Energy imports, Regional Coordination, Geoeconomics



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.


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.

Germany’s Energiewende and the Baltic Sea region: Public opinion and systemic interactions

Author: Thomas Sattich

Executive summary

Germany’s energy transition changes the demand for energy on regional and international energy markets. A major share of the country’s energy imports comes from, or passes through the Baltic Sea region, making Germany the area’s main energy importer. Public discourse does, however, not reflect this situation accurately. Imports of natural gas block the view on the importance of other energy carriers. The latter, especially oil and coal, are, however, equally important both as elements of the regional energy system and with regard to Germany’s energy future. This article therefore aims at going beyond the narrow focus on natural gas, and provides a more encompassing assessment of the impact Germany’s Energiewende is likely to have on energy flows in the Baltic Sea region.


In 2011 Germany started enthusiastically into its Energiewende adventure. Since then it became clear that the goal of a nuclear free and carbon-neutral energy system is not to be achieved easily or cheaply. The international implications of the project have not received much attention in the beginning; yet in the energy sector things are per definition interrelated and not confined to the national level. Soon after the phase-out of the first eight nuclear power stations, the country hence saw itself confronted with the international dimension of the latest of its energy policy u-turns. But to the major surprise of the general German public, the idea of a quick nuclear phase-out and large-scale increase of renewables did not turn out to be an Exportschlager (export success).

On the contrary, the focus of countries, such as Poland, Sweden and the Great Britain, remained on coal, gas and nuclear power. Others such as Spain even reduced their subsidies for renewables. But even though Germany’s energy transition causes only little enthusiasm in neighbouring countries, the Energiewende still has repercussions in the international energy system: being Europe’s largest importer of energy, the transformation of Germany’s energy system changes demand on international and regional energy markets. Moreover, electricity flows go through the interconnectors between national power systems, and thus have an impact on the emerging EU electricity market. It is thus very likely that the Baltic Sea region will not remain unaffected by the Energiewende.

The aim of this article is a twofold assessment of 1) the role of the Baltic Sea region for Germany’s Energiewende project and 2) the likely impact of this project on energy flows in the region. A short-term and a long-term scenario could serve as the basis for this analysis: according to Germany’s national energy strategy the nuclear phase-out is to be completed by 2022. At this point renewables should contribute with at least 18 per cent to meet national net energy demand, and with at least 35 per cent to electricity demand. By 2050 these renewables are supposed to increase to 60, respectively 80 per cent (BMWi 2014a). As the Energiewende’s history suggests, sudden turns in Germany’s energy policy are possible. As a consequence, the article elaborates on the basis of a 2020/2022 short-term scenario.

Germany’s energy system and the Baltic Sea region

What role does the Baltic Sea region play in Germany’s plans to transform its national energy sector? The following section provides an analysis of public discourse in Germany. Aiming at an assessment of those issues that will affect the region’s energy system in the following years, this analysis looks at the Baltic Sea region through the eyes of the country’s energy-interested public. Based on this assessment, the energy system of the region and the likely impact of Germany’s energy system itself is analysed. The focus of this step lies on import/export flows of different energy carriers.

Germany’s energy transition and energy flows in the Baltic Sea region: public opinion in Germany

The significance of a particular region for a country’s energy policy should be reflected in the national media coverage: the more important a particular region appears to journalists and experts to be as a source, supply route, and/or location for energy production of a given country, the more prominent its place in the energy related media coverage should be. Similar patterns should be noticeable in the German case. On the basis of this assumption, the following analysis aims at assessing the relative importance of the Baltic Sea region for Germany’s Energiewende. It is based on a sample of 717 articles from five of Germany’s leading daily and weekly newspapers, covering the spectrum from centre-right to centre left and a time period from April 2005[1] to October 2014: Die Zeit (76 articles), Der Spiegel (63), Süddeutsche Zeitung (206), Die Tageszeitung (90), and Die Welt (282).[2]

How much attention does the Baltic Sea region receive in German debates around the Energiewende? From the sample of articles, 134 mention the term ‘Ostsee’ (the Baltic Sea), that is almost 19 per cent. However, this number shrinks drastically if the search term is amended with ‘erneuerbare Energie’ (renewable energy) or ‘Energiewende; only 33 (4.6 per cent), respectively 26 articles (3.6 per cent) discuss the role of the Baltic Sea for the country’s energy transition towards more renewables. In order to put these numbers – and hence the relative importance German press attributes to the Baltic Sea – into perspective, it has to be related to the prominence of other areas. Since Germany is not only a littoral state of the Baltic Sea, it seems logical to ask also about the prominence of the North Sea and other neighbouring regions in German energy-related press (Figure 1).

Based on the findings of this analysis, aforementioned search results appear in a different light. Even though other countries and regions rank higher on the echelons of energy-interested public awareness in Germany, a nevertheless considerable percentage of energy-related press articles seems to discuss the threats or benefits of the Baltic Sea for the country’s energy policy. It can hence be assumed that the Baltic Sea is considered an area of significant importance for Germany’s Energiewende project by German press (and thus the country’s energy-interested public). Moreover, this general interest in the Baltic Sea seems to increase (Figure 2). Yet the results of this analysis are indifferent with regard to the specific role the Baltic Sea plays in energy-related public debates in Germany; the relatively low number of articles in the year 2013, for example, cannot be explained on this basis. In order to provide a better view, a closer look on the specific targets of the Energiewende is necessary.

Figure 1. Percentage of press articles mentioning randomly chosen countries/regions in Germany’s vicinity and renewable energy / Energiewende


Note: ‘Renewable energy’ (outer ring) and ‘Energiewende’ (inner ring).

