Studies

The study assesses the flexibility needs and options to balance each Contracting Party’s power system on different time-scales (daily, weekly and annual) until 2030 and 2040 under different assumptions mainly linked to the speed of renewables uptake and level of market integration.

It identified that there will be no need for additional investments into flexibility sources until 2030 when variable renewables (wind and solar) might reach 30 GW. The study underscored the pivotal role of cross-border interconnectors and market coupling in providing the flexibility needed to enable higher penetration of renewables and decarbonisation in the Energy Community. Annualised investment needs/costs between 2030 and 2040 into additional flexibility sources will drop by as much as EUR 150 million if organised spot (day-ahead and intra-day) and balancing markets are coupled between the Contracting Parties and with the EU.

This report analyzes the scale of direct subsidies in the six Energy Community Contracting Parties that owned and utilized generation capacities and resources from coal and lignite in 2020: Bosnia and Herzegovina, Kosovo* , Montenegro, North Macedonia, Serbia and Ukraine. The other three Contracting Parties, Albania, Moldova and Georgia, do not have coal-fired electricity generation capacity. The report builds on previous research and studies,  encompassing the periods 2018 - 2019 (12/2020 coal report) and 2015 - 2017 (06/2019 coal report).

The report concludes that all six Parties provided direct subsidies to electricity generation from coal/lignite during 2020. These subsidies amounted to more than EUR 400 million. In absolute terms, the amount of subsidies was the highest in Ukraine, Serbia and Bosnia and Herzegovina.

With the Decision 2018/04/PHLG-EnC, the following EU regulations were incorporated into the Energy Community acquis: 

• Regulation (EU) 2016/631: Network Code on requirements for grid connection of generators; 
• Regulation (EU) 2016/1388: Network Code on Demand Connection; 
• Regulation (EU) 2016/1447: Network Code on requirements for grid connection of high voltage direct current systems and direct current connected power park modules.

In order to support the DSOs and TSOs to prepare and align their grid codes to the EU regulations, the Secretariat contracted technical assistance. The overall objective was to assist system operators in further implementation, through: 

• setting the specific parameters left to be defined on a country level (TSO/DSO),
• drafting the provisions for respective DSO and TSO documents related to connection process and containing technical connection requirements and parameters,
• methodologies with rationale for selection of particular technical requirements/parameters to serve as the ground for justification in future public consultations,
• identification of connection issues and related business processes which affect both TSO and DSO and require their close collaboration.

As a final outcome, the technical assistance resulted in a series of reports:

• Report on identified non-exhaustive technical connection requirements to be set at national level and gap analysis on level of transposition (9 reports for each Contracting Party);
• Setting of methodologies for determination of non-exhaustive requirements (one consolidated report);
• Drafting the provisions for inclusion of non-exhaustive requirements in national legislation (9 reports for each Contracting Party);
• Mutual TSO and DSO connection issues and business processes.

The consolidated Contracting Party reports are displayed in the table below.

This report sheds light on the scale of direct subsidies in the six Energy Community Contracting Parties which own and utilize generation capacities and resources from coal and lignite: Bosnia and Herzegovina, Kosovo*, Montenegro, North Macedonia, Serbia and Ukraine. The report covers the period 2018–2019 and builds on previous research encompassing the 2015–2017 period. The World Trade Organization’s definition of subsidies was used to research, identify, calculate and describe subsidies.

The report revealed that all six Contracting Parties analysed provided direct subsidies to electricity generation from coal/lignite during 2018 and 2019. These subsidies amounted to more than EUR 900 million. In absolute terms, the subsidies were the highest in Ukraine, Serbia and Bosnia and Herzegovina. The report also uncovered the scale of state guaranteed loans, which amounted to almost 2 billion in 2019 alone. 

As defined by the International Energy Agency, “a smart grid is an energy network that uses digital and other advanced technologies to monitor and manage the transport of energy from all generation sources to meet the varying energy demands of end-users”. The aim of smart grids is to maximize system reliability, resilience and stability and minimize costs and environmental impacts by coordinating the needs and resources of end-users and generation, grid and market operators. Since smart grids are mainly based on information sharing, the new information and communication technologies are their vital enabler.

This study is intended to give a snapshot of the current situation of smart grids and smart meter penetration in the Energy Community, based on responses to questionnaires prepared by the Secretariat in consultation with members of the ECDSO-E coordination group. 

The electricity markets in the Contracting Parties are experiencing a period of complex transition, characterised by the coexistence of the liberalization and decarbonisation agendas. As a consequence, a number of plants could potentially retire, which raises security of supply concerns.

