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Interviews

28.11.2012

More Efforts in Market Liberalization Are Needed

Izabela Kielichowska, Government Affairs and Policy Director at General Electric

AUTHOR: publics.bg

How do you cooperate with the European administration in order for the business to have its say in the energy strategy?

All private organizations, both companies and associations, have an active dialogue with the European Commission in order to bring up certain energy matters and reach mutually beneficial solutions. The proposed measures are considered by the EC because the best solutions come from different angles.

Do you believe that in terms of energy strategy the CEE has seen a rather good development?

There is not a single answer and solutions take many years to become reality. There has been some development regarding the opening of the state-dominated energy sector and I do believe that every country has to find its best formula. Nevertheless there is no single country that would ever go entirely private.

The most important is that the CEE countries forge a clear energy strategy that is in line with the European milestones. Even if countries such as Bulgaria and Romania have not yet come to the optimal strategy, I see positive development. For example I see that the Romanian grid operator is open to new solutions. The problem with the grids is with financing, as usual. The important thing is that it is open to discussion, which is not the case in some other countries. This is why I am generally optimistic, because I understand that it takes time to build a workings strategy for CEE countries.

Do you believe the total unbundling of the grid operator in Bulgaria can be sped up?

Unbundling of grid operators is an essential part of the European plans for a unified market. As a member-country Bulgaria has the commitment to support this process, but I have the impression that it is still struggling to find the right formula and steps to go to the end, the grid operator still being a part of the National Electricity Company.

The energy market is supposed to be based on competitive practices which bring blood into the entire economy. One way or another, your grid operator is supporting this. Once you have competition and clear rules, then investors will decide easier to come to a certain country. So this is why I believe it is very important to have clear energy market operation rules which are definitely supported by the unbundling idea.

Is there any tech that can get to be a development focus for the region?

In all the countries in our region there is a growth potential basically all technologies. I can see the district heating is a sector that does not get enough attention and investment, though it is in urgent need to be modernized both in terms of assets and management. Gas technologies could easily be one of the best solutions for these utilities.

Energy efficiency in the industry is also another branch that should be of great importance.

As for renewables through the eyes of GE, there are already some great projects, such as one of the biggest wind farms in the region built by GE in Romania. It was largely helped by the “friendly” regulatory framework. Unfortunately Bulgaria is not such a good example recently, in terms of investment climate for renewables. I hope, however, that this will change soon.

Would the CO2 trading scheme make it even harder for countries joining it in 2013, such as Bulgaria?

There has been a great discussion about ETS, especially in our part of the world and the largest threat could be the industry opting to relocate their production outside the EU in order to escape the obligation to participate in the ETS. However I read this as a sign that the industry is rather running from modernization costs than the CO2 trading system itself. Nevertheless, these businesses should be aware that modernization is the key to competitiveness and that investing now could mean a shift in investment flows to a certain region.

As for the set-back of CO2 permits I believe that it was inevitable, but then again it means a set-back for the modernization of the power industry. Yes, entering in the ETS would have a repercussion on electricity and heating prices, but I believe there is always a place for negotiation.

In this case would distributed power generation become more popular?

I believe so. 15 years ago when I was still a university student, I visited a small CHP station in Denmark which provided energy just for the town. I think this is one of the ways to go, because often these generations use local fuels, such as waste. Waste incineration, however, is not always positively regarded. On the other hand, there is also biomass and biogas, which are also sustainable options for local generation. This is an important step towards the concept of “procumers”.