According to BMWi (2014a, 11), the Energiewende aims at distinctively changing central elements of Germany’s energy system: On the one hand the share of renewables in Germany’s gross energy consumption is to be increased to 18 per cent until 2020 (60 per cent by 2050); on the other hand, the use of primary (fossil and nuclear) energy is to be decreased by 20 per cent (50 per cent by 2050). In sum these and other measures are supposed to decrease green house gas emissions by 40 per cent in the same time period (80 to 95 per cent by 2050). The electricity sector has to play a fundamental role in this programme, with targets even more far reaching: power consumption is to be decreased by 10 per cent until 2020 (25 per cent by 2050), and full nuclear phase-out is to be achieved until 2022. By then (2020) renewables are to increase to a share of 35 per cent in gross final power consumption (80 per cent by 2050).

Figure 2. The varying prominence of the Baltic Sea in German press


Note: Within a sample 134 articles mentioning the Baltic Sea, only a fraction deals with the subject of Germany’s energy transition: Blue line = number of articles mentioning the Baltic Sea (‘Ostsee’) and renewables (‘erneuerbare Energie’); red line = number of articles mentioning the Baltic Sea (‘Ostsee’) and the ‘Energiewende’.

How does German press reflect these targets with regard to the Baltic Sea? While the percentage of newspaper articles from the sample generally reflect the significance of individual Energiewende targets, the Baltic Sea appears to be a blind spot in this regard: only a small fraction of those articles, which are dealing with Energiewende targets also mentions the Baltic Sea. A look at the different forms of energy explains why: German press mostly reflects on the Baltic Sea region with regard to conventional energies; most important in this context is gas and oil, but nuclear energy and coal also play a significant role. Renewable energy, such as solar, biomass and hydropower on the other hand hardly appear at all (Figure 3). The exception that proves the rule in this context is wind power, as more than a third of those articles that mention the Baltic Sea deal with this form of power generation.

In a first approximation this analysis has examined the prominence of the Baltic Sea in German energy-related press; yet the search term ‘Ostsee’ (the Baltic Sea) is too narrow to include the entire region, that is those countries around the Baltic Sea. A deeper assessment therefore has to include the individual littoral states in German Energiewende-related press. There are slight differences between the numbers of articles that mention the search terms ‘Energiewende’, ‘erneuerbare Energie’ and individual countries around the Baltic Sea; yet all in all Poland, Russia, and Sweden appear to be at the centre of attention, whereas Denmark, Finland and Norway attain less attention and rank second in German press.[3] Estonia, Latvia and Lithuania attract the smallest share of attention.

Figure 3. Number of articles mentioning the Baltic Sea and various other types of energy


Note: Within the sample of 134 articles mentioning the Baltic Sea, the prominence of various types of energy varies considerably.

Thus, a few preliminary conclusions can be drawn: if the prominence of the Baltic Sea in German press is taken as an indicator, it appears that the energy-interested public in Germany attributes only limited attention to this region in terms of the Energiewende targets. The interest is, however, growing. Moreover, by broadening the scope to include the littoral states of the Baltic Sea, the picture changes significantly, with individual countries, such as Poland, Russia, and Sweden attaining considerable attention by German press. Seen through the eyes of the German press, the Baltic Sea region is, however, of limited importance with regard to the primary targets of Germany’s energy transition, that is the reduction of (fossil) energy consumption and the increase of renewables. On the contrary, the German press perceives the Baltic Sea region mostly as a supplier for fossil energy, especially gas and oil, or as the location of conventional/nuclear energy based electricity generation capacity.

A closer analysis reinforces this impression: screening the sample of articles mentioning the Baltic Sea for different search terms to appear in the same section as ‘Ostsee’ (the Baltic Sea), almost two thirds of the results account for the term ‘gas’, while only 18 per cent account for ‘wind’. Hence, not only do most articles in the sample largely cover fossil fuels; the particular sections within the articles that contain the search term ‘Ostsee’ also mostly cover the issue of natural gas which is mentioned. The conclusion of this analysis must hence be that gas largely predominates where public discussions in Germany mention the Baltic Sea region and the Energiewende. Given the Energiewende targets to decrease the use of carbon based energy carriers[4], the following sections can hence be based on the hypothesis that – with the exception of wind power – the Baltic Sea region will lose some of its importance for Germany’s energy system.

Germany’s energy transition and energy flows in the Baltic Sea region: statistical facts and trends

Where the Baltic Sea region is mentioned, it is largely portrayed as a supplier or supply route for fossil fuels – namely gas – by the German press. In comparison, other forms of energy, such as nuclear energy or biomass, hold an inferior position. The construction of the Nord Stream pipeline might, however, have resulted in a place of gas imports in German public discourse disproportionate to its actual role. Beyond, renewables pose a serious challenge for gas-fired power plants in Germany. The role of natural gas might therefore decrease in the years ahead. The Energiewende targets to generally decrease the use of fossil fuels until 2020 and beyond point in a similar direction. In order to provide a clearer idea of the interactions between Germany’s Energiewende and energy flows in the Baltic Sea, this section will therefore analyse the energy system of the Baltic Sea region in more detail. Basis of this analysis is Eurostat data on energy consumption and imports from 2010-2012 (see Annex).

If the territory of the littoral states is included in the analysis, the Baltic Sea region[5] is an area rich in energy resources, with a three years (2010-2012) average surplus of primary energy production of 500.2 mtoe (million tonnes of oil equivalent). Unsurprisingly, the distribution of available energy resources is, however, highly unequal, with only three countries – Denmark (2010-2012 average surplus of 1.7 mtoe), Norway (2010-2012 average surplus of 169.6 mtoe) and Russia (2010-2012 average surplus of 602.5 mtoe) – showing a positive balance between energy consumption and production. If one compares this (positive or negative) balance with gross energy consumption of individual countries, the seriousness of this situation becomes clearer: with the exception of the three net exporters, the countries of this region do not produce indigenous energy in numbers sufficient to supply the national economies (Figure 4). The energy supply gap of those countries[6] with insufficient access to indigenous energy sources amounts to a (2010-2012) average of -273.7 mtoe.

