25^th Energy Community Electricity Forum calls for accelerated energy transition in the Contracting Parties

The 25^th Energy Community Electricity Forum highlighted that the COVID-19 pandemic recovery, together with the decrease in the cost of renewables and the general orientation of European and international energy policies, provides an opportunity for an accelerated energy transition towards decarbonisation in the Contracting Parties. This opportunity should not be missed.

Discussions carved out that essential elements supporting the transition must include appropriate pricing of carbon emissions, increased deployment of renewables as the cheapest form of power generation, introduction of new services and technologies such as hydrogen, storages, electrification of the transport sector and increased energy efficiency, as well as planning and monitoring progress on national and regional level. Lessons can be learned from the experience made in North Macedonia and Albania on the deployment of renewable capacities through market based mechanisms or in Montenegro on carbon pricing.

Panel contributions made clear that efforts on greening the energy sector must be tackled on the regional level and that the focus of today’s energy policy on decarbonisation should be better reflected in the Energy Community Treaty. The Forum stressed that political decisions need to be translated into clear targets set in the National Energy and Climate Plans (NECP) in order to reach this objective and invited the European Commission to table Energy Community 2030 targets in the first half of 2021 at the latest, together with a draft Clean Energy Legislative Package.

Speakers also underlined that progress should be made in the realization of market coupling projects, including between Contracting Parties and EU Member States and that reforming the Energy Community Treaty to introduce a reciprocity mechanism would be beneficial to ensure stronger market integration between Contracting Parties and EU Members States. Until then, the Contracting Parties should join Single Day Ahead Coupling on a contractual basis. In this context, the Forum invited the Energy Community Secretariat and the European Commission to develop a legal framework for a staged implementation of the Regulation on capacity allocation and congestion management in the Energy Community.

Regarding the development of a carbon price cross-border adjustment mechanism, the Forum underlined the importance of raising the level of ambition of climate policies based on market signals related to carbon emission costs in the Contracting Parties. Designing an adequate carbon pricing mechanism for the Energy Community Contracting Parties is a key instrument for ensuring a level playing field for market participants in the Contracting Parties and the EU needed to prevent carbon leakage and to send the appropriate investment signals for future energy projects.

Finally, the Forum invited the Contracting Parties, in cooperation with the Secretariat, to review existing (and when imposing new) public service obligations in the electricity sector in order to replace the physical obligatory sales and purchases of electricity with financial or service contracts, in compliance with the obligations from Energy Community law.