No country is an island: New energy opportunities in the West Balkans

14 Jul 2014

imagePHOTO: UNDP Croatia

Written by Zoran Kordic, UNDP Croatia (zoran.kordic@undp.org)

In January 2013, the governments of Ireland and Britain had signed a memorandum of understanding for the trading of thousands of gigawatts of wind electricity. This agreement brought with it the potential to stimulate an estimated 15 billion euro of economic investments, and create 30,000 new jobs in wind industry until 2020. 

Is this kind of deployment of renewable energy replicable in the South Eastern Europe? 

South Eastern Europe is the richest region within European Union in potential for hydro energy, solar energy, wind energy and biomass.

The majority of potentials are still unused because many of the countries still heavily rely energy from fossil fuels, particularly on base load energy from coal power plants.

The potential for trading renewable energy with Albania, Bosnia and Herzegovina, Croatia, Kosovo*, the Former Yugoslav Republic of Macedonia, Montenegro, and Serbia has been explored within BETTER project. Funded by Intelligent Energy Europe, the project began in 2012 and will continue through next year. 

Preliminary project results revealed in a recent regional workshop in Belgrade in July, showed significant potentials for trading renewable energy in terms of employment, economic stimulation, and more positive impact on the environment when compared to existing sources of energy.

Albania and Serbia have recognized the potential for exporting renewable energy and this was included in their respective National Renewable Energy Action Plans.

Trading in renewable energy has the potential to create at least twice as many jobs (with higher share of domestic components this number would be even higher) with three times more economic stimulation through investments.

In Croatia, trading renewable energy can match 6,000 jobs annually and 3 billion euro in new investments! 

The answer is blowing in the wind? 

Cooperation between two countries on renewable energy is introduced by a European Union directive on the promotion of the use of energy from renewable sources aiming to help both countries reach their renewable targets in a more cost-effective way.

If countries fail to meet the renewable targets by 2020, it will cost them 150 million euro, annually for each missing percentage. According to current trends in some countries, this is not an unrealistic.

One option for these countries to reach their renewable energy targets by 2020 could be  in trading renewable energy. Possible methods for this trading were introduced within the same directive through cooperation mechanisms.

One way of trading is through statistical transfer. This means that the renewable energy is transferred with statistical shares, without physical transfer of electricity. Another option can be through joint projects, meaning physical transfers of electricity, either among member states, or between member states and other countries.

For the West Balkan region, the largest potential for trading renewable energy lays in projects with European Union countries currently lacking potentials in renewable energy.

An example can be found in the 2009 memorandum of understanding signed by Italy and Serbia for trading renewable energy. However, due to changing political and economic situations in the countries, the projects have now been put on hold.

Cooperation for renewable energy trading begins by signing the memorandum of understanding between two governments. This sets up the framework for cooperation such as the share of renewables that will be exported from the host country.

After that, companies start to prepare tangible projects such as building wind parks in Albania or a hydroelectric power plant in Bosnia and in Serbia.

For joint projects, host countries produce the electricity, and receive support from tariffs that are in place in the user country gaining the electricity. The user country also has an obligation to invest in renewable projects in the host country.

Ireland and Britain are the first within the European Union to set the framework for cooperation on trading renewable energy, which should bring economy benefits for both sides.

Because of huge potentials in renewable energy, countries from the South Eastern European region should consider this option while planning their national energy policies. Moreover, this is a step forward towards planning joint energy future for the West Balkan region based on renewable energy, because without it - each country is an isolated island.


*Hereafter referred to in the context of UN Security Council Resolution 1244 (1999).

BETTER project
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