With an index of -0.613 Germany is to be found amongst those countries that in the region with the smallest basis of indigenous energy. As a result of its internal energy situation and the size of the German economy, the country thus is confronted with a massive (2010-2012 average) energy gap of (-)198.1 mtoe, that is 72.38 per cent of the region’s combined energy supply gaps. 95.3 mtoe – or 48 per cent – of the necessary imports to Germany come from the littoral states of the Baltic Sea littoral.[7] The Baltic Sea region can thus be described as the backbone of Germany’s energy supply, and should be of strategic interest for the country. Given that Germany also accounts for some 24 per cent of gross energy consumption in the Baltic Sea region (including entire Russia), any changes in the German system of energy production, imports and consumption can be expected to affect energy flows in the entire region (Figure 5).

Energy imports from the Russian Federation and Norway play a particular role in this regard, as they account for nearly the totality of imports from the Baltic Sea region to Germany, and hence fill almost half of the country’s energy gap. Including Norway and Russia in the analysis is, however, based on a very broad understanding of the Baltic Sea in terms of geography, as both countries stretch far beyond the geographical limits of that area. This analysis therefore requires a closer definition of the ‘Baltic Sea region’. In this regard it is important to understand that Germany’s national energy system is located at the crossing point of several major Euro-Eurasian energy regions (Högselis, Aberg & Kaijser 2013, 56). German gas and oil imports from Norway, for example, come from fields in the North Sea, and cross that Sea through different pipelines (via Europipe I, Europipe II, and Norpipe); from its entry points to the national German system – located at the shores of the North Sea – Norwegian gas then predominantly supplies areas in North-Western Germany (such as the Ruhr), which, in a more narrow sense, cannot be described as being part of the Baltic Sea region.

Figure 4. Indigenous energy supply of countries in the Baltic Sea region


Note: Red = production of indigenous energy equals national energy consumption; blue = the energy situation of individual countries: negative values = no (use of) indigenous energy (-1) or limited capacity to supply the national economy with indigenous energy; positive values = capacity to fully supply the national economy with indigenous energy plus export capacity (+1 = export equals national consumption)[8].

Source: EUROSTAT online energy statistics (2010-2012), EIA (2010-2012).

In the strict geographical sense, Norwegian gas (2010-2012 average of 25003 mtoe) and oil (8.5 mtoe) supply to Germany can hence mainly be attributed to the North Sea Europe region (Högselis, Aberg & Kaijser 2013, 56); they are thus to be excluded from the following analysis. With energy from Russia, things are more complicated, as parts of the transit system are part of the Baltic energy system (Nord Stream, Yamal/Europol), whereas others (e.g. Brotherhood) pass through different regions. However, yearly transport capacities of individual pipelines[9], and actual gas flows in these pipelines[10] allow to infer an estimated 50 per cent of Russia’s gas and oil supply towards Germany passing through countries in the Baltic Sea region. The following analysis thus includes only those 50 per cent of German oil and gas imports from Russia that can be assumed to pass through the Baltic Sea region.

Figure 5. Who causes, who fills the regional energy gap?


Note: Energy deficit (pink nodes: regional energy deficit, see Annex, Table 2), energy surplus (blue nodes: regional energy surplus, see Annex, Table 2), and energy flows (blue arrows: energy exchange, see Annex, Table 4).[11]. Latvia has not been included in this figure. [12]

Source: EUROSTAT online energy statistics (2010-2012).

As a result of this, the overall picture of energy flows in the Baltic Sea region changes considerably, and leaves a clearer perspective on the interplay of Germany’s Energiewende with the flux of various forms of energy in the area (Figure 6). Accounting for approximately 79 per cent of energy exports, the predominance of Russia amongst the energy exporting countries remains largely unchallenged in this closer definition of the Baltic Sea region, whereas Norway’s role as energy exporter becomes far less important. Germany’s energy imports from the region reduces largely, to approximately 57.6 mtoe, that is a comparably small 36 per cent share. In other words, the importance of the Baltic Sea region for Germany’s energy sector diminishes if the analysis is based on a strictly geographical understanding of the geographic area.

Moreover, the perspective on different energy carriers as a commodity in the Baltic Sea region changes with an exclusion of Norwegian and Russian sources: while gas is most prominent in the German (Energiewende-related) press on the Baltic Sea region, its actual share amongst those energy carriers which are traded and shipped in the region, is small compared to other energy carriers such as oil and the different forms of coal (see Figure 6). Compared to the flows of oil, gas is only the second most important energy in the energy system of the region, and depending on the share of coal among solid fuels[13] it is likely that gas even ranks third. An analysis of the impact of Germany’s Energiewende on energy flows in the region has to take this limited role of gas into account. Moreover, the place of electricity imports and exports in the region amongst other forms of energy flows has to be noted, as its relatively small share indicates that electricity generation still has a very strong national basis.

Figure 6. Energy flows in the Baltic Sea region[14]


Note: Energy export and import patterns in the Baltic Sea region (2010-2012 average, in ktoe).

Source: EUROSTAT online energy statistics (2010-2012).

The impact of Germany’s energy transition on energy flows in the Baltic Sea region

Its scarcity of indigenous energy resources makes Germany irrelevant as an energy exporter.[15] Regardless of major modifications of Germany’s energy system, such as the Energiewende, this is unlikely to change. As an importer Germany plays, however, an important role in different energy markets. With a yearly average of 57.6 mtoe (2010-2012) of energy imports, 25 per cent of Germany’s total imports of 176.4 mtoe (2010-2012 average) come from or pass through the Baltic Sea region.[16] To put it differently, 36 per cent of the Baltic Sea region’s total energy flows enter Germany’s energy system. The Energiewende will affect this pattern (until 2020 and beyond), yet the question is, how and to what extent. Since Germany’s exports is unlikely to change significantly[17], the reminder of this section focuses on energy imports.

