Treaty establishes Energy Community
By Mr. Jure ZRILIC on Jun 01, 2007 Status: Public
The Treaty establishing the Energy Community, which entered into force on July 1, 2006, brings together the EU, along with Albania, Bosnia and Herzegovina, Croatia, the Former Yugoslav Republic of Macedonia, Montenegro, Serbia and the United Nations Interim Administration Mis-sion in Kosovo. Bulgaria and Romania have recently joined the EU, changing theirs status from Contracting Party to Participant. Moldova, Nor-way, Turkey and Ukraine have obtained observer status, and may eventually join the Energy Community in the future, provided that they take on board the commitments of a contracting party to the Treaty.
The Treaty commits all its partners to work together to develop integrated gas and electricity networks across their territory. In time, all Con-tracting Parties will implement most of the legal framework, already adopted by EU Member States, in the area of energy networks, including competition, environmental protection and increasing use of renewable energy sources. The process of transforming 27 EU national markets, which seven Contracting Parties will also join, into a single energy market is as yet at an early stage. Whilst the administrative and regulatory changes are advancing, the huge investments needed to modernise and adapt the infrastructure designed for national networks will take many years. And it is only when electricity and gas flow freely across national boundaries in an integrated European network,will consumers feel the full benefits of the single market.
Benefits for the customers
The single market (or internal market) is the fundamental basis of EU policies across a wide range of fields, and energy is no different. The Un-ion’s electricity and gas networks have been opened up to allow generators and suppliers access to the market throughout the Union without discrimination on the basis of nationality. As of July 1, 2007, all consumers will have the right to choose a different supplier in place of the previous monopoly gas and/or electricity supplier. The Contracting Parties will join the EU’s single market in the electricity and gas sector. While the Energy Community entails legal obligations and corresponding rights,the Parties will benefit from integration in many ways. In fact, through identifying examples of good practice, they will benefit from the experiences of others in modernising their networks, allowing faster development and at lower costs.
The Energy Community has clear decision-making and support structures, ensuring that all partners are fully involved in and committed to the work of the Energy Community. The Ministerial Council is the body which takes key decisions at a political level regarding the Energy Commu-nity’s policies and formally adopts its rules. The Permanent High Level Group brings together senior officials from each contracting party, en-suring continuity and follow-up of the political meetings of ministers, and decides on implementation of measures in some cases. Regulators from each partner and from the EU are represented on the Regulatory Board, which advises on details of statutory, technical and regulatory rules and makes recommendations in the case of cross-border disputes between regulators. Stakeholders from the electricity and gas indus-tries, including consumers, meet to discuss issues related to the work of the Energy Community in the Electricity Forum and Gas Forum. The activities of the Energy Community are administered by the Secretariat, regularly reviewing each Contracting Party’s fulfilment of its obliga-tions under the Treaty. It is also responsible for ensuring the Energy Community’s budget – to which all partner countries contribute – is cor-rectly spent and accounted for. The Secretariat, whose staff are appointed in accordance with the principle of geographical equilibrium amongst all Contracting Parties, is based in Vienna.
Just as EU energy policy will develop to take account of changing circumstances, so too will the policies of the Energy Community. But there is no automatic change in Energy Community policies as a consequence of EU policy changes. Partners have to agree on new policies, when ap-propriate, for example following changes in EU legislation.
Article published in see-science.eu eJournal spring 07.