Secretariat's Implementation Reports

State of implementation 2021

As the energy crisis loomed, we have seen in some days the highest electricity prices in Europe recorded on the day-ahead market in Serbia which is not yet coupled. This proved that small isolated markets are more prone to price volatility and that their integration at regional and pan-European level was never more pertinent.

The same goes for the decarbonisation path the Energy Community has been embarking on in the footsteps of the Green Deal. An increasing number of Contracting Parties have formally or implicitly accepted that coal and lignite have no future in their energy mix in the mid-term. The full potential of renewable energy is tapped where a stable legal framework and competitive auctions for market-based support schemes have been implemented. Several Contracting Parties have adopted climate laws while carbon pricing – arguably the most effective instrument in the Green Deal’s regulatory toolbox – has remained a rare exemption. The rather reluctant endorsement of decarbonisation and the alignment of policies and measures with the European Union’s may be choked off by reactions to the energy price surge where governments do not stay the course. For now, domestic lignite and coal-generated power are again in high demand. What matters is that the Contracting Parties do not lose sight of the decarbonization objective in this situation, and follow the transition trail blazed by the European Union.

While the last twelve months may look dramatic from this November's vantage point, looking at the full period gives a more balanced picture. Generally speaking, most Contracting Parties made progress in important areas but continue to lag behind in others:

  • Albania unbundled the distribution system operator and established a balancing market, but has not yet established a spot market for electricity.
  • Bosnia and Herzegovina unbundled the first transmission system operator in line with the Third Energy Package, but has still not even transposed the Second Energy Package.
  • Georgia pushed ahead in terms of organized markets for electricity and gas, but has not yet unbundled its transmission system operators.
  • Kosovo* is preparing for an energy sector post-coal, while market liberalization has stalled.
  • In Moldova, the current crisis acutely reveals the weaknesses of the country’s energy sector governance which is in need of a significant upgrade.
  • Montenegro is finalizing the go-live of its spot market as the second country in the Western Balkans, but needs to revamp or replace its coal-fired power plant.
  • North Macedonia has finally resolved a dispute paralyzing gas sector reforms and committed to coal-phase out by 2028 but has done little in terms of power market reform.
  • Serbia upgraded its legal framework and thus boosted the renewable energy sector in particular but does not rectify some straightforward cases of non-compliance.
  • Ukraine is taking further steps towards consolidating its market framework in electricity and gas, but still needs to ensure stability and viability of some key market players.

Among the open issues to be addressed in the upcoming period, three deserve special attention: electricity market integration, environmental protection and decarbonisation.

Without further integrating their power sectors, the domestic markets (which are of small scale, with the exception of Ukraine) are economically sub-optimal, non-transparent and do not provide the maximum flexibility for further up-take of renewable energy. This is even more deplorable as the rate of interconnection is way above the European average, and allocating the existing capacities for trade is unduly restricted. Market integration and market coupling has always been among the biggest challenges in the Energy Community. Closing the gap by implementing the European legislative package on capacity allocation, balancing and system operation remains high on the agenda.

Get more information

Browse the diverse Contracting Party pages and benchmark their 2021 implementation performance, including key energy sector data. Get more details on the applied methodology, review the Secretariat's past reports and/or Compliance Notes.

Albania

Implementation indicators, state of implementation, energy sector
benchmark data

Bosnia and Herzegovina

Implementation indicators, state of implementation, energy sector
benchmark data

Georgia

Implementation indicators, state of implementation, energy sector
benchmark data

Kosovo*

Implementation indicators, state of implementation, energy sector
benchmark data

Moldova

Implementation indicators, state of implementation, energy sector
benchmark data

Montenegro

Implementation indicators, state of implementation, energy sector
benchmark data

North Macedonia

Implementation indicators, state of implementation, energy sector
benchmark data

Serbia

Implementation indicators, state of implementation, energy sector
benchmark data

Ukraine

Implementation indicators, state of implementation, energy sector
benchmark data

Methodology

Background, scope and weighting

Compliance Notes

Public service obligation, TYNDP, tariffs

Past reports

Results and document downloads