REEEP regional meeting in Central and Eastern Europe and Turkey, Budapest, 30 September 2004

1. An European perspective on renewable energy and energy efficiencyMSc. Anca-Diana Barbu, Carl von Ossietzky University REEEP regional meeting in Central and Eastern Europe and Turkey, Budapest, 30 September 2004

2. Overview • Political processes: EU Accession, Stability Pact, Energy Community for South East Europe; • Lessons learnt from EU 15; • Opportunities for renewable energy and energy efficiency • The Why, Where and How questions;

3. Multi-speed Europe EU-15 Common standards NMS Other Economic development Stable democracy

4. EU Accession

5. Stability Pact The Stability Pact for South Eastern Europe is a political declaration and framework agreement adopted in June 1999 to encourage and strengthen co-operation among the countries of South East Europe (SEE) and to facilitate, co-ordinate and streamline efforts to ensure stability and economic growth in the region.

6. Energy Community for South East Europe Objectives set by the Athens Forum in June 2004: • December 2005, the legislative, regulatory and technical rules for the development of each national market in the SEE region will be concluded; • December 2007, the regional aspects of the market, such as investments of a regional nature, market esign for the regional market, regional licensing, regional scheduling and trading facilitation mechanisms, are envisaged; • From January 2008, is the actual, real-time operation of the Integrated SEE regional energy market;

7. Lessons learnt from EU-15Liberalisation Evolution of energy prices: • Electricity (€¢/kWh, all taxes included, end-consumer ) 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Ind. 6.19 6.38 6.42 6.33 6.35 6.27 5.89 5.87 5.68 5.48 5.45 5.49 5.49 Hds 10.79 11.39 12.64 12.51 12.71 12.57 12.60 12.61 12.51 12.14 12.26 12.40 12.56 • Gas (in €/GJ, all taxes included, end-consumer) 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Ind. 3.46 3.74 3.62 3.44 3.50 3.41 3.26 3.70 3.72 3.19 3.78 5.26 4.91 Hds 10.23 10.85 10.78 10.47 11.14 11.19 11.04 11.77 11.80 11.39 12.07 13.49 13.62 Source: EU (2003) ......but increase in price volatility

8. Lessons learnt from EU-15Liberalisation The learning by doing process tends to trigger “volatility” in policy making • The regulatory framework is bound to change faster than it used to be the case in the past; • This may trigger shorter business cycles as both governments and investors alike may tend to focus on short-term objectives; • Leading to expectations for higher returns on investment in shorter payback periods;

9. Lessons learnt from Eu-15Renewables • Policies and measures currently in place are not sufficient to meet the RES target in 2010; • The main risk in achieving the target is the significant imbalance between the level of commitments among Member States; • Main culprits: production of electricity from biomass and sluggish developments in heating and cooling sectors; • Fragmentation of European market; • Complicated administrative procedures, inadequate local energy planning to include a larger share of RES and opaque grid connection conditions; • Implementation of the GOs;

10. Opportunities for RES&EE in Central and Eastern Europe and Turkey • energy prices are rising; • availability of low cost energy efficiency measures in the public sector; • energy efficiency potential also in the residential sector; • diminished need for imports; Household expenditures in Czech Republic Source: Energy Charter (2003)

11. Opportunities for RES&EE in Central and Eastern Europe and Turkey Energy saving potentials in Czech Republic Source:Energy Charter (2003)

12. Opportunities for RES&EE in Central and Eastern Europe and Turkey ADMIRE-REBUS Model - ECN, Carl von Ossietzky University

13. Opportunities for RES&EE in Central and Eastern Europe and Turkey ADMIRE-REBUS Model - ECN, Carl von Ossietzky University

14. ...but • Scarce public and private funds EX: Romania - investments in infrastructure in the transport sector, €bn 18.3 will be required for the period 2004-2007 and an additional €bn 10.6 for the period 2008-2015; - to comply with the environmental Acquis, €bn 29.5 will be required for the period 2004-2021; out of which 20% will come from the state budget (€bn 5.9), 30% from EU funds (€bn 8.85), about 35% is expected from the business sector (€bn10.3) and the rest of 15% from other sources http://www.ier.ro/impactstudiesPAIS2.html

15. ...and • Lack of capacity at local level Ex. Estonia Structural funds available for the period 2004-2006 amounts M€ 200/year, these funds to develop tourism, local transport and municipal infrastructure. The Athme Biomass CHP Project • The project is one of the projects on the pipeline. Its aim is to replace an oil-shale fired power plant commissioned in 1950s with a biomass CHP with an output of 50 MWth and 20 MWel. The project is estimated to deliver aprox. 270,000tCO2 emissions savings per year. The total project cost is €48 bn out of which 35% are to be covered from structural funds. Experience of the developer • A significant lack of awareness on energy issues and capability to prepare good projects at local level. • Consequently, the developer has decided to offer assistance to the local authority in: advising on potential eligible projects, public awareness campaigns, developing technical guidelines for project preparation and tools for project monitoring.

16. The Why question • To reduce import dependency; • To mitigate climate change; • To create jobs; • To stay/become competitive; ….and/or “ to reduce the depletion of domestic fossil fuel deposits to keep them available for future generations” Objectives of the National Programme for Energy Efficiency and the Use of Renewable and Secondary Energy Resources to 2005, Czech Republic

17. The Where question • Need to have priorities: short,medium and long term; • Need for accurate data (including potentials); • Need for appropriate local energy planning; • Need for appropriate infrastructure and lobby;

18. The How question ? Thank you for your attention Diana.barbu@uni-oldenburg.de