EUROPEAN COMMISSION

Brussels, 12.7.2016

COM(2016) 456 final

2016/0213(NLE)

Proposal for a

COUNCIL DECISION

on a proposal to establish the Energy Community list of energy infrastructure projects

EXPLANATORY MEMORANDUM

1.CONTEXT OF THE PROPOSAL

On 16 October 2015 the Ministerial Council of the Energy Community adopted a Decision on the implementation of the Regulation (EU) No 347/2013 of the European Parliament and of the Council on guidelines for trans-European energy infrastructure 1 . The purpose of this measure was to create a legal framework for prioritising key energy infrastructure projects among Contracting Parties and between Contracting Parties and EU Member States.

Regulation (EU) No 347/2013 as adopted in the Energy Community sets a comprehensive framework for streamlining the permitting, regulatory and cost-allocation procedures in Contracting Parties. It also requires, subject to a number of criteria, a Ministerial Council Decision to establish under Title III of the Energy Community Treaty a list of priority infrastructure projects called projects of Energy Community interest (PECI). The final transposition deadline for main provisions of the Regulation and deadline for establishment of the list of PECI is 31 December 2016.

The list of projects in annex 2 to this decision has been submitted by the project promotors and submitted for the public consultation by the Secretariat 2 of the Energy Community. It is under scrutiny by the Energy Community institutions as foreseen by the Regulation. The Commission is informing the Council about any developments regarding this process. The Commission will propose final position of the European Union on the Decision of the Ministerial Council adopting the list of projects of Energy Community interest in the course of preparations for the Ministerial Council in Sarajevo on 14 October 2016.

The Regulation (EU) No 347/2013 also gives a possibility to apply the provisions of the Regulation to projects of mutual interest (PMI). These projects are projects that benefit two neighbouring states (Contracting Party on one and Member State on another side) but do not have the legal status of a project of Energy Community interest. At the same time these projects are supported by Contracting Parties and a Member States concerned. Regarding such projects and in addition to the proposal for a legally binding decision on PECIs, the Commission proposes that the EU proposes to the Ministerial Council of the Energy Community to issue a Recommendation to give a political impetus and undertake all necessary regulatory measures in order to progress with the realisation of PMIs.

2.LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY

Under Article 7 paragraph 5 (a) of the Decision of the Ministerial Council on the implementation of the Regulation (EU) No 347/2013 3 the Ministerial Council shall establish the list of projects of the Energy Community interest by way of a Decision under Title III of the Energy Community Treaty.

Under Article 82 of the Energy Community Treaty the Ministerial Council shall take measures under Title III on a proposal from a Party or the Secretariat. The Commission proposes to submit on behalf of the European Union such a proposal to the Ministerial Council of the Energy Community.

The position of the European Union on the decision of the Ministerial Council needs to be established pursuant to Article 218(9) of the Treaty on the Functioning of the European Union and in accordance with the provisions of Council Decision 2006/500/EC of 29 May 2006 on the conclusion by the European Community of the Energy Community Treaty.

In line with Article 76 of the Energy Community Treaty the Recommendation of the Ministerial Council is legally non-binding and therefore falls outside of the scope of Article 218(9) TFEU. The text of the Recommendation is attached to this decision for information.

The Procedural Act governing the proceedings in the Ministerial Council 4 requires submitting documents two months before the Ministerial Council meeting i.e. by 13 of August 2016.

3.STAKEHOLDER CONSULTATIONS

As required by the provisions of the adopted Regulation two working Groups were created in order to prepare PECI list. Projects that have been submitted by project promotors have been subject to a public consultation launched by Energy Community Secretariat on 2nd of May 2016. In the course of 2016 projects were assessed as regards their eligibility for the PECI and PMI status. A cost benefit analysis of each project was performed leading to the ranking of projects which was based on specific scores related to the level of the fulfilment of the criteria. At the end of the process, foreseen in late September 2016, the Groups will propose based on a consensus a draft preliminary list of PECIs to the decision making body which is the Energy Community Permanent High Level Group (PHLG). Following the positive opinion of the Energy Community Regulatory Board, the final preliminary list of PECIs is scheduled for agreement by the decision making body during the meeting on 13 October 2016. The final Energy Community list will be submitted to the Ministerial Council for a decision on 14 October 2016.

