Enhance energy cross-border trading in the Balkan region.

Abstract

A key development in the southeast European energy sector is the agreement between Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Greece, Macedonia, Kosovo, Romania, Serbia and Montenegro to develop a regional electricity market. As will be explained, benefits would arise from competition and co-ordination in a regional electricity market considering the diverse resources of the countries involved, difference in demand shapes and the possibility for sharing capacity reserves. Benefits would be displayed in the form of lower end-user prices for a given level of system security. In this context, one key issue is the regional electricity balance and potential for cross-border trading between the countries in the region. Under this framework, the concept of a Balkan Benelux has been developed regarding regional energy co-operation and views on the western Balkan six (WB6) countries initiative: Albania, Bosnia and Herzegovina, Kosovo, Macedonia, Montenegro and Serbia. This led to the WB6 countries’ transmission system operators, national regulatory authorities, energy ministries and power exchanges signing a memorandum of understanding (MoU) on 27 April 2016 (Energy Community, 2016). The MoU signatories agreed to implement day-ahead market integration between the six countries with the aim of achieving market coupling of national day-ahead markets with at least one neighboring WB6 or EU country by July 2018 and cross-border balancing co- operation between the WB6 countries by December 2018. The purpose of this paper is to provide an analysis of cross-border trade in SEE based on economic electricity exchange and to bring together the latest available knowledge on energy developments in the region and provide comprehensive data on energy demand, system characteristics, market integration and cross-border exchange between the Balkan countries challenging. In this framework, the energy crisis gave rise to strengthening market integration and paving the way to decarbonization in the Energy Community as well as in the Balkan Countries. The energy transition continues to unfold in the Contracting Parties in the EU, showing positive trends with regard to boosting renewables, investing into energy efficiency and reducing emissions, even though it was not driven by political or business decisions to phase out coal; (i) Reducing the carbon footprint, (ii) Making the energy market fit for decarbonization (iii)Boosting deployment of renewables (iv) Making energy efficiency the first fuel; (vi) Reaching a decarbonized energy future.