South East
Europe’s role in European energy security, market integration and transition
was discussed in the light of latest developments in a special evening lecture
jointly organized by IENE and the Energy Institute (EI) in London, on March 15.
The lecture was delivered by Costis Stambolis IENE’s Executive Manager and Gus
Papamichalopoulos IENE’s Deputy Charmain, with more than 90 energy
professionals attending the event. The speakers stressed the role of SEE as an
energy bridge between Eastern hydrocarbon resources and energy demanding
Western markets, and how the region has emerged over the last few years as a
vital link in European energy security architecture. As the economies of SEE
countries are catching up with those of the rest of Europe, energy plays an
important role both from a financial/investment perspective but also because of
market development (i.e. integration, liberalization, competition, etc.).
Although
considerable progress has been achieved in recent years on energy market
integration, the region currently faces serious challenges when it comes to
adapting its energy systems and energy markets to meet EU basic targets (i.e.
decarbonization, RES penetration, energy efficiency). Furthermore, we observe
great divergence in the degree of adaptation between the different country
groups of the region. With EU member states (Slovenia, Croatia, Romania,
Bulgaria, Greece, Cyprus) having to a large extent achieved market integration,
while West Balkan countries, with the help of Energy Community, trailing behind
but on a firm footing as their regulatory authorities and other institutions
are now taking the lead.
In their
exposition, Costis Stambolis and Gus Papamichalopoulos were greatly assisted by
the work undertaken by IENE in its seminal study, the "SEE Energy Outlook
2016/2017”, published in June 2017. A tremendous amount of data and analysis is
contained in this publication which helps us understand the economic and energy
background and market dynamics of the region.
A number of
key regional energy issues were identified and discussed with Costis Stambolis
presenting the overall energy demand – consumption situation, the energy mix
and infrastructure background of the region and Gus Papamichalopoulos focusing
on energy security, the legal and regulatory environment and the new EU
solidarity mechanism. Key issues such as the marked divergence between EU and
SEE energy strategies, the region’s high energy security vulnerability, energy
supply diversification versus security of energy transportation and
transmission (oil, gas and electricity) were also highlighted. Other key areas
of interest were discussed, and included SEE’s high hydrocarbon dependence, the
emergence of gas as a fuel of choice for power generation, the lack of adequate
electricity and gas interconnections, the continuing relevance of coal, the
difficult and uncertain path of SEE towards decarbonization, the nuclear power
as a viable option for SEE power generation, the impediments to RES growth due
to repeated policy failures and electricity grid constraints and finally the
emergence of energy poverty as a regional concern, mainly related to
deteriorating social conditions.
A main
conclusion of the joint presentation by IENE’s leadership was is that Energy
Transition, towards cleaner energy sources and a more competitive price
environment, currently in evidence in Europe and worldwide, will take
considerable more effort and far greater regional cooperation in SE Europe in
order to harmonize with stated EU targets and overall objectives. A lively
discussion ensued the lecture while a drinks reception, hosted by EI, followed.