The EU’s Energy Union: A Sustainable Path to Energy Security?

Abstract

The Ukraine crisis and subsequent tensions in relations with Russia urged the European Union to diversify its energy suppliers and integrate the energy markets of member states. However, the EU does not seem to have a clear strategy to strengthen its energy security. Member states are reluctant to relinquish control over their energy policy. Moreover, the diversification of fossil fuel suppliers may lead to new dependencies on authoritarian states, while the emphasis on unconventional energy sources may delay the development of renewables. A coordinated focus on renewable energy, coupled with investments in energy efficiency, appears to be the most forward-looking and climate-friendly way of reducing external dependencies.

Keywords:

• European Union
• energy
• climate
• foreign policy

Notes

¹ European Commission, A Resilient Energy Union.

² Tusk, “A United Europe”.

³ Directive 2009/72/EC of the European Parliament and of the Council concerning common rules for the internal market in electricity, published in OJ L211/56; Directive 2009/73/EC concerning common rules for the internal market in natural gas, published in OJ L211/94; Regulation 714/2009 of the European Parliament and of the Council on conditions for access to the network for cross-border exchanges in electricity, published in OJ L211/15; Regulation 715/2009 of the European Parliament and of the Council on conditions for access to the natural gas transmission networks, published in OJ L211/36; Regulation 713/2009 of the European Parliament and of the Council establishing an Agency for the Cooperation of Energy Regulators, published in OJ L211/1.

⁴ Keating, “Orbán Criticises Commission’s Plan”.

⁵ Buchan, Europe’s Energy Security, 5; Carrington, “UK Defeats Fracking Regulations”; Neslen, “Poland on Road to EU Court”; Jacobsen and Crisp, “EU leaders Adopt 'Flexible' Energy Targets”.

⁶ European Commission, Member State’s Energy Dependence 2014, 6-8.

⁷ Eurostat, “Simplified Energy Balances - Annual Data”, 17 April 2015, http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=nrg_100a&lang=en.

⁸ Denmark is the only EU member that produces more energy than it consumes. European Commission, Member State’s Energy Dependence 2014, 6.

⁹ Vice-President for Energy Union Maroš Šefčovič, opening speech at the Energy Union Conference in Riga, 6 February 2015.

¹⁰ Political instability in North Africa following the Arab Spring, particularly the civil war in Libya (an important energy supplier for some EU member states, notably Italy), further complicated the overall security of EU energy supplies. European Commission, Member State’s Energy Dependence 2013, 138-9.

¹¹ Eurostat, “Statistical Analysis of EU Trade in Energy Products, with Focus on Trade with the Russian Federation”, 17 April 2015, http://ec.europa.eu/eurostat/statistics-explained/index.php/Trade_in_energy_ products. More precisely, 49% of EU natural gas imports in gaseous state come from Russia; however, if liquefied natural gas imports (LNG) are included, the share of gas imports from Russia is 41% of the total (Russia does not export LNG to the EU).

¹² At the end of 2014, Lithuania launched a floating LNG terminal, which allows the country to import gas from other regions. This terminal could also supply the Latvian and Estonian markets, but the lack of infrastructure, the closure of the Latvian market (which is still dominated by Gazprom) and Estonia’s pursuit of its own LNG terminal have hindered cooperation thus far. Dudzinska, “A System of Unconnected Vessels”.

¹³ Dickel et al., Reducing European Dependence, 3-11 ; European Commission, Member State’s Energy Dependence 2014, 118.

¹⁴ For an account of the origins of Europe’s dependence on Russian gas, see Högselius, Red Gas.

¹⁵ In 2013, oil and natural gas sales accounted for 68% of Russia’s total export revenues; the European Union was the destination of most of Russia’s exports of natural gas, crude oil and petroleum products. US Energy Information Administration, “Oil and Natural Gas Sales Accounted for 68% of Russia’s Total Export Revenues in 2013”, http://www.eia.gov/todayinenergy/detail.cfm?id=17231.

¹⁶ Price differentials in Russian gas sales to EU member states are illustrated in Loskot-Strachota and Zachmann, Rebalancing the EU-Russia-Ukraine Relationship, 4.

¹⁷ Destination clauses also existed in contracts with Western European companies, but were removed in the 2000s. Sharples, Special Report, 6-9.

¹⁸ Oroschakoff and Hirst, “Brussels vs Gazprom”.

¹⁹ Kovacevic, Impact of Russia–Ukraine Gas Crisis, 10-15; Pirani et al., The Russo-Ukrainian Gas Dispute, 53-6.

