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Michael LaBelle54min

Michael LaBelle

00:00

phasing out coal in the southeast of Europe? That's the question interview with IANA Tuta. Episode 68. Welcome to the My energy 2050 podcast where we speak to the people building a clean energy system by 2050. I'm your host Michael LaBelle. This week we speak with Ivana Tuta, energy coordinator at the sea bank Watch Network. We'll be speaking with her about the southeast of Europe. In general historical terms, we can use the word Balkans, we can update that more specifically for the former Yugoslav republics and call it Western Balkans. And even more specifically, we look at the neighborhood, I would say the southeast of Europe, with Romania, Bulgaria and of course, Albania. In this episode, we're going to discuss the role of the Energy Community treaty. This is why the geographic context in which countries belong is important to understand this is really important when we talked about the EU and how the EU and I would even say the United States are engaged in countries in the southeast of Europe, as you want to tell us at the start, there was there was and still is great interest in building coal fired power plants. So as crazy as that sounds, as some people like me, there's still governments that want to build coal. And yeah, even backed up by China and other international institutions. But I think what you want to tells us and what we reflect on in this episode is how times have changed, actually. So now, maybe it is more possible to prevent these coal fired power plants from being built than just a few years ago. So it really does say a lot, but also says a lot about governments like China, or Serbia and Bosnia and Herzegovina, who actually see coal as a viable energy source. And bank watches we learn is working hard to prevent financing to build new facilities to ensure reduction of emissions, and prompt investment into alternative energy technologies. So I bring it up. And it's a great point, I think that if the banks are not financing coal, hopefully they're financing some other energy, either reduction technology or renewable energy technologies. At the beginning of the episode he wanted describes how she became involved in environmental issues issues. First with nuclear power, then fighting for coal phase out, the episode provides context to understand the support for fossil fuel in the region, how it was there, a why it was there, and how it shifted over time, or Yeah, even in some places hasn't really changed. The importance of the Balkans lies and the necessity to bring them along in Europe's energy transition. So I recently was just in Bucharest, and I'll be going back to Croatia, as well, and really learning more about the region. And this is really important, because we can't have the energy transition in Europe, without involving the Balkans, which is really one of the poorest and I don't say deprived regions just it's a it's a magnificent region to go and visit and to see. And it's amazing the nature, they're just, it really has these challenges. And the EU and other international donors really have to help on the government and the governance side to ensure that the environment is protected in a lot of these places. And the right, I would say energy technologies that are forward looking and forward leaning are utilized, rather than looking back at coal or as fossil fuels as an option such as gas, and we talk about the role that EU plays and maybe promoting gas in that region. Now we can start to say that there's geopolitical realities in play now. And hopefully, maybe that that has changed in the region. Why would you build new gas infrastructure? Anyways, maybe I'm becoming more but more radical on this podcast about what the solutions are. And it's not fossil fuels. As Ilana points out, even firewood is increasing in price in the region. And relying on old technologies and resources not does not provide households or industry a way forward in this economically deprived region. The lowest cost generation source is not cool. You got to look long term on this. So there's a tremendous need to change the ways of thinking. And this is really important when we talk about the region, the way of thinking about what we can do now and where are things headed and how the money that is spent now? What is that spent on and how does that contribute towards the energy transition? This episode in some future episodes, as I mentioned, are looking at Romania and Croatia. I'm actually just recording this while I'm in Estonia. So we have some really interesting episodes coming out over the next few weeks or even few months doing a lot of recording and lots of meeting with different people and research. And I have to say this is all possible because the Open Society University Network, senior fellowship that I hold at Chatham, house and 2022 they are helping fund this podcast, or at least the traveling the interview portions of it. And it's been a tremendous experience. And I'm really excited about how things are going and the experts I have lined up to talk to. Of course, this all feeds into my academic research that will be worked on in 2023. And I have to give out a shout out to Roxana bukata. She's doing her PhD at Central European University with me, and she contributed towards lining up this interview and some future interviews that we have coming out too. So without her knowledge of Romanian, environmental and energy experts, some of these interviews would not have been possible so I have to give a shout out for her and thank her very much for for her work. And actually, for everyone for agreeing to be interviewed on this podcast. It's always an amazing experience, not just interviewing people, but getting people willing to come on to the podcast and actually having other people help out lineup these guests. So I want to thank everyone that contributes to making the podcast happen. So finally the intent so what are we doing here? What are you listening to the intent at least that I hope of the my energy 2050 podcast is to spread the knowledge about how the energy system can assist our energy transition towards a greener future. Now for this week's episode, I'm here today with Ivana Tuta. She's the energy coordinator at cee cee bank Watch Network focused on the on the Balkan, so you want to I just want to welcome you to the My energy 2050 podcast.

