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Energy reforms advance despite war, says annual Energy Community report

Contracting Parties of the Energy Community has “made progress” in reforming their energy sectors with reforms even gaining new momentum in certain countries – nonetheless, “significant challenges” remain, according to the latest Annual Implementation Report 2022 from the Energy Community Secretariat.

“Despite the destabilising impacts of Russia’s war against Ukraine, many Contracting Parties made progress in reforming their energy sectors. Reforms even gained new momentum in certain Contracting Parties. Nevertheless, significant challenges do remain and the Secretariat will continue to do its utmost to support all Contracting Parties in advancing the reform agenda in line with their obligations under the Energy Community Treaty and the European Green Deal,” said Artur Lorkowski, Director of the Energy Community Secretariat.

The report “encouraged” Contracting Parties to continue improving their regulatory and legal framework to accelerate the share of renewables. Additionally, it called for “more progress” on energy efficiency and energy savings in all sectors and to replace across-the-board regulated retail prices by targeted support to vulnerable customers.

“This reporting year has been by far the most challenging in the history of the Energy Community. It is encouraging to see that the majority of reforms proved resilient in an extremely difficult environment. Ukraine managed to stay the course of reform in many areas, while Moldova used the crisis to advance energy reforms that were almost unimaginable just one year ago. The strategic goal of connecting Ukraine and Moldova to the continental European network was one of the biggest breakthroughs, reflecting the solidarity that the Energy Community is built on,” said Dirk Buschle, Deputy Director of the Energy Community Secretariat.

The report pointed to several deficiencies in the implementation of environmental law, which remains of concern in terms of pollution standards and in the quality of permitting procedures. In Bosnia and Herzegovina, “no progress” in the environment was made during the latest reporting period as implementation remains “at a low level”. Whilst in Albania, “some progress” was recorded in nature protection, however, “more attention” must be paid to the environmental assessments of hydropower projects.

There was little overall progress to advance the creation of electricity spot markets in the region, an “essential precondition for the further development of electricity markets and their integration needed for the transition towards a decarbonised and decentralised electricity sector”. This development is expected to accelerate with the adoption of the electricity integration package by the Ministerial Council at its meeting on 15 December in Vienna.

The energy crisis also saw the rise of emergency stabilisation measures in many Contracting Parties, which will continue to be monitored by the Secretariat to ensure compliance with the acquis.

The Contracting Parties comprise Albania, Bosnia and Herzegovina, Kosovo, North Macedonia, Georgia, Moldova, Montenegro, Serbia and Ukraine. The report covered electricity, gas, energy regulators, oil, renewable energy, energy efficiency, environment, climate, infrastructure, competition, statistics and cyber security.

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