Giannos Kranidiotis auditorium in the Greek Ministry of Foreign
Affairs, in Athens, to a selected group of senior business executives, energy
experts, foreign diplomats, as well as IENE members and associates and
contributors to the SEEEO 2016-2017. Greece’s PPC, DEPA, IGI Poseidon, ADMIE
and EnSCo were the event sponsors.
«South East Europe Energy Outlook 2016 - 2017»
provides a thorough and comprehensive insight of the region’s energy sector and
contains a huge amount of data including energy demand and supply projections
and investment estimates until 2025 for a whole range of energy applications.
The group of the 13 countries examined in the
current Outlook consists of EU Member States, (East Balkans, Croatia and
Cyprus) the Energy Community contacting parties (mainly West Balkans) and an EU
Associate Member, Turkey. Although culturally, politically and economically
diverse these countries are related and also bound, in different degrees each,
to EU energy policies, strategies and objectives. Hence, the EU and its various
bodies (i.e. Energy Community, ACER, CESEC etc.) exert considerable influence
in energy policy formulation and energy market operation in SE Europe.
Commenting on EU and SEE energy policy review,
IENE’s study observes that there is "painful realization of the conflicting
points of view between EU energy planners and SEE countries’ priorities when it
comes to the development of indigenous energy sources. The hierarchy agreed and
followed by the countries at national energy policy level is strictly
determined by economic considerations and gives credence to solid fuels, in
spite of GHG commitments and the overall EU Climate Change policy direction”.
In the case of renewable energy sources and how
these could be best utilized at country level in the SEE region, the "Outlook”
sees a clear failure at EU policy level since EU planners encourage countries
to achieve specific national targets for RES penetration but at the same time
expect the governments of the very same countries to respect strict budgetary
rules by not exceeding specified public deficit levels. The unhappy story of
the rapid RES growth and then deflation, all within 3-4 year period, in
countries like Romania and Bulgaria clearly demonstrates the failure of such EU
policies and their application at regional level in economies still struggling
to achieve sustainable economic development, or in the case of Greece, a
country whose economy has suffered from continuous contraction over the last
six years.
Although the economies of the SEE region appear
widely divergent in terms of structure and level of development, they share a
number of challenges which appear to be common to all. Chief among them is the
priority they all give for the development of the energy sector, both in terms
of infrastructure and market operation.
Oil and coal still appear as a mainstay of the
regional energy mix. Moreover, the large amounts of indigenous coal and lignite
deposits explains the persisting relevance of solid fuels, which contributed
about 33% of the gross inland consumption and 38% of the gross electricity
generation of the SEE region respectively in 2015. The SEE region is
characterized by high oil and gas import dependence. Crude oil and oil product
imports corresponded to 82.65% of total oil consumption and natural gas to
69.5% compared to 53.5% of the EU average.
Natural gas is becoming increasingly important to
the energy mix of the various SEE countries, both for power generation and
domestic use. However, its further use is hampered because of poor
infrastructure, lack of adequate cross border interconnections, and until very recently
high prices.
The so called peripheral countries are playing an
increasingly more influential role in the channeling of energy flows into the
SEE region. Moreover, in terms of security of energy supply the SEE region as a
whole appears more vulnerable than the rest of Europe (mainly Western European
countries). The SEE region being close to major gas producer countries in the
southeast borders and the East Med can be used as a route for energy supply to
the rest of Europe. Main energy routes in the making include the Expanded South
Corridor, the Vertical Corridor, the East-Med, the EuroAsia Interconnector etc.
The market liberalization process in the
electricity sector in most SEE countries, especially in Member Countries and in
Turkey has made impressive progress over the last five years with unbundling
having taken place and competition in the retail area now evident in some
countries after many years of protectionism. Less impressive is progress in the
natural gas sector where competition is largely limited to the industrial
sector with retail lagging seriously behind.
For renewable energy sources to achieve greater
penetration in the SEE energy mix and thus facilitate the region’s
decarbonisation, the IENE study says that strong policy measures are needed to
be backed by EU guaranteed financing, which should be introduced over the next
five years. It must also noted, that, despite national and regional regulatory
and legislative initiatives, energy efficiency in SE Europe is not being given
enough priority or attention.
Investment prospects for energy related basic
infrastructure and energy projects across the board (i.e. electricity, natural
gas, RES, thermal power plants, oil and gas explorations, energy efficiency)
look positive over the next decade. There appears to be marginal improvement in
anticipated and planned projects from now on until 2025, compared to the
projections made in 2011 for the period 2011-2020, with total estimated funding
in the region of €267 billion in the base scenario and €321 billion in an
optimistic scenario.
The SEEEO 2016-2017 study will be published early
in the next year and can be ordered through IENE’s website
www.iene.eu
Funding for this major IENE Study came from a group
of sponsors which have included the following companies: Hellenic Petroleum
(HELPE), Public Power Corporation (PPC), Public Gas Corporation (DEPA), while
supporters included: Terna Energy, LAGIE (The Electricity Market Operator), ADMIE
(The Electricity Transmission Operator),, EnSCo, Energean Oil & Gas and KG
Law Firm.
In the first quarter of 2017, a number of road
shows are planned in Sofia, Bucharest, Belgrade, Istanbul, Vienna and other
cities in the broader region. Details will be announced through IENE’s website.