4.BUDGETARY IMPLICATIONS

Not applicable.

2016/0213 (NLE)

Proposal for a

COUNCIL DECISION

on a proposal to establish the Energy Community list of energy infrastructure projects

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the Functioning of the European Union, and in particular Articles 194 and 218, paragraph 9, thereof,

Having regard to Council Decision 2006/500/EC of 29 May 2006 on the conclusion by the European Community of the Energy Community Treaty, 5 and in particular Articles 4 and 5 thereof,

Having regard to the proposal from the European Commission,

Whereas:

(1)The Energy Community Ministerial Council Decision 6 on the implementation of the Regulation (EU) No 347/2013 of the European Parliament and of the Council on guidelines for trans-European energy infrastructure sets up a process to establish the list of projects of Energy Community Interest and gives also a possibility to apply the provisions of the Regulation to projects of mutual interest on a voluntary basis.

(2)The European Union should make a proposal to establish such a list, in accordance with Title III and Article 82 of the Energy Community Treaty.

(3)The annex to the proposal mentioned in the previous recital and consisting of the final list of projects to the proposal can only be constituted at a later date once the assessment of the various projects proposed has been completed. The present decision should therefore set out all the projects from which the Commission can choose the ones to be included in the list at a later date.

HAS ADOPTED THIS DECISION:

Article 1

The European Union Proposal for a text of an Energy Community Ministerial Council decision establishing a list of projects of Energy Community interest is set out in the Annex 1 to this Decision.

Article 2

The Annex to the proposal referred to in Article 1 shall be constituted from the projects included in the Annex 2 to this Decision. The Annex 2 consists of the projects submitted for assessment and final decision as established under Energy Community Ministerial Council Decision 2015/09/MC-EnC on implementation of Regulation 347/2013 on Guidelines for trans-European energy infrastructure .

On behalf of the European Union the Commission may support any of projects in Annex 2 to be included in the final list, provided they comply with the criteria of the Ministerial Council Decision 2015/09/MC-EnC. The projects can only be chosen amongst those listed in Annex 2.

Article 3

This Decision shall enter into force on the day of its adoption.

Article 4

This Decision is addressed to the Commission.

Done at Brussels,

(1) D/2015/09/MC-EnC

(2) https://www.energy-community.org/portal/page/portal/ENC_HOME/SECRETARIAT/Consultation/2016_PROJECTS

(3) D/2015/09/MC-EnC

(4) Procedural Act 2006/01/MC-EnC Internal Rules of Procedures of Ministerial Council of Energy Community

(5) OJ L 198, 20.7.2006, p. 15.

(6) D/2015/09/MC-EnC

EUROPEAN COMMISSION

Brussels, 12.7.2016

COM(2016) 456 final

ANNEX

to the

Proposal for a Council Decision

On a proposal to establish the Energy Community list of energy infrastructure projects

ANNEX

to the

Proposal for a Council Decision

On a proposal to establish the Energy Community list of energy infrastructure projects

EXPLANATORY MEMORANDUM

1. Introduction

On 16 October 2015 the Ministerial Council of the Energy Community adopted a Decision on the implementation of the Regulation (EU) No 347/2013 of the European Parliament and of the Council of on guidelines for trans-European energy infrastructure 1 . The purpose of this measure was to create a legal framework for prioritising key energy infrastructure projects among Contracting Parties and between Contracting Parties and EU Member States.

Regulation (EU) No 347/2013 as adopted in the Energy Community sets a comprehensive framework for streamlining the permitting, regulatory and cost-allocation procedures in Contracting Parties. It also requires, subject to a number of criteria, a Ministerial Council decision to establish under Title III of the Energy Community Treaty a list of priority infrastructure projects called projects of Energy Community interest (PECI). The final transposition deadline for main provisions of the Regulation and deadline for establishment of the list of PECI is 31 December 2016.