The results of this study show that an efficient energy-only regional market would bring the flexibility and adequacy required to maintain security of supply. Yet despite all progress, an efficient regional market mechanism is still not in place in the Western Balkans. Beyond delayed reforms, government actions such as non-compliant State aid distort operational and investments signals. Such State aid is often justified by the claim to maintain security of supply, a claim for which the present study in the current conditions does not provide support.

This final report is based on the analysis of direct and selected hidden subsidies to coal-based electricity production in the Energy Community Contracting Parties published by the Secretariat in March 2019 and the outcome of a subsequent public consultation.

It underlines the serious situation in the coal sector of the Energy Community Contracting Parties where direct subsidies amounted to EUR 1,2 billion in 2015-2017. On top of this, hidden subsidies, notably the non- payment of a carbon tax, totalled EUR 1,9 billion on an annual basis. In the three most coal intensive Contracting Parties (Bosnia and Herzegovina, Kosovo* and Serbia), coal subsidies were in absolute terms significantly higher than renewables support. The resulting market distortions and unsustainable consumption patterns are putting the region’s energy transition further at risk.

Following the publication, the Secretariat has continued to revise the study in order to incorporate improved data and new information. The latest summary of comments dates from September 2019.

The hands-on report offers practical information on the import and transmission capacity that is available regionally, identify and describe the projects that are being developed and recommend solutions to barriers that are causing bottlenecks.

Although the SEEGAS project has the double mission to integrate exchanges and infrastructure, this study focuses strictly on the latter. More concretely, the SEEGAS Infrastructure Report has surveyed 10 national gas transmission system operators in Bulgaria, Croatia, Greece, Hungary, Moldova, North Macedonia, Poland, Romania, Turkey, Ukraine, 10 existing or prospective LNG terminal operators in Croatia, Greece, Poland, Turkey as well as the operators of the recently commissioned Trans-Anatolian Pipeline (TANAP) and Trans-Adriatic Pipeline, which together make up the Southern Gas Corridor. Respondents include operators in EU Member States and Energy Community Contracting Parties which have also expressed interest in joining the SEEGAS project.

The report begins by providing an overview of the SEEGAS Initiative and summarizing its achievements to date. The second chapter outlines gas market and exchange developments in the SEEGAS participating countries, three Energy Community Contracting Parties (Georgia, Moldova and Ukraine), five EU Member States (Austria, Bulgaria, Greece, Hungary, Poland and Romania) and one Observer to the Energy Community (Turkey). All countries which are covered by this report are either in the process of establishing exchange traded gas markets or have such markets already in operation.

The SEEGAS report should not be considered as a regulatory report but rather as a collection of information compiled and developed by the Energy Community Secretariat based on the implementation report and on information submitted by key regional stakeholders and in close consultation with them.

The Study is composed of three, interconnected reports:

• Synthesis Report
• International Review
• Economic Analysis
• Contracting Party assessment

At present, gas system operators in the Energy Community do not have legal obligations to monitor, report or decrease their methane emissions. However, this sector has significant methane emissions reduction potential. Decreasing allowed network losses, setting minimum regular maintenance levels and fostering energy efficiency measures are some of the measures that could be explored.

This report is the outcome of the Secretariat's internal data collection project. Establishment of a baseline of methane emissions stemming from gas system operation activities is a precondition for any concrete, future emissions reduction action. The scope of the project also included joining the Methane Guiding Principles, to underline the Energy Community’s future direction in relation to methane emission policies.

The main objective of this project was to contribute to understanding of the effects of the Tariff Network Code (TAR NC)^[1] implementation on the existing gas transmission tariffs in two selected Energy Community Contracting Parties, namely Serbia and Ukraine. Proper understanding of the possibilities delivered by the TAR NC should help all regulators to prepare for the legislative and regulatory challenges ahead in the field of gas transmission tariff setting.
 

^[1] REGULATION (EU) 2017/460 of 16 March 2017 establishing a network code on harmonised transmission tariff structures for gas

For the assessment of candidate projects the consultant developed an assessment methodology, building on its previous assessments of infrastructure projects on behalf of the Energy Community in 2013 and 2016, as well as taking into account the methodology applied for the latest selection of EU Projects of Common Interest (PCIs) under the same Regulation as well as the methodologies for the assessment of network infrastructure projects developed by ENTSO-E and ENTSOG. 
The report provides an overview of all submitted investment projects as well as the modelling assumptions that have been made and agreed to with the PECI Groups, presenting detailed results and rankings of the projects. Based on the best estimate ranking and the additional information provided by the sensitivity analysis, the Groups were able to make an informed decision on the preliminary list.

