Intervention of Mr Diego RUIZ ALONSO, Head of EU Delegation to Turkmenistan, during a conference: “Sustainable cooperation in the energy sector – an important prerequisite for global development”, held in Ashgabat on 1 December 2020

Reflecting EU's approach to energy and its impact on the relation with Turkmenistan cannot be done without a reference to the present framework created by the COVID19 crisis and the new EU strategy for CA. The pandemic has made it clear the need for a change in the way we interact with our environment. The strategy considers energy and fighting climate change as priorities for regional cooperation in CA.

In this sense, recovery from the COVID19 pandemic should be used as an opportunity to promote the transition to more sustainable, low-carbon economies. The EU and its Member States will pursue three interlinked key objectives: (1) addressing the lack of energy access; (2) increasing energy efficiency (EE) and renewable energy (RE) generation to achieve a sustainable balance between energy production and consuption; and (3) contributing to the global fight against climate change in line with the Paris Agreement.

The Green Deal approved at the end of last year already envisages an EU free of fossils fuels by 2050 (at least 55% cut of GHG emissions by 2030); a very ambitious, to some even unrealistic, goal. It might be true. However, the guidelines are clear and, by that date, the decrease in fossil fuels consumption (whatever the percentage) will have substantially and definitely changed the energy market in the EU.

At the same time, the pandemic has had the effect of pushing European integration further, with the adoption of the unprecedented Next Generation EU Recovery Plan, which will act as a strong stimulus to address the impact of COVID19, while ensuring that our economies undertake their green and digital transitions. Post COVID-19 recovery should aim to build back better.

On the other hand, during our last EU-Central Asia Ministerial Meeting on 17 November 2020, chaired by EU High Representative for Foreign Affairs and Security Policy, Josep Borrell, it was made clear that the EU and Central Asia will work closely to intensify cooperation in the promotion of renewable energy and ensure close consultation on the ongoing discussions on the modernisation of the Energy Charter Treaty.

In this respect the priorities set out in the EU Strategy on Central Asia (resilience, prosperity and supporting regional cooperation) remain more relevant than ever. The EU, as the largest source of private investment worldwide, had the potential to make a real difference in the region, provided a sound business and investment climate is in place.

The EU welcomed recent measures and investments to pursue a clean energy transition in Central Asia and considers this an area where the EU could be a source of policy advice and where EU companies can deliver investments. The EU is ready to promote future cooperation to decarbonise energy systems and to invest in clean and green technologies, in post Covid19 recovery.

On the same occasion, FM of Turkmenistan, Rashid Meredov, indicated that Turkmenistan would announce ambitious targets in its efforts to reduce greenhouse gas emissions at the upcoming 12 December Climate Summit, Moreover, he confirmed that a draft law on renewable energy is also being developed at the Parliament and should be ready by end of 2021 or beginning of 2022. All this in line with the goals set by the President of Turkmenistan to increase the use of alternative energy sources, as the main priority of the policy for limiting GHG emissions.

Next year, the EU will launch a new regional programme, EU Support to Sustainable Energy Connectivity in Central Asia (SECCA). The approved programme will strengthen public capacity (institutional, regulatory and financial); raise awareness; improve data and modelling; facilitate the identification of bankable projects; and boost regional cooperation. SECCA will work towards the achievement of Sustainable Development Goal 7 (access to affordable, reliable, sustainable and modern energy), while catalysing actions to fight climate change.

In CA the energy situation presents some common characteristics. There is aging, poorly performing and inadequately maintained infrastructure (in particular electricity generation, transmission and distribution assets), high technical and commercial losses in the networks and high energy intensity of economic activities. At the same time, the tariffs are below the costs of production and thus disincentives investments and discourage greater energy efficiency.

Total primary energy consumption in Turkmenistan has increased by about 41% over the past decade, according to the IEA World Energy Balance for 2018. Natural gas accounts for approximately 58% and petroleum products 34% of total final energy consumption (IEA, 2018). Turkmenistan has reportedly high potential for solar, wind and geothermic energy (converting depleted gas deposits into geo thermic energy sources is a very promising sector), but rich gas and oil deposits as well as extremely low energy tariffs are strong disincentives.

The new EU Strategy on Central Asia commits to “building upon the region’s potential in solar, wind and hydroelectric energy” in order to “contribute to strengthening the region's energy resilience, helping to meet its climate objectives, and creating jobs and business opportunities on both sides”. In this context, Turkmenistan is very well place to make this energy transition thanks to its important and regular gas and oil revenues, the potential of its renewable sector and the increase cooperation with the EU and its neighbours.

Driven by economic and population growth, regional electricity demands in CA will increase by 50 percent by 2030. Meeting this demand will require significant investments, market reforms and capacity development. Renewable energy has increasingly become more competitive as costs have drastically reduced. Hence, new technologies must be actively considered as part of any new generation capacity development plan. Those are positive signs for future sustainable energy connectivity in Central Asia.

On top of the need for regional cooperation on a subject so transboundary, there is a growingly alarming need to tackle climate change through sustainable energy development. The region is specifically vulnerable to climate change impacts; average temperatures have increased up to 1.6°C since 1950s, and the region knows countless weather-related disasters. The biggest impact was caused by extreme temperatures that affected over 2 million people and resulted in close to US$ 1 billion damages; and floods that have affected over 600,000 people and resulted in over US$ 500 million damages.

In addition to hazards, climate change is causing economic losses up to 1.3 percent of GDP per year. It is predicted that in 2050 climate change impacts in Central Asia will lead to a decrease up to 10 percent of the region's GDP. Climate change hazards will inevitably affect the energy sector (notably across the areas of electricity generation, transmission and distribution). More efficient use of natural resources, however, could contribute to positive economic growth, in which case the region could have positive GDP growth of up to 11.5 per cent. The EU is working towards this through the ongoing WECOOP and CAWEP programmes focused on environment, climate change, water and its linkage to energy.

The energy sector accounts for over 70% of GHG and coordinated international effort has to be done to change that fact. The new "EU Strategy to reduce methane emissions in Europe and internationally" creates a specific framework for additional bilateral cooperation on energy. Methane is the second most powerful GHG and an important cause of air pollution. Methane emissions globally have continued to rise despite the impact of COVID-19. Given the situation, we could speculate that reduced demand has led to overstock in the producer countries, which must be vented or flared. Indeed, there is evidence of a significant increase in methane emissions starting in Q2 2020. This is also true for Turkmenistan; the total emission is approximately 3 times bigger than last year. The EU's Strategy spells out elaborated different international actions to work with partners worldwide to achieve methane emission reduction along the supply chain.

Finally, it is convenient to remind that EU is also interested in bringing Turkmen natural gas to our markets as a way of diversifying sources and risks, all in the framework of the 2050 targets. Once this project starts moving on, it will be necessary to negotiate a comprehensive MoU on energy cooperation that will be able to tackle the modernisation of the energy sector in Turkmenistan, the increase of the energy efficiency, the gradual transition to a more sustainable economy through an increased in the share of the renewable energies.

Brief, even if the EU counts for less than 8% of global GHG emissions, the European Green Deal is a central priority of the EU, in and outside its borders. Cooperating to accelerate the global clean energy transition and to generate the maximum possible global momentum towards a better and sustainable future economy offers ample possibilities for energy cooper