²⁰ Sharples and Judge, “Bulgaria and Macedonia Hardest Hit”; Siddi, “EU members cannot Afford Confrontation”; Siddi, “Winners and Losers”.

²¹ Mihalache, “South Stream is Dead”.

²² Levoyannis, “Greece: Russian Backdoor”; Greece will also host the Trans-Adriatic Pipeline, an EU-supported project that will transport gas from the Greek-Turkish border to Albania and Italy.

²³ On climate negotiations in the UN, see Vihma, How to Reform Climate Negotiations.

²⁴ Eurostat, “Europe 2020 Indicators – Climate Change and Energy”, 11 August 2015, http://ec.europa.eu/eurostat/statistics-explained/index.php/Europe_2020_indicators_-_climate_change_and_energy.

²⁵ Only France and the Netherlands failed to achieve – by a narrow margin – the interim goals for renewables; European Commission, Renewable Energy Progress Report.

²⁶ Crisp, “27 Member States hit with Legal Action”.

²⁷ At the moment, work for the Southern corridor is focusing on the Trans-Adriatic (TAP) and Trans-Anatolian (TANAP) pipelines, which channel Azeri gas as far as Italy, via Georgia, Turkey, Greece and Albania.

²⁸ Sartori, “Geopolitical Implications”, 79-80.

²⁹ German Government, “German Non-paper on the Energy Union”.

³⁰ Buchan, Europe’s Energy Security, 3.

³¹ Interview with an expert at Centre for European Policy Studies, Brussels, 3 February 2015.

³² Work on the pipeline was later stopped due inter alia to the Ukraine crisis.

³³ For a good summary of this criticism, see : Flues and Simon: “A Slow Costly Road to Nowhere”.

³⁴ Mihalache, “No Shale Gas in Eastern Europe”.

³⁵ Crisp, “Fracking Advisors Controlled by lobbyists”.

³⁶ European Commission, Achieving the 10% Electricity Interconnection Target.

³⁷ Ibid., 13.

³⁸ Crisp, “ACER as Energy Union Supervisor”.

³⁹ European Commission, A Resilient Energy Union, 12.

⁴⁰ See Wyns, ”Lessons from the EU’s ETS”.

⁴¹ Vogler, “The Challenge of the Environment”, 367.

⁴² This relates to the inherent variability of energy production from renewable sources; power grids have to be adapted to allow for the quick allocation of renewable energy across the market.

⁴³ According to the Commission’s impact assessment, a share of 27% of renewables in energy production is the minimum to achieve a 40% reduction in greenhouse emissions. Cf. Zachmann, “Elements of Europe’s Energy Union”, 3.

⁴⁴ The EU’s roadmap for 2050 states that the Union should cut its emissions by 80-95% compared to 1990 levels; see European Commission, Energy Roadmap 2050.

⁴⁵ Levänen, Turning Point in EU’s Climate Policy, 5.

⁴⁶ Stephens, “Carbon Capture and Storage”; and interview with an expert at the European Policy Centre, 3 February 2015.

⁴⁷ European Commission, “Investment Plan”, http://ec.europa.eu/priorities/jobs-growth-investment/plan/index_en.htm.

⁴⁸ Neslen, “Shell Lobbied to Undermine Renewables Targets”.

⁴⁹ European Commission, Energy Roadmap 2050.

⁵⁰ As for the interconnection target, the Commission itself admits that “The completion of the internal electricity market, notably ending the isolation of electricity islands, secure energy supplies for all consumers and a greater share of electricity generation based on variable renewable energy sources require more than 10% interconnection capacity” and that a 15% target should be pursued for 2030; European Commission, Achieving the 10% Electricity Interconnection Target, 15.

⁵¹ Article 194 of the TFEU stresses the right of a member state “to determine the conditions for exploiting its energy resources, its choice between different energy sources and the general structure of its energy supply”.

⁵² Energy policy is listed in Article 4 of the TFEU as one of the competences shared by member states and the EU.

⁵³ Gotev, “Energy Union a Threat to Hungary”.

⁵⁴ Dickel et al., Reducing European Dependence, 71.

⁵⁵ Crooks, “The US Shale Revolution”.

⁵⁶ European Commission, Green Paper.

⁵⁷ European Council, “European Council Conclusions on Energy Union”.

⁵⁸ European Commission, The Paris Protocol.

⁵⁹ Arguably, the EU leaders’ agreement on the EU 2030 climate goals in January 2014 stimulated US President Barack Obama to launch negotiations on reducing carbon emissions with China; see Carafa, “The US-China Climate Agreement”, 11.