Onsite Insight - March - Balkans Infrastructure Development
On 22 February 2016, the Western Balkans Investment Summit took place at the headquarters of the European Bank for Reconstruction and Development in London.
One of the hot topics discussed at the conference was the development of the electricity transmission grid in the Balkans region. The grid will initially connect the electricity systems of Italy and Montenegro and then, at a later stage, connect the electricity systems of Croatia and Albania.
The project involves the construction of a 390km cable under the Adriatic Sea which will connect the electricity system in Pescara, Italy with the electricity system in Tivat, Montenegro with a 25km onshore cable. The construction of the infrastructure will be carried out by the Italian electricity transmission system operator Terna and is expected to be completed by the end of 2017.
The development of the electricity grid in the Balkans region is aimed at enhancing and diversifying the energy supply in Europe. Countries like Montenegro have already expressed their desire to export energy from their renewable sources to Italy.
The new infrastructure will also allow countries within Western Europe to import energy from the Balkans region and neighbouring areas. The large hydroelectric and renewable source potential of the Balkans region will result in the diversification of the fuel mix and reduce the dependence on gas in Western Europe. It is anticipated that the project will increase cross-border trade throughout Europe, lower energy prices and stimulate investment in renewable energy in the Balkans region.
The European Union (EU) has identified a number of priority corridors under its Trans-European Networks (TEN-E) strategy to help build and finance important energy infrastructure. The priority corridors concern urgent infrastructure development to strengthen existing cross-border interconnections and help integrate renewable energy. The Italy-Montenegro interconnection project is regarded as an important step towards the integration of the Balkan electricity market and has received finance through the TEN-E 2009-2013 programme. Other EU priority corridors include infrastructure development to connect EU countries currently isolated from European energy markets, offshore grid in the Northern Sea and transmission lines to Northern and Central Europe, which will transport energy produced by offshore wind to consumers and energy storage centres.
A modern energy infrastructure is one of the top priorities for the European Commission. The latter has estimated that around €200 billion is needed to upgrade the transmission grids and gas pipelines in Europe. Major gas and electricity infrastructure developments are therefore expected to take place in the future.