Brussels, 04/12/2014 (Agence Europe) - MEDREG (which brings together regulators from the electricity sector in the Mediterranean) and MED-TSO (the network of grid operators in the region) signed a memorandum of understanding on 19 November for “structured cooperation”. The document, which was also signed by the European Commission, is said to be a significant step towards the Euro-Mediterranean energy community, which is much desired in a region with strong potential in fossil fuel and renewable energy.
In an interview with EUROPE, Michel Thiollière, the head of MEDREG, said that “the signature of this new memorandum places this cooperation in the broader framework of the UfM [Union for the Mediterranean], ensuring the continued existence of our association. The first stage will doubtless be to organise a trilateral meeting with the European Commission”.
Agence Europe (AE): Does the European energy market currently seem encouraging?
Michel Thiollière: The European energy market is facing many tough obstacles with seemingly different objectives (competitiveness, sustainability and security of supply). It is nevertheless the most successful example of regional integration, with expected economic benefits of between €16 million and €40 million per year thanks to increased trade and a more efficient use of resources. The main difficulty comes from the diversity of the economic, political and institutional situations between the countries that enjoy natural resources and that focus on their exports. Other countries focus resolutely on their cross-border interconnections. They want to be able to import in the best conditions. Then, the countries of the southern and eastern shores of the Mediterranean are experiencing a strong increase in demand, when this is becoming smaller in the EU countries.
MEDREG promotes harmonisation of the rules - but not making them uniform - (…) by providing a permanent discussion framework. MEDREG is taking initiatives to attract investment because of a stable and coherent regulatory framework.
(AE): What are your priorities?
Since June 2014 MEDREG has had a comprehensive development strategy (2020-2030) so as to contribute to the creation of a Mediterranean Community with five priorities: - setting up independent regulators in the region and strengthening them; - progressively opening markets up to competition; - developing infrastructure (particularly cross-border); - consumers (especially the most vulnerable); - and more exchanges of experience on local pilot projects, with the aim of then extending this throughout the whole region (…) Our vision is that of a Community in which it would be too costly not to cooperate. In the Maghreb, the lack of open trade depending on market rules results alone in a 5% of GDP deficit in annual growth for each of the three countries.
(AE): Is the failure of the Mediterranean Solar Plan (MSP) and Desertec projects proof that there is not a convincing outlook for potential investors?
Regulators can't ignore the political context (…) Some projects have been suspended, giving the impression of limited success. In order to avoid the stumbling blocks encountered by the MSP and Desertec, MEDREG is focusing its action on more local projects.
(AE): Is it realistic to export electricity from the south to the north?
Abandoning regional cooperation projects can have very different reasons beyond the issues of technical or economic feasibility (…) Any investment decision is based on fundamental elements such as: Is the legislative and regulatory context transparent and stable in the long-term? Who will the main beneficiaries of the project be and who will have to bear the costs? Is the technology chosen for the project appropriate? How does this project guarantee more profitability than others that are based on different technological bases and economic models? If some projects have been delayed or suspended recently it is because there have not been clear answers to these questions. (FB)