UN/ECE COMMITTEE ON
SUSTAINABLE ENERGY ANNUAL MEETING: HIGHLIGHTS
19 October 1998
The Committee on Sustainable Energy met in
Geneva for a three day session that substantively reinforced the
work of this key UN/ECE group, the principal subsidiary body of
the Commission in the field of energy whose 55 country membership
includes North America, western Europe and the transition
countries of central/eastern Europe, the CIS, the Baltic States
and Israel. The mandate of this committee are in the areas of
sustainable energy, energy efficiency and gas as well as on coal
and thermal power and electricity interconnections.
ECE Executive Secretary, Mr. Yves Berthelot,
highlighted the key issues that were taken up by the Committee:
- The opening and liberalisation of energy
markets;
- The energy sector's potential
response to climate change in the light of the Kyoto
Protocol of the United Nations Framework Convention on
Climate Change; and
- The need to focus attention on
improving energy conservation and efficiency.
Liberalisation/Restructuring
Liberalisation of energy markets will affect
the competitive setting of energy producers and distributors and
impact energy consumers. This process, already advanced in North
America, the Nordic countries and the United Kingdom, is seen as
a probable continuing trend for the entire ECE region.
Restructuring, liberalization and privatization that are taking
place in the energy sector are likely to enhance energy security
and promote a more efficient allocation of resources, greater
consumer choice and the continued development of new sources of
energy to meet demand. But there is the need for Governments to
strive to strengthen energy security by championing energy
conservation and efficiency, expanding the fuel mix and
diversifying sources of supply. A potential economic/political
problem concerning energy security, in reference to the new
development of energy supplies from the Caspian Sea, is the need
for confidence by investing countries in the region's social and
economic stability and the paramount importance of the rule of
law. Otherwise, investment is not likely to develop at a rate
consistent with the importance of the newly discovered reserves.
Coal
Progress in the next four years was seen as
crucial in attaining goals. Productivity gains were viewed as a
positive element but employment problems (e.g. those associated
with mine closures) particularly for transition countries are a
continuing policy challenge.
It was stated that rational pricing policies
aiming towards world market prices were needed for coal and for
all forms of energy in general. This would include the removal of
state subsidies.
A problem for the coal industry in transition
countries was stated to be the lack of adequate financial
support, in view of the squeeze on state budgets, a factor in
western Europe as well. Investment was also seen as inadequate to
support the modernization of the industry in transition
countries.
It was concluded that the restructuring process
in central/eastern Europe and the CIS are advancing but at
different paces with social problems faced by the major coal
producers.
Gas
The diversity of the situation in the
transition countries was noted. Integration into the European gas
market is an objective for transition countries as it allows for
an enlargement of the entire European gas market with the
attendant benefit of increased competivity and security of
supply. The key issues facing the gas industry were stated to be:
- Establishment of a stable and
transparent regulatory framework;
- Rational pricing policies including
the elimination of cross-subsidies between household and
industry. The problem of non-payment was also said to be
a serious matter in Russia and other transition
countries;
- Marketing strategies; and
- Long-term security of supply, which
was seen to be enhanced by long-term contracting.
Electricity
Technical, economic and institutional forces
are all part of the restructuring equation in the electricity
sector. The main challenge facing the electricity sectors was
seen to be the technical and organizational restructuring of
electricity generation, transmission and distribution systems.
The key targets in the restructuring process were seen to be:
- Promotion of competition generally;
- Regulation of the natural monopoly of
transmission and distribution and the introduction of new
market means for enhancing competitivity, thus forcing a
change in these market structures such as third party
access and unbundling of production, transmission and
distribution; and
- Limitation of environmental impacts.
The new EU directives in gas and electricity
were seen as a force towards liberalisation of markets and would
enhance security of supply as well.
The Kyoto Round Table: On the Eve of the
Buenos Aires Conference
The Kyoto Protocol to the Framework Convention
of Climate Change was the focus of a Round Table organised by the
Committee. The timing of this Round Table is particularly
appropriate for two reasons. It occurred just one month before
the crucial Fourth Conference of Parties of the Climate
Convention to be held in Buenos Aires. Equally important, the
stakeholders -- energy industries in particular -- had a voice at
the Round Table in expressing their views on how the issues
relating to the Kyoto Protocol might be dealt with. These issues
include emissions trading among developed countries and both
among developed countries and between developed and developing
countries, joint implementation and the AClean Development
Mechanism@, aimed at fostering greenhouse gas reduction projects
carried out between partner countries.
The Energy Efficiency 2000 Project:
Achievements/New Directions
The UN/ECE Energy Efficiency 2000 project has
fostered, for a number of years, Energy Efficiency Demonstration
Zones in ECE transition countries. A success has been the
leveraging of comparatively small technical assistance support in
the Project to obtain much larger technical assistance grants.
One example: the Project worked with the World Bank, with the
support of Norway, for investment in eight Energy Efficiency
Demonstration Zones in Russia.
The Project's Action Plan looks beyond
Demonstration Zones to encourage the transformation and
modernisation of transition country energy sectors through
networking, traditional capacity development and technical
assistance activities to facilitate the implementation of energy
efficiency projects. Future work will aim at legal, legislative
and policy matters geared at improvement of the overall
investment climate for energy efficiency projects and to
stimulate trade and co-operation between the western countries
and transition countries, particularly in energy efficiency
demonstration zones. The Project's Bureau foresees the need to
enter into a new phase, "Energy Efficiency 21" to
assist governments to meet their international treaty commitments
under the Kyoto Protocol and the UN/ECE Convention on Long-range
Transboundary Air Pollution.
Gas and the ECE Gas Centre: Key Elements in
the ECE Energy Picture
The work in the gas sector concerns upstream
and downstream activities, carried out by the Working Party on
Gas, and in the area of technical cooperation, by the UN/ECE Gas
Centre. The Working Party on Gas has major projects underway on
underground gas storage, interconnections of gas networks and is
finalizing an international map of gas fields. The Gas Centre,
supported by 26 major gas companies from 20 ECE countries,
is organizing forums on topics of strategic importance, for
example on market liberization, introduced by the EU Gas
Directive, and on market-oriented reforms in general.
UN Framework Classification for Solid Fuels
and Mineral Resources
This classification, developed by UN/ECE, will
enhance communication on a a national and international level,
provide a framework for evaluating the existing
reserves/resources on a common market-oriented basis and make
investment in solid fuels and mineral commodities safer and more
attractive. This work is being presented to other UN regional
entities in Bangkok,Thailand this week.
For more information please contact:
Mr. George Kowalski, Director
Energy Division
United Nations Economic Commission for
Europe (UN/ECE)
Palais des Nations
CH - 1211 GENEVA 10, Switzerland
Telephone: (+41 22) 917 2761
Telefax: (+41 22) 917 0038
E-mail: [email protected]