The following factors play a decisive role in regional energy developments:

• Growth rate. During the past couple of years growth in the region has significantly accelerated. The implementation of structural reforms in many countries, along with their prospects of joining the European Union, guarantee that this acceleration is not a passing phase but will continue over the coming years. These prospects obviously have an effect on energy, since Southeastern Europe’s inhabitants are attaining greater consumption potential and have correspondingly increased energy needs.
• Energy sources. The region has considerable energy sources, including carbon (such as our own lignite), hydroelectric and wind power (due to the wealth of mountainous and seaside areas), which are far from being fully exploited. Their development could cover a great part of the region’s future energy needs. However, this requires the creation of a business environment that will facilitate the huge investments required to exploit these resources. A study presented at a recent conference on investment prospects in Southeastern Europe, organized by the Center for Strategic and International Studies (CSIS) in Washington, forecasts that investment in the electricity generation sector could reach 37.6 billion euros ($47.8 billion) by 2020.
• Creating an integrated energy market. A very important step in this direction was the treaty creating a Southeastern Europe Energy Community, made up of nine Balkan states and five EU members (Austria, Greece, Hungary, Italy and Slovenia). The treaty came into effect on July 1, 2006, after the required six countries ratified it. The founding of the Energy Community aims at creating an integrated energy market in the Balkan region and, in a second phase, its connection with the EU’s energy market.
• Creating new energy axes and connecting energy networks. Greece has contributed in several ways toward this goal. First of all, it has consistently and steadfastly supported Balkan countries’ aspirations to join the EU. It is with great satisfaction that Greece has observed the progress of reforms in many Southeastern European countries and the successful entry of Bulgaria and Romania into the EU due in January 2007. Concurrently, Greece is contributing to the creation of an integrated economic space in the Western Balkans, intended to facilitate EU expansion into the area and already producing tangible economic results.
  

The Greek government, and especially the Ministry of Development, contributed greatly toward the setup of the Southeastern Europe Energy Community and, of course, it is no coincidence that the treaty was signed in Athens and provides for the Council of Energy Regulators from the 14 countries, as well as the Electricity Forum, to be headquartered in Greece. At the same time, Greece, along with its neighbors, is implementing large-scale projects concerning energy axes and electricity grid interconnections in the region. Specifically, we are implementing:

1. The construction of the Burgas-Alexandroupolis oil pipeline, in cooperation with the governments of Bulgaria and Russia. The goal is to create an oil route complementary to the one through the Bosporus strait, which will help carry significant amounts of oil from the Black Sea to Western markets.
2. The construction of the Greek-Turkish natural gas pipeline, which is expected to be completed in early 2007. That of the Greek-Italian pipeline, which will turn Greece and Turkey into major transit hubs for the transfer of natural gas from production areas in the Caspian Sea and the Middle East to European consumer markets, is at an advanced planning stage. Connecting Greece’s natural gas network with Albania and the Former Yugoslav Republic of Macedonia (FYROM) is another planned major project.
3. The boosting of the electricity grid connections with neighboring countries, with projects such as the construction of the Philippi-Nea Santa-Babaeski line with Turkey and the second connecting line into FYROM. These new lines will help strengthen the Balkans’ electricity network and the capacity to transfer power between countries.
   

Progress and success on all these fronts turns the energy sector into a motor of growth and integration of Southeast European economies, with great benefits for prosperity and peace in the region.

By Theodoros Skylakakis
Theodoros Skylakakis is general secretary for international economic relations and development cooperation at the Greek Ministry of Foreign Affairs.
Greek Ministry of Foreign Affairs website: www.mfa.gr