By Vesna Peric Zimonjic
BELGRADE, Oct 27 2005 (IPS)

A new energy treaty between Balkans countries and the EU promises power in homes people badly need.

As winter approaches, about two million people in the southern Serbian province of Kosovo face hours of power cuts daily. In Bosnia too, millions face similar problems.

In the rest of Serbia the state-owned production and distribution giant EPS is again warning people that long power cuts will be imminent if consumption is not restrained.

All that will not change this winter. But after the signing of the Energy Community Treaty with the European Union (EU) earlier this week in Athens, experts agree that over the next few years it will.

Nine countries of the region (Croatia, Bosnia, Serbia, Montenegro, Macedonia, Albania, Bulgaria, Romania and Kosovo represented by the United Nations administration) joined the treaty that should improve power supply to some 150 million people.

The EU declared that this was “the first time in history that all of these states and territories have signed a legally binding treaty, a milestone in reconciliation after the wars of the 1990s.”

The treaty was modelled “on the European Steel and Coal Community, that was the genesis for the EU,” the EU reminded the Balkans countries in a statement. The countries are all in the process of joining the EU, or in queue.

“The treaty means we are fulfilling one of the conditions of joining the EU,” Serbian energy and mining minister Radomir Naumov told journalists in Belgrade. “Rules of behaviour are being synchronised with the EU. Our countries will become more interesting for foreign investors as well.”

The EU believes that investment of 30 billion dollars over the next 15 years will bring the region up to European standards. Implementation and the investment efforts will be coordinated by the EU, the World Bank, and the European Bank for Reconstruction and Development (EBRD).

After years of wars and devastation in former Yugoslavia in the 1990s and the difficult transition to a market economy, many see this as one of the most promising events for the region.

“This is a step to the real open energy market, a blessing from the skies,” analyst Misa Brkic told IPS. “It establishes standards and rules that will prevent tycoons from profiting in one of the most important strategic areas. On the other hand, it will definitely end the decades-long monopoly of EPS.”

With the beginning of the transition to a market economy in Serbia five years ago, some firms run from abroad and by Serb nationals made inordinate profits through supplying electricity. Some of them face prosecution.

On the other hand, EPS raised the cost of electricity on pretence of badly needed overhaul, but maintained a communist era workforce of almost 60,000, with almost no improvement in quality and services.

“With the provisions of the treaty, that say industry and private persons will be able to choose who they buy the electricity from, the monopoly of EPS as a white elephant in Serbia will disappear,” Brkic said.

“For reasons of poverty, the price of electricity remained a social category, but the awareness of people on how to consume and calculate what’s best for them will certainly rise,” analyst Sijka Pistolova told IPS. “Introduction of choices, for example gas for heating, will ease the situation.”

In some countries such as Croatia and Romania, gas is consumed in large quantities. In others like Albania, it was never introduced.

The treaty followed the United Nations Development Programme (UNDP) report last year that pointed to the need for sustainable production and rational consumption. Although many countries of the region had an energy consumption per square metre of living space about 2.5 times higher than northern Europe, the mortality rate in winter months was more than 30 percent higher than in other regions of the continent, the report said.

More than half the population used wood and lignite coal as a major source for heating and cooking, creating high levels of indoor air pollution leading to chronic illnesses.

“We do lag behind others by years now,” Brkic said. “But it’s better late than never. People become aware of the energy problem only when power cuts are on, or when winter comes. There should be a lot of explaining to the broader public on what being aware of energy in the modern sense really means. And this is a big step forward.”

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