As required by the provisions Regulation (EU) No 347/2013, as adopted in the Energy Community, two working Groups were created in order to prepare PECI list. Projects that have been submitted by project promotors have been consulted in a public consultation launched by Energy Community Secretariat on 2nd of May 2016. In the course of 2016, projects were accessed as regards their eligibility for the PECI status. A cost benefit analysis of each project was performed leading to the ranking of projects which was based on specific scores related to the level of the fulfilment of the criteria. At the end of the process, based on a consensus, a draft preliminary list of PECIs is to be proposed to the decision making body which is the Energy Community Permanent High Level Group (PHLG). Following the positive opinion of the Energy Community Regulatory Board the final preliminary list of PECIs has to be agreed by the decision making body.

The Annex with respective list of projects are established following the decision making process as described above.

2. Legal basis of the proposal

Under Article 82 of the Treaty the Ministerial Council shall take measures under Title III on a proposal from a Party or the Secretariat. The Commission submitted on behalf of the European Union such a proposal to the Ministerial Council of the Energy Community.

Under Article 7 paragraph 5 (a) of the Decision the Ministerial Council shall establish the list of projects of the Energy Community interest by way of a Decision under Title III of the Treaty.

European Union Proposal for a

DECISION OF THE
MINISTERIAL COUNCIL OF THE ENERGY COMMUNITY

on the establishment of the list of projects of Energy Community interest ('Energy Community list')

THE MINISTERIAL COUNCIL OF THE ENERGY COMMUNITY,

Having regard to the Treaty establishing the Energy Community ('The Treaty'), and in particular Articles 2, 26, 27, 82 thereof,

Having regard to the Decision of the Ministerial Council of the Energy Community D/2015/09/MC-EnC on the implementation of the Regulation (EU) No 347/2013 of the European Parliament and of the Council of on guidelines for trans-European energy infrastructure, and in particular Article 3, paragraph 4 of this Regulation, as adopted in the Energy Community.

Having regard to the proposal from the European Union,

Whereas:

(1)    On 16 October 2015 the Ministerial Council of the Energy Community adopted a Decision 2  on the implementation of the Regulation (EU) No 347/2013 of the European Parliament and of the Council on guidelines for trans-European energy infrastructure.

(2)    Under Article 82 of the Treaty measures are to be proposed by a Party or the Secretariat.

(3)    Projects proposed for the inclusion in the list of projects of the Energy Community interest ("PECIs") have been assessed by the Groups and meet the criteria laid down in the Regulation.

(4)    The preliminary list of PECIs was agreed by the Groups at technical-level meetings. Following the positive opinion of the Energy Community Regulatory Board ("ECRB") on the consistent application of the assessment criteria and the cost/benefit analysis, proposed list was discussed and agreed upon in the [XX] meeting of the Energy Community Permanent High Level Group ('PHLG') on the [XXXX] 2016 and this Decision was finalised and endorsed by the PHLG acting for this purpose as a decision-making body.

(5)    Organisations representing relevant stakeholders, including producers, distribution system operators, suppliers, and consumer and environmental protection organisations were consulted on the projects proposed for the inclusion in the Energy Community list.

(6)    The inclusion of PECI list is without prejudice to the outcome of the relevant environmental assessment and permit procedure. Under Article 5(8) of the adopted Regulation, a project that does not comply with Energy Community law may be removed from the Energy Community list. The implementation of PECIs, including their compliance with the Energy Community legislation, should be monitored in accordance with Article 5 of that Regulation.

(7)    Pursuant to the second paragraph of Article 3(4) of the adopted Regulation, the Energy Community list is established every two years by way of a Decision under Title III of the Treaty.

HAS ADOPTED THIS DECISION:

Article 1

The list of PECIs is adopted as set out in the Annex to this Decision.

Article 2

This Decision shall enter into force on the day of its adoption.

The Decision is addressed to the Adhering Parties, to the United Nations Interim Administration Mission in Kosovo and to the Member States referred to in Article 27 of the Energy Community Treaty.

Done at …, … 2016.

