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Security of gas Supply in the Energy Community

Vienna Forum on European Energy Law, 8 March 2013

Janez Kopač, Director

Energy Community Secretariat

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Energy Community

Status: February 2013

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Security of gas supply acquis - Legal framework

Energy Community Treaty (Security of supply Statements, safeguard measures, mutual assistance in the

event of disruption)

Directive 2003/55 (Monitoring security of supply, Reporting obligations)

Directive 2004/67 (Polices for securing gas supply; security of supply for specific customers; security of

supply standards; national emergency measures)

Preparatory work to implement some elements of Regulation (EU) 994/2010 started

The relevant acquis implemented in the Contracting Parties to a satisfactory level

Shortcomings: definitions of supply standards and major supply disruption; reporting obligations elements

(ECS: Implementation Report 2011-2012)

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Long term security of supply – gas case

Gas is expected to have an increased role for meeting growing electricity demand in long term:

In the SEE 2030 – 21 bcm demand – 3 times higher than today → new supply sources/routes needed

in TPES in TFC For electricity and heat

Albania 0,58 0,05 0,00

Bosnia and Herzegovina 3,11 4,41 0,39

Croatia 30,84 24,57 31,89

Former Yugoslav Republic of Macedonia 3,32 1,65 1,11

Kosovo* 0,00 0,00 0,00

Moldova 58,66 23,46 96,08

Montenegro 0,00 0,00 0,00

Serbia 11,87 11,97 7,48

Ukraine 42,32 38,48 25,77

EU-27 25,74 22,96 20,45

2010Natural gas share (%)

Natural gas use in the Contracting Parties (source: Security of gas supply draft final report, ECS)

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Institutional framework

EU level: the Secretariat is a full member of the Gas Coordination Group

Energy Community: The Security of Supply Coordination Group envisaged as a platform for

coordination of security of supply measures taken at national level and at a regional level - gas and

electricity

ECS – a link between the two Groups

A revival - October, 2012

Members: Contracting Parties, Participants, Observers, Eurogas, ENTSOG, ENTSO-E, Eurelectric, EFET,

IEA, NALAS, ACER, ECRB, Donor‘s Community

Gas Sub-Group established (February 2013)

Tasks - EnC Emergency Contact Points List; Emergency Questionnaire; Security of Supply Statements

Guidelines; Introduction of risk assesment elements (from Regulation 994/2010)

Finalization of secuirty of gas supply Study

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Priority corridors: gas, oil, CO2 transport

North-South

interconnections

Western EU

BEMIP

North-South

interconnections

CEE & oil

Southern gas

corridor

+ c

arb

on d

ioxid

e tra

nsport

infr

astr

uctu

re

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ENTSOs (G/E) Project

promoters NRAs (G/E)

Regional Groups

ACER (G/E) European

Commission

• Prepare

TYNDPs for

gas and

electricity

• Submit

projects

• Criteria

• Cost Benefit

Analyse

• Check

application of

criteria

• Cross-border

relevance

• Evaluate

projects

• Rank

• Adopt

regional lists

• Adopt Union-

wide list of

projects of

common

interest (no

ranking)

• Opinion

• Cross-regional

consistency

Process

General criteria

Priority corridor implementation

Economic viability

Crosses border or has cross-border

impact

Specific criteria

Market integration, Security of supply,

Sustainability

+ urgency, number of Member States,

complementarity and territorial

cohesion

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Preparing for first PCI list in 2013

Submission of project proposals

through Groups (TYNDP) or

public request for information 422 projects submitted (E:

268, G: 144)

26 withdrawn

Check if within scope,

fulfils general criteria

Ranking based

on CBA,

urgency etc.

Based on preliminary analysis

E: 148 eligible

G: assessment on-going

~150 projects of common interest

(E: 100, G: 50)

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Overview of PECI candidates submitted

A total of 75 project proposals was submitted by Project Promoters from the Western Balkans

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Permit granting – Regime of common interest

• Priority status for PCIs (Projects of Common Interest)

– Most rapid (preferential) treatment in Member States – considered as being of public interest

– Streamlining of procedures

• Competent Authority to manage permit granting process

• 3 and a half years time limit for the permit granting decision

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The Gas Ring

Feasibilty studies (FS)

funded by EU

Energy Community Gas Ring

demonstrates the importance

of the Energy Community

It requires coordinated action

among multiple CPs and

cannot be developed in

isolation.

Existing pipelines

Studies ongoing

Potential projects - not cooridinated yet

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Regulatory framework - measures

• Energy system-wide cost-benefit analysis

– Proposal by ENTSOs, ACER opinion, Commission approval

• Enabling investments with cross-border impact:

– Cross-border cost allocation

– National Regulatory Agencies’ joint decision on investments and cost allocation

– ACER decision if no agreement

• Long-term incentives for investment:

– Obligation on NRAs to grant appropriate risk-related incentives

– ACER guidance on best practices of NRAs and methodology

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Permit granting – Regime of common interest

• Streamlining of environmental assessment procedures (EC’s guidance, reporting to EC, legislative changes in 2 years)

• Increased transparency and enhanced public participation

• Project promotors shall draw up an implementation plan, including timetable, approved by NRA

• Annual report by 31 March each year to competent authority

• In case of implementation difficulties EC may designate in agreement with the MS a European coordinator for a period of up to one year renewable twice

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Financing – Connecting Europe Facility 2014-2020

• Eligibility criteria (in guidelines):

– Grants for studies and financial instruments

– available to all PCIs

– In exceptional cases, grants for works for

PCIs where:

- CBA shows positive externalities

- Commercially not viable

- Cost-allocation decision done

BUT NOT FOR EXEMPTIONS!!!

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Adaptation of the Regulation in Energy Community – draft proposal

EU Energy Community

• 12 corridors maximum North-South and East-West

• selection process based on regional maximum 2 regional groups (electricity, gas expert

groups + advisory role of ACER and oil) + advisory role of ECS

•covers also CO2 transport projects this is not included in the regional Energy Strategy

•Regulation aims at replacing the existing No one mechanism existed

TEN-E Guidelines and forms a logical

Package with the “Connecting Europe

Facility” (CEF) developed in view of

replacing the current TEN financing Reg.

•certain role of ENTSO E and ENTSO G what institution is going to take their role

with respect of market and network modeling

• certain roles to ACER and EC what institution is going to take their role

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Adaptation of the Regulation in Energy Community – draft proposal

• Regulation is based also on additional Aquis : EnC adaptation: to be discussed how to relate

e.g. the Water framework Directive, the Habitats to these in the adapted MC Decision

Directive, and some Conventions (ESPOO, Arhus,

etc) to which EnC is not party or is not obliged to

implement.

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Thank you for your attention