EU: Strengthening regional cooperation on Energy

Cross-border regional energy cooperation delivers lower prices and higher security of supply, and is a crucial building block of a competitive European Single Energy Market. Today, the European Commission has set out its ideas on how to reinforce such regional cooperation. In its Communication "The future Role of Regional Initiatives" published today, it identifies new tasks of Regional Initiatives such as the development of cross-border infrastructure and the implementation of the Third Energy Package including network codes. It also proposes a new governance structure of existing Regional Initiatives and an adjustment to their geographical scope to make regional cooperation more effective. Regulators, transmission systems operators and other stakeholders are invited to express their views on these ideas by the 15th of February 2011.

The European Commissioner for Energy Gunther Oettinger said: "The Regional Initiatives have a key role in creating a truly integrated single energy market as they favour a strong cooperation including on infrastructure. We have to use their potential wisely and make sure that we reap all the benefits a well-targeted and effective regional cooperation can offer."

The Regional Initiatives were initiated in 2006 by the European Commission and the European Regulators' Group for Electricity and Gas (ERGEG) as an intermediate step from national markets to European scale which would favour further integration.

In its Communication, the Commission proposes that the Regional Initiatives concentrate on more targeted goals, in particular on the following actions:

• accelerate the implementation of the 2nd and 3rd legislative energy package, including network codes

• ensure competitiveness through market coupling by 2015 allowing lower price for cross-border energy

• launch pilot testing to experiment new ideas which could then be used at the EU scale, for example on Smart Grids

• identify regional infrastructure priorities and coordinate cross-border investments to ensure security of supply and help cope with possible gas crisis

• promote development of renewable energy

The European Agency for the Cooperation of Energy Regulators (ACER) should monitor and coordinate the work of Regional Initiatives to ensure greater coherence of the regions' work programmes.

The Commission proposes that the number and composition of the geographical regions for gas is adapted by adding Italy to the South Region (France, Portugal, Spain) and by splitting the current South, South-East region into three new regions:

- Central-South region: Italy, Austria, Slovakia, Slovenia, Hungary, Romania, Bulgaria and Greece.

- Central-East region: Germany, Poland, Czech Republic, Slovakia and Austria.

- New BEMIP region: Sweden, Finland, Estonia, Latvia, Lithuania, Poland, Germany and Denmark.

For the electricity regions no change is envisaged but flexible ad-hoc cooperation should be allowed when needed, for instance for the North Seas Offshore Grid Initiative.

Background

The 7 Electricity and 3 Gas Regional Initiatives (RIs) were set up on an ad hoc basis. Each RI gathers National Regulators, Member States, the Commission and other interested parties from neighbouring countries. The Regional Initiatives aim at the correct implementation of the Second Energy Package and especially those parts of the acquis requiring cross-border coordination. The RIs are:

Electricity:

Baltic: Estonia, Latvia, Lithuania

Central East: Central East: Austria, Czech Republic, Germany, Hungary, Poland, Slovakia, Slovenia

Central South: Austria, France, Germany, Greece, Italy, Slovenia

France – UK – Ireland: France, Ireland, United Kingdom

Central West: Belgium, France, Germany, Luxembourg, Netherlands

Northern: Denmark, Finland, Germany, Poland, Sweden, Norway

South West: France, Portugal, Spain

Gas:

South Region: France, Spain, Portugal

South South-East Region: Austria, Bulgaria, Czech Republic, Greece, Hungary, Italy, Poland, Romania, Slovakia, Slovenia

North West: Netherlands, Belgium, France, Ireland, United Kingdom, Germany, Denmark, Sweden, Norway

The Regional Initiatives (RIs) have been beneficial in providing a forum for regulators, network operators and other stakeholders of neighbouring countries to discuss issues of common interest.

Stavros MAVROUDIS

KLC Law Firm, Business Development, South-Eastern Europe

*1 Based on a European Commission Press Release of December 7th 2010.

№12(50), 2010