South East Europe's electricity sector: Attractions, obstacles and challenges of Europeanisation

The Energy Community is a bold experiment in integration, creating a regional energy market between the European Union and nine South East European partners – Albania, Bosnia-Herzegovina, Bulgaria, Croatia, Montenegro, the Former Yugoslav Republic of Macedonia, Romania, Serbia and the United Nations Mission on behalf of Kosovo. This paper examines the challenges posed by the application of the EU model of energy regulation and the acquis communautaire, and the ability of States to meet those challenges.

An investigation of governance in the countries of South East Europe (SEE), including analysis based on the World Bank's Worldwide Governance Indicators, suggests a lower overall performance of governing institutions in SEE, compared with countries of the EU 25. The paper, therefore, considers whether the EU energy model is appropriate in South East Europe at this stage. The EU model confers certain institutional resources, but at the same time imposes significant costs of compliance with the energy chapter of the acquis. It remains to be seen which of these two opposing factors will dominate, but the analysis suggests that for some countries in the region, regulatory reform alone may not be sufficient.