Transcript Mr. Robert F. ICHORD - Black Sea Energy Conference

Impact of Energy on Stability and
Economic Development in the
Region
Dr. Robert F. Ichord, Jr.
Chief, Energy and Infrastructure
Bureau for Europe and Eurasia
US Agency for International
Development
Washington, D.C. 20523
Remarks to Black Sea
Energy Conference
Bucharest, April 3, 2006
Headline Theme of Energy Security
• Global, Regional and National Dimensions; Black Sea region is
significant in terms of the intersection of these dimensions.
• Cooperation is vital among countries committed to free market
principles to overcome disruptions and supply constraints;
• Diversification of Supplies and Reduction in Import
Dependence are important approaches to enhancing energy
security;
• Commercial decisions must drive process since options may not
always be feasible or economically justified, especially in the
short and medium term;
• Governments and regulators play critical role in establishing
transparent regulatory and commercial law frameworks for
these ventures;
• Countries in their energy strategies need to consider industrial
competitiveness as well as environmental, social and other
factors;
• Improvement of Customer Service is important objective
EU Gas Imports, Import Capacity and Projected Imports
T E N-Energy- I n v e s t: Study on Energy Infrastructure
Costs and Investments between 1996 and 2013 (mediumterm) and further to 2023 (long-term) on the TransEuropean Energy Network and its Connection to
Neighbouring Regions
CESI, ITT, ME, RAMBØLL
October 2005
Improved Customer Service
• Fundamental to the reform and design of national and regional
energy markets is the impact on the consumer
• Price is a critical factor but quality of service is increasingly
important in today’s electronic societies
• Modernization of energy systems to meet the needs of
consumers in various sectors of the economy is a significant
challenge for countries of the Black Sea Region.
• Development of larger markets and harmonized regulatory
frameworks can stimulate investment and trade benefits.
• Focus on three important ingredients to improving customer
service: affordability, reliability, and transparency
---------------------------Affordability-----------------------------•
Competition
•
Economic Efficiency
•
Social Responsibility
•
Competition based on market forces may
help improve the affordability of energy
services. US and European experience
has shown the competitive model for
network industries can benefit
consumers.
•
Improved economic efficiency of the
energy companies can reduce costs of
production, transport and delivery to
consumers. Benefits from a regional
trading and dispatching system that can
utilize the diversify of sources in an
economically efficient manner
•
Higher oil and gas prices in the region,
while promoting greater end-use
efficiency, are putting strains on
industries, municipalities and government
systems to help vulnerable and low
income groups
Trends of the Residential Electricity Tariff for Selected
Countries (Q2-US Cents/kWh)
16.00
2000
14.00
2003
12.00
2005
10.00
Cents/kWh
8.00
6.00
4.00
2.00
0.00
Bulgaria
Source: ERRA
Georgia
Hungary
Moldova
Poland
Romania
Russia
Turkey
Ukraine
Trends of the Non-Residential Electricity Tariff for Selected
Countries (Q2-US Cents/kWh)
12.00
2000
2003
10.00
2005
8.00
Cents/kWh 6.00
4.00
2.00
0.00
Bulgaria
Source: ERRA
Georgia
Hungary
Moldova
Poland
Romania
Russia
Turkey
Ukraine
2003 kWh Electricity consumption/capita vs. GDP/capita US$
6000
Hungary
GDP/capita (US$)
5000
Russia
4000
3000
Turkey
Romania
Bulgaria
2000
1000
Georgia
Ukraine
Moldova
0
0
1000
2000
3000
4000
Electricity Consuption/capita
Source: ERRA Statistics Data
5000
6000
7000
----------------------------- Reliability-----------------------------•
•
•
•
Close relationship between reliability and
security of supply. Blackouts in Europe and US
in last several years has galvanized concern
over security of large integrated systems and the
critical tele-information systems on which they
depend. Regional grids can be strengthened to
facilitate reliability through better frequency
control and enhanced ancillary services
management.
•
Reducing transmission and distribution system
losses and improved technical efficiency is also
a priority for the Black Sea region. Reliability
requires investment and the existence of
management and financial systems that can
properly procure and implement the
modernization programs. Privatization as well as
IFI financing is critical to improving managerial
capacity as well as mobilizing needed
investments.
•
Environmental factors can affect reliability. The
variation in the availability of hydro resources is
important in the Black Sea region. This
variability can have a significant impact on costs
of generation and requirements for imports in a
number of countries. The advancement in
nuclear safety is also significant in ensuring
good capacity utilization of these major baseload units.
Security of Supply
Technical Efficiency
Environmental Sustainability
----------------------------Transparency--------------------------•
•
Corporate Governance
•
•
Accountability
•
•
Regulatory Effectiveness
Improved financial management
and release of information to
public and markets on energy
company operations.
Increased openness of
Government, Regulators and
utilities to consumers.
Procedures adopted for public
hearings, reporting, licensing
and penalties, and dispute
resolution.
Enhanced role for competent
and independent energy
regulators to protect public
interest and ensure financially
sound energy utilities.
USAID Regional Activities
•
Energy Regulators Regional Association (ERRA): development of competent regulators
and staff and exchange of information and best practices. (US National Association of Utility
Commissioners (NARUC) in collaboration with CEER)
•
Support to Energy Community for Southeast Europe (ECSEE): Assistance for
regulatory development and implementation of Energy Community Regulatory Board,
market design and monitoring, transmission planning, and energy efficiency and
affordability.
•
Black Sea Regional Electricity Transmission Planning Project: regional utility
collaboration, chaired by Transelectrica, to develop regional analyses of transmission
system development potentials and investment priorities to increase reliability and facilitate
expanded trade and power exchange. ( US Energy Association in collaboration with donors,
IFIs and BSEC.)
•
Urban Heating and Affordability Review and Investment Strategy (Alliance to Save
Energy in collaboration with UNECE and IEA)
•
Proposal to Congress in FY07 Budget for New Regional Energy Security Project
Black Sea Region Existing Interconnection Lines
Talashkino
Smolenskaya
Roslavl
Belarus
Mazir
Vitebsk
Beloruskaya
Gomelj Krichev
Shostka
Kurskaya
Chernobil Chernigov
Rzeszow
North
Ukrainskya
Ukraine
Poland
Hmelnicka
V. Kapushani
Slovakia
Zakhidnoukrainska
Dnestrovska
Mukachevo
Mukachevo
Balti
Sajoszeged
Tiszaloek
Albertirsa Kisavarda
Rosiori
Hungary
Sandorfalva
Arad
Vulcanesti
Romania
P. de Fier
Djerdap
Isaccea
Tintareni Isalnita
Belgorod
Sumi Pivnichna
Pivdenukrainska
Kotovsk
Rabnita
CERS Moldova
Usatov
Shebekino
N. Odeskaya
Arciz
LEGEND :
Centralna
Psou
Kozloduy
Blagoevgrad
Varna
Maritsa East
Thessaloniki
750 kV
Black Sea
Sofia w.
Bulgaria
Macedonia
N. Voronzeska
Valujki
Losevo
Zmievska
Donbas
Peremoga
Shahti
Pivdena
Novocherskaya
Amrosivka
T15
Serbia
Nis
Russia
Kurskaya
Bzibi
Dobrudja
Enguri
Georgia
500 kV
Gardabani
Batumi
Hamitabat
Babaeski
HopaKars
Gumri
Alaverdi
Igdir
D.Beyazit
Greece
Armenia
Turkey
Babek
Bazargan
Khoy
Hakkari
Birecik
Azerbaijan
PS3
Iran
400 kV
330 kV
220 kV
150 kV
Kesek
Halep
Syria
Iraq