Development of Regional Energy Markets for Europe and Eurasia (DREM) Quarterly Report: FY 2021 Q2

The initiative focuses on energy sector reform, energy efficiency, utility management, and environmental resource management. In North Macedonia, DREM supported the Government of North Macedonia in developing the Energy Balance for 2021, which was the first energy balance initiated and developed by the Ministry of Economy. The energy balance was developed with the assistance of DREM, and it marks a significant milestone in the country's energy sector development. In Albania, DREM supported the Albanian Power Exchange (ALPEX) in developing and initiating procurement for a service provider for the exchange. The team also assisted ALPEX with drafting a code of ethics, advising on VAT-related issues, and the planned contract for differences. Additionally, DREM drafted the nominated electricity market operator's (NEMO's) proposal for maximum and minimum clearing prices for single day-ahead coupling. In Azerbaijan, DREM finalized the new draft Energy Law and submitted it to the Ministry of Energy for further action. The draft law establishes the basic principles of energy industry regulation and provides flexibility for the government to introduce competition, unbundling, and third-party access to natural monopoly systems. In Moldova, DREM received USAID approval to support the Ministry of Economy and Infrastructure in developing Amendments to the Law on Electricity. The anticipated amendments relate to tariff setting principles for distribution activity, promoting security of supply, and integrating REMIT. In Serbia, DREM continued monitoring the results of recently implemented projects at Pančevo Hospital and Niš district heating company. Pančevo Hospital is experiencing average savings of 47 percent in gas consumption, as well as an 84 percent reduction in specific electricity consumption following DREM interventions. Gas savings in Niš have averaged 40 percent compared to the 2019-2020 baseline period. In Kosovo, DREM presented the final results of its two-year technical assistance program to the Albanian electricity distribution utility, OSHEE. The program aimed to reduce electricity losses, including meter relocation, energy theft prevention, revenue protection protocols, and capacity-building to improve individual performance. These activities saw billing efficiency increased by an average of 35 percent in pilot distribution transformers, increasing revenues and reducing reading errors by 100 percent. In Georgia, DREM initiated its support to a project developer for drafting a feasibility study for a new 16 MW hydropower project. The project aims to promote regional energy security and diversification. In terms of cybersecurity and critical infrastructure, DREM completed the first iteration of the Critical Infrastructure and Key Resources Database and Legislative Review at the request of the Ministry of Information Society and Administration. DREM also developed a Memorandum of Understanding (MoU) codifying the proposed assistance to MISA and awaits its signature. Overall, the DREM task order has made significant progress in promoting regional energy market development in Europe and Eurasia. The initiative has supported various countries in developing their energy sectors, promoting energy efficiency, and improving energy security.