Podgorica, 21 February 2019
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Prime Minister, Ministers, Distinguished guests, Ladies and gentlemen, Let me start by thanking Prime Minister Marković for hosting this meeting.
We are here today to reinforce your commitment to align as swiftly as possible with the EU's energy and climate policies, in line with the Paris agreement. This includes the EU’s 2030 targets to reduce energy consumption by 32.5%, boost the share of renewables to at least 32% of energy consumption and cut greenhouse gas emissions by 40%.
These targets will help your transition to clean energy and increase investment, growth and jobs in the process. The Statement is also a significant step towards the extension of the EU Energy Union to the Western Balkans, a goal that is in line with our joint Sofia Declaration. One of the main objectives of the Energy Union is to increase our energy security by reducing our reliance on external energy sources, while providing citizens and businesses with a competitive and reliable energy source.
The first goal of energy security is to ensure that your countries need less energy. Investing in energy efficiency will contribute to reducing energy costs as well as financial & political dependence on imports and is the most effective way to meet carbon reduction targets. In the Western Balkans, there is an enormous potential [between 20 and 40% of energy savings, around 2.5 bn EUR/year] to advance in this field with investments and also education of the people to the importance of saving energy for the planet. Later today, I we will sign a substantial financial package of 30 million euro that will be added to the ongoing Regional Energy Efficiency Programme of €50 million.
I am also happy to announce that we are disbursing a further 2 million euro of support through a regional programme dedicated to climate change. It will help you define the three targets for 2030 within your National Energy and Climate Plans. These plans will help provide the certainty and predictability that investors need, as well as help combat climate change in the process.
Decreasing energy dependence also implies developing sustainable energy supplies, such as those coming from renewables.
By 2030, half of the electricity generated in the EU will come from renewables (29% today already). Renewables are proving to be increasingly profitable for generating electricity. Solar and wind power generation costs have fallen dramatically in recent years. I would also like to stress the potential of hydropower among other sources of renewable energy, such as wind, solar, geothermal and biomass. As you know, there is a large number of plans for new hydropower plants in the region. A study that my services commissioned identified some 140 projects. It is clearly not possible to build them all.
We should all RESPECT a set of principles for sustainable hydropower. The first is that a priority for investments should be to rehabilitate existing plants to secure the megawatts that hydropower is already providing to your grid (half of generated power in 2016). This measure alone will not be enough, particularly if you want to improve the proportion of energy coming from renewable sources. So, when considering the construction of new plants, they must be built in line with your future EU obligations.
There are certain parts of your region where it is simply not possible to build hydropower plants without irreversibly damaging valuable ecosystems and sites of outstanding natural beauty. That is why it is important to engage with stakeholders: it is not only good politics; it can save you money in the long term and is a legal obligation according to the EU acquis. If any of these projects go ahead there will be obligatory Environmental and Social Impact Assessments, and that includes speaking to local communities and civil society. In a region this automatically has to mean you will also speak to your neighbours.
The regional dimension is a key element of your transition to clean energy. Here I would like to stress the potential offered by the regional electricity market. The ability to manage power supply and demand across the EU as a whole has improved competitiveness immensely. The Western Balkans can do something similar, notably by carrying out the Connectivity Reform Measures to make this happen. I urge you to overcome political obstacles and bilateral issues to accelerate these.
I would also like to stress that committing to decarbonisation through the Statement today will pave the way to tackling air pollution, one of the major environmental issues of the region. We cannot continue to have towns, cities and whole valleys, listed as having the most polluted air in the world, especially in winter. Many ageing power plants provide cheap energy because their investments have long since written off, but, the price comes with the air we breathe. As you move closer to the EU, many of those plants will have to be decommissioned, since they will never meet EU standards. And this will bring significant benefits. As stated this morning by Health and Environment Alliance (HEAL), they have estimated in 2016 that the health-related savings to your budgets from moving away from coal could be between 6.5 and 11.5 EUR billion per year in the region. Each year air pollution from outdated coal power plants causes 3,000 premature deaths, 8,000 new cases of bronchitis in children.
In the coming years, a large number of investments will be needed to replace ageing and inefficient energy infrastructure. As policy makers, you need to avoid being “locked-in” to carbon intensive infrastructure. In that respect, the EU is ready to support you, as stated in flagship 4 of the Western Balkans Strategy on “increasing connectivity”, as well as in the Sofia Priority Agenda. The Western Balkans Investment Framework is there to help you ensure that investments are in line with EU standards. For example, this already foresees over 450 km of 400 kV electricity transmission lines and associated substations, over 100 km of gas pipeline, to diversify sources of supply, as well as more efficient transport, including substantial investments in railways and a significant package of funds for energy efficiency and now has been opened to finance smart grids as well.
To conclude, let me stress that the transition to clean energy requires long term and strong political commitment. A lot of this transition is guided by the connectivity reform commitments you have taken. On the energy side, you all know that things are going less well than, for example with your transport colleagues. I will continue to write – in this case rather bad news – to your Prime Ministers. I would be grateful to get some updates and ideally good news from you today.
Our energy agenda needs to be at the heart of your growth agenda, as it is the case for European Union as well. You can count on our support in this important objective.