Based on an energy scenario from 2010 (Prognos, EWI, GWS 2010)[18], it can be assumed that Germany’s energy imports from the Baltic Sea region will decrease by 27 per cent to 41.8 mtoe until the year 2020 (Figure 7). In today’s numbers, this implies that Germany remains the largest destination for energy flows within the region, but the country’s share of imports would reduce from 36 to 26 per cent. As a consequence, the region’s combined energy deficit of -273.7 mtoe (see Annex, Table 2) would be reduced by about 15 per cent. In other words, energy demand would decrease. Yet in order to infer from Germany’s national energy policy on future energy flows in the entire region, several factors need to be taken into account, namely economic growth, national policies of neighbouring countries, and energy prices.

Sound and continuing economic growth of Germany’s eastern neighbours, makes it, for example, possible that by 2020 Poland will be the region’s main importer of energy from the Baltic Sea region.[19] In view of relatively large share of oil, development of road traffic and transport could be a decisive factor in this regard, both in Germany and other countries. National policies are very different in terms of their approach to road traffic: while Germany implemented programmes to promote the use of electric cars and increase their number from only 12,156 at the beginning of 2014 (Car Sales Statistics 2014) to one million by 2020 (Bundesregierung n.d.), other countries did not. Depending on the success of Germany’s policy to convince consumers of the benefits of electric cars, oil demand will develop accordingly.

Figure 7. Energy imports of Germany (in mtoe, average 2010-2012, import scenario 2020)


Sources: EUROSTAT online energy statistics (2010-2012) and Prognos, EWI, GWS (2010).

Other national policies, such as supply diversification programmes in Poland and the Baltic States – that is increased use of LNG from overseas and of indigenous shale gas, as well as the continued use of nuclear power (in Sweden and Finland) and/or the successful construction of new nuclear plants and the necessary grid infrastructure (in Poland and the Baltic States) – might generally reduce demand for gas in the region (largely gas from Russia). Whether Germany will actually retain its role as the region’s main importer thus depends on the development of German demand for natural gas, bituminous coal, and solid fuels. Their place in Germany’s energy system is, however, very much unclear. The reason behind this uncertainty is to be found at the very core of Germany’s Energiewende project – namely the phase-out of plants suitable for meeting base load requirements and increasing number of intermittent renewables.

Both technically and economically this combination of decreasing numbers of base-load generators and increasing numbers of peaking units such as solar and wind power is a complex issue, and – despite many scenarios and plans – there is no blueprint for a system where decentralised and intermittent renewables largely replace centralised base load plants. Flexible gas and biomass power plants are seen as the ideal technological link between the two elements; yet as the case of Europe’s most recent gas power plant in Irsching (FAZ, 2015)[20], illustrates, investments in state-of-the-art equipment and turbines becomes unprofitable under the economic conditions of the Energiewende: as renewables have priority access to the grid, are growing in numbers, and come with low prices at peak hours, there market for gas and other fossil fuels is shrinking, reduced to periods of little wind and sun. Moreover, gas faces a double challenge, as coal still outcompetes gas due to lower prices.

The development of Germany’s gas imports hence largely depends on the question whether policy makers agree on a capacity market that provides an economic framework suitable to keep gas plants in the system. Such a step is currently under discussion (BMWi, 2014b). Outcomes of this discussion and their implementation will certainly affect Germany’s demand for coal and gas imports. Notwithstanding the results of this political process, the demand for biomass is likely to increase in Germany over the following years, because this form of energy – either used in decentralised plants or in form of co-combustion in existing fossil fuel plants.[21] The share of biomass amongst energy imports is thus to until 2020. Depending on the availability of biomass and the outcomes of Germany debates on capacity markets, this energy source is hence – to a larger or smaller extent – to replace either coal or gas in Germany’s energy imports from the Baltic Sea region.


Against the backdrop of energy imports and exports patterns in Northeast Europe, this article analyses the place of the Baltic Sea region in Germany’s public discussions about the country’s energy future; natural gas imports from Norway and Russia largely dominate this public discourse. The construction of the Nord Stream pipeline is likely to be one of the reason for this highly topical nature of gas in German public discourse; it can hence be assumed that the perception of the Baltic Sea region by the German public is largely distorted. This article therefore attempts to broaden the discussion by expanding the focus of the analysis to include other forms of energy such as coal and electricity. On the other hand, this article attempts to focus on the energy system of the Baltic Sea region in the narrower sense. As Norwegian oil and gas exports to Germany come from and through the North Sea, they are hence excluded from this analysis. And as about half of Russia’s oil and gas exports to Germany pass through Central Europe, they are equally excluded.

The result of this analysis is, that the importance of the Baltic Sea region for the future of Germany’s energy supply is not fully grasped by German public. Individual countries such as Poland and Russia obtain varying degrees of attention, and so do the various forms of energy. But all in all the narrow focus on gas largely hides the role of other forms of energy coming to Germany from or through the Baltic Sea region, and thus the true role of the area for Germany’s future energy system. Taking the bigger picture of energy flows in the Baltic Sea region into account, the role of gas imports from Russia appears overestimated in German discussions concerning the role of the Baltic Sea region for Germany’s energy supply: even though Russia is the region’s main supplier of energy, natural gas is not the most important energy carrier. The focus of German media on this topic hence seems to obstruct the view on other important energy carriers, such as coal and – most importantly – oil, which are at least equally important.

