European energy (comm)unity with national interests

  • 2012-02-08
  • By Linas Jegelevicius

The European Union has set an ambitious energy goal, known as the 20-20-20 plan, encompassing reduction of greenhouse gas emissions by 20 percent, hiking energy use from renewables by as much, and the decrease of energy consumption by 20 percent by 2020. However, with efforts often floundering, mainly due to lack of a common European energy policy and different energy interests at national levels, the EU, sticking to the plan, scrambles to make core adjustments to it, leading to a European energy (comm)unity. Effectively, the bid boils down to this: reduce Europe’s dependency on imported fuels, first of all on Russia’s, and find alternative energy sources. What challenges does the European Union encounter? To what degree are the EU energy goals reconcilable with national energy policies? How do the Baltics, and especially Lithuania, stand in the context? The Baltic Times correspondent, who recently participated in the high-level EU-sponsored conference “The European Union moving towards a European energy community” in Brussels, spoke on these issues with the president of the European Economic and Social Committee (EESC) of the European Union, Staffan Nilsson.

In the conference, some high-ranking energy policymakers have deliberately avoided mentioning the name Russia, referring to it instead as “the country that provides 90 percent of some EU countries’ gas needs and 60 percent of the EU gas supply.” Why don’t you say bluntly that the EU has to be brave and seek relevant energy security from Russia’s Gazprom?
I want to answer the question in the framework of issues regarding the project of Nord Stream. [The Nord Stream twin gas pipeline system consisting of two 1,224-kilometer offshore pipelines running through the economic zones of Russia, Finland, Sweden, Denmark and Germany on the bottom of the Baltic Sea, and is a direct connection between the vast gas reserves in Russia and energy markets in the European Union]. The project also involves my country, Sweden, and is in the interests of the three Baltic countries: Lithuania, Latvia and Estonia. However, let me say this straightforwardly: we cannot avoid having imports of Russian gas. On the other hand, the European Union is striving to have a mix of available energy sources. The latter is in the interests of all EU member countries. Although endeavoring to decrease its dependency on non-EU energy sources, the European Union still has to rely on imports of fossil fuel from countries whose policies are often contradictory to the EU’s. Let me reiterate: though seeking a bigger energy mix in the European Union, I do not see a way we can do so without Russian gas imports today.

In an EESC report I have been handed at the conference, the EU lays out its vision on energy development till 2030, foreseeing increasing EU energy security by cutting its oil and gas imports by 90 and 60 percent, respectively. Is this a feasible goal?
I believe it is if all EU countries produce cooperation and understanding on the importance in this matter. It is understandable that some may have certain doubts in fulfilling these objectives, especially when it comes to an EU gas import decrease, as it [import] is very high in some EU countries. EU countries, aiming to decrease dependency, should take on projects of renewable energy more actively. If we don’t succeed in achieving these goals, a focus on renewables should be strong in every EU country.

On the one hand, the EU seeks more unity in EU energy issues speaking of a European energy community. On the other hand, we have EU countries, like Lithuania, which carry out their own energy policy. Should big energy projects, like the Visaginas Nuclear Power Plant (NPP) project, be tied with the EU? How is it possible, with the differences on the issues, to reconcile EU and national energy policies?
As you remember, the common market has been the very backbone of the European Union itself. And history has proved that a unified, single approach towards many issues, particularly in times of crisis, always works better than a lot of single approaches. Obviously, it is very difficult sometimes to come up with one approach and one opinion, especially when we speak about a community of 27 countries. However, I think the EU member countries start realizing that a common stance in such complicated matters as energy and energy security is the right position to succeed in the longer term.

Renewable energy developers in Lithuania complain of the state’s lackadaisical efforts to green energy and prioritization of nuclear energy with the Visaginas NPP project under way. Is it possible, in Vilnius’ case, to accord the EU’s efforts and Lithuania’s nuclear bid?
All EU countries carry out energy policies which suit them best. And not always pursuing nuclear projects. The United Kingdom has postponed implementation of its nuclear plant project for a while and, for example, Germany has frozen its nuclear power plants in the wake of Japan’s Fukushima nuclear power plant meltdown. Other countries follow their energy policies. For some EU countries, Lithuania maybe included, it seems that nuclear plants produce the lowest electric power costs and, thus, are the most effective. However, in the aftermath of the Japanese disaster especially, we see a developing understanding that, even in such a modern country like Japan, nuclear power can be unsafe, and that renewables cannot be disregarded. Speaking of nuclear disasters of the last century, we see that they have been triggered by different causes. In Fukushima, the meltdown was caused by nature, and in Chernobyl by poor management. So we cannot blame nuclear power for everything. Many developed Western countries, like France, or Sweden in the north, have not been deterred by the disasters from running their nuclear power plants. In fact, Sweden is heavily dependent on nuclear power. To generalize, the EU leaves it up to its member states to choose what is best in their interests. On the other hand, the European Union is ready to seek a more active and unified way in tackling energy issues on the continent.
 