Ioana Ciuta

06:34

Thanks very much happy to be here.

Michael LaBelle

06:36

I'm going to start off with with a question I'd really like to know about your background, and how did you become involved with bank watch,

Ioana Ciuta

06:45

I studied journalism when I was growing up, I was convinced that this was what I wanted to do my entire life. And then sure enough, I only did maybe a couple of years of reporting. And then I discovered the topic of climate change. It was something that I was expected to to report on one day, I think it was one of the first Conference of the Parties, the cops that were being covered by by Romanian media. It really it really caught my eye. And then I was looking for NGOs in Romania who are working on on climate change. And I found one and I went there to to work as a as a comms person because I thought, you know, my, my training would be in communication and public relations. But soon after I joined, there was an active campaign against the betanin nuclear power plant in Bulgaria, right on the other side of the Danube, from the nature in Romania. So I got involved with the community there and collecting signatures and doing all these kinds of campaigning on the ground. That's when I got into activism and being part of an environmental NGO. And then when I, when I joined back watch, it was also there was that was 2013, late 2013, there was a wave of coal power generation appearing together with the new concept of China plus 16 in the region. So it was an initiative the the early days of the One Belt, One Road initiative led by China. So it came with with a lot of coal projects for Central Eastern Europe and Southeast Europe. So the Western Balkans were and still are hotspot for new coal capacity. And it was for me outrageous in 2013, when there was like, consensus in the scientific community that coal is an basically fossil fuels are contributing to the acceleration of climate change. And yeah, it was outrageous that some countries would consider remaining included, would would still consider building new coal capacity. So that's how I got involved. And I've been I've been around for about eight years now and bank watch.

Michael LaBelle

09:15

Okay, great. I want to definitely follow up with the question and I'm gonna say it so I don't forget it is is why why is the region looking at Kohler was looking at coal. But my follow up question is and to help explain the context here is about being quashed and bait bank Watch Network. Could you describe the organization and what it does and its focus

Ioana Ciuta

09:36

Bank, which is looking at public finance, in the sense that it is preventing public finance from being spent on projects that are harmful for people and the environment? We traditionally follow public banks, such as the European Investment Bank, or the European Bank for Reconstruction and Development and you funds of which there are a lot lately. So this is basically the core of the work and bank watch, we are quite focused on the energy sector as one of the biggest contributors to climate change and to greenhouse gas emissions. Not just electricity in the energy sector, but we're also looking at district heating lately. But yeah, there there are colleagues of mine who are working on local policies such as resilient cities, and with frontline defenders, in, in countries, such as in Central Asia, for, you know, human rights, and democracy and so on all kind of connected with, with how public banks are playing a role in the development of democracy and societies basically.

Michael LaBelle

11:05

And so, when we talk about coal and coal fired power plants, then government financing plays a strong role in that, is that right?

Ioana Ciuta

11:14

Yeah, in the Western Balkans, at least, most of the most of the projects that were part of this One Belt, One Road initiative, and were out for financing for Chinese public money, they all required public guarantees from the governments, which is allowed under very strict conditions, many of the projects that we follow currently the best known now I think, is Tuzla seven in Bosnia and Herzegovina. This was proven to be illegal state aid offered by the by the Bosnian state under the the legislation of the Energy Community Treaty, which basically transfers EU legislation on environment and state aid. Okay, I feel like are explaining what the energy review did.

Michael LaBelle

12:14

Yes. And that's, that's exactly one of my questions. But can I want to like kind of bring home and ask you a question. There's One Belt, One Road initiative, because I think people not familiar with that won't won't No, no, that, and then I definitely want to get back to the energy community. But the One Belt, I'll just say. So from an observation point of view, I went to Montenegro and drove there this summer through Serbia, and Montenegro. And I noticed that the highway is was built with by the Chinese. So these initiatives are actually real, is that correct?

Ioana Ciuta

12:48

Yes, yes. And it's not just the energy sector. It's also transport and transfer of goods. Basically, it's It's China's way of rebuilding the old Silk Road, finding its way for for its products, technology, and even labor, to be exported from China, to the EU. And obviously, through the Balkans. Through the Western Balkans. It was slightly easier because of the countries, let's say a bit more flexible understanding of the rule of law and availability to, you know, not apply legislation 100% as maybe some of the European countries, some of the EU member countries would have done?

Michael LaBelle

13:48

Well, I'll just say as an example would be the Belgrade to Budapest railway, which is financed by the Chinese and the Hungarian government has put that classified as it like top secret for like 100 years. I don't think I'm exaggerating when I say 100 years, so people can't find out what are the financial conditions, but the payback period, I think is like 999 years. Oh, wow. So it's, yeah, the Hungarian, we could say the Hungarian Kingdom is 1000 years old. But yeah, hopefully, maybe it lasts another 1000 years, and then people can get their money back. But okay, okay. That was a little side note. But but if you hit on this, this point, which is really important about how legislation or maybe EU legislation or EU directives are transposed, and kind of this, I'll say is you can correct me but I'll say it's this gray area or reinterpretation of the rules and how it's done in some of these countries. And maybe if you explain the role of the energy community, and then I'll say maybe the second part of that would be about the role of the EU in the end. G community. So what is what is the energy community?

Ioana Ciuta

15:04

Yeah, the the Energy Community treaty is something that has been enforced already since 2006. Basically, it was established. So that the EU internal energy market rules and principles would would spread to countries of Southeast Europe at the time, also of Romania and Bulgaria and Croatia were part of the energy community because they were not in the EU yet. So you can say it's, I like to refer to to the energy community as kind of a waiting room for countries until they get into the EU. But it's a waiting room which comes with with some some rules they have to apply. You are key in the energy sector. So being members of the energy community helps the countries prepare for when they will be full members of the EU. So they also have to comply with certain environmental laws. And as of late 2020, the Western Balkans, six countries signed the SOFIA declaration on the green agenda for the Western Balkans, for instance. And this means that they've been formally committed to adopt us climate law. So they've committed to decarbonisation by 2050 plus a host of other tasks related to areas such as circular economy and de pollution. So there is we have these ups and downs and political will and political significance. If you if you like, like this Safiyah declaration, then we come to actual implementation of the legislation, which is there and this is really it's, it's quite problematic for the countries. Because there are, there are currently no sanctions for countries of the west or of the energy community who do not comply with with the legislation that is transposed. So we have cases such as the PFD, a power plant in Montenegro, which has been operating beyond its 20,000 hours. It's it's a derogation under the large combustion plants directive, which allows the the power plant to work without any environmental improvements until it hits this 20,000 hour mark. And after that, either it's retrofitted completely ended it is it becomes compliant with the with the legislation with the the pollution limits or it closes down. So clear there has been operating illegally for over a year and a half. And there is basically no monetary sanction that would be dissuasive and proportional to the damage that this this pollution is producing to to the environment and to people living in Montenegro and beyond. So yeah,

Michael LaBelle

18:36

no, no, no, this is a great point and on this like, why are there no sanctions for not complying with what is agreed to by the within the Energy Community framework?

Ioana Ciuta

18:51

Because there, this has been subjected to treaty amendments in the last couple of years and such decisions. First of all, such such a proposal to to adopt monetary sanctions, for instance, would have to come by the EU would have to come from the European Commission. This is in the mandate. This is how the whole energy community treaty is set up. And yeah, this did come from from the commission from DG energy, but then the countries that it concerns so Western Balkan countries, plus Moldova, Ukraine and Georgia, all the members of the energy community would need to vote on it. So it's, you know, this is the problem it has to be voted unanimously. So you basically have in the room countries who are supposed to approve their own sanctions, and there were a few rounds of negotiations how, how to count Calculate such such monetary sanctions. There was no no agreement. And this is where we are. The topic has been dragging for for ages and more urgent things appeared.

Michael LaBelle

20:17

And I'm going to ask a leading question, because I actually have to say that I don't remember the what year it was. May was 2000 677 or eight I think I was in a previous job I had. I was working Energy Research Institute in Budapest. And I was able to attend one of these forums where they were encouraging people to work together the TSOs to work together on Yeah, just on the cross border rules and regulations, all this type of stuff on the interconnectors, I think I wrote a report about it. But what struck me was not interviewing people or writing about it, but actually attending the meeting in person and seeing how unhappy everybody was. And and Bulgaria The End? Usually, they would just say, Yes, well, it was really the United States and European Commission, or the representatives at least kind of pushing them to cooperate. And it was Bulgaria that was always saying, Well, no, we have to go back home. And we have to ask whether we can say yes to this or not. So and I think maybe if we can describe the history of of, of the history of we could say maybe you can slavery, the breakup of Yugoslavia. I mean, could you maybe provide some context of why the energy community was created in the difficulty of getting this cooperation among members? That's

Ioana Ciuta

21:42

That's the paradox. I mean, technically, because all of these countries of the Western Balkans were once the same country, technically, energy flows are very easy to realize in the region there are they were once part of the same national energy grid. So they are interconnected. Yeah, I think maybe the biggest barrier now to cooperation. Is this kind of competitive, like countries of the Western Balkans like to compare and compete? So I think, on the one hand, yeah, there is a bit of a bit of a dispute for domination in the region, who has the most power and who can be maybe my own personal observations from from such meetings as who can be the most cynical and kind of which of the countries has it worse, you know, to to compare with the others and has to to obtain better? Or more benefits from whoever isn't the the European Commission or certain donor institutions? So I think everybody paints a bleaker picture than that in reality.

Michael LaBelle

23:15

Yeah. Because I mean, then there's the trading market, the day ahead market that's formed. And so like, technically these things can, can operate because that's how it was created. Well, for many of these countries, not all but for many right there, they are highly interconnected. And for the former Yugoslav republics, they were all interconnected to one single energy system. And so it totally technically worked. Yeah. Right. And I mean, even the, I forget the name of the nuclear power plant in Croatia, but that's jointly owned by Croatia. Oh, no, sorry. Slovenia, Slovenia, and Croatia. Yeah. So it shows the level of cooperation historically was there and still has to be there as well. And okay, maybe maybe we move on a bit about the coal fired power plant and for for example, in Bosnia and Herzegovina you mentioned that power plant I don't remember the name, but I've heard about this in the past maybe could you give some backstory to that and why why did it go ahead? It's a brand new power plant is it could you discuss that?

Ioana Ciuta

24:24

I'm actually the one that I referred to earlier Tuzla seven, that is that has still not happened and we're kind of hopeful that it will not materialize. There is however, one coal power plant in Bosnia in the in the in the entity of Republika Srpska, which is called fanatee and which started operating in 2018, I think. So this is basically the only only power plant the only coal power plant that actually got constructed and was put into operation in in 2016. So this one will actually be online for as long as it can do the seven, on the other hand was was met with opposition from the local community. It was met with complaints to the energy community's dispute settlement mechanism over environmental concerns, but also over state aid concerns. And quite importantly, during the the financing deal has been signed for Tuzla with with China ExIm Bank White, a long time ago. But what happened in the in the interim is the China's basically announcement at the UN General Assembly two years ago about not financing new coal projects anymore. And also General Electric's phase out of our cooling out of coal projects. So generally, that could have been one of the technology suppliers in the Toothless seven project. So it's it's looking quite hopeful that the that this project will not materialize in the end. And yeah, I mean, also, renewables in in Bosnia have started picking up in the in the recent months. I mean, since since last year, with with changes to energy legislation, we noticed quite an uptick and prosumers and small scale renewables that are that is coming online.

Michael LaBelle

27:10

Oh, great. I mean, and is is that example, Bosnia Herzegovina? Is it one of the example countries or are there other countries that show that small scale solar can really be deployed? Are there other countries in the region that have specific programs that are looking successful?

Ioana Ciuta

27:31

You know, countries have taken turns in the last couple of years to enjoy being the regional champion for for a moment only for their efforts to stagnate later, I think North Macedonia was the first example. And I was actually I was in a meeting of the coal regions in transition the other day for so just transition of coal mining regions, in the Western Balkans and the example of North Macedonia did come up a lot. This is obviously it's large scale solar, on degraded land, basically on old, depleted coal mines and ash disposal sites. I think when it comes to pursuers and small scale solar, it's indeed, Bosnia, who is looking and who's appearing to be the temporary champion in the region. As I said, I don't think we can we can hold any of the countries for too long in this position. Okay. always happens.

Michael LaBelle

28:46

Something because I'm in Romania right now, as you know, in Bucharest, and, yeah, because in the past here, there was deployment of wind and solar at a large scale. And then it hasn't happened in a long time. Is that Is that what you mean, were the legislations change, and then there's a spurt of deployment, and then the legislation is changed again, or something happens and then it kind of stops?

Ioana Ciuta

29:08

Exactly. Yeah.

Michael LaBelle

29:12

Okay, and the role that the state aid plays, maybe we can speak more generally about that. And coal fired power plants in general. is I know the answer, but I think I know the answer, but I'm interested to know is like, Can coal fired power plants be competitive on a market base based on market based basis? And by private investors? Why why do Why does state aid need to be given to coal fired power plants?

Ioana Ciuta

29:50

Yeah, I don't see any kind of private company that would steal put its money in coal these days, eras. But I mean, it does look like coal is making a comeback these days. But I'm absolutely convinced it's it's temporary. So this is this is I think the the starting point, I don't, I don't see how a private company would even consider that. So this is what is different in the Western Balkans from Western Europe, let's say like, all of these energy, or the majority of the energy utilities are state owned. So then it's the state that drives its own energy policies. And that makes financial allocations and it kind of encourages one company over over the other to develop projects. So most of the times it's either or it has been either coal fired energy or hydropower as the staple energy supply, whereas renewables would be somewhere some something more like, you know, the salad on the side. That is nice to have. But yeah, we don't have to, again, irrespective of commitments to have to meet renewables targets on the energy community treaty as you countries do as well. So yeah, a lot of the countries haven't met their their 2020 renewable energy targets, or if they have they have, because they fiddled a bit with the statistics. So so as to have biomass play more than others. Oh, yes. Right. Right. It's quite fascinating. Yeah.

Michael LaBelle

31:57

Count people burning firewood as Yeah. Biomass and contributing towards the renewable energy targets. Yeah. Okay, but then let me follow up is if it's only the state owned companies, with the government support, why are government governments supporting the poor? Were our I mean, yeah, let me let me ask the question, and then let me put the, the conditionality on it, like why are they supplier government supporting coal fired power plants? But are we also at a maybe a key point in this transition? Where this this support is wavering or more difficult to supply?

Ioana Ciuta

32:39

Yes, I think we've come to a fork in the road where support to coal is really fading in the region. Basically, there are you know, when I started in this position, eight years ago, all the countries of the Western Balkans had at least one coal project on their wish list. Now, it's only Bosnia and Serbia who are actively pursuing some some coal fired generation still. And I think it's, it's in the case of Serbia, I think it's because it does have a lot of coal already in its generation. And for ages, we kept hearing that that Serbia had huge deposits of coal. But here we are, after the winter 2021 2022 We see that Serbia is even having trouble supplying coal for its existing coal power plants. So it ended importing coal from Can you imagine Serbia importing coal from Montenegro, or from Bulgaria or from Bosnia? So it's availability of the resource is going down, and it's going down quite fast? And I think, indeed, the competitiveness, it's starting to become visible. So in Serbia, I'm I think, transition will be a bit more difficult than in other countries, but obviously not impossible to get to because it has this this large share of coal in its mix. But for Bosnia, what we what we notice is, Bosnia has been making quite a lot of profit from exporting its electricity to two EU countries mostly to Croatia. So because, you know, the prices for electricity in the country are heavily regulated. Energy Utilities would not be able to to keep their come to keep themselves Have alive only by selling electricity at this regulated price on the domestic market. So then they need to make these exports. And there was no as a story in Reuters the other day, saying that price of electricity on the export, like on the market, basically, the price at which electricity is being sold is sometimes even 30 times bigger than the regulated price. So that's probably one of the reasons why governments in the in these two countries think coal still still has a role to play. However, and this is something that we've started following recently. The space is shrinking, even for electricity exports. So there's the carbon border adjustment mechanism that is part of the EU emission trading scheme. package that is now being negotiated in in the within the European Parliament and council and commission, either the carbon border adjustment mechanism will come online and in 2025, or 2026. And so the countries will need to pay to the EU for the electricity for the carbon footprint of the electricity that they export. Or the the way to avoid this mechanism would be to adopt a domestic or regional carbon pricing carbon pricing mechanism that would ensure that the the revenue comes back to the country. So yeah, I think I, I went a bit overboard with answering your question. No,

Michael LaBelle

36:49

no, no, no, you did not. No, no, it was it's really good. And then this back brings back the Corbett. Sorry, the carbon border adjustment. Wait, the CBM. Right. The carbon? Carbon? Yeah, border border adjustment mechanism mechanism. Okay. And so that, yeah, this would make it more expensive for and this applies not just to electricity, while imports into the EU, but also goods coming into the EU as well. My question is, and it kind of goes back to our discussion on the energy community, is how much influence does the EU have, and we can maybe just be in general about energy policy in the region and and this push towards renewable because, for example, if the exports and the imports become more expensive, then there's less incentive to export, like cheap coal or something like this. So is there you see, or, yeah, kind of have a sense, I guess, I guess, is how policy is made. Right? What what's the sense we have around the table here? But what do you think that the the role that renewables can play in the region could be picking up? Like, like, let me explain that, like it's sincere role that renewables can play and not just like these waves, as you described.

Speaker 1

38:19

I feel that maybe a lot of

Ioana Ciuta

38:24

private investors see point C of a business case in the region for for large scale renewables, but I also think awareness among communities and citizens has increased considerably. So I, I have a feeling that there is sincere interest from from citizens and I have seen it with my own eyes traveling to the region, the number of solar PVS on houses is increasing. Yeah, this this is the the bottom up and this is kind of the organic change that we're happy to see. But I don't think this this will force policies fast enough to drive the actual decarbonisation in the region. And indeed, this is where the the EU comes into place and has a role to play. Unfortunately, what what we've also witnessed, you know, there's this quite a big gap in how the European Commission, the discourse on gas, how it's centered for EU countries, and how much the commission is pursuing gas as a transition fuel in the Western Balkans, which is Absolutely, it makes no sense half of the countries don't even have any gas infrastructure. So it will be, like locking these countries into a fossil fuel that we they will need to transition again from 1015 years maximum. So Kosovo, Montenegro, Albania, they don't have one single gas pipeline, and yet the commission is, is promoting gas as a transition fuel. So this is very, very disturbing. To witness and yeah.

Michael LaBelle

40:46

And when we're wondering one row, where does the gas come from? What's the source of the gas for the Balkans? And?

Ioana Ciuta

40:54

Well, Albania is on the end of the Southern gas corridor, which, as you know, comes from Azerbaijan. And look, oil is still one of the companies that is involved in that in that project. So it's not even it's not even free of Russian gas or of Russian influence. Yeah, there's Turks direct stream and basically, interconnectors, North Macedonia is pursuing this gas interconnector with with grease who would get its gas via LNG terminals. So a lot of new and costly and unreliable in the end fossil fuels, the commission is pushing towards the the Western Balkan countries,

Michael LaBelle

41:52

and then maybe that we can shift a little bit and I'll build on on this policy framing of gas, the commission put pushing the gas. But do you think that this, maybe you? I don't know. Because everything is so recent. So in one sense, it's kind of hard to talk about the energy crisis and the geopolitical changes or the changes due to the geopolitical situations and in Russia's war in Ukraine. Question is, is what has been the impact on the energy, I would say discussions about the future energy system because of the Russia's war in Ukraine, I think

Ioana Ciuta

42:29

in the countries, we're in the Western Balkans, we're heading towards an energy crisis, even before Russia's invasion and Ukraine and before the war, because, paradoxically, the countries, as I said earlier, are not nearly as dependent as the EU is on gas. They were the countries were more hit hard by by prices of electricity, which the region also imports from the EU. So it's not just Bosnia and Montenegro exporting electricity to the EU countries do import a lot of electricity from the EU. They had to do this because of the of a series of technical problems at the coal power plants and mines across the region, particularly in Serbia and North Macedonia and Kosovo. So they increased the electricity import needs. And then to make things worse, 2022 was a very dry year. And it was it has prevented the region's hydropower plants from making up for the coal plants being off. And it was it caused, for example, Albania to increase in imports more than in previous years. When trouble is never on, it never arrives on its own. Biomass prices were increased massively across the region. Some countries, I think, I think, in both Bosnia and Serbia were imposing export bans, because they needed this. So I think this was brewing even even before the war. And it was it was forcing the countries to make some to make decisions now that will determine what their energy systems are, what their energy sectors would look like in the medium and long term. So I think the war and the current crisis is it can be both it can be a serious threat to the energy transition and an opportunity. I mean, we've we've seen, as I said solar development and to some extent wind speeding up and Bosnian and North Macedonia and Serbia, but it has also revealed how unreliable the region's coal plants or coal fleet is, and somehow it's making the government's less willing To commit to phase out,

Michael LaBelle

45:01

you want to I just want to like, maybe, yeah, for the outside listeners that maybe not too knowledgeable about the region. These things they're hard to describe. It's always kind of shifting. And from the outside, it's like, yeah, it totally makes sense. Because I actually, I think about a year ago, I did an interview with staff from Irina, and they had made a model about how how much renewable could be used. And really, the whole region could be 100%, renewable with biomass, solar, and wind and everything. So so the numbers are totally there. Financially, it makes sense to do it. But it's this everyday politics, and, you know, some external factors going into play, but also just internally, and the political, political acceptance of renewables or other policies that need to be changed. And then it's kind of weird to look from the outside and say, Well, why don't you do that? But internally, right, there's always these. I don't know, contradictions are that are accepted? Yeah. Why continuing with coal if there's not even enough coal? So? It? Yeah, so so it's one sense, it's hard to describe what's going on. And then maybe the easy phrase to say it's, well, it's the Balkans. So and then, in one sense, kind of summarizes what I mean by that is, it's a very complex region with these relationships, like we talked about around the energy community, but also the selection of technologies and maybe different interest groups that control those technologies and the social relationships and political relationships as well. You mentioned earlier about attending an event and being involved in this cold transition forum for the region. And could you describe a bit more? What is the dialogue about? And what is it? How is it progressing about phasing out? And I'm particularly interested in understanding the communities that that are affected by the coal phase out or a possible phase out of coal?

