Patrick McGrath, American lecturer at the State University of Novi Pazar in Serbia, says integration of the West Balkan countries via the Energy Community can benefit the EU.
The Energy Community Treaty has been now implemented for 10 years. What are its top three achievements.
Certainly the three things that have been prioritized mostly in the Energy Community. The first is working together on the integration side. Some of the specific projects have not been implemented yet, but there are fully elaborated plans for infrastructural developments. Infrastructure, given its inefficiency and outdatedness in the region, is one of the biggest challenges.
The second priority is seeking further to adopt renewable energy sources in production and consumption. Again, there are challenges to this, but all Western Balkans countries besides Macedonia and Kosovo consume a higher percentage of renewable energy than the EU, so that’s already very significant. It has big returns for the Western Balkan countries, since it is a way of securing domestically produced energy.
Security of supply is the third priority. There have been some developments. The directives that aim at securing minimum stocks of crude oil and gas, assuming they are fully implemented, are significant, because Central and Eastern European countries suffer from insecurity in oil and gas.
And what are the three main challenges facing the Energy Community?
One of them is on the side of enforcement – whether the regulations and directives passed by the Energy Community are effectively implemented or enforced. Another challenge is the expansion of the Community. In South East Europe, there are similar prospects and opportunities. But the expansion to Ukraine and Moldova, potentially the Caucasian markets, Turkey and Norway puts a challenge on what the Community means. The third challenge is ensuring a commitment to this initiative. The Energy Community really was externally driven by the EU. It is important to ensure that key countries are invested in what is happening and are committed to furthering this project.
Is the Energy Community a one-way street between the EU and Western Balkans? Or is there anyway the Energy Community can contribute to the EU and to building the Energy Union?
The Western Balkans occupy a really important position vis-à-vis the EU and its energy sector. They benefit from a very important location, a geostrategic situation between major hydrocarbon consumers in Central and Eastern Europe and major hydrocarbon producers in the Middle East and the Caspian Basin. The infrastructural projects that help connect producers like Azerbaijan, Iran and Turkmenistan that would necessarily go through the Balkan peninsula.
So, we are talking about energy security and diversification. There is the example of the Trans Adriatic Pipeline, which goes through Albania.
Absolutely. And this pocket of non-EU countries that are fully surrounded by the EU provides an additional source of security challenge. Bottlenecks can emerge. Having all these countries integrated with the EU benefits both the Western Balkans as well in general the EU and in particular the surrounding neighbors like Bulgaria, Romania and Greece that are generally a little more disconnected from the rest of the EU.
In your research you emphasize that Albania has 100 percent of electricity from hydroelectric power plants. That means 100 percent of renewables. Montenegro’s share of renewables is 55 percent. At the same time, the Western Balkan countries are very dependent on coal.
Five Western Balkan countries including Montenegro rely heavily on coal in electricity production. It is inefficient and environmentally very bad. The pollution due to high emissions of CO2 has become an issue of national concern. In Albania, 100 percent of electricity is coming from a renewable source, and this is a good thing. But it is also a challenge, because there is a heavy dependence on one source.
Do countries like Albania and Montenegro suffer blackouts?
Yes, but it is due to the infrastructure itself. Not necessarily because of the source. That is what brings regional integration into the issue of security of electricity supplies. If one county has a problem, it can connect to the electricity grids of other countries.
Who are the major energy players in the West Balkan energy markets?
Gazprom plays a very large role. In 2008, it acquired the national gas provider of Serbia, Naftna Industrija Srbije, and since then there has been effectively a monopolization in Serbia. There is some advancement of non-Western Balkan companies in the energy markets, but, still, there is a continued dominance of state-owned enterprises that are inefficient and not competitive. Because of that, there has not really been a significant involvement of Western businesses that can bring technology and increase investments and competitiveness.
Are you optimistic? Western companies lack cash, they have been selling their assets in Central Europe. And the markets in Western Balkans are very fragmented and very small.
I would like to say I am optimistic. The goal of the Energy Community is building a bigger market. Even together, the Western Balkan countries are not big, but they are significant. The large multinational infrastructural projects like the Trans Adriatic Pipeline and the Ionian Adriatic Pipeline can help them develop pipelines and storage facilities, because they will be passing through the region.
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