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Round table: Energy Diversification and Energy Security
 
On 5 October 2009 the Center for the Study of Democracy organized a round table dedicated to the energy diversification and energy security.

The round table was opened by Dr. Ognian Shentov, Chairman of the Center for the Study of Democracy, Ambassador Tove Skarstein, Royal Norwegian Embassy in Bulgaria and Ambassador John M. Ordway, Chargé d’Affaires at the US Embassy in Bulgaria.


In his opening remarks, Dr. Shentov called for an open dialogue about the process of energy policy decision-making. Ms. Tove Skarstein, Ambassador of Norway to Bulgaria, highlighted the readiness of Norway to work with Bulgaria on developing knowledge-based strategic approaches to good governance and sustainable energy, based on transparency and alternative scenarios for reaching the country's energy goals. Ms. Skarstein accentuated on the need of prior sober assessment of the social, economic and environmental costs of each scenario, taking into consideration the interests of future generations. Ambassador John M. Ordway, Chargé d’Affaires at the US Embassy in Bulgaria stressed on the importance of energy security and diversity in terms of fuels and suppliers. According him every monopoly, including at the energy market, would create problems with the energy supply and would limit the competitive-based pricing power.

Mr. Edward Chow, Senior Fellow at the Energy and National Security Program, Center for Strategic and International Studies, Washington DC pointed out that currently the new Bulgarian government, not unlike the U.S. government, is presented with the opportunity to rethink and redirect its energy policy. The energy security is a public good and the government should protect the interests of the society. Mr. Chow stressed that investment is the lifeblood of the energy sector and it is crucial to be sustained in future projects. Import dependence is not excuse for the shortcomings in the energy policy. Many energy dependant countries have found the right mix of a number of small-scale solutions, such as diversifying the energy sources and making use of the renewable energy sources (RES), thus reducing the economic risk and dependence on monopolies.

Mr. Traicho Traykov, Minister of Economy, Energy and Tourism, highlighted the relevance and good timing of the roundtable and its theme, in a time when the adoption of Bulgarian energy strategy is expected by the end of 2009. The strategy will focus on efficient energy market, enabling system transformation facilitating environmental development, innovation and new technologies, and ensuring diversification of sources and routes. As major challenges before the Bulgarian energy sector, Minister Traykov pointed out the low market liberalization (transparent rules for setting prices, management of energy companies, etc.), independence of national regulators, security of system operators, energy efficiency (excessive energy consumption and low energy saving in spite of the devised financial instruments). Minister Traykov stressed that there should be clear rules between suppliers, carriers and consumers and that Bulgaria should embark on gradual opening and integration into the regional market.

Mr. Martin Dimitrov, Chair of the Economic Policy, Energy and Tourism Committee to the National Assembly, stressed that Bulgaria does not have clear energy strategy that could lead to concrete results. Energy efficiency has already received popularity, but in comparison to the EU, it is extremely weak in Bulgaria. Mr. Dimitrov said that there is debate about the diversification and liberalization of the energy sector, but no concrete measures are being taken for their implementation. Another issue on which he drew particular attention was the state's role in the construction of NPP “Belene”. According to him the country can not afford the risk of such long-term investment, because no one could foresee the economic risks in 30 years.

Ms Valentina Nikolova, Policy Analyst at the Center for the Study of Democracy, highlighted the key challenges that the current government faces in the energy sector, the urgent need to change the decision making model, the key questions that need further investigation and the specific areas for immediate strategic intervention. To achieve a new and efficient model of decision making on the most vital energy projects, the government needs to: put energy diversification and security as a priority; take the necessary time to review the projects without allowing sunk costs and political pressures to influence the final decision; initiate independent expert review that will integrate latest available data, revised financial models and correct economic assumptions. Ms. Nikolova posed a number of important questions that the policy makers need to further research and act upon, such as: the strategic inclusion of renewable energy sources, the lack of transparency in the transportation and storage of spent nuclear fuel, the diversification of nuclear suppliers and the lack of control over the expenses for the modernization of NPP “Kozloduy” and the decommissioning of reactors 1 - 4.

Ms. Tzvetelina Borislavova, Chair of the Supervisory Board of CIBank, noted the growing role of civil society and NGOs. She also stressed the necessary for Bulgaria to coordinate its efforts and ambitions with those of the European and global players: improving energy efficiency, flexibility, development of new technologies, security of supply and compliance with environmental standards. Ms. Borislavova called for the development of gas infrastructure and the use of biomass for electricity production.

Mr. Ilian Vassilev, Chairman of Deloitte, Bulgaria, defined the energy security as an important part of the national security. According him not only the country but all public institutions, the private sector and NGOs should work closely together to achieve long-term vision for the sector`s development. The energy consumers in Bulgaria need to have the potential to quickly react and adapt to the changing situation at the energy market.

During the discussion Mr. Sasho Donchev, Executive Director of Overgas EAD questioned the role of the state in the energy sector and presented as example the U.S.A., where electricity is produced and distributed by private companies. Mr. Velizar Kiryakov, Chairman of the Association of Ecological Energy Producers, expressed concern of the lack of transparent pricing in the sector. Prof. Atanas Tasev, energy expert, stressed on the importance of developing alternative scenarios and proactive planning for the future developments in the energy sector. Mr. Levon Hampartsumyan, CEO of Unicredit Bulbank highlighted the need of transparency of the procedures and relationships between the energy companies and their customers. He pointed out that it would be easier for the banks to support energy projects if they understood more clearly the risks and the involvement of people and shareholders.

The Swedish Ambassador, Mr. Paul Beijer made the closing remarks to the event. He presented the EU perspective on the energy policy. According Ambassador Beijer the energy policy of each country should have two focus areas: establishment of an early warning system to support the risk management, and improving the internal energy market mechanisms. He stressed that the increase of energy efficiency will directly contribute to the increase of energy security.



Agenda (Adobe PDF, 23 KB)
Agenda and speeches (available only in Bulgarian)
Verbatim report (Adobe PDF, 414KB, in Bulgarian)
Presentation: Better Governance for Sustainable Energy Sector in Bulgaria: Diversification and Security (Adobe PDF, 794 KB, in Bulgarian)
CSD Brief No 18: Better Governance for Sustainable Energy Sector of Bulgaria: Diversification and Security
Media Coverage (In Bulgarian)

Picture gallery



The event was supported by a grant from Norway through the Norwegian Co-operation Programme for Economic Growth and Sustainable Development in Bulgaria.
 
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