Friday 27 October 2006 at 20:30 on Europe by Satellite

TV Newspackage on Regional Co-operation: Energy market


  • 00:00 Cutaways of a child playing by switching a light on and off
  • 00:10 Cutaways of an electricity meter
  • 00:15 Cutaways of an exterior way of a house whose windows switch on and off
  • 00:23 Cutaways of a high tension line
  • 00:40 Cutaways of the European Commission exterior views
  • 00:44 Cutaways of the interview with Fabrizio Barbaso, Deputy Director General, Energy and Transport DG, European Commission
  • 00:52 Beginning of the interview with Fabrizio Barbaso

    “The Energy Treaty is a concrete, tangible, visible form of cooperation between the EU countries, 25 today, 27 very soon – beginning of next year, with the countries of South Eastern Europe, in particular with the Western Balkans and on this concerns an area of activity which is both politically and economically crucial, and this is energy. And this is one of the very few cases where this cooperation is consolidated in a legal act which is the Treaty establishing the energy community.”

    • 01:38 Cutaways of Ulrich Weins, expert on energy, DG enlargement, European Commission
    • 02:03 Cutaways of a map of SEE
    • 02:07 Interview with Mr Weins

      “It was decided at the famous Thessaloniki summit for further political integration of the Balkans in the European Community area and we have a double purpose which is the energy development, and the political regional cooperation, so it has both. At the basis of course you need reliable, stable, accessible and affordable energy for economic and social development, that is clear. But you also need these countries or entities to cooperate with each other to develop what we call the European spirit of cooperation, regional integration. And to overcome the difficulties towards the legacy we have. So it’s very much like the first European Community for coal and steel of 1951 which also brought a lot of former enemies like especially France and Germany and others on a project which would integrate a very central part of the economy, btw making it impossible for them ever to go to war again, and fostering the spirit of cooperation.”

      • 03:11 Cutaways of the European Commission building
      • 03:14 Series of cutaways of Radomir Naumov, Serbian Minister for Energy in front of the Berlaymont building of the European Commission.
      • 03:35 Interiew with Mr Naumov (in Serbian)

        “In Serbia we ratified the Treaty establishing an energy Community, it has been notified here in Brussels so now we are full members of that energy community, and from a legal and energy point of view we have become an integral part of the market, the future Southeast Europe market and of this market of the European Community. We are obliged to behave according to the rules and directives existing in Europe, to respect the investments, the protection of the environment and we have to work on the creation of a single energy market, in the energy networks for gas and electricity.”

        04:29 Cutaways of high tension lines – aerial view

        • 04:45 Cutaways of high tension lines
        • 05:15 Mr Weins

          “The consumer may be, could be content with the situation where prices are very low, energy is always there, always stable and reliable but this is not the situation we have. We have a situation of an unstable supply and in which people are cut off from electricity for hours. Electricity but also gas supplies have been cut the last winter, so the situation is very, very unsatisfactory. Also for industry, you cannot produce goods, you cannot have economic development if you don’t know if tomorrow you will have electricity, gas or not. So this is unacceptable and in order to have conditions for social, economic development, you need to have investments. If you’re looking at the infrastructure situation it’s very poor, all through the nineties during the conflicts and also after that. No investments were done at the necessary level, there’s a huge investment gap and the money has to come from somewhere.”

          • 06:12 Cutaways of the Stability Pact building in Brussels
          • 06:29 Cutaways of Mr Renaud Van der Elst, energy expert at the Stability Pact
          • 06:47 Interview with Mr Van der Elst

            The infrastructure was either damaged or destroyed by war and the investment needs are huge, they are estimated to around 20 billion euros by the World Bank and the states alone cannot afford the bill. Donors show signs of fatigue and also there are many competing projects for example alone in railways they need 12 billion euros to restructure the railways, so by having a new energy community Treaty integrated in the European Energy Community you can attract investors who then will not only be able to sell electricity or gas in one country, because each country in SEE is too small a market to attract investors, so with that you will attract other people. Of course we need to build new inter connectors that is to say transmission lines for electricity or pipelines for gas and we need to devise and that’s what’s being done under the Energy Community Treaty, we have to devise new rules for cross border transmission mechanisms.”

            • 07:59 Cutaways of high tension lines in different places
            • 08:30 Mr Barbaso

              “We have an agenda which fixes dates, this has been clearly set up in the Treaty itself starting from next year and this in particularly throughout implementation of the EU directives, not all of them at the same time, not by all the countries but in a very limited time frame the full acquis has to be fully taken up by the legislations of these countries. That’s why the countries of the region are now setting up a roadmap indicating very clearly when they will take up each legislative EU act, directive or regulation and how this will be transposed in their national legislation. So, it’s a way, if you want so, to make urgent and rapid progress towards the objective of joining the EU.”

