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Energy Community at a crossroads – interview with Karolina Cegir, Gas Expert of the EnC Secretariat

The national energy and climate plans (NECPs) are key instruments that pave the way for increased climate ambition, contributing to the overall EU climate and energy targets for 2030. EU Member States were required to submit these 10-year integrated plans, which could provide valuable input for the Energy Community (EnC) countries, that are also drafting their national energy and climate plans as they move forward on the path of energy transition.

Karolina Cegir, Gas Expert from the Energy Community Secretariat tells CEENERGYNEWS about the status of the NECPs in the Energy Community, their expected outcomes and the future of gas in the region in light of accelerated decarbonisation efforts.

The Energy Community has nine Contracting Parties – Albania, Bosnia and Herzegovina, Kosovo, North Macedonia, Georgia, Moldova, Montenegro, Serbia and Ukraine. Without a legal obligation to do so, all of them are developing NECPs, which are in various stages.

As Karolina Cegir explains, so far only North Macedonia prepared an official draft NECP, that is now being finalised by the national working group based on the Energy Community Secretariat’s recommendations before the Government’s adoption.

In the other Contracting Parties, the drafting and modelling activities are still ongoing. The initial draft NECP of Albania, Bosnia and Herzegovina, Georgia was already submitted to the Secretariat for informal comments in 2020 and a similar review of parts of Montenegro’s draft NECP is presently ongoing. The authorities of Albania and Ukraine are planning to send their first formal draft in the summer of 2021 while for Serbia, it is expected in the autumn of 2021.

“This is a complex exercise involving several authorities on a national level such as the ministry of energy, environment, climate, economy, industrial policy but also academic institutions and representatives of local communities and NGOs,” says Karolina Cegir.

The NECPs represent the backbone of national policies up to 2030 and beyond, which should navigate Contracting Parties towards the 2050 climate-neutrality objective.

For this reason, the plans must be designed and structured in the same manner, and the main pillars of the analytical part must also be comparable.

Together with the European Commission, the Energy Community has prepared Policy Guidelines to help countries develop their NECPs, which also aim to ensure that NECPs cover the five areas of the Energy Union.

One of the crucial aspects of the NECP is regional cooperation, which also underpins the importance of harmonisation. Mrs Cegir highlights that energy systems cannot be developed in isolation from neighbouring countries and the negative impacts of climate change and environmental pollution do not stop at the borders.

“Regional cooperation in an ideal world should primarily stem from accepting this reality and not from political ambitions,” she says.

The coordination of NECPs offers a great opportunity to trigger common thinking among Contracting Parties on how to overcome the challenges, which they will all be facing soon, for instance when they need to start phasing out coal.

She reminds us that it will take time to build up that trust and openness for stronger coordination on national policies, that’s why it is important that common thinking starts now. Through the NECPs Contracting Parties become aware of each other’s plans on how to manage the green transition.

“It is important that national administrations realise that moving together and exploiting the competitive advantages in each Contracting Party will make the transition less costly than everyone going their separate ways,” says Mrs Cegir.

As the Energy Community aims to bring together the EU and its neighbours to create an integrated pan-European energy market, the Secretariat is continuously supporting regional cooperation through its regular and ad hoc thematic working groups.

One of the major questions of the ongoing energy transition is the future role of gas. Experts suggest that gas could be a bridging fuel where the infrastructure already exists, but in not yet gasified markets gas is not the way forward.

Karolina Cegir also raises her concerns regarding the introduction of natural gas to new markets in light of the urgent need to reduce carbon emissions. As she explains natural gas is mainly used for electricity and heat production at individual households or via district heating and renewable sources and technologies to produce electricity are now vastly available and economically affordable.

Even when we take into account challenges of production/demand balancing and electricity storages, as well as the need for baseload fuel (where natural gas can replace coal effectively), completely new gas infrastructure is not a sound, efficient and commercial solution.

As she explains arguments for the introduction of natural gas from the scratch in the heating sector are even weaker than for electricity production as gas distribution networks, as well as district heating systems, require decades to be fully utilised.

“Those decades – to 2050 – can be used to implement strong energy efficiency measures in the building sector and to introduce smart, combined, renewable, both centralised and decentralised heating and cooling systems. Thus, I do not see natural gas coming to the Western Balkan Contracting Parties without gas infrastructure,” she concludes.

In fact, the Western Balkans Contracting Parties are in a quite specific situation in this regard. As Mrs Cegir points out they have either limited natural gas’ role in the energy sector despite existing, but relatively undeveloped infrastructure or do not have gas markets at all. However, they intend to follow the paths of the European gas market to develop natural gas infrastructure – being second interconnectors (while having usually only one connection), or joining the big international infrastructure projects such as the Turkish/Balkan Stream, TAP or the LNG terminal in Greece. Mrs Cegir underlines that this illustrates the main challenges of gas infrastructure development in the Western Balkan.

The national networks are not well connected and markets are too small to individually attract new suppliers and investors, thus joining big nearby passing projects seems to be the only solution.

Mrs Cegir suggests that well-coordinated regional cross border and cross-sectoral cooperation, plus putting policymakers and energy companies in the same boat would be a more desirable solution.

Unfortunately, this has not been achieved, despite a few regional energy strategies and initiatives. According to Mrs Cegir, the concrete realisation would require giving up on the ultimate goal to ensure energy security individually and all-around present national appetites to become a regional hub.

“Besides, many national gas companies are still not properly unbundled and clear infrastructure operator/developer’s interests are not divided from the interests of present suppliers keeping the biggest share or even complete natural gas market,” she adds.

She reminds that cross-sectoral interferences must also be more carefully considered as the assessment of the impact of developments on other sectors are sometimes missing from the draft NECPs submitted so far.

“There are examples where a need of abandonment of coal for electricity production is underlined, and development of new gas infrastructure elaborated, but this is not visible in concrete plans and projections: gas share in future electricity production stays neglectable or even zero,” she explains.

In another case, the heating sector is shown as a future user of natural gas, as an argument to develop the infrastructure while in the very next chapter increase of renewable heat is strongly promoted, as sole solution.

“Since those are not final NECPs, we expect and hope for significant improvements,” underlines Mrs Cegir.

According to the Secretariat, once finalised, the NECPs could increase transparency and clarity on the policy goals of Contracting Parties and on the planned measures how to achieve them.

“With the preparation of NECPs the countries in the region take another step towards implementing the European Green Deal and moving together with the EU towards a cleaner future,” concludes Mrs Cegir.

Karolina Cegir was the guest speaker of a webinar organised by REKK and the Sustainable Energy Priority Area (PA2) of the EU Strategy for the Danube Region (EUSDR)  focusing on the assessment of the National Energy and Climate Plans in the Danube Region. Join the second workshop on May 20 will cover two important energy policy areas largely influencing decarbonisation efforts in the (yet) non-ETS sectors: the deployment of renewable energy in the heating and cooling sector and the transport sector.

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