As a response to the growing role of renewables, Germany currently discusses a new market design for fossil fuel power stations. Capacity markets for coal and gas-fired plants will be the likely result of these debates, as backup for the notoriously volatile renewables is needed. As Germany is the region’s largest importer of gas and coal, the design of these markets will largely determine the impact of Germany’s Energiewende on regional flows. The way Germany’s Energiewende will affect patterns of energy exports and imports in the region depends, however, on more factors. The future of the German transport sector will at least be equally important, as oil represents the largest share in energy flows in the region. Widespread use of electric cars could serve as a storage battery for intermittent wind and solar power; in 2014 the German government therefore renewed its support with a broad range of incentives for the use of electric cars.

It remains, however, to be seen whether the customers of the German car industry see electric cars as an attractive option. If they do, Germany’s role as an importer of energy from the Baltic Sea region could diminish largely. In this case, Germany’s place in the energy system of the Baltic Sea region will be determined by the results of current discussions about a capacity market for flexible fossil power stations. Depending on the exact outcomes of these debates, German energy imports could decrease according to official scenarios. In such a case, Germany might lose its role as the region’s main importer of energy. For those countries in the region which have only limited access to indigenous energy resources and hence can only play a minor role in supplying Germany’s energy system, such a development is not necessarily a bad one, as their bargaining position on the regional energy market would improve, especially if they successfully implement programmes to further diversify their energy supply.


Auer J. and Anatolitis V. (2014) The changing energy mix in Germany. The drivers are the Energiewende and international trends. Deutsche Bank Research. Current Issues, June 26, 2014.

BMWi (2014a) Zweiter Monitoring-Bericht „Energie der Zukunft“. Berlin: Bundesministerium für Wirtschaft und Energie BMWi.

BMWi (2014b) An Electricity Market for Germany’s Energy Transition. Discussion Paper oft he Federal Ministry for Economic Affairs and Energy (Green Paper). Berlin: Bundesministerium für Wirtschaft und Energie BMWi.

Bundesregierung (n.d.) Leitmarkt und Leitanbieter für Elektromobilität. Retrieved from, date accessed: April 9, 2014.

Car Sales Statistics (2014) 2014 Germany: Total Number of Electric Cars, March 29, 2014. Retrieved from, date accessed: April 9, 2014.

CIEP (n.d.) Russian Gas Imports to Europe and Security of Supply. Fact Sheet. The Hague: Clingendael International Energy Programme.

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EUROSTAT online energy statistics (2010-2012), annual import of different forms of energy.

FAZ (2015) Energiewende. Irrsinn in Herrsching. Frankfurter Allgemeine Zeitung, March 17, 2015.

Gazprom Export (2015) Transportation. Retrieved from, date accessed: February 11, 2015.

Högselis P., Aberg A. and Kaijser A. (2013) Natural Gas in Cold War Europe: The Making of a Critical Infrastructure. In The Making of Europe’s Critical Infrastructure. Common Connections and Shared Vulnerabilities, edited by Per Högselius, Anique Hommels, Arne Kaijser, Erik van der Vleuten, 2761-101. Basingstoke: Palgrave Macmillan.

OECD and IEA (2004) Energy Statistics Manual. Paris: Organisation for Economic Co-operation and development, International Energy Agency.

Prognos, EWI and GWS (2010) Energieszenarien für ein Energiekonzept der Bundesregierung. Studie für das Bundesministerium für Wirtschaft und Technologie. Basel, Köln, Osnabrück: Prognos AG, Energiewirtschaftliches Institut an der Universität zu Köln, Gesellschaft für Wirtschaftliche Strukturforschung mbH.

Sattich T. (2014) Germany’s Energy Transition and the European Electricity Market. Journal of Energy and Power Engineering, 8(2): 264-273.


Table 1. Yearly energy production and consumption in the Baltic Sea region (2010-2012 average, in ktoe)

Country Average consumption Average production Balance
DE 322773.17 124684.17 -198089
DK 18875.73 20578.53 1702.8
EE 6149.33 5019.9 -1129.43
FI 35892.37 17173.87 -18718.5
LI 6963.77 1306.27 -5657.5
LV 4514.33 2129.7 -2384.63
NO 30346.63 199960.77 169614.13
PL 99841.07 68491.9 -31349.17
RU 772254 1374802.8 602548.8
SE 50100.53 33757.9 -16342.63

Table 2. Yearly energy deficit/surplus in the Baltic Sea region (2010-2012 average, in ktoe)

Country In per cent of national consumption In per cent of regional deficit

(-273670.87 ktoe)

In per cent of regional surplus

(773865.73 ktoe)

DE -61.37 -72.38
DK +9.02 0.2
EE -18.37 -0.41
FI -52.15 -6.84
LI -81.24 -2.07
LV -52.82 -0.87
NO +558.92 21.9
PL -31.4 -11.45
RU +78.02 77.9
SE -32.62 -5.97


Table 3. Exchange of energy in the Baltic Sea region (2010-2012 average, in ktoe)[22]

DE 0 539.7 0 0 0 0 0 1764.1 0 90.2
DK 1760.1 0 0 0 0 0 204.8 28.1 0 4421.4
EE 0 0 0 114.4 0 249 0 0 0 0
FI 68.1 0 0 0 0 0 10.7 0 0 218.4
LI 88.7 0 0 0 0 27.8 0 0 0 0
LV 0 0 89.53 0 258.4 0 0 0 0 0
NO 30943.6 3228.1 0 988.3 0 0 0 1114.9 0 5265.5
PL 222.6 0 0 0 0 0 0 0 0 25.8
RU 62056.0 84.1 537.0 14067.2 3542.2[23] 0 828.2 21846.2 0 8959.0
SE 173 489.5 0 611.7 0 0 521.8 141.8 0 0

Table 4. Exchange of energy in the Baltic Sea region (2010-2012 average, in per cent of regional deficit[24])[25]

