The European Perspective on the Energy Developments in Eastern Mediterranean and South East Europe

Abstract

The gas developments in Eastern Mediterranean facilitate discussions on potential regional cooperation, but as well as on strengthening political tensions. Although energy can be seen as a facilitator on resolving regional political disputes, recent illegal drilling activities by Turkey on the Exclusive Economic Zone of Cyprus offset any relevant progress. On the other hand, regional activities, such as the establishment of the Eastern Mediterranean Gas Forum by the energy ministers of seven countries, pave the way on the formation of regional institutional capability for cooperation on the energy issues. This chapter aims at presenting the European perspective on the energy developments in Eastern Mediterranean and South East Europe. It presents key elements of the European energy policy, highlighting the importance of Projects of Common Interest. However, the chapter comments on the suitability of Cost Benefits Analysis, providing a review of alternative approaches and proposing an optimization model for an integrated natural gas and power systems planning. Such model, requiring comprehensive information on the European energy system, would be able to provide a robust assessment of critical energy projects. It would be able to identify if there are bottlenecks among the different regions in the EU and providing useful insights to the decision makers, involved companies and market participants on the bankability and viability of critical infrastructure.