Energy Sector

Regional Energy Indicators:
Electricity Generation (TWh) 440.7
Electricity Consumption (TWh) 411.3

Energy Consumption per Capita (kgoe/cap) 1786
Energy Import Dependence (%) 61%
CO2 Emissions per Capita (kg CO2/cap) 5231
Note: kgoe – kg oil equivalent

Energy Conferences and Trade Shows: Enhancing Regional Investment Potential

By Vlad Popovici

As with any other industry, countless events around the world – conferences, forums, seminars, symposia and tradeshows – are dedicated each year to the energy sector. Some of them are general in scope and audience; others are extremely specialized and attract a targeted audience.

During the fall season, this event activity seems to reach its annual peak, followed closely by the spring event season. By assessing the main themes and conclusions of the major energy events, such as the ones discussed below, we can get a picture of the current challenges and ongoing trends in an increasingly globalized sector, and their implications for the Southeast European energy sector.

Selecting the most important or consequential energy conference or tradeshow of the year is a very subjective and probably impossible task. However, among the many energy events of the peak fall season, three major events are representative of the current status of the energy sector. These events have a significant following and are relevant for the energy sector in Southeast Europe. To avoid any controversial ranking, we are going to discuss them chronologically.

Globalization before the Gates

The World Energy Council (WEC) is a global energy forum founded in 1923, which brings together governments, industry and other energy-related organizations to provide thought leadership for the development of sustainable energy supply and use around the world.

Every three years, the WEC organizes a World Energy Congress; this event is an impressive gathering of ministers, company CEOs, executives from international organizations and other energy sector leaders. This year, the World Energy Congress took place September 12-16 in Montreal, Canada.

More than 3,500 delegates from nearly 100 countries attended the 2010 World Energy Congress in Montreal to network, discuss and listen to 200 speakers coming from 52 countries and covering all imaginable energy-related topics. Among the hundreds of presentations and plenary sessions, the delegates tried to define three main issues at work on the global level – future priorities of the energy sector, constraints and opportunities relevant to the energy world, and the next steps for adjusting energy policies around the world and fostering international cooperation in this sector.

The future priorities of the energy sector sound very familiar for the Balkan region: they include security of energy supply, environmental protection and climate change, energy poverty and rapid urbanization. Addressing any of these issues will require new and clean technologies to be developed and implemented on a large scale. Energy policy and global trade were also widely discussed.

Another relevant topic for the Southeast Europe region is energy policy. While most governments around the world are developing and implementing energy strategies and action plans with 5-10 year timeframes, the real timeframe of energy policy, especially if a transition to new technologies or a radical fuel mix change is targeted, is much longer – major energy infrastructure projects need 5 to 15 years to be conceived, approved, financed and built and the infrastructure (power plants, pipelines, etc.) will ideally then be usable for 30 to 60 years. This discrepancy has led to countless energy policy and investment failures.

Globalization of the energy markets was another hot topic at the Montreal Congress. Suppliers of equipments, products and services for the energy industry are pushing for the opening of the national markets but are often facing, as discussed by Mr. John Krenicki, President and CEO of GE Energy, strong headwinds, especially in the renewable energy sector – custom tariffs, limits on personnel movements, local content and “buy national” requirements, lack of pricing mechanisms for carbon, pollutants, water, etc.

The same complaints come from those interested in the globalization of the energy trade. To confirm that the march towards globalization has started, Mr. Pascal Lamy, Director-General of the World Trade Organization (WTO), has discussed how WTO works with WEC, other organizations and its member countries – including those from Southeast Europe – to develop more predictable and transparent trade rules in the energy field that would benefit both energy producing and consuming nations.

As Mr. Pierre Gadonneix, Chairman of the World Energy Council, stated in the WEC 2010 Declaration presented during the closing ceremony: “sustainable growth is no longer an option – it is a necessity. While the goal is clear, finding the best path to reach it will be a challenge for all.”