The 16th Ministerial Council adopted the list of projects of Energy Community interest in November 2018. 

The 2013 Ministerial Council proposed the implementation of Directive 2012/27/EU in the Energy Community in 2014 with certain modifications. When adopted in the Energy Community, the Directive will repeal Directive 2006/32/EC and set more ambitious energy efficiency targets. This study assesses the impact of the implementation of the Directive 2012/27/EU in the Energy Community focussing on its four key provisions: national targets; exemplary role of public buildings; energy efficiency obligation schemes; and promotion of efficiency in heating and cooling.

The main aim of the study was to support the Contracting Parties in their efforts to meet their obligations under the Energy Community Treaty. The study gives a comprehensive overview of status of implementation of the Building Directive in the Contracting Parties. It also tries to facilitate the Parties' future efforts in preparation of NEEAPs and to change attitude toward energy consumption in buildings. The report gives guidelines for preparing inventory of buildings and defining reference building for each category as defined in the EPB Directive.

Enabling customers to switch their suppliers is a core prerequisite for a well-working liberalised market. Whilst functional in the EU, these procedures have not yet been established in the Energy Community context. To facilitate the process, the Energy Community contracted consultants to develop best practice recommendations for customers’ supplier switching, both for electricity and gas markets.  The study identifies a best practice switching model among the EU-27 using a variety of criteria.

In an ideal world, the national regulatory authorities would ensure liberalization of the electricity market without any worsening of the quality of electricity service. The study provides recommendations for the quality of electricity service data collecting, reporting and auditing and the gradual development of the quality of service regulation. The study refers to recently made experience of European Union Member States on the quality of service regulation and uses best practise legislation as a sort of a checklist for all the necessary activities. It addresses the three dimensions of the quality of service, namely the continuity of supply, the voltage quality and the commercial quality.

The aim was to develop a set of best practice recommendations for rolling-out smart metering in the Energy Community, taking into account the EU's lessons learned and the specifics of its Contracting Parties.  The cost-benefit assessments regarding smart metering deployment as specified in Annex I of the Directives 2009/72/EC and 2009/73/EC are due by Jan 2014. The ECRB commissioned the report due to the fact that large-scale implementation of smart metering has not yet taken place in the Energy Community and that all Contracting Parties still need to carry out the economic assessment of the long-term benefits and costs of smart metering implementation. 

The study estimates the number of energy poor households, analyses the legal frameworks for the protection of vulnerable and energy poor consumers and investigates the main drivers and causes of energy poverty in the Contracting Parties. Efforts to address energy poverty are part of the Energy Community Just Transition Initiative to ensure that the move away from fossil fuels in the Contracting Parties is socially just, in the interest of women, workers and entire communities.

The study found that while all Contracting Parties have definitions of vulnerable customers, that definition is closely related to the social (income) and health status. Other aspects and drivers of energy poverty, such as the energy efficiency of homes, gender and energy needs, are not considered. This means that not all energy poor households are getting the support they need.

The starting point of this study was an assessment of the current state of development of the Contracting Parties with respect to the EU cybercrime legal framework (Budapest Convention), which forms a basis for cybersecurity legislation by defining criminal law offences and associated provisions and thus enables prosecution of cybercrime actors. Special attention has been placed on critical infrastructure and essential services identification criteria, as well as on national strategies on the security of network and information systems applicable to both the electricity and gas sectors.

An overview for each Contracting Party was prepared based on the collected and consolidated information. International standards, training programs and cooperation initiatives as enablers for energy-related cybersecurity capacity building, were indicated at a country level.

The core objective was to further develop the methodology and to conduct a quantitative assessment of pathways for achieving calculated 2030 energy efficiency, RES and GHG emissions reduction targets that can be expected under aligned framework conditions in the Contracting Parties.The report describes the methodologies, data and key assumptions for deriving 2030 energy and climate targets. A set of options that can be used for target setting has been derived within each respective field and for overall GHG emission reduction.

The study concludes that setting GHG targets is strongly needed due to several highly GHG emitting industrial processes in the Energy Community region. Setting 2030 GHG emission targets is the beginning of a convergence process towards the EU long term (i.e. 2050) target that needs to take into account countries current and historic emissions pro-files and the strong need for economic recovery.