DE 0 0.2 0 0 0 0 0 0.64 0 0.03
DK 0.6 0 0 0 0 0 0.07 0.01 0 1.6
EE 0 0 0 0.04 0 0.09 0 0 0 0
FI 0.02 0 0 0 0 0 0.004 0 0 0.08
LI 0.03 0 0 0 0 0.01 0 0 0 0
LV 0 0 0.03 0 0.09 0 0 0 0 0
NO 11.3 1.2 0 0.4 0 0 0 0.4 0 1.9
PL 0.08 0 0 0 0 0 0 0 0 0.009
RU 22.7 0.03 0.2 5.1 1.3 0 0.3 8 0 3.3
SE 0.06 0.2 0 0.2 0 0 1.9 0.05 0 0

Table 5. Exchange of energy in the Baltic Sea region (2010-2012 average, in % of national deficit of importing countries, see Table 1)[26]

DE 0 n/a 0 0 0 0 n/a 5.63 n/a 0.55
DK 0.89 n/a 0 0 0 0 n/a 0.09 n/a 27.05
EE 0 n/a 0 0.61 0 10.44 n/a 0 n/a 0
FI 0.03 n/a 0 0 0 0 n/a 0 n/a 1.34
LI 0.04 n/a 0 0 0 1.17 n/a 0 n/a 0
LV 0 n/a 7.93 0 4.57 0 n/a 0 n/a 0
NO 15.6 n/a 0 5.28 0 0 n/a 3.56 n/a 32.22
PL 0.11 n/a 0 0 0 0 n/a 0 n/a 0.16
RU 31.33 n/a 47.55 75.15 62.61 0 n/a 69.69 n/a 54.82
SE 0.08 n/a 0 3.27 0 0 n/a 0.45 n/a 0

[1] The first Merkel Cabinet was formed in November 2005.

[2] These articles have been retrieved from the Factiva data base, using a number of energy-related search terms in various combinations. Search Terms used in Factiva data base: Nord Stream, Energiesicherheit (energy security), Ostseepipeline (Baltic Sea pipeline), Ostsee-pipeline, Nord Stream-pipeline, Nord Stream pipeline, Erneuerbare Energien (renewable energies), Energiewende (energy transition), Regenerative Energien (renewable energies), Alternative Energien (alternative energies), Energieunabhängigkeit (energy independence), Gaslieferung (gas supply), Energieknappheit (energy scarcity), Blackout, Atomenergie (atomic energy), Kernenergie (nuclear energy), Nuklearenergie (nuclear energy), Energiesicherheit (energy security), Grenzüberschreitende Stromflüsse (cross-border power flows), Elektrizität (electricity), Strom (power), Phasenschieber (phase shifter), deutscher Strom (German power), grenzüberschreitende Leitung (cross-border power line), Atomkraftwerk (atomic power station), Atommüll (atomic waste), Atommüllendlager (nuclear waste disposal facility), Atomendlager (nuclear waste repository), Schiefergas (shale gas), Unkonventionelles Gas (unconventional gas), Shale Gas, Fracking. A full list of word combinations can be obtained from the author.

[3] Number of articles mentioning ‘Energiewende’ is as follows: Poland (41), Russia (36), Sweden (9), Norway (9), Denmark (8), Finland (6), Estonia (4), Lithuania (1) and Latvia (0). Number of articles mentioning ‘Erneuerbare Energie’ (renewable energy) is as follows: Russia (45), Poland (37), Sweden (20), Finland (14), Norway (12), Denmark (6), Estonia (3), Lithuania (1), and Latvia (0).

[4] Accordingly the need for CO2 neutral prime energy carriers will increase.

[5] In this analysis the following countries are included: DE (Germany), DK (Denmark), EE (Estonia), FI (Finland), LI (Lithuania), LV (Latvia), NO (Norway), PL (Poland), SE (Sweden), and RU (Russia).

[6] Estonia, Finland, Germany, Latvia, Lithuania, Poland and Sweden.

[7] German energy imports from the Baltic Sea region (in per cent): RU: 31.33; NO: 15.6; DK: 0.89; FI: 0.03; LI: 0.04; PL: 0.11; SE: 0.08.

[8] Norway has an index value of 5.6.

[9] The annual pipeline capacities are as follows: Brotherhood 100 bcm/year; Yamal 33 bcm/year; and Nord Stream 55 bcm/year (Gazprom 2015).

[10] In 2013, gas flows were as follows: Brotherhood 59 bcm; Yamal 34 bcm; and Nord Stream 23.5 bcm (see CIEP n.d.).

[11] Computed with Gephi, ForceAtlas2.

[12] According to Eurostat data, Latvia did not import energy from the region’s main energy suppliers in the time period 2010-2012.

[13] Eurostat does not provide a clear definition of the term ‘solid fuel’ (for a definition, see OECD and IEA 2004, 109).

[14] For the calorific values used for the conversion of Eurostat data on different forms of energy to ktoe; Anthracite 35 MJ/kg; Bituminous coal 29.5 MJ/kg; Lignite 17.5 MJ/kg; and Solid fuel 20.65 MJ/kg (OECD and IEA 2004, 109).

[15] In view of the decision to phase-out economic support for hard coal mining until 2018 (Auer and Anatolitis, 2014, 7), it is even more likely that Germany’s limited role as an exporter will not change.

[16] Note that 100 per cent of oil and gas imports from Norway, and 50 per cent of oil and gas imports from Russia have been excluded from this analysis.

[17] Electricity may become the exception to this rule, as the increased recourse on electricity generation from renewable sources might exacerbate network fluctuations (see Sattich 2014).

[18] The following analysis is based on the average of individual scenarios to be found in Prognos, EWI and GWS 2010 (note: the reference scenario is not included).

[19] Based on a hypothetical yearly growth rate of three per cent, Poland’s energy imports from the Baltic Sea region could increase to a hypothetical 40.5 mtoe.

[20] This ultramodern gas-fired power plant, equipped with a most advanced and efficient turbine from Siemens might be forced out of business by heavy price competition from solar power.

