Energy has been an important underlying factor in the Ukraine crisis, with Russian gas exports accounting for a significant share of Europe’s energy needs. Bob Feidt writes on the role of energy security in the EU’s attempts to tackle climate change. He argues that while the creation of a competitive single energy market in Europe is a vital component of the EU’s climate strategy, a secure energy supply is also required while states shift their energy mix toward renewable sources. This means engaging with the EU’s traditional energy suppliers, including Russia, to make sure the transition is as smooth as possible.
Today European energy markets essentially present a fragmented picture. Although the barriers for goods and services have been gradually erased between EU Member States, in practice they remain strong for energy markets, particularly for gas and electricity networks. This reality perfectly reflects the lack of consensus that characterises energy politics at the European level.
Western Europe, led by Germany and France, is less dependent on Russian gas supplies, meaning that it has lent little support to Eastern Europe, which relies heavily on energy sources from Russia. While Lithuania’s primary energy dependence on Russia is “only” as high as 50 per cent, it is near 100 per cent for natural gas for Finland, Sweden, Bulgaria and the Baltic countries. For Europe to be able to lead the fight against climate change and to make the transition towards more renewable energy, it needs not only a Single Energy Market that includes all Member States, but also a good relationship with all its energy suppliers, especially Russia.
The reasons for this are simple. The share of gas in the EU’s gross inland energy consumption has risen from 18 per cent in 1990 to 24 per cent in 2009, and it is likely to increase in the near future. With Russia as the biggest gas exporter to the EU, and EU countries as Russia’s biggest customers, both Brussels and the Kremlin have every interest in cultivating good relations. Indeed, energy security is vital when it comes to energy transition, and any disruption has the potential to impair an already fragile European economy.
Although renewable energy has gradually become more efficient and affordable, it is still an unstable energy source overall. For example, northern Germany frequently drowns in its own renewable energy supply, which causes difficulties for transmitting it quickly to regions with fewer renewable energy resources. Until there is a Single European Energy Market that connects all the Member States and that can instantly adjust to unstable renewable energy supplies and pass them on to other regions with high demand volumes, Europe should ensure a stable energy supply from conventional energy sources.
The European Commission has, however, entered into a tit-for-tat with Russia that may bring certain Central Eastern European countries, such as Bulgaria or Hungary, closer to yet another winter without heating. Since 1996, the European Commission has launched three energy packages aimed at liberalising Member State energy markets. Yet instead of fostering competition in energy markets and easing the tensions between Eastern European Member States and Russia, these successive waves of liberalisation have made them worse. For example, Lithuania recently tried to reduce the influence of Gazprom, the Russian energy giant, by forcing the company to give up its monopoly on the country’s gas supply, using the EU’s Third Energy Package as a legal basis. In a similar vein, the European Commission has recently declared that Russia’s South Stream pipeline project, which would render the EU’s Nabucco pipeline project irrelevant, is in breach of EU law and must be renegotiated.
The EU could also increase its energy security by tapping into new energy sources, such as those of the Caspian region, which would enable it to bypass Russia, with the help of Georgia, Armenia, Azerbaijan and/or Ukraine. Yet with the on-going Ukrainian crisis still far from reaching a resolution, European leaders will have to re-evaluate their energy policies while simultaneously reviewing the broader EU-Russia relationship.
Ensuring market competition and diversifying energy supplies are key factors for creating a European energy market and fighting climate change, but this venture could be jeopardised if the EU fails to play its cards right with Russia. As stated by European Council President Herman Van Rompuy in 2013, “On Russia, we need to move from a partnership of necessity to a partnership of choice.” Instead of trying to sideline Russia, as it did ahead of the third European Eastern Partnership Summit in Vilnius, the EU should cooperate with it to achieve mutual benefits in strategic areas such as energy.
The creation of a competitive Single Energy Market is vital for tackling climate change effectively, but so is energy security. For Europe to lead the way in renewable energy and climate change, it needs to have a functioning economy, which in turn is dependent on a secure energy supply. To make Europe’s transition from greenhouse gas emitting energy sources as smooth as possible, policy-makers in Brussels must acknowledge that, at least in the short-run, Europe is dependent on good cooperation with its conventional energy suppliers, including Russia.
However, this may prove difficult to put into practice. As European Commissioner for Energy Günther Oettinger said during his speech at the Dahrendorf Symposium in Berlin, “The real challenge [of EU energy policy] is to get all European Member States on a common denominator”.
This article is a contribution to our series on the Dahrendorf Symposium
Note: This article gives the views of the author, and not the position of EUROPP – European Politics and Policy, nor of the London School of Economics.
Shortened URL for this post: http://bit.ly/1htqX4y
Bob Feidt – LSE
Bob Feidt is studying for the dual degree MSc in Political Economy of Europe and European Affairs at the London School of Economics and Political Science and SciencesPo Paris.