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

13 th Forum: Energy Day in Croatia Presentation by Dr Ria Kemper2 November 2004 Topics for Presentation: Two perspectives on security of supply: Reliable and secure energy supply: The role of the Energy Charters 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

13 th Forum: Energy Day in Croatia Presentation by Dr Ria Kemper3 November 2004 The Energy Charter Process 51 Signatory States of the 1994 Treaty, 46 of which have completed ratification 17 Observers, including signatories of the 1991 European Energy Charter

13 th Forum: Energy Day in Croatia Presentation by Dr Ria Kemper4 November 2004 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

13 th Forum: Energy Day in Croatia Presentation by Dr Ria Kemper5 November 2004 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.

13 th Forum: Energy Day in Croatia Presentation by Dr Ria Kemper6 November 2004 Investment Economies in transition in Eastern Europe, the Caspian and Central Asia require USD 1.6 trillion in investment over the period 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) Promotion and Protection of Investments

13 th Forum: Energy Day in Croatia Presentation by Dr Ria Kemper7 November 2004 Benefits : Reduces domestic consumption, and thereby creates an alternative to new supply Reduces environmental impact Increases industrial competitiveness Obligations under the Energy Charters 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 Improving Energy Efficiency

13 th Forum: Energy Day in Croatia Presentation by Dr Ria Kemper8 November 2004 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 PEEREA Activities

13 th Forum: Energy Day in Croatia Presentation by Dr Ria Kemper9 November 2004 Background: The Energy Charter June 1990Dutch Prime Minister Ruud Lubbers launches the proposal for a European Energy Community at a European Council meeting in Dublin December 1991The European Energy Charter is signed in The Hague December 1994The Energy Charter Treaty and the Energy Charter Protocol on Energy Efficiency and Related Environmental Aspects (PEEREA) are signed in Lisbon April 1998The Energy Charter Treaty enters into full legal force, following completion of the thirtieth ratification. The Trade Amendment to the Treatys trade provisions is adopted, bringing them into line with present WTO rules

13 th Forum: Energy Day in Croatia Presentation by Dr Ria Kemper10 November 2004 New Observers to the Charter Process China (2001) Korea (2002) Iran (2002) ASEAN (2003) represented by the ASEAN Centre for Energy More information at (including full draft text of the Transit Protocol) A broad framework for energy cooperation