Blowing in the Wind

A second key autumn energy-sector event, HUSUM WindEnergy, is the world’s most important international wind energy trade fair, organized every two years in the German city of Husum. The HUSUM WindEnergy 2010 took place from September 21-25 and attracted 33,000 visitors from more than 80 countries. The exhibitor list was impressive as well, with 971 companies from 28 countries.

The trade show’s audience covered the entire wind energy value chain – wind turbine manufacturers and component suppliers, wind farm operators and utilities, financial services, wind farm engineering companies, power network operators, industry associations, and new technology research.

Several grand themes were at the center of attention in Husum this year. Although its growth rates are still impressive – the amount of electricity produced by wind farms roughly doubles every three years, according to the World Wind Energy Association (WWEA) – the wind energy sector has evolved and, as mentioned at the tradeshow by Mr. Christian Kjaer, CEO of the European Wind Energy Association: “Nobody can dispute that the wind energy sector has become a mature, global industry and a mainstream source of power.” Its focus is now shifting towards new technologies that could reduce the electricity supply variability, such as future innovations in wind electricity storage.

The industry is now looking more and more at the offshore wind potential that comes with different technological challenges, compared to onshore farms. In terms of global wind capacity installations, 2009 seems to have been a peak, while in 2010 the installation activity is going to be more subdued, due to the impact of the protracted global economic uncertainty, disappearance of some of the big wind project financing organizations (such as Lehman Brothers), and to the end of some of the significant government incentive programs: in the US, the incentives for the wind sector under the economic recovery program are coming to an end in December, while in Germany the feed-in pricing system for wind energy is currently being re-negotiated.

The sustained growth of wind energy projects in the future will also depend on easier access to the national grids, and on major investments in the strengthening and expansion of the transmission grids needed to accommodate new wind generation capacity.

All of the above topics are increasingly relevant for Southeast Europe countries, as most of them are just starting now to embark on introducing or expanding their wind energy capacities. While there still is a strong interest in promoting and financing wind projects in the region’s countries, some of them, such as Bulgaria and Romania, still have to heavily invest in upgrading and expanding their power networks to give access to the new capacities. They also must reform regulations and administrative steps required to license new projects and bring them online.

Moreover, those Southeast Europe countries interested in developing a sustainable renewable energy sector have to start investing in the other segments of the value chain, such as – in the case of wind energy – suppliers of turbines and turbine components, or wind farm engineering and construction companies.

Fall at the Black Sea

The last energy event that should be mentioned is the Black Sea Energy & Economic Forum, which aims to develop best-policy solutions to help the region become a center for economic cooperation, investment and trade, and to promote energy security, economic growth and political stability in one of the world’s energy and economic crossroads region.

A much smaller event than the ones already discussed, the second edition of the Black Sea Energy & Economic Forum (held in Istanbul from 29 September to 1 October 2010) brought together the region’s top politicians and corporate executives, with strong support from the EU and the US.

The agenda of the forum was more pragmatic than exciting, the main topics being: the development of a strategic vision for the Black Sea region as an energy and economic hub; the impact of the global financial crisis on the energy sector of the region; facilitating energy investments and trade; the future of the regional nuclear sector; climate change and emerging technologies in the energy sector (such as renewable energy and unconventional energy resources); and of course the Southern corridor for natural gas exports to Europe.

This event also assumed more political connotations, with discussions about the future role of Turkey as an energy transit corridor between Asia and Europe. Political and media observers, as noted by the Turkish daily Hürriyet, commenting on the absence of Russia from the forum.

Some Southeast European countries are naturally involved in the Black Sea Energy & Economic Forum as riparian states, but this initiative is extremely relevant for the entire Balkan region, as it is currently emerging as a significant energy player, both in terms of energy supply – especially as one of renewable energy, but also potentially as an unconventional energy production center – and in terms of energy consumption. More than just in the Black Sea’s immediate vicinity, the entire region between the Black, Adriatic and Mediterranean seas is the prize in the competition for new energy transit corridors, including the currently competing South Stream project and Southern corridor projects – Nabucco, Trans-Adriatic Pipeline and the Italy-Greece Interconnector – that were discussed at the Istanbul forum.

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