                               For the Ministerial Council

                               The President

(1) D/2015/09/MC-EnC

(2) Decision D/2009/2015/MC-EnC

EUROPEAN COMMISSION

Brussels, 12.7.2016

COM(2016) 456 final

ANNEX

to the

Proposal for a Council Decision

on a proposal to establish the Energy Community list of energy infrastructure projects

ANNEX

to the

Proposal for a Council Decision

on a proposal to establish the Energy Community list of energy infrastructure projects

The list of projects submitted by promotors under Energy Community Ministerial Council Decision 2015/09/MC-EnC on Implementation of Regulation 347/2013 on Guidelines for trans-European energy infrastructure

GAS (17 projects):

Projects of Energy Community Interest (PECI)

- Interconnection pipeline of FYROM with Kosovo* 1 , Albania and Serbia

- Infrastructure gas pipeline FYROM – Albanian border

- Gas Interconnector Serbia – FYROM, Section on the Serbian territory

- Gas Interconnector Serbia – Montenegro (incl. Kosovo* 2 ) ­ Section Nis (Doljevac) ­ Pristina

- Albania­Kosovo* 3 Gas Pipeline (ALKOGAP)

- Interconnection Pipeline Serbia – Bulgaria, Section on Serbian territory (PCI status for entire interconnector)* 4  

- FYROM part of TESLA project*

Projects of Mutual Interest (PMI)

- Interconnection Pipeline BiH-HR (Slobodnica-Bosanski Brod-Zenica)

- Interconnection Pipeline BiH-HR Licka Jesenica-Trzac-Bosanska Krupa)

- Interconnection Pipeline BiH-HR (Zagvozd-Posusje-Novi Travnik/ Ploce-Mostar Sarajevo)

- Interconnector of FYROM with Bulgaria and Greece

- Interconnector Serbia-Romania – Serbian section

- Interconnection pipeline Serbia - Croatia- Serbian section

- Interconnection pipeline Poland ­ Ukraine

- Interconnection Hungary to Ukraine developing firm capacity

- Ionian Adriatic Pipeline (IAP)

- EAGLE LNG and Pipeline

ELECTRICITY (12 projects):

Projects of Energy Community Interest (PECI)

- Transbalkan corridor ­ phase 1 (Romania, Serbia, Montenegro, BiH)*

- Transbalkan corridor ­ phase 2, 400 kV OHL Bajina Basta ­ Kraljevo 3 (Serbia)

- Transbalkan electricity corridor, grid section in Montenegro

- Interconnection 400 kV OHL Bitola (FYROM) ­ Elbasan (AL)

- Interconnection 400 kV OHL, Skopje 5 (FYROM)­ New Kosovo* TPP (KS)

Projects of Mutual Interest (PMI)

- Interconnection between Banja Luka (BA) and Lika (HR) with supporting internal facilities

- Interconnection between Balti (MD) and Suceava (RO)

- Back to back station on 400 kV OHL Vulcanesti (MD) Isaccea (RO) and new OHL (MD)

- Interconnection 400 kV OHL between Straseni (MD) and Iasi (RO) with Back to back station in Straseni (MD)

- Asynchronous Interconnection of ENTSO­E system and Ukrainian electricity network via 750 kV OHL Khmelnytska NPP (UA) - Rzeszow (PL), with HVDC

- Rehabilitation of interrconnection, 400 kV OHL Mukacheve (UA) - V.Kapusany (SK)

- Rehabilitation of interconnection 750 kV OHL Pivdennoukrainska NPP (UA) - Isaccea (RO) and modernisation of 400 kV OHL Primorska (UA) - Isaccea (RO)

Electricity smart grid projects (2 projects)

- Reduction of grid losses (FYROM)

- Kosovo* Smart Meter Project

- Demand Response, Energy Storage and Distributed Energy Resources for Enhanced Power System Operation of Republic of Serbia

OIL (1 project)

- Construction of the Brody-Adamowo oil pipeline

(1) This designation is without prejudice to positions on status, and is in line with UNSCR 1244 and the ICJ Opinion on the Kosovo declaration of independence

(2) ibidem

(3) ibidem

(4) Project marked with "*" hold a status of Project of Community Interest (PCI) in the European Union.