Ioana Ciuta

47:00

Yeah, so this initiative is basically a sister initiative of the core regions in transition in the EU, which, you know, in the EU, started maybe in 2017 2018, I don't remember anymore. But the big difference, I would say is that rapidly in the EU, there was indication of a just transition fund, and that that communities, would these coal dependent regions would need to come up with territorial just transition plans and come come to a development model that they would see for themselves. So this kind of bottom up design of, of policies and future for the communities. So I think in the EU, this is going pretty well, at least from from the stories I hear from my colleagues, for example, in the school Makia or in Greece, and to some extent in Romania, as well, in the Western Balkans. On the other hand, the coal, the coal regions are are paired with some similar regions in EU countries, and they've been there have been exchanged visits. So that's always very, very helpful for local decision mayor, mayors and local decision makers to kind of get inspiration for what they could do for their communities. What is indeed missing maybe is this disconnect from the official date, Energy policy, which as I said earlier, in the case of Serbia, or Bosnia, there is no commitment to to a phase out. So nothing to do nothing in the in the national level. strategic documents gives any indication of that. And then you have very progressive and forward looking mayors and coal dependent regions, which are like they've prepared projects. They know what they have to do. And there's no funding and this was maybe yeah, one of the overarching arguments during this this two day meeting that I was attending in Brussels, that you know, there needs to be dedicated funding for the just transition. We need to the local communities need to know how much they can rely on grants and on European public money and what comes from loans and you know, well, watch how to shape their communities how much there is available and how big they can dream. Yeah, this was for on the one hand for me, it was refreshing to see such progress. of mayors in from the regions for example, the the mayor and G Vinita. In Bosnia Herzegovina, even to some extent the mayor and pfdi, in Montenegro and representatives of Beto la municipality from North Macedonia. These kind of energetic optimistic leaders from from the ground, and then a bit of a stagnation from the European Commission and its dedication to, to support financially such such an effort, because it will be a huge financial effort.

Michael LaBelle

50:38

There's already been a huge decline, like here in Romania. But yeah, spread that out throughout the region, and then how to provide the social support and economic support for the region. So that, yeah, life doesn't get so bad for the people living in these places where what happens when that employer goes away? I think that's one of the justifications for keeping the coal mines open. But it's, yeah, in one sense, it's not worth it. But it's finding the economic alternatives for the people to have jobs and make a living. So okay, I wanna I just want to maybe wrap this up. But one of the last questions I have, and I'm hoping I'm thinking this is a positive question is, what are what's like one or two of the successes that you've experienced while at being Quach in the job that you're doing?

Speaker 1

51:29

Definitely, for me, when I when I just started the job. It was the commitment of EU public bank, so the

Ioana Ciuta

51:37

European Investment Bank and the EBRD to get out of coal. And then recently, there was the decision by the European Investment Bank to not support gas either. So we're kind of hopeful that the next big step would be that BB rd doesn't support gas either, especially as it's currently revising its energy strategy.

Michael LaBelle

52:07

Yeah, wow. That is, so I mean, because it's great to reflect on this because you can see that things changed and institutions change. And particularly since this bank watched the financing of these energy, technologies change as well. So if if the money is not there for coal, hopefully, if the money is not there for gas, then hopefully the money goes towards renewables, that I mean. So So then it just means more support for for renewables and finding the solutions, variety of solutions, right, it's not just one solution to exactly match it with renewable energy. Yona, I just want to thank you so much for your time to discuss these issues today. Thank you for coming on to the podcast.

Ioana Ciuta

52:48

Thanks very much for inviting me.

Michael LaBelle

52:51

Thank you for joining us for this episode, we produce the my energy 2050 podcast to learn about cutting edge research and that people building our clean energy system. If you enjoy this episode, or any episode, please share it. And remember, each episode is equivalent to consuming 10 journal articles one book and 500 charts and how to implement the energy transition. And you get it all in less usually than 60 minutes for each podcast guarantee. I can actually say no other podcast makes this guarantee. The more we spread our message of the ease of an energy transition, the faster we can make that transition. You can follow us on LinkedIn where we are most active on the My energy 2050 page or on Twitter and Facebook. I'm your host Michael LaBelle. Thank you for listening to this week's episode.

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