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Integrated Assessment of RES cooperation between the EU and its neighbours

3    Results on the short-term (2020) perspective for RES cooperation

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This section focuses on the identification of short-term (2020) prospects for RES cooperation between the European Union and assessed neighbouring countries. For doing so, a brief qualitative assessment has been undertaken in prior - and this is complemented by model-based analytical works.

Outcomes of the qualitative assessment at a glance:

Despite these expected benefits, since 2009, not a single RES cooperation project between the EU and its neighbours in accordance with Article 9 of the RES directive 2009/28/EC project has been implemented - and prospects until 2020 are very limited. This statement builds on the outcomes of a qualitative assess-ment conducted at case study level throughout this project, underpinned by some quantitative analysis done related to the 2020 context. The outcomes of the qualitative work, i.e. our reasoning for the limited prospects for RES cooperation with third countries in the near future, are summarised below, and there-after key results from the 2020 modelling work are presented.

Compared to the other cooperation mechanisms, additional barriers to the implementation of the coop-eration mechanism between the EU and its neighbouring countries include a higher degree of grid infrastructure requirements, some degree of geopolitical unrest, more complex financing schemes, differences in public acceptance, potential socio-economic and environmental impacts, existing laws and regulations (Jacobsen et al., 2014). RES projects in neighbouring countries may also need a long lead-time before being fully interconnected to the territory of the EU (Karakosta et al., 2013). Thus, the physical import re-quirement as postulated by Article 9 currently represents an additional hurdle as very limited interconnections exist between Europe and neighbouring countries, while the existing interconnection capacity within many Member States is also a limiting factor. Thus, for the subsequent model-based analysis we had to conclude that due to the infrastructural constraints, RES cooperation with third countries is in the short-term practically limited to the Western Balkan countries - all of them being Contracting Parties of the Energy Community.

Moreover, since 2009 there have been various unforeseen events which have not been conducive for the implementation of cooperation mechanisms:

- Among others, events such as the Eurozone crisis have led to a reduction in energy demand - as a direct result of the slow-down of economic growth, indirectly making it easier for some EU Member States to achieve their 2020 RES target domestically.

- Secondly, the cost decline of domestically available RES-E in the EU (particularly for solar PV) has reduced the cost advantage of RES-E imports from neighbouring countries to the EU.

- Third, following the Russia-Ukraine crisis, energy security concerns are now at the top of energy policy priorities. In this sense, following the Energy Union package in February 2015, the EU has taken steps to revitalise energy cooperation with neighbouring countries as a way to improve energy security (but mostly focusing on fossil fuels).

- In neighbouring countries, important events include episodes of civil unrest, such as the Arab Spring, which have led to higher country risks and financial costs, resulting in scepticism from foreign investors.

In accordance with above we have to conclude that at present, there is almost no demand for RES cooperation in general, and in particular for RES-E imports to the EU, as most Member States believe they can reach their 2020 RES target domestically while reaping the associated co-benefits (in terms of employment, job creation, etc.). On the other hand, neighbouring countries increasing internal electricity demand together with the need to reinforce their electricity system has limited their capacity to generate RES-E surplus that could potentially be exported to Europe in a short time frame (i.e. up to 2020).

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