Focus on Energy, 2010 - Karanovic & Nikolic

INTRODUCTION TO SOUTH EASTEUROPEAN REGIONAL ENERGYCOMMUNITY TREATYThe badly damaged energy infrastructure from the Yugoslav conflicts of the 1990s was one of the factorsthat helped contribute to the breakdown of a once integrated energy system that stretched all theway from the Adriatic to the Aegean Seas. The latest stage of the EU expansion process to the SouthEast Balkans coupled with the ever-increasing need to find an alternative source to the Russian Federationfor energy supplies to Western Europe (from Turkey and beyond) highlight the ever increasingnecessity to improve regional co-operation amongst South East European states. Such co-operationis also important in order to further consolidate and advance peace, democracy, stability, economicprosperity and growth in the region. Furthermore, it is becoming ever clearer that a regional approach toenergy security offers significant advantages both in terms of the improved utilization of existing energysupplies and production capacities as well as optimizing future investments 1 .3Based on the above logic, commentators agreed that the South East European (“SEE”) region needed aninstitutional and legal framework that would facilitate co-operation on rebuilding its energy networks.In addition it would ensure the stability required for investment seen as being contingent on the rule oflaw. It would also create the conditions where its economies could be rebuilt effectively, whilst at thesame time contributing to the security of energy supply in the wider European region.As a response to the above mentioned factors, the Energy Community of South East Europe (the ”EnergyCommunity”), has been established between the European Union (“EU”) and a number of SEE countriesin order to extend the EU internal energy market to the SEE region and beyond.THE ATHENS FORUMFOCUS ON ENERGYThe end of the twentieth century was marked by the evolvement of the European internal energy market.Parallel to this process, an idea to create an integrated regional market in SEE began to unfold. Consequently,in 2002, the European Commission established the SEE Electricity Regulation Forum. This socalled “Athens Forum” was established as a neutral and informal forum for the discussion and exchangeof experiences.The inaugural session of the Athens Forum took place in June 2002 and the conclusions of the intensediscussion that took place resulted in the Athens Memorandum of Understanding (the “Athens Memorandum”).The signing of the Athens Memorandum by the “adhering parties” (Albania, Bosnia and Herzegovina,Bulgaria, the Hellenic Republic (Greece), Romania, Turkey, the Federal Republic of Yugoslavia,the Former Yugoslav Republic of Macedonia (“Macedonia”) and the United Nations Interim AdministrationMission in Kosovo (“UNMIK”) (on behalf of Kosovo), whilst Croatia was to sign later as a “nonparticipatingsponsor”) and the “observers” (Austria, Hungary, Italy, Moldova, Slovenia) took place inNovember 2002.1 In 2005, the EU and World Bank estimated that EUR 12.5 billion will be required in the following 15 years (i.e. until 2020) to rehabilitate existingpower plants and to construct new ones. This is on top of the EUR 8.5 billion required for investments in the transmission and distribution of energyin the SEE.