At the end of June, Aspen Institute Romania proposes the third edition of the Bucharest Energy Forum, a major event designed to provide a space for debate and exchange of ideas at the highest level of competence and responsibility. For two days, experts, analysts and decision makers in the public and private sectors in South East Europe, the Black Sea, the Eastern Mediterranean, the Caucasus and Central Asia will contribute to strengthening a trans-regional platform evaluation for public policies and strategies in the energy sector. As a moderator at the event, I talked with Julian Popov, a Fellow of the European Climate Foundation, one of the speakers invited to the Bucharest Forum Energy. 2015 edition will take place between 25 and 26 June, at the Parliament Palace in Bucharest.
In the last few years, some environmental organizations with international or local significance rallied public support to pick a fight with oil, gas, nuclear power and mining companies. Do you think that Eastern European politicians should or could focus on a green agenda as a mean of gaining more votes? Are environmental messages popular or not in this part of Europe?
Betting on the green agenda simply for winning a few votes is not a very good idea. Politicians should listen to the people but they should do it competently. Environmental campaigners should also base their objections on strong analysis. We need a competent political debate on energy and environment for at least two reasons. First, we are facing an increasing climate and environmental stresses which also have massive economic implications. Second, the world of energy is changing rapidly and if the industry doesn’t realise that it will be faced with massive investment in stranded assets. That could lead to significant financial losses, bankruptcies, loss of competitiveness and strangled economic growth.
About the regional energy mix, how should look the cost-benefits balance? What are the current and future best options for the region?
Very good question. We must look at energy in regional context. A serious mistake of energy industry and politicians is restricting the energy planning inside the national borders. We are becoming increasingly interdependent and we should think not about energy independence but about sustainable, market based and fair energy interdependency. Romania and Bulgaria have significant electricity generation overcapacity. Turkey and other countries have growing needs. The whole South East Europe region has strong hydro, wind, solar and biomass potential. If we advance the regional cooperation and establish functioning regional energy market we will benefit from these resources and will be able to cut our cost. The region clearly offers low cost indigenous clean energy mix, but we have to work more closely together and look into the future, not into the past.
Is it possible for citizens, companies and authorities to reach a common ground regarding a harmonized and proportional use of primary energy resources or should the state just decide what is best for the country and its market? What could be the most important three measures you think that should absolutely be implemented?
The state should reduce its role. The state’s role should be to secure transparency and long term view. Very important is the role of the energy regulator. It is essential that the energy regulator is both independent, but also highly competent. The energy regulator is the brain of the energy system and it is important that this brain is smart, clever and detached from corporate and political interest. Then the market will solve many of the problems. But not all. Markets are not always the perfect solution simply because they often ignore the current and future externalities. If we compute properly the cost of environmental and health damage by coal power, if we account properly for the risks and future cost associated with nuclear energy, if we have a reliable price for future climate related harm then the we might be able to rely almost entirely on markets.
In what ways could Bulgaria and Romania (and other Eastern European countries as well) contribute to the energy security of EU and of themselves? Have you some data about more close energy and economic cooperation between our countries and the Balkan ones? Please, try to explain how could our two countries increase their stance in the energy business in this part of Europe.
We must make a clear distinction between South and North, between South East Europe and North East and Central Europe. These are different energy regions. They might be connected, but they have different characteristic and dynamics. Bulgaria and Romania have absolutely vital role not only for the regional energy security, but for the energy security of the entire Europe. On one hand, South East Europe is a key alternative gas route. Bulgaria and Romania are two important countries that could play critical role in both developing, but also in blocking this route. On the other hand, South East Europe is the European region that has by far the most abundant renewable energy and energy efficiency potential in the entire Europe. Both countries have significant developments in hydro, solar, wind and biomass energy use. They also have huge additional potential. However, they must work together if they want to realise this potential. This is not currently the case. Closer energy cooperation between Bulgaria and Romania and the involvement of the Western Balkans, Turkey ,but also Italy and Austria could make the region a champion in the new energy wave.
In terms of regional threats, apart from the Russian aggressiveness, name other 2 or 3 challenges the region is facing that is keeping it from doing easy business at affordable prices and with strategic objectives always in mind.
The main challenge is the lack of regional energy strategy. Countries in the region work in isolation and that could bring serious threat of developing stranding assets that will turn into a heavy burden on the companies and the governments in the region. Subsidies for the incumbent energy companies is another challenge. We must remove all kind of subsidies for fully mature technologies – coal, nuclear, gas – and use financial support very selectively for technologies that we believe could bring competitiveness, security, economic growth and will contribute to mitigating the climate risk and the environmental and health harm. A third challenge is our competence. The new energy era is highly decentralised, complex and dynamic. We need to develop wide and high energy intelligence that will help people participate properly in the energy revolution that we are witnessing now. People have to understand the nature of energy because they are becoming active participants in its generation, trade, transmission and conservation.
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The full version of this article can be read in printed edition of energynomics.ro Magazine, issued on June 2015.
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