Energy imports, Regional Coordination, Geoeconomics

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The Case of Germany and Poland in the Baltic Energy System – Close Neighbours, Close(r) Cooperation?

International Journal of Energy Economics and Policy, 2016, 6(4), 789-800.

Abstract:

When the Baltic Sea region is included in debates concerning European energy policy, the focus often lies on the transit of natural gas. However, this focus on gas transit is too narrow to fully grasp the region as a wider element within the complex fabric of the European energy system. This article therefore approaches the energy system of the Baltic Sea region in a holistic manner and discusses ows of natural gas, oil, coal, and electricity. Against this backdrop, the article presents and discusses the energy supply and demand situation of the Baltic Sea littoral states. Focussing strictly on the Baltic Sea region in a narrow geographical sense allows a detailed visualisation of energy ows between individual countries. From a geoeconomic perspective, the article then analyses and compares the positions of Germany and Poland in the regional energy system; furthermore, scenarios concerning the effect of Polish and German national energy policies on regional energy flows are presented and discussed. As most European countries are energy importers, this discussion focuses on the effect of national policies on energy imports and their impact on the regional energy system. Based on this discussion, the article evaluates the geoeconomic implications of these scenarios for Poland and Germany and the prospects for better aligning the two countries’ national energy policies.

Past event: China’s New Silk Road – Good or bad for Europe’s green economy?

Organisation: Thomas Sattich

4 June 2015 from 12:00 – 14:00.

The Chinese government has proposed the New Silk Road, or “one belt and one road”, which would link China and Europe by land and sea. The one belt and one road is a high- level initiative to which the Chinese government attaches enormous importance and would in theory improve interlinkages between China and Europe and the intervening regions. Although the details of the initiative remain unclear, the Chinese government intends that it will an important role in the development of the EU-China economic relationship. Its potential impact in the EU will have many dimensions that are not simply about infrastructure and trade, but also concern key issues such as sustainability.

In the course of the last two decades the concept of a green economy with limited carbon dioxide emissions and reduced resource intensity has evolved to a key element of many European policies. Use of renewables and resource efficient economic and industrial processes are key issues of this sustainability agenda. The integration of two or more economic areas is believed to bring the distribution of resources and markets closer to their optimum. Under certain circumstances the integration of different economies hence appears to be beneficial for EU’s sustainability agenda. Various initiatives of the European Union such as enlargement, neighbourhood policy, trade and investment agreements are based on this assumption.

Accessibility is the key issue in this regard: Without access to markets, no exchange of goods, services and ideas can take place, thus leaving existing patterns of production and consumption unchallenged and unchanged. Economic development is therefore closely tied to network conditions. In other words, existence and state of transport, energy and communication networks determine the capability of putting potential synergies between different regions to practical use. Improving the basis for economic exchange between different regions should therefore present various opportunities for sustainable economic development. The need of cost intensive green technologies for big markets represents only the most prominent example in this regard.

The Chinese government has already committed US$40 billion to a Silk Road infrastructure investment fund. The project would involve not just infrastructure, but will require a broad range of other institutional initiatives such as customs, as well as security. By extension it will also involve Chinese investment in infrastructure in the EU. As a result it is highly likely that China will have a direct impact on the sustainability and integration agendas in the EU. This Policy Forum will address what the impact of the New Silk Road in the EU:

  • What is the current state of the New Silk Road project?
  • Does the New Silk Road project merely entail transport systems, or is it a more encompassing concept?
  • What are the economic, political, security and environmental risks?
  • What sustainability issues does the construction of such a large project entail?
  • Would its construction be positive or negative for Europe’s concept of a green economy?
  • What impact does the project have in the EU and on its policy goals?

The expert panel will consist of the following panellists:

Chair: Duncan Freeman, Research Fellow, Brussels Institute of Contemporary China Studies

Speakers:

Xiang Yu, First Secretary at the Economic & Commercial Counselor’s office of the Mission of the People’s Republic of China to the European Union

Michael Grabicki, Vice President ZOA BASF Group

Thomas Puls, Senior Economist, Environment, Energy, Transport and Infrastructure, Cologne Institute for Economic Research

MapChinaNewSilkRoad

cheburashka

We like trains!

Ukraine’s nuclear power plants: What should, what can be done?

Author: Thomas Sattich

Ukraine’s power system can stand representative for the country’s geopolitical situation: Consisting of several sub-systems, one part of the country’s power system in the West is integrated in the continental European, whereas the Eastern parts of the country remain part of the post-Soviet power system. On the other hand Ukraine is independent when it comes to electricity supply: Most of the generated power is also consumed in the country, with balanced import-export figures. Limited interaction with neighbouring countries is rather the rule than the exception in Europe, but the given these figures, Ukraine can be described as highly self-sufficient in electricity supply.

15 nuclear power reactors back Ukraine’s independence: Atomic energy accounts for more than half of generated electricity in Ukraine. Moreover, Ukraine is the second-largest producer of Uranium in Europe after Russia.

The significance of nuclear energy for the country’s economy can hence hardly be overstated. But Ukraine seems to be at the brink of anarchy: Despite several initiatives to bring the country’s unrest to a halt, Ukraine has fallen into a bloody civil war between army, right wing extremists and armed separatist groups. The situation also indicates increasing economic tension, political unrest, and continuing street violence. As if the situation was not worrying enough, several reports mention threats for the country’s nuclear programme. Europeans are therefore confronted with a very serious question: What to do with Ukraine’s nuclear infrastructure?

Since the Euromaidan events in early 2014, Ukraine is sliding into an abyss of civil war and chaos. International negotiations so far failed to stop this downward spiral, as apparently not all sides are equally interested in a peaceful development. The question, who is to blame for this situation, certainly is a very important one. In view of the threats for Ukraine’s nuclear power plants, the blame game has, however, little meaning: Ways have to be found to secure the plants against immediate threats. This should be one of the first priorities during the negotiations.

It is of course difficult to forecast the country’s future course. Yet despite this distinct insecurity, medium and long-term solutions have to be found to neutralise the threat originating from Ukraine’s nuclear infrastructure. At least in this regard the conflicting parties should be able to agree. Insofar Ukraine’s nuclear power plants might be a somewhat neutral item for constructive negotiations. In any case, a survey of Ukraine’s nuclear facilities, their current state and their potential future is necessary, before further analysis of what can be done.

Only in a second step reflections on potential ways to take action can be discussed. Ultimately this is an older debate, as the state of the country’s nuclear programme was cause for concerns long before February 2014. But the current crisis accelerated developments and put Ukraine on a trajectory that demands renewed thinking about this issue. The author of this blog will  therefore ask what means and programmes the EU (possibly) has to deal with Ukraine’s nuclear infrastructure and the Ukrainian power system. Given the highly political nature of the Ukrainian issue, a European contribution can, however, be only one part of a bigger puzzle.

Update 07 August 2014:

Electricity generation in Ukraine, 1992 - 2011
Electricity generation in Ukraine (in billion kilowatthours), 1992 – 2011