Energy Community

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Not to be confused with European Atomic Energy Community.
Energy Community
Energy Community.svg
  Contracting parties

  Observers
Formation 1 July 2006; 8 years ago (2006-07-01)
Legal status Treaty
Headquarters Vienna, Austria
Membership  European Union
 Albania
 Bosnia and Herzegovina
 Republic of Macedonia
 Montenegro
 Serbia
 Moldova
 Ukraine
 Kosovo
Official language English
Website www.energy-community.org
Formerly called Energy Community of South East Europe
European Energy Community

The Energy Community (also referred in the past as Energy Community of South East Europe (ECSEE) and European Energy Community (EEC)) is a community established between the European Union (EU) and a number of third countries to extend the EU internal energy market to Southeast Europe and beyond. With their signatures, the Contracting Parties commit themselves to implement the relevant EU acquis communautaire, to develop an adequate regulatory framework and to liberalise their energy markets in line with the acquis under the Treaty. The Treaty establishing the Energy Community was signed in Athens, Greece, on 25 October 2005, and entered into force on 1 July 2006.

Aim[edit]

The Energy Community aims at establishing a common regulatory framework for energy markets in contracting parties by extending the acquis communautaire of the European Union to the territories of participating countries. It covers the relevant fields of energy, environment, and competition of the EU legislation. After entry into force, the treaty acquis has been extended on several occasion.[1] It now also includes legislation in relation to security of supply, energy efficiency, oil, renewable energy and statistics. In line with the update at the EU level, the Energy Community tranposes and implements the EU's Third Energy Package since September 2011.

Timetable for implementation of the treaty is the following:

History[edit]

The roots of the Energy Community Treaty go back the South-East Europe Regional Energy Market for electricity and natural gas formed originally in the framework of the Stability Pact for South Eastern Europe through the Athens Memorandum. To this end, the establishment of the Energy Community represents a very important political step in a key-economic sector before the accession of the SEE countries to the EU.[2] The institutional setting of the Energy Community shows great parallels to the structures of the European Union. It was in the negotiations for this treaty that the Commission "reproduced" the institutions that were created by the founding fathers of the European Communities and reproduced its own institutions outside its borders.[3] On the occasion of the signing of the Treaty, the European Commission stated that the Energy Community Treaty is consciously modelled on the European Steel and Coal Community that was the genesis for the European Union.[4]

Athens Memorandum[edit]

The 'Athens Memorandum' refers to the memorandum of understanding of 2002[5] and its revision of 2003, signed in Athens. It was proposed by the European Union and it outlined the principles and the institutional necessities for regional electricity market development in South East Europe. Following intense discussions, an agreement was reached at the first South East Europe Electricity Regulation Forum in June 2002. The signing of the memorandum took place in November 2002 by Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Greece, the Republic of Macedonia, Romania, Serbia and Montenegro, and Turkey.

The 2003 revision added natural gas to the scope of work. Under the Athens Memorandum a South-East Europe Regional Energy Market (SEEREM) was envisioned, to form part of the EU's internal energy market. The Athens Memorandum also set up a number of institutions, which collectively are known as the 'Athens Process'. In 2004, the Athens Forum meeting decided to name the process 'Energy Community'; at the same time the location of future institutions was agreed.

Energy Community Treaty[edit]

In May 2004, the European Union opened negotiations with the countries of the south-eastern European region to conclude a legal agreement. The negotiations took place between the European Community on one side, and Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Republic of Macedonia, Republic of Montenegro, Serbia, Romania, Turkey and UNMIK on behalf of Kosovo on the other side. The treaty establishing the Energy Community was signed in Athens, Greece, on 25 October 2005 and entered into force on 1 July 2006. Signature of the treaty has been approved by the European Parliament on 29 May 2006.

Parties, participants and observers[edit]

Parties[edit]

Parties to the Energy Community Treaty are the European Union and eight contracting parties (date of ratification):

  •  European Union (29 May 2006)[6]
  •  Albania (24 May 2006)
  •  Bosnia and Herzegovina (20 September 2006)
  •  Montenegro (15 December 2006)
  •  Republic of Macedonia (29 May 2006)
  •  Serbia (9 August 2006)
  •  Moldova (17 March 2010)
  •  Ukraine (15 December 2010)
  •  Kosovo (23 December 2005)[7]

After having obtained the observer status, Moldova, Ukraine formally expressed their interest in full membership. Mandated by the Ministerial Council, the European Commission had the first round of formal negotiations with Moldova and Ukraine in late 2008. After three negotiation rounds, the technical negotiations with Moldova and Ukraine on full membership were concluded in 2009. The Ministerial Council, however, made the membership conditional on legislative amendments. In concrete, it requested both countries to revise their gas laws and to align them with the EU's Gas Directive 2003/55/EC.[8] Whilst Moldova became a full fledged member as of 1 May 2010, Ukraine officially acceded the Energy Community on 1 February 2011.

