A Mediterranean electricity co-operation strategy: Vision and rationale.

Dr Alessandro Rubino, ENEL Foundation

Energy markets, and electricity markets in particular, are increasingly interconnected and interrelated, both physically and institutionally. Like a spider’s web, transmission networks develop almost everywhere across Europe responding to the EU’s need to guarantee unconstrained exchange of energy flows. The network development clearly reflects the regulatory, economic and legal convergence that has occurred among most of the EU countries in the last decades. The outlook is somewhat more complex when we enlarge the scale of our analysis. The Mediterranean region is composed of countries that show a significant variety in their level and path of economic growth rate and other economic fundamentals. This diversity is also mirrored by the energy landscape of the region. In the region key hydrocarbon suppliers, transit countries from other regions to the EU and net energy importing countries coexist. Consequently, energy policy in the Mediterranean area is characterised by a composite set of technical, economic and geo-political factors that contribute to determine a multifaceted scenario. This poses the problem of how European countries should deal with non-EC neighbours. We explore the regulatory challenges related to the development of a Euro-Mediterranean electricity area and identify three pillars upon which it should be built and organised in the coming years. The first pillar is the foundation a legislative and regulatory convergence based on the “energy corridor” specific approach; the second is the expansion of network infrastructures in the area; finally, the third pillar is represented by the establishment of an “energy free trade area” in the Mediterranean region based on Renewable Energy Sources.