Energy Community acquis implementation proceeding but slowly

The reforms in the energy sectors of the contracting parties progressed over the past year, however significant challenges remain, the Energy Community Secretariat warned. The annual report highlights the need to support vulnerable energy customers, encourage energy efficiency and savings measures, implement environmental law and establish electricity spot markets, among other issues.

Ahead of the Energy Community Ministerial Council on December 15 in Vienna, the Energy Community Secretariat published its Annual Implementation Report, which tracks the adoption of Energy Community acquis.

“Despite the destabilizing impacts of Russia’s war against Ukraine, many contracting parties made progress in reforming their energy sectors. Reforms even gained new momentum in certain contracting parties. Nevertheless, significant challenges do remain and the secretariat will continue to do its utmost to support all contracting parties in advancing the reform agenda in line with their obligations under the Energy Community Treaty and the European Green Deal,” the secretariat’s Director Artur Lorkowski said.

Spot markets are necessary for integration, energy transition

Given the urgent need to shift the energy sector away from fossil fuels, especially of Russian origin, all contracting parties are encouraged to continue to improve their regulatory and legal framework to accelerate the uptake of renewable energy, the announcement adds. More progress is also needed in terms of encouraging energy efficiency and energy savings in all sectors, and replacing across-the-board regulated retail prices with targeted support to vulnerable customers, the secretariat pointed out.

The report points to several deficiencies in the implementation of environmental law. There was little overall progress to advance the creation of electricity spot markets in the region, an essential precondition for the further development of electricity markets and their integration needed for the transition towards a decarbonized and decentralized electricity sector, the authors concluded.

Most challenging year so far

“This reporting year has been by far the most challenging in the history of the Energy Community. It is encouraging to see that the majority of reforms proved resilient in an extremely difficult environment… The strategic goal of connecting Ukraine and Moldova to the continental European network was one of the biggest breakthroughs, reflecting the solidarity that the Energy Community is built on,” Deputy Director Dirk Buschle said.

The energy crisis also saw the rise of emergency stabilization measures in many contracting parties, which will continue to be monitored by the secretariat, which stressed that market interventions need to be proportionate and strictly limited to the period of the actual energy crisis.

Market interventions need to be proportionate and strictly limited to the period of the actual energy crisis, the secretariat warned

The Energy Community extends the European Union’s internal energy market to its neighboring countries. At the upcoming meeting, the contracting parties are expected to adopt the 2030 targets for energy efficiency, renewables and greenhouse gas emissions.

As for progress in numbers, the average advance was three percentage points, led by Moldova’s seven points. On the other end of the scale, Kosovo* came in barely above water, at 0.1 points.

Looking at the segments, North Macedonia covered the most ground cumulatively in the implementation of electricity rules – 85%. Montenegro follows, with 82%, but at the same time it is the best on the sustainability front, reaching 74%.

Montenegro has the best overall result in the Energy Community, too, 69%. Bosnia and Herzegovina is the worst by far, at just 44%.