The Energy Community High Level Reflection Group has issued a report on how the work of the Energy Community – an international organisation comprising the European Union and eight neighbouring countries (Albania, Bosnia and Herzegovina, Kosovo, former Yugoslav Republic of Macedonia, Moldova, Montenegro, Serbia and Ukraine) – may be improved.
The Report contains proposed solutions to the most pressing challenges facing the Energy Community, including the gap between political commitment and real implementation of the acquis communautaire, lack of investment in infrastructure and partial effectiveness of the institutional setup.
“I am confident that our report offers correct responses to the main challenges. Responses which are ambitious but absolutely realistic and feasible in an evolutionary, not revolutionary way”, said the Group’s Chairman Jerzy Buzek. “In today’s geopolitical situation we realize better than ever before how important for prosperity and stability in entire Europe is secure, competitive and sustainable energy supply. The Energy Community is a key instrument of international energy policy and its efficient functioning is essential for achieving the goal.”
Besides expressing his recognition for the Group’s relentless efforts, Director of the Energy Community Secretariat Janez Kopač promised the Secretariat’s continued support in the next steps of the reforming process. “Now that the Energy Community is featured in the European Energy Security Strategy, presented by the EU Energy Commissioner two weeks ago, there is an additional push and a perfect momentum to upgrade the institution. We would not be able to use this momentum without reshaping the Treaty and readjusting it in line with the challenges awaiting” – explained Kopač.
The recommendations cover four key areas: legal perspective, investments, geographical scope and institutional set-up. The majority can be adopted without amending the Treaty, sometimes requiring a simple decision of the Ministerial Council. A small number of recommendations require full Treaty revision.
Key points of the Report:
1. A Single European Energy Market – which will allow for cross-border trade and integration of the EU market and non-EU members’ markets – is a precondition for stable and secure energy supply to citizens and businesses.
The Group recommends that the current Energy Community acquis should be widened to include additional rules on competition, state aid and public procurement in the energy sector and new environmental acquis. Moreover, Energy Community institutions should be better linked to EU energy institutions created by the Third Energy Package – ACER, ENTSO-E and ENTSO-G. At the same time, the Group concluded that EU rules need to be better adapted to the socio-economic situation of the participating non-EU countries. It also recommended strengthening and expanding Title IV of the Treaty, which allows for designing true pan-European energy governance.
2. Building a single market requires investment. Its levels have remained low.
The Group recommends the introduction of risk mitigation schemes for investments, such as an Energy Community Risk Enhancement Facility providing investment guarantees or insurance products and an entity allowing for demand aggregation for imported gas. The Group also suggests the harmonization of permitting procedures and criteria in order to enhance transparency and shorten the duration of such procedures.
3. Law enforcement must be more efficient. Today’s imperfect enforcement mechanisms are one of the major obstacles to the success of the Community.
The Group proposed for the current dispute settlement procedure to be gradually replaced by a Court of Justice and financial sanctions to be introduced, as in the EU. Moreover, the court should also be accessible directly by individuals and companies, as having access to a vigorous and independent judicial system is also fundamental for investors.
4. Investments and market integration need more funding.
Increased funding should be made available in bilateral and multilateral support, including from international financial institutions (e.g. World Bank) and the EU, for technical assistance and investments, especially for Projects of Energy Community Interest. All funding should be conditional on compliance with the Energy Community obligations.
5. The whole process should be more transparent.
The Group recommends that civil society and business should be engaged more broadly in the work of the Community’s institution as observers.
The report, released on 11 June 2014, will be officially presented by Jerzy Buzek at the Energy Community Ministerial Council, the body consisting of Energy Ministers of the Energy Community Members (“Contracting Parties”) and the European Energy Commissioner representing the EU, on 23 September 2014 for endorsement. The Group recommends the creation of a roadmap based on its proposals by the end of March 2015.
(Source: Energy Community)