              • 09:34 Cutaways of an Electrabel employee (Belgian electricity company) installing an electricity meter at a customer’s
              • 09:40 Electricity meter turning
              • 09:50 Mr Barbaso

                “I would distinguish two categories of problems. Problems which are common to all countries in Europe. For example high prices, volatile prices, high rate of dependence on imports, in particular imports from just one big importer, which is Russia. So these are problems for all European countries. And then in addition, there are problems which are specific to the countries of SEE; this is for example the lack of investments in the past, in particular after the wars, lack of inter connections between the countries and among the different countries of the region, these are for example insufficient supply in many cases, I would like to mention two examples: for example last winter Albania suffered from many, many blackouts and also the situation was very difficult in Kosovo. So, as you see, in addition to our common European problems, they are facing specific and particular problems for this region due to the legacy of the past.”

                • 11:20 Mr Weins

                  “So, yes prices will rise but the sector will improve and you will have stable energy supplies in the future. Another aspect that is very important: it is possible under the Treaty as it is under EU law to subsidise consumers that are the lower income ranges, so these people will not simply be cut off but will be able to afford energy because they get direct subsidies, obviously now the state subsidises, not the consumers but the companies in a way because the State imposes low prices and other are direct financial payments from governments to companies which results in the distortion of competition so you see one energy company getting direct subsidies, others getting less, you see some companies having better investment conditions, having access to certain markets, so it is not transparent, there is no real competition, which means that inefficient practices, inefficient companies can continue to dominate certain sectors and others that have better management strategies, better options to offer, better products, simply do not get into the market. So, we try to get away from all that, we try to have a transparent regime in which the best solution can be applied in which everyone has a level playing field but which also takes care of consumers’ interest, very important aspect is the social memorandum that is under preparation to do exactly that to protect the consumers, to involve workers, trade unions to have a dialogue between enterprises and trade unions, also civil society will be involved. So we need public support for this process and I think we can convince people that rising prices are not necessarily such a bad thing if the benefits are there that I tried to explain.”

                  • 13:21 Mr Van der Elst

                    “In the first step prices are going to increase but actually to a normal level because before it was not cost effective and once they reach the cost effective level, because of competition, because the markets will be open, everybody will be able to sell and buy gas or electricity, people will be able to auction for the best price and so it will keep a pressure on the price so as to be sure that the prices are not too expensive for the consumers. So that will be in the medium and longer term; so prices will not evolve too high, normally, also the energy community treaty calls for (?) management, that means energy efficiency. The region for the time being consumes too much energy e.g. for television or a fridge, so people will have to learn, and that’s a good thing also for environment, people will have to learn to consume less energy and that’s a win-win situation because living in a polluted environment is not a good thing.”

                    • 14:35 Cutaways of industrial view at night: gas and electricity consumption
                    • 14:48 Dispatching in Belgium: office, control screens, output circuits
                    • 15:03 Mr Barbaso

                      “By belonging to one single large market it will be possible to supply them with energy needs much easier it is the situation today as I said before because mainly lack of connection, inter connections and so on. So, first of all they can rely upon a large market which means larger supplies and also in case of crises we can try to … on energy security, crises which means that throughout mechanisms linked to the better functioning of gas and energy market we would be able to supply the citizens and the consumers of these countries with the energy they need. In addition, we will plan new investments which will be supported by the donors, the World bank has already allocated one billion dollars for this purpose , but also the EBRD, the European Bank for reconstruction and development, the European Investment Bank (EIB), and other donors which are present in the region and they want to be reassured before financing investments and the fact that countries fulfil conditions related to the functioning of the markets ad free markets, according to the market rules and principles will certainly reassure the investors and secure future investments in the region.”

                      • 16:51 Cutaways of transformer
                      • 17:37 Mr Barbaso

                        “The added value is that throughout this form of cooperation consolidated in a treaty, we on the EU side are able to prepare to streamline the progressive alignment of the countries with the EU acquis, EU legislation in an area such as energy and this is a precondition in view of establishing a full integrated internal market, throughout this treaty the EU market is extended to the countries of the area so that they are progressively preparing for enlargement by benefiting from the moment that the treaty is fully implemented, benefiting from the existence of an internal market for energy.”

                        • 18:34 Berlaymont building
                        • 18:44 High tension lines
                        • 19:42 Electricity meter and gas bill
                        • 19:52 Switching on lights
                        • 20:10 END OF TRANSMISSION