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Development of a competitive Balkan electricity market, the Balkan countries
Development of a competitive Balkan electricity market, the Balkan countries

CATEGORY: Energy, Markets, Strategy & Policy, Transmission & Distribution Networks

LOCATION: Albania, Bosnia and Herzegovina, Bulgaria, North Macedonia, Greece, Romania, Turkey

START/END: 1998-1999

CONSULTANCY BUDGET: 506,840 €

CLIENT: European Commission DG IA

ORIGIN OF FUNDING: PHARE

PARTNERS: Bechtel; SPRU; ECA; Energy Policy Group

LDK’s BUDGET SHARE: 35%

STAFF PROVIDED: 5

Development of a competitive Balkan electricity market, the Balkan countries

Type of Services

LDK was leader of an international consortium, providing intensive high level support to the national authorities in the seven Balkan countries, as well as the European Commission. Adopting a phased approach, through 12 tasks, the work team collected and analysed data about the power sector of the region; carried out deliberations with country representatives; prepared recommendations concerning the design and set-up of the Regional Electricity Market (REM), in cooperation with the beneficiaries; and undertook initiatives leading to the initiation of the Market.

The services provided by the work team included:

  • an estimate of the possibilities of integration of the internal electricity markets of the beneficiary countries through their liberalisation;
  • an examination of the perspective for interconnection of the regional electricity market with UCTE;
  • an examination of the cost and technical reliability of interconnection, as well as different trading issues related to electricity interconnections;
  • identification of the major obstacles (political, technical, commercial and others), which would prevent the establishment of a regional electricity market;
  • the recommendation of ways to overcome major obstacles towards the development of the Balkan electricity market.

Services provided in the context of current project included the following:

  • set up of the Task Force and its internal procedures;
  • identification and preparation of a detailed inventory of energy interconnection projects (in electricity, natural gas and oil sectors);
  • preparation of a list of projects with common interest;
  • assessment of the global energy supply and demand in the Balkans;
  • detailed economic evaluation of projects of common interest;
  • setting of priorities among projects of common interest.

 

Description

The project was one of the most important cooperation projects in South-eastern Europe, with considerable economic and development consequences for the region. It was one of the initiatives resulting following the successful work of the Balkan Energy Interconnections Task Force, as manifested in the Bucharest Memorandum signed by the Energy Ministers of the countries of the region.

A derivative of the project, the Ministerial Conference which took place in Thessaloniki on September 10th, 1999, was characterised by the European Commissioner Christos Papoutsis as a political event of major political significance not only for the energy sector but also for the economic development, stability and co-operation of the whole region. The Ministerial Conference, not only offered political endorsement to this project, at the highest level, but through the Declaration signed then, clarified a number of very important issues concerning the nature, orientation and principles of the market.

Another important achievement of the project, was the Technical Workshop held in Athens on September 16th and 17th, 1999, among high level representatives of the Dispatching Centres and Planning and Development Departments of the power companies from the country members of the Regional Electricity Market. The agreement reached in the workshop were of great importance for the next steps towards the establishment of the Market.

Furthermore, the over 60 participants from the power sector of all countries of the region attended the closing event `The Emergence of a Competitive Regional Electricity Market` (Task 12) and confirmed the importance of the development of the Regional Electricity Market for the economic development of the countries of the region.

The main objectives of the project were the following:

  • to assist in the development of a regional electricity market in the Balkan region, operating under UCTE standards;
  • to propose a development plan of important steps towards the creation of a regional electricity market;
  • to provide the mechanisms (legislative, technical, financial, institutional) for the development of the Balkan electricity market and the establishment of the necessary institutions.

The Task Force was a common effort between the countries of the Balkan region and the European Union with an objective to set up a comprehensive inventory of common interest projects in the energy sector (electricity, oil and gas) for the region and subsequently define a list of priorities among them, taking into account the present and projected energy situation there. The project led to the establishment of an inventory of common interest interconnection projects, as well as an evaluation of these projects on account of economic, technical, social and other criteria. The Task Force acted as a catalyst facilitating bilateral and multilateral discussions among the countries involved and the EC, leading to further maturity of the projects. The work and recommendations of the Task Force was ratified in Bucharest on 28.11.97, where Energy Ministers of the countries of the region and the European Commissioner responsible for Energy signed a relevant Memorandum, and agreed on further action in the region.

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