Romanian minister calls for fairness in EU rules

The changing winds of energy in Southeast Europe 

By Mark Swift

25/11/2020

The European Union (EU) should consider the full range of energy options while transitioning towards carbon net zero, according to the Romanian minister of energy. In particular, he highlighted the critical necessity of continued natural gas use in Southeast Europe.

“Romania strongly believes that the future regulatory framework should enable the development and deployment of all available [energy] options,” said Dan Drăgan, the state secretary for the Romanian Ministry of Energy.

He also underlined the importance of natural gas infrastructure investment, despite international calls for ambitious carbon reduction targets.

Natural gas will definitely play an important role in the short to medium term, ensuring the smooth transition towards decarbonisation, he said during the first day of the Romanian International Gas Conference.

“For Romania, and for other states in the region, it is essential to use natural gas in the green transition phase,” he said.

With the European Commission driving carbon reduction targets up to 55%last year, pressure to cut emissions is being put on Europe’s most polluting nations, the coal burning states of its southeast flank.

The EU’s goal of achieving climate neutrality must also ensure technological neutrality during the energy transition phase, Drăgan said. He highlighted that many member states need the transition strategy to take into account regional infrastructure realities. The minister suggested that energy targets that might be feasible for some member states would be impossible for others to match.

In the context of the EU raising the initial carbon emission reduction targets to be met by 2030, a significant volume of investment will be needed throughout Romania’s technology chains, including reforming the natural gas market, Drăgan said.

Progress was made at the European Parliament in ensuring that the new Recovery and Resilience Facility will not exclude investment in clean gas, he said. This grants and loans fund will provide post-Covid-19 support to member states over the next four years.

Overall, in the national energy system, Romania foresees investment of €12.5 billion in the next five years, the minister said, with funds coming from industry stakeholders, the government, and through EU financial instruments.

Regional interconnectivity

For the EU, it is critical for a notably absent gas energy hub to develop in the southeast region. While Bulgaria has hub aspirations, if anyone can create a functioning hub during the late-2020s it is probably a well-connected Romania, according to research by the Oxford Institute of Energy Studies.

Many nations in the southeast region, however, have only a single pipeline to supply their natural gas, and they are island-like in terms of their gas markets, explained Mariana Liakopoulou, a research fellow at the Energy Security programme of the NATO Association of Canada, speaking during a recent panel discussion.

The EU aims to improve market conditions within this region, through the Central Europe and Southern Europe Energy Connectivity initiative, and to ensure that gas demand growth will be satisfied by at least three different sources, she said.

With Russia already having such a dominant stake in European natural gas, there is obvious incentive for supporting the creation of alternative supply routes. Countries in this region, namely Greece, Bulgaria, Croatia, Serbia, Slovenia, Bosnia Herzegovina, and North Macedonia — have themselves also been historically dependent on Russia for natural gas.

Romania is the exception, having worked since the 1900s to develop its upstreaming business. As a result of this, Russia has ended up covering relatively small volumes of Romania’s domestic gas consumption, Liakopoulou said.

The EU Aims to advance these countries traditional transit roles via prospective pipeline and LNG flows,” Liakopoulou explained, be it from the Caspian and Central Asia regions, or elsewhere. This mission gains a certain time-sensitivity in view of Europe’s long-term gas supply contracts, which expire early-to-mid 2030, Liakopoulou added.

Trans Adriatic Pipeline

On November 15th, the Trans Adriatic Pipeline (TAP), a gas transportation system crossing Greece, Albania, the Adriatic Sea, and Italy — began commercial operations. TAP is the European section of the Southern Gas Corridor, an energy project that can now transport 10 billion cubic metres of new Azerbaijani gas supplies from the Caspian Sea to Europe. This is one of many natural gas distribution projects which are altering the Southeast Europe region.

“TAP enables double diversification: a new, reliable and sustainable energy route and source of gas reaching millions of European end-users,” said Luca Schieppati, TAP’s managing Director.

The pipeline ensures that Europe can receive supplies from another source, while supporting the key EU objectives of achieving an integrated energy market [in the region], and a sustainable, secure and diversified energy mix, explained Murad Heydarov, chairman of TAP’s board of directors.

The TAP represents a notable change to the strategic energy map, presenting opportunities for far higher gas market integration.

The development also foreshadows considerable prospective overhauls to the energy infrastructure of the south-eastern countries. With numerous inter-country gas pipeline connectors planned in the region in the coming years, the state of play is set to change dramatically. The speed at which this transformation can take place, however, depends as always on investment.

%d bloggers like this: