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EU Energy Union May Already Be Proving Its Worth

EU Energy Union May Already Be Proving Its Worth

If the goal of the EU’s Energy Union is to promote interconnectedness and stimulate competition, it may already be working with a project on its southeastern periphery.

Albania has commissioned a study for an undersea electricity interconnector to Italy that it believes can be built more quickly and cheaply than a similar link proposed between Montenegro and Italy.

The Montenegro project has already been identified as one of the 248 projects of common interest (PCIs) in the Energy Union program launched earlier this year.

However, Albanian experts note the distance separating their country from Italy is only 60 miles at the narrowest point and piggybacking the laying of the 400 kV interconnector cable on the construction of Trans Adriatic Pipeline for gas that passes through Albania would further reduce costs. Related: Why The US Should Worry About Oil Sector Jobs

Albania is in the process of building new hydropower plants and could export excess electricity via the interconnector.

The country’s Energy Ministry commissioned the German engineering firm Max Streicher to conduct a feasibility study for the project, which would cost an estimated 200 million euros. The cost of the Montenegro project has been estimated at 760 million euros.

The German firm would put together a construction consortium and secure financing if the project were to proceed.

The Albanian project has been listed among the common interest projects of the Energy Community, a regional grouping of Albania, Bosnia and Herzegovina, Macedonia, Moldova, Montenegro, Serbia, Kosovo and Ukraine linking them to the EU internal energy market. Related: Range Resources Expects Natural Gas Glut To Even Out By Year End

Neither Montenegro nor Albania are members of the EU, but both are candidates for membership.

The EU Energy Union aims to further integrate Europe’s energy infrastructure, harmonize regulations and create supranational EU authority in some areas. The list of PCIs includes a number of cross-border interconnectors, oil and natural gas pipelines, and smart grids, among other projects.

In addition to eliminating inefficiencies that mean wholesale prices for electricity are 30% higher in Europe than in the US, and for gas more than twice as much, the Energy Union aims to cut emissions and reduce consumption.

Infrastructure has often been overlooked as a factor in European integration, but the construction of highways, rail lines, bridges and tunnels across borders has played an important role in knitting the continent together. It is an important underpinning for a truly common market. Related: How Shale Is Becoming The .COM Bubble Of The 21st Century

Now the Juncker Commission wants to better coordinate the integration of energy infrastructure. Although its ambitious Framework Strategy met with some skepticism when it was announced in February, the nuts-and-bolts approach of the PCIs is likely to bear fruit.

Albania was isolated during the Cold War under the autarkic policies of longtime strongman Enver Hoxha and remains one of the least developed countries on the continent. However, it is already a member of NATO and the World Trade Organization as well as an official candidate for the EU.

Its strategic location on the Adriatic between Italy to the West and Greece and Turkey to the East make Albania a key component in energy security and supply in Southeastern Europe.

By Darrell Delamaide of Oilprice.com

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