Participants[edit]

Pursuant to the treaty, any EU member state may obtain the status of a participant. In doing so, the EU member state has the right to attend the Ministerial Council, the Permanent High Level Group, the Regulatory Board and the fora and participate in the discussions in these bodies. This privilege is presently used by 17 EU member states, namely

  •  Austria (17 November 2006)
  •  Bulgaria (1 January 2007)
  •  Croatia (17 Jul 2013)
  •  Cyprus (17 November 2006)
  •  Czech Republic (17 November 2006)
  •  Finland (24 October 2013)
  •  France (18 December 2007)[9]
  •  Germany (17 November 2006)
  •  Greece (17 November 2006)
  •  Hungary (17 November 2006)
  •  Italy (17 November 2006)
  •  Netherlands (29 June 2007)
  •  Poland (6 October 2011)
  •  Romania (1 January 2007)
  •  Slovenia (17 November 2006)
  •  Slovakia (17 November 2006)
  •  United Kingdom (17 November 2006)

Observer[edit]

Any other neighbouring third country can obtain an observer status upon approval of a reasoned request by the Ministerial Council. A separate Procedural Act regulates the rights and obligations of the observers to the Treaty.[10] The observers to the treaty are presently:

  •  Norway (Nov 2006)
  •  Turkey (Nov 2006)
  •  Georgia (Dec 2007)[9]
  •  Armenia (Oct 2011)

Institutions[edit]

The main institutions established by the treaty are:

  • Ministerial Council
  • Permanent High Level Group
  • Energy Community Regulatory Board (ECRB)
  • Fora
  • Secretariat

Ministerial Council[edit]

The Ministerial Council is the principal decision-making institution of the Energy Community. It takes the key policy decisions and adopts the Energy Community's rules and procedures. The Ministerial Council is composed of one representative from each Contracting Party and of two representatives from the European Community.

Following a decision in December 2009, the Ministerial Council meets once a year. Moreover, the Presidency of the Council is held in turn by each contracting party for a term of 12 months. For the period of 1 January to 31 December 2012, Montenegro holds the presidency in office and chairs the key institutional meetings.

Permanent High Level Group[edit]

The Permanent High Level Group brings together senior officials from each Contracting Party and two representatives of the European Community. It ensures the continuity of and follow-up to the political meetings by the ministers and decides, in certain cases, on implementing measures.

Energy Community Regulatory Board[edit]

The Regulatory Board composes regulators from each contracting Party and officials from the European Commission. It advises the Ministerial Council and PHLG on details of statutory, technical and regulatory rules and makes recommendations in the case of cross-border disputes between regulators. The Regulatory Board meets in Athens. Its work is supported by four staff members of the Energy Community Secretariat.

Fora[edit]

The fora have the task to advise the Energy Community. Chaired by the European Commission, a forum brings together all interested stakeholders from the industry, regulators, industry representative groups and consumers. Their conclusions, agreed by consensus, will be addressed to the Permanent High Level Group.

The establishment of the fora reflects the process leading to the creation of the Energy Community. The Athens Electricity Forum, previously known as South East Europe Energy Regulation Forum, met for the first time in 2002. The terms governing the Gas Forum were established in 2006. In 2007, it was decided that the Gas Forum shall convene in Slovenia. In 2007 discussions on the possible establishment of a new Forum on social issues began to unfold. The first Social Forum took place in November 2008. At its Dec 2008 meeting, the Ministerial Council decided to implement certain provisions of the treaty on the oil sector and to establish the Oil Forum. The first Oil Forum convened in 2009 in Belgrade, Serbia.

Secretariat[edit]

The day-to-day activities of the Energy Community are administered by the Secretariat, in particular by regular review of each Contracting Party's fulfilment of its obligations under the treaty and by initiating treaty enforcement procedures. Based on its assessment, the Secretariat submits an annual implementation report to the Ministerial Council of the Energy Community. The Secretariat is also responsible for making sure that the Energy Community's budget – to which all Parties contribute – is correctly spent and accounted for. As of March 2012 the Secretariat consists of a staff of 22 originating from 13 different European states. The Secretariat has its seat in Vienna, Austria.

Achievements[edit]

In October 2011, the Energy Community Secretariat celebrated its fifth anniversary in Vienna, Austria. In its press release, the European Commission stated that "Contracting Parties have been successful in creating a stable regulatory framework and aligning their rules to the European Union standards."[11] In addition to the legislative alignment, also the political dimension of the process is decisive. Reflecting the legal and political objectives of the treaty, the key achievements of the Energy Community include:

  • Regional cooperation project – establishment of a Coordinated Auction Office Project Team Company by ten South East European electricity network operators (TSOs of Albania, Croatia, Bosnia and Herzegovina, Macedonia, Greece, Montenegro, Romania, Slovenia, Kosovo and Turkey) in Podgorica, Montenegro in June 2012.[12]
  • A new geographical scope – on the ground of the original area of operation in the Western Balkans, the accession of Moldova (April 2010) and Ukraine (February 2011) granted the Energy Community a new geographical definition.
  • Continuous steps towards treaty implementation – the Secretariat has helped the Contracting Parties to draft numerous EU compliable pieces of national law, both primary and secondary legislation.
  • Keeping abreast with the EU developments – extension of the treaty acquis to include core EU legislation on security of supply (2007), energy efficiency (2009) and 3rd energy internal market package (2011)[13]

