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“Perspectives on Long-Term Energy Supply – the Role of the Energy Charter”

“Perspectives on Long-Term Energy Supply – the Role of the Energy Charter”. Presentation by Dr Ria Kemper Secretary General, Energy Charter Secretariat 13 th Forum – Energy Day in Croatia, Zagreb 2004. Topics for Presentation:. Two perspectives on security of supply:

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“Perspectives on Long-Term Energy Supply – the Role of the Energy Charter”

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  1. “Perspectives on Long-Term Energy Supply – the Role of the Energy Charter” Presentation by Dr Ria Kemper Secretary General, Energy Charter Secretariat 13th Forum – Energy Day in Croatia, Zagreb 2004

  2. Topics for Presentation: • Two perspectives on security of supply: • Reliable and secure energy supply: • The role of the Energy Charter’s framework of rules on energy investment, trade and transit across Eurasia • Efficient and rational use of energy: • International cooperation through the Energy Charter supporting sound policies on energy efficiency 13th Forum: Energy Day in CroatiaPresentation by Dr Ria Kemper

  3. The Energy Charter Process 51 Signatory States of the 1994 Treaty, 46 of which have completed ratification17 Observers, including signatories of the 1991 European Energy Charter 13th Forum: Energy Day in CroatiaPresentation by Dr Ria Kemper

  4. Energy Transit – a Key Challenge • Existing Provisions (ECT Article 7): • ‘National Treatment’ for Energy in Transit • Commitment to take all necessary measures to facilitate transit of energy • Measures to facilitate transit are to be taken without distinction as to origin, destination or ownership of energy, or discrimination as to pricing. • Not yet covered: • Conditions for access to networks • Criteria for setting of tariffs • Illegal taking of gas in transit 13th Forum: Energy Day in CroatiaPresentation by Dr Ria Kemper

  5. The Draft Transit Protocol Key features: • a definition of “available capacity for transit” in national energy networks • the criteria for access to available capacity (obligation to negotiate, in good faith, access to available capacity, not mandatory TPA) • the criteria for setting transit tariffs (cost-based, objective, and non-discriminatory tariffs) Additional elements: • prohibition of unauthorized taking of energy in transit; • International coordination action in the event of accidental interruption, reduction or stoppage of transit; • protection of international energy swap agreements; • minimisation of environmental impacts of transit in a cost effective manner; • energy metering and measuring strengthened at international borders. 13th Forum: Energy Day in CroatiaPresentation by Dr Ria Kemper

  6. Promotion and Protection of Investments • Investment Economies in transition in Eastern Europe, the Caspian and Central Asia require USD 1.6 trillion in investment over the period 2001-2030. This amounts to around USD 55 billion every year(IEA World Investment Outlook, 2003) • Energy Charter Treaty provides a mechanism to reduce risks associated with investment • Key signal to the international community, fostering investor confidence • Guarantees of non-discriminatory treatment • Protection against expropriation and other politically motivated losses • Supported by international dispute settlement provisions (State/State and Investor/State) 13th Forum: Energy Day in CroatiaPresentation by Dr Ria Kemper

  7. Improving Energy Efficiency • Benefits: • Reduces domestic consumption, and thereby creates an alternative to new supply • Reduces environmental impact • Increases industrial competitiveness • Obligations under the Energy Charter’s Protocol on Energy Efficiency and Related Environmental Aspects (PEEREA) • Formulate aims and strategies (art 5) • Establish policies (art 3.2) • Develop, implement, update programmes (art 8.1) • Create the necessary legal (art 3.2),regulatory (art 3.2) and institutional (art 8.3) environment 13th Forum: Energy Day in CroatiaPresentation by Dr Ria Kemper

  8. PEEREA Activities • Country Reviews • Regular Reviews (all countries) • In-depth Reviews (12 so far): Slovak Republic, Lithuania, Poland, Hungary, Bulgaria, Romania, Estonia, Denmark, Turkey, Czech Republic, Moldova, Croatia (2004) • Forum for information exchange and policy dialogue • Developing an energy efficiency strategy • Effects of market liberalisation on energy efficiency policies • Cogeneration and District Heating • Kyoto and energy efficiency policies 13th Forum: Energy Day in CroatiaPresentation by Dr Ria Kemper

  9. The Energy Charter Background: 13th Forum: Energy Day in CroatiaPresentation by Dr Ria Kemper

  10. A broad framework for energy cooperation New Observers to the Charter Process • China (2001) • Korea (2002) • Iran (2002) • ASEAN (2003) represented by the ASEAN Centre for Energy More information at www.encharter.org(including full draft text of the Transit Protocol) 13th Forum: Energy Day in CroatiaPresentation by Dr Ria Kemper

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