Energy reforms move ahead despite COVID-19 – Energy Community annual report

Energy Community contracting parties have increased the capacity of renewable power plants by 19% this year, but North Macedonia, Serbia and Ukraine most likely won’t meet the 2020 targets, according to the Energy Community Secretariat’s Annual Implementation Report.

“While there is no doubt that more needs to be done in the areas of emissions abatement, energy efficiency, sustainable renewables and genuine market integration if the Energy Community is to succeed in the clean energy transition, I see the glass as half full,” the secretariat’s Director Janez Kopač said.

Ukraine overtakes North Macedonia, Serbia in implementation

The report reveals the contracting parties have made progress in market-oriented and sustainable energy reforms despite the COVID-19 crisis. The average implementation score increased from 48% to 53%.

While Montenegro remains the frontrunner, Ukraine jumped ahead of North Macedonia and Serbia, where progress has plateaued, to claim the second place.

As an explanation for his point of view he highlighted progress in the area of climate, where the Energy Community does not have a hard legal framework yet. Montenegro is the first contracting party to introduce an Emissions Trading Scheme (ETS) similar to the EU ETS.

Kopač: I see the glass as half full

“North Macedonia led the way in the preparation of the integrated National Energy and Climate Plans, followed by Albania, Bosnia and Herzegovina and Georgia,” Kopač added.

Renewable energy is another sector where the report confirms genuine progress, showing a 19% increase in renewables capacities, predominantly in solar and onshore wind.

Auctions achieved prices that are much lower than the previous administratively set feed in tariffs

“Auctions for renewables in Albania and North Macedonia achieved prices that are much lower than the previous administratively set feed in tariffs, decreasing support costs charged to final consumers. This should be a motivation for all contracting parties to move to market-based support schemes,” the secretariat’s Deputy Director Dirk Buschle said.

The amendments to the Energy Community Treaty will finally be sealed

According to the Annual Implementation Report, the Energy Community will have to prove that it can not only support the energy transition but actively boost and steer the process, taking the contracting parties along on the European pathway towards decarbonization.

As a good sign in this direction, the report points to progress in the process of changing the Energy Community Treaty.

The amendments to the treaty will finally be sealed at the end of this year, which is expected to enhance compliance with the acquis by the contracting parties and at the same time unlock the potential for market integration between the European Union and the Western Balkans, at least in the electricity sector, the report underlines.

Study for 2030 targets launched

Decarbonization, renewables and energy efficiency targets for 2030 were discussed as early as 2017 but have still not been set, and in early 2020 the Ministerial Council could not even agree on the adoption of non-binding decarbonization guidelines. But things are starting to move.

The EU’s interest in phasing out coal, pricing carbon and extending the Renovation Wave to its immediate neighbourhood is increasing

A study has been launched identifying the scope for the 2030 energy efficiency, renewables and decarbonization targets to be adopted in 2021, almost in the last minute, together with the Clean Energy Package, the document adds.

The report also underlines that the European Union’s interest in phasing out coal, pricing carbon and extending the Renovation Wave for non-efficient buildings to its immediate neighbourhood is increasing.

The EU has also pledged recovery and transition support to these countries, according to the report.