In March 2011, the European Commission published its first assessment report on the Energy Community.[14] According to the Commission, "after four years of existence, the Energy Community has grown into a mature organisation, which provides a solid institutional framework for cooperation, mutual support and exchange of experiences and therefore serves as a model for regional cooperation on energy matters." Regarding the Energy Community in the context of external dimension of the EU energy policy, the Council of the European Union set the following priorities in November 2011:[15]

  • encouraging full and timely implementation and enforcement of the acquis, as well as the removal of technical barriers, aiming at the creation of an Energy Community-wide energy market;
  • extending the Energy Community Treaty beyond the year 2016;
  • undertaking actions with the view of enlarging the Energy Community Treaty to neighbouring countries provided that they demonstrate both willingness and ability to implement and enforce relevant EU legislation;
  • continuing cooperation with Turkey, aiming at integration of the country into the Energy Community;
  • continuing the analysis of the functioning of the Energy Community Treaty as well as establishing an operational roadmap allowing the accelerated modernisation of energy sectors in Energy Community contracting parties, further enhancement of the Energy Community integration with the EU as well as adapting the decision-making and organisational structures of the Energy Community to future challenges.

Critics[edit]

The treaty has been criticised by the European Federation of Public Service Trade Unions as it lacks a social dimension.[16] The Energy Community acquis makes an explicit reference to public service obligations and customer protection. Whilst the Treaty may lack a legally binding acquis on social dialogue, the Contracting Parties have a legally binding obligation to foster social dimension within the process. In October 2007, the Parties signed the Memorandum of Understanding on Social Issues in the context of Energy Community.[17] The Memorandum recognises that economic development and social progress are mutually linked and should go hand in hand. It also spells out the importance and the necessity to involve social partners in the reform process. Ukraine and Moldova signed the Declaration of Memorandum of Understanding on Social Issues in October 2011.

Environmental organisations from south-eastern Europe criticised the process in December 2008 as they believed that the ECSEE contains insufficient safeguard mechanisms to ensure that the well-intentioned promotion of energy efficiency and renewable energy is not drowned out by the promotion of large and often environmentally harmful coal and hydropower plants.[18] The Energy Community Ministerial Council decided to establish a task force in energy efficiency in 2007. The Energy Community Energy Efficiency Task Force has been operational since January 2008. It now operates under its fourth mandate. In 2009 the ministers also adopted the core EU energy efficiency acquis.[19] In the area of renewable energy the discussion to adopt the "new" EU renewable energy directive started already in 2008. The Ministerial Council established a renewable energy task force in 2009. The ministers are expected to decide on the possible adoption of the renewable energy Directive at their next meeting in October 2012.

See also[edit]

References[edit]

  1. ^ Energy Community acquis communautaire
  2. ^ "Florence School of Regulation, EUI working paper on the Energy Community, Rozeta Karova, p.18, RSCAS 2009/12". 
  3. ^ "EIoP, The Energy Community of Southeast Europe: A neo-functionalist project of regional integration, Stephan Renner, p. 11". Eiop.or.at. 
  4. ^ "The EU and South East Europe sign a historic treaty to boost energy integration, IP/05/1346". Europa.eu. 
  5. ^ "Athens Memorandum of Understanding 2002" (PDF). 
  6. ^ "European Council Decision on the conclusion of the Energy Community Treaty, L 198/15". 
  7. ^ "members". Energy Community. Retrieved 26 August 2013. 
  8. ^ "Directive 2003/55/EC of 26 June 2003 concerning common rules for the internal market in natural gas, L 176". Eur-lex.europa.eu. 
  9. ^ a b "Ministers put the Energy Community well on track for the next two years". Energy Community. 19 December 2007. Retrieved 19 January 2008. 
  10. ^ "Ministerial Council Decision on adoption of Procedural Rules on Acceptance of Countries as Observers to the Energy Community" (PDF). 
  11. ^ "Energy Community – Five years of regional cooperation, IP/11/1223". Europa.eu. 
  12. ^ "SETimes 10 countries form company to boost electricity distribution". Setimes.com. 16 July 2012. 
  13. ^ "ICISHeren South East Europe to enforce EU third energy package by 2015". Icis.com. 6 October 2011. 
  14. ^ "European Commission Report on the Energy Community". 
  15. ^ "Council conclusions on external dimension of the EU energy policy" (PDF). 
  16. ^ "EPSU Press Release, Energy Community Ministerial Council urged to strengthen social dimension". Epsu.org. 
  17. ^ "layout.indd" (PDF). 
  18. ^ "South-East Europe Development Watch1 position paper, South-east Europe energy policies" (PDF). 
  19. ^ "Ministerial Council Decision on the implementation of certain Directives on Energy Efficiency" (PDF). 

External links[edit]