[21] EUROSTAT provides no precise definition of the term solid fuel; the data does hence not allow to determine the share of biomass within this category.

[22] EUROSTAT online energy statistics (2010-2012); exporters: left column, importers: top line.

[23] According to Eurostat data, Lithuania imported 11661.9 ktoe of energy from Russia. Given that Lithuania has an average yearly energy consumption of 6963.77 ktoe, this figure appears to contain energy transfers to Russia’s Kaliningrad enclave. According to IEA data, Lithuania exported 8119.66 ktoe to Russia. It can hence be assumed that net energy export of Russia to Lithuania amounts to 3542.24 ktoe.

[24] -273670.87 ktoe

[25] See footnote 21.

[26] EUROSTAT online energy statistics (2010-2012); exporters: left column, importers: top line (in per cent of national energy supply gap); Table shows energy exports (Table 3)/national energy balance (Table 1).

Russia to Shift Ukraine Gas Transit to Turkey as EU Cries Foul

Russia plans to shift all its natural gas flows crossing Ukraine to a route via Turkey, a surprise move that the European Union’s energy chief said would hurt its reputation as a supplier.

The decision makes no economic sense, Maros Sefcovic, the European Commission’s vice president for energy union, told reporters today after talks with Russian government officials and the head of gas exporter, OAO Gazprom (GAZP), in Moscow.

Gazprom, the world’s biggest natural gas supplier, plans to send 63 billion cubic meters through a proposed link under the Black Sea to Turkey, fully replacing shipments via Ukraine, Chief Executive Officer Alexey Miller said during the discussions. About 40 percent of Russia’s gas exports to Europe and Turkey travel through Ukraine’s Soviet-era network.




Gazprom Say Russia Needs To Build Turkey Pipeline Since It’s Shutting Down Gas Shipments To Ukraine
17:07 (GMT)

As of right now a significant amount of Russia’s natural gas travels through Ukraine and into Europe. 63 billion cubic meters of gas travels through this line each year. This supply has been threatened by the conflict in Ukraine, however. In December, Putin announced that Russia was scrapping plans to build the South Stream pipeline, a pipeline which was supposed to bypass Ukraine. TASS reports:

The South Stream gas pipeline worth €15.5 billion was intended to pump 67 billion cubic meters of Russian natural gas to Europe annually. The pipeline’s underwater section 900 km (559 miles) long was intended to run along the bed of the Black Sea from the Russkaya compressor station on the Russian shore to the Bulgarian coast.
Russian President Vladimir Putin announced on December 1 that the project to build the South Stream gas pipeline was closed due to the European Union’s unconstructive approach to cooperation in that sphere, including Bulgaria’s decision to stop the construction of the pipeline’s stretch on its territory.

Instead, Russia will build a gas pipeline to Turkey where a gas hub on the border with Europe will be created, Putin said.
Today, however, Gazprom CEO Alexei Miller has announced that within several years no gas will be shipped through Ukraine. Instead, Russia will construct the Turkey Stream pipeline, shifting that supply through Turkey, and if Europe wants that gas it will need to build a pipeline along the border of Greece and Turkey in order to receive that gas. The Kyiv Post reports:

“They have at the most a few years for this. It’s a very, very tight schedule. In order to meet the deadlines, efforts to build new trunk pipelines in EU countries must begin right now, otherwise that gas will end up on other markets,” Miller said.
Business Standard is running a related headline, “Europe at risk of being cut off from Russia :Gazprom.” The article focuses on warnings from Miller that transit supplies through Ukraine, even in the short term, are at risk:

“Ukraine, due to financial difficulties, was not able to buy the necessary volume of Russian gas in November and December last year and significantly depleted its reserves of gas in underground storage,” Miller said.

Gazprom said for its part that it had met its obligations on supplies to Ukraine under a gas accord reached in November in Brussels but that Ukraine was not complying with its terms.

Ukraine’s state gas company Naftogaz “is acquiring gas in lower volumes than in the Brussels accord,” Gazprom complained.

Ukraine is taking gas out of its underground stores at a rapid rate, leaving supplies that are “not enough to reliably get through the winter period,” Gazprom said in a statement.
While Gazprom’s warning that Ukraine does not have enough gas is likely accurate, Miller seems to be sending a different message – that Europe needs to lessen its dependency on Ukraine.

It also bears noting that at various times in the last several months, Russia has threatened European countries, saying that if they reverse gas flow into Ukraine in breech of any negotiated deal with Russia, then their own gas supplies could be cut off.


Power Struggles: The Intra-Community Implications of EU Energy Policy

Authors: Daniel Scholten, Thomas Sattich, Inga Ydersbond

EU policies to integrate energy markets, promote renewable energy, and diversify supply are aiming at a competitive and sustainable European power sector. The resulting dynamics should largely affect the systems of electricity generation, transportation and storage in Europe: With increasing market integration come new new competitors; coal and gas power plants face new renewable challengers domestically and abroad; and diversification towards new suppliers will bring new trade routes and infrastructure. All in all, EU policies to integrate power markets, promote renewables, and diversify supply will thus profoundly reshuffle national energy assets. The impact of the three EU policies is thus likely to have considerable ‘geopolitical’ implications for individual member states and affect their capability to negotiate, agree on, and/or implement further measures. We conduct a thought experiment which explores potential benefits and losses for individual member states implicit to Europe’s ‘energy transition’, and the political concerns which may be expected to arise as a consequence.

Regarding their impact on the future shape of the European power system, and their relevance for relations between EU member states, the following three EU energy policies stand out: Market integration, the promotion of renewable energy, and supply diversification. Each of these policies has individual implications for the ‘geopolitical’ situation in Europe, and will cause frictions between member states.