With the political turmoil in the East still brewing, and with some Middle Eastern countries, like Syria and Iran ineligible to provide fuel to the EU because of the embargo, what other gas and oil providers, besides Russia, does the European Union have?
First of all, speaking of oil imports, you have to consider the capacities of the North Sea, which are not fully employed yet. There might be other options as well on the continent. You seem to emphasize dependency on Russian gas too much. The Nord Stream pipeline is just one option in receiving gas. It is so far very important, however.

Following discussions at the conference, I could not fight the feeling that the EU is effectively following in the footsteps of the Baltic countries, which are actively seeking diminishing their dependency on Russian energy. Is my hunch right?
The European Union has given different safeguards to the Baltic countries’ pursuits in their energy policies. However, I wonder whether the three Baltic countries will be able to be absolutely independent from Russian energy sources. Even countries like Poland and the Ukraine, with considerably larger energy resources of their own, do not aim to get rid of Russian energy completely. Essentially, the EU is dependent not only on Russian fuels, but also on Saudi Arabian energy resources, and on Iranian fuel until recently, though our policies are often very different on most of the issues. Unfortunately, energy has become a significant part of politics. From that point of view, the three Baltic countries’ concerns are well understandable.
 
The EU-supported power projects engaging Lithuania, the NordBalt project linking Swedish and Lithuanian electric power grids and LitPol connecting Polish and Lithuanian power grids, are significant strides in achieving larger independence from Russia. However, do they suffice? Does the EU have to offer the Baltics other energy projects to guarantee the region’s energy security?
Obviously, the two mentioned projects are not enough to secure the three countries’ energy independence. I understand well Lithuania’s ambitions to gain full energy independence. However, is it completely possible, in reality, considering that Lithuania’s close neighbor, Russia, is one of the biggest energy suppliers in the world? Nevertheless, the European Union realizes the importance of connecting Lithuania into the European electrical power transmission system. Because of the networks, the entire Europe is becoming more heavily interconnected and dependent, but that is the reality Lithuania has to deal with. And I know that certain steps have been done in that direction, i.e. connecting Lithuania into the European electricity transmission network. The aforementioned projects of NordBalt and LitPol are very good examples of that.

How much do you reckon Lithuania’s bids for energy security to be historically and politically motivated? Doesn’t history and politics sometimes overshadow economics?
For Lithuania as well as for [the other two] Baltic countries, all these sentiments are much related, I believe. However, it is hard for me to speak just of the energy issues of the Baltic region, as I, in my capacity, focus more on energy issues of the entire European Union. Those countries that have never been occupied by the Soviet Union, like Lithuania, Latvia and Estonia, maybe sometimes do not understand the Baltic countries’ concerns when it comes to dealing with Russia. As the countries are so close to it and because Russia is concerned about its minorities in the three countries, Lithuania, Latvia and Estonia have to perceive Russia’s concerns and make the necessary decisions. However, economics and energy cannot be used as a tool if any disputes arise.

Which of the three Baltic countries seems to you to have advanced the most in managing its energy sector?
I would rather not answer this question. My concern is solidarity and cooperation among the EU member countries in the field of energy.

Lithuania has asked the European Commission (EC) to allocate around 800 million euros for the Ignalina NPP decommissioning work; however, the EC hinted on a four-fold lower amount. What dissatisfies the EU and EC in the closing work? Don’t you think the smaller allocation will result in dragging out the decommissioning process and, possibly, in an environmental threat due to the nuclear waste hazards?
Not going into details, I want to stress it is still a question of the negotiations between both sides. All agree that shutdown of the Ignalina NPP is necessary. The Commission’s intention to provide fewer funds for the works should not be considered as the EC’s dissatisfaction about implementation of the project. It just shows the Commission’s estimation of what Lithuania needs for the purpose. It is as simple as this. No doubt, Lithuania seeks bigger funds in order to make sure the works correspond to all the requirements of safety and make up the loss of plant output due to the closure. Sure, the lower funds could possibly hamper the nuclear plant decommissioning works but, once again, the [price] tag is up to negotiation.

Do you believe that the Visaginas NPP will be able to compete with the Baltic NPP in Kaliningrad and the Astrav NPP in Belarus, both in the proximity of Lithuania?
It is hard to say today. Possibly. However, as you understand, it depends on many things that sometimes will not depend on Lithuania. As other examples of new nuclear power plants show, the plant management costs are rather high, especially in the beginning. And that is something Lithuania has to consider. When it comes to nuclear plants, all costs are rather high. Insurance costs in case of an accident included.
 
Lithuania, Latvia and Estonia, having not agreed on where a liquefied natural gas terminal should be built in the Baltics, have each decided to build it on their own. Does this seem smart?
The EU leaves this kind of issue up to the decision of its member states. For me, it seems to have been much more logical if the Baltics have decided to build one such facility in the region. Furthermore, we speak of a common energy market in the European Union. It is a pity that the three Baltic countries have not shown cooperation on this matter.