Regional Energy Market

Towards an Energy Community of South Eastern Europe (ECSEE)
Conference for SEE Parliamentarians, Social Partners and NGOs
Draft Conclusions

Parliamentarians, Social Partners and non-governmental organisations (NGOs) from South-Eastern Europe (SEE) met in Bucharest on 11-12 October at the invitation of the Romanian Chairmanship-in-Office of the South Eastern Europe Cooperation Process (SEECP). The Conference was organised with the support of the European Commission and the Stability Pact for South Eastern Europe. Appreciation was expressed by all participants for the excellent hospitality extended by the Romanian government.

The Conference was opened by welcoming remarks, among others, by Mr. Valentin Zoltan Puskas, Vice President of the Romanian Senate, Mr. Mircea Geoanaš, Minister of Foreign Affairs, and Mr. Dan Ioan Popescu, Minister of State, Minister of the Economy and Trade, of Romania, as well as by Mr. Jonathan Scheele, Head of the EU Delegation in Romania.

In the first session, the representative of the European Commission, (DG TREN) explained how the proposed ECSEE would extend to SEE the benefits of the EU internal energy market, in terms, among others, of security of supply, enhanced operational efficiency and the introduction of the EU standards. She outlined the important political commitments already undertaken by the countries of the region in the framework of the two “Memoranda of Understanding” and the progress already achieved under the so-called “Athens Process.” The representative from the World Bank confirmed the strong support that multilateral and bilateral donors in the international community were willing to extend to the ECSEE project, in the form of both financial and technical assistance.

The second sessions provided the opportunity for Parliamentarians, Social Partners and NGOs to express points of view on the benefits and costs of the proposed transformation and regional integration of the SEE energy sector, on the challenges faced by their countries and the solutions that had been found.

The third session on issues of tariff reform and affordability showed clearly that a cost reflective tariff was necessary for sustainable energy. A representative from the EBRD presented the results from the EBRD-financed SEE affordability study, showing how such a cost reflective tariff would impact household budgets and describing mechanisms to protect more vulnerable household groups. A representative from the Albanian Ministry of Energy and Industry explained how Albania had been able to substantially enhance discipline in energy and tariff payments. The impact of renewable energy and environmental measures on tarification was stressed. The UNDP study on Energy, Environment and Poverty in SEE showed how concerns in these areas could be better addressed. In the general debate several constructive suggestions were made on how to adapt general principles to the specific conditions of SEE.

The fourth session concentrated on the restructuring in the SEE energy sector that would result from the proposed transformation and regional integration process and from the ensuing change and diversification in the mix of primary energy sources. It was shown that the restructuring was needed in any case “to keep the lights on“ and that it would take place in a less costly manner if it was part of a regional strategy. It was shown that changes in the conditions of work and in labour relations linked with new technological developments could also be positive, in terms of human resource development, greater flexibility and changes in salary structure. Specific restructuring experiences were discussed and the positive role was shown of re-training and regional development programmes to mitigate the redundancies resulting from restructuring.

In the first session on the second day, presentations were made on the infrastructure, particularly in generation and transmission, necessary for the creation of a fully integrated electricity and gas market in SEE and the donors coordination process. The World Bank representative explained the work underway towards defining investment prioritisation and the savings investment requirements resulting from the regional integration process. The representatives of the major international financial institutions (World Bank, European Investment Bank and EBRD) provided information on their past and prospective financing for energy infrastructure in SEE, while the representative of USAID gave an overview of training and capacity building in support of the ECSEE provided by bilateral and multilateral donors.
In the last session, the European Commission representative made a detailed presentation of the draft treaty, including the proposed timetable for market opening and compliance with environmental standards. This allowed, in particular Parliamentarians, to familiarise themselves with the prospective key features of the Treaty, under negotiation, which at a later stage will be submitted for their ratification in each of the SEE country concerned.

The concluding session was honoured by the presence, among others, of Mr. Valer Dorneanu, President of the Chamber of Deputies of Romania, Dr. Erhard Busek, Special Coordinator of the Stability Pact, and Director General, Dr. Bruno Zluwa, Head of the Directorate General, Energy and Mining, Federal Ministry of Economic Affairs and Labour of Austria, who currently holds the chair of the Athens Process.