Market integration

In an attempt to integrate power markets, the EU developed different policies and legislations to finalise the Internal Electricity Market (by the end of 2014). Capital-intensive and redundant overcapacities would be reduced to a minimum in such a European market, thereby saving large financial means. From a national perspective market integration implies, however, that new competitors to domestic producers emerge, and that electricity companies which are not efficient enough to compete on a European market will get into trouble, while other utilities (including foreign) will be able to strengthen their market position. Moreover, a European power market implies that the interconnection capacity (shortage) along borders will cease to protect domestic markets from foreign competition; a successful EU market integration policy thus increases the likeliness for generation capacity to migrate beyond national borders.

Renewable transition

The promotion and integration of renewables implies three important changes to the European power system:

First, every country or region has access to at least some form and amount of renewable sources of energy; yet some countries are better qualified to become competitive producers than others, because renewable energy sources are denser at certain locations (e.g. the North Sea), and the technological and economical capabilities for their exploitation differ. Production will therefore shift to those countries that have access to better and more sources of renewable energy, offer better incentives for expanding capacity, and can exploit them more cost-efficiently. As a result, countries which decide to exploit their own renewable sources to cover their consumption will (potentially) become (more) self-reliant, with the need for cross-border energy trade (potentially) becoming smaller. Other countries might prefer to import energy, i.e. to buy from EU energy and power markets; as a consequence their strategic focus will shift from the access on overseas fossil fuel resources towards the ownership, management, and protection of grids (and other supply routes for renewables) in order to secure imports.

Second, most renewable generation is of an intermittent nature. Large scale adaptation of the power transmission infrastructure are necessary to harness renewable energy sources such as wind and solar. Increasing the use of this form of power generation in one part of Europe therefore implies also growing balancing costs elsewhere. Moreover, countries that feature cheap balancing services (e.g. dispatchable hydropower or other storage means), standing reserves, interconnector capacity, or renewables that can deliver in times of peak demand, will gain influence over neighbouring countries. Without a regulatory framework that clarifies costs and benefits of renewable electricity generation and transport, conflicts will arise.

Third, renewable electricity implies distributed generation in so called combined power stations. Contrary to today’s big, centralized fossil fuel or nuclear power plants, this form of power generation hence allows for a business model that brings together a larger number of smaller generation units dispersed over larger territories. Where the option of distributed generation is chosen, energy markets become rather locally oriented, and are likely to involve a mix of private and communal companies. Regions/countries with a focus on this business model would hence be less present on the integrated EU market. Decentralised power systems could therefore be an interesting way to protect particular industries from the competitive pressures of European markets.

Supply diversification

Security of energy supply has been on the policy agenda since the oil crises in the 1970s, and especially since the Ukrainian crises in 2005/2006 and 2009. Two dimensions of these EU policies can be identified:

First, external relations between supplier and transit countries outside the EU. Diversification away from Russian and Middle Eastern energy sources towards other regions will lead to altered entry points to the European energy system, for example new LNG capacity; gas grid capacity in those regions will hence have to be increased. Given that the integration of European energy markets proceeds, power generation and transmission capacity might follow these changes. Member states in risk of losing power generation to regions closer to new entry points are thus likely to oppose further steps in such a direction. Another example would be solar PV imports from North Africa which would necessitate new HVDC and interconnector capacity at the Southern European border; member states which are located too far away to benefit from potentially lower electricity tariffs in the Southern regions might feel inclined to oppose the use of European funds to stimulate the construction of the necessary power transmission infrastructure.

Second, stimulating the construction of inter-member state transmission infrastructure is main part of EU’s policy on supply diversification. Common grid planning and Projects of Common Interest for electricity and gas grids are two important instruments in this regard. Yet more interconnection capacity would not only increase the ability to secure and stabilise power supply, but (as in the case of market integration) also contribute to shifts in power generation capacity. Supply diversification through more cross-border interconnection capacity hence implies increased dependency on the will and the capability of (power companies in) neighbouring countries to uphold and stabilize electricity supply. Moreover, the stimulation of interconnectors is currently pursued without a clear legal framework for such an integrated market. Potentially the EU’s internal approach to supply diversification therefore opens the door to continuous fears about the reliability of neighbouring countries. Clear agreements and regulations are therefore necessary to avoid mistrust among member states.

What does it all mean?

While EU policies are aiming at the modernisation of Europe’s power system, member states have enough reasons to worry as to their relative position in the emerging European energy system: Bigger markets, growing transmission capacities, new (renewable) energy carriers, and new supply routes represent greatly altered framework conditions for the future evolution of the power system. And not every country is likely to benefit equally from changes involved with a European power system such as the relocation of power generation capacity and the accompanying infrastructure effects. The internal geopolitical frictions resulting from these EU policies would probably be negligible if the balance between winners and losers were approximately equal in all EU member states, and if the regulatory framework established a level playing field for all market players which promises an overall net gain. But what if a substantial part of Europe’s power generation capacity would – for example – move towards North-Western Europe?

In short, the EU policies discussed above will cause increased economic activity in some countries, whereas others will lose parts of their power industry, and hence produce winners and losers. It seems therefore likely that member states will consider increased participation in the EU power market as a matter of strategic choice: Even though large parts of the electricity generated in Europe might one day be transmitted through a truly European grid system, governments will attempt to keep self-provision for areas of vital state interests and economic reasons, while local communities may desire to become self-sufficient in their power supply. The successful implementation of EU policy to integrate markets, increase renewables, and diversify supply therefore requires at least three different key elements:

– High levels of mutual trust between member states must be reached in order to increase the political acceptance of shifts in power generation and transmission capacities implicit to the EU policies under discussion
– Economic instruments and a regulatory framework are necessary to ease the geopolitical concerns of EU member states
– Co-ownership and/or shared control over grid assets and their operation, either between groups of countries or on the EU level.

See also:

Power Struggles: The Intra-Community Implications of EU Energy Policy