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Energy policy has the potential to foster Europe's role as an innovative hub for transnational cooperation, but it too often demonstrates the gaps between competing national interests. E&M explores energy cooperation through the internal market, external energy security and how Europe is creating innovation in the sector.

Towards a European energy strategy?

The first multinational attempts to institutionalise and regulate energy interests emerged after the Second World War. New energy market dynamics and the awareness that disputes over natural resources can breed war led to the creation of the coal and steel agreement, providing the first pillar of communal European interests. The European Union now oversees its Member States' own measures and conducts its own transnational decision-making processes to ensure a stable and affordable energy supply across Europe. 

The ambitious Europe 2020 Energy initiative, formulated in 2010, required member states to reduce their greenhouse gas emissions by 20%, to increase the share of renewable energy to 20% and to improve energy efficiency by 20%. During the next two years the European Commission responded to the lack of commitment by member states and has since issued a series of European level reforms to ensure that European Member States pull their weight in producing a sustainable energy programme. These additional steps show a distinct aim at closing the gaps between national actions and European visions.

One key vision put forward in the Treaty of Lisbon was the notion of a transnational energy market.

One key vision put forward by the Commission in the Treaty of Lisbon was the notion of a transnational energy market. Energy was now to be considered an EU policy area in its own right and the creation of a single internal European gas and electricity market was a major goal that would support the Energy 2020 goals. At its core, this common market aims to separate energy production from international distribution by breaking big companies' exclusive infrastructure ownership and to encourage competition among energy providers. Hence, this market would grant all European consumers more supply options, would enhance free trade and make an important step towards common market-based prices. This plan therefore directly Europeanises two key facets of energy strategy: better accessibility for supply and greater price affordability.

responses to Russia

Better accessibility has not reached a point where energy security is no longer fragmented among its members. This is simply due to the fact that external market actors are essential for guaranteeing the energy supply of most member states because European energy created within European borders cannot meet demand. There is a universal consensus that Russia, and its state owned company Gazprom, is the most important actor in the EU's energy security system. Russia currently supplies 38.7% of total gas imports and 32.6% of total oil imports to the EU. In several Eastern European states and particularly the Baltic countries, all gas is provided by Russia.

windturbines
Photo: bracchetid (CC BY-NC-ND 2.0) 
Wind turbines are now a familiar sight but only one proposed energy solution 

Despite a recognition that Europe is subject to the whim of Russia, there exists no unified response to this development among EU states. Even after 2009, when Gazprom cut gas supplies to Ukraine, a 'transit country' to the rest of Europe, and the impact was felt as far as the UK, the approaches of different member states continued to conflict with one another. Germany sought close ties with Gazprom, and pushed for the construction of the Nord Stream gas pipeline, running through the Baltic Sea, to avoid land transit through Belarus and Ukraine. Poland's government was horrified by the new German-Russian alliance, with Radek Sikorski going so far as to call it the 'Molotov-Ribbentrop pipeline', and Polish public opinion remains very negative towards the project. The project in fact evolved into a multilateral endeavour, albeit a western one, involving not just Russia and Germany but also France and the Netherlands. 

In contrast, the Baltic states traditionally pursue a rather cautious policy towards Russia and are certainly wary of their 100% dependency of Russian gas. They have engaged in an Eastern European movement to tackle the troublesome Gazprom monopoly of European energy. Lithuania initiated the complaint against allegedly unfair pricing mechanisms, contracts for gas which are linked with (greatly increasing) oil prices - resulting in an official investigation of Gazprom by the EU Commission on anti-trust law violations. The investigation covers deals between the Russian state company and the buying nations Poland, the Czech Republic, Slovakia, Hungary, Bulgaria, Estonia, Latvia and Lithuania, who are all highly dependent on Russian gas. If the investigation turns out to be successful, Gazprom could face fines of up to 10% of its annual sales.

The issue of external actors shows that European states aren't acting as a unified front. However, they all share the common understanding that unilateral decisions are memories of the past and that the EU should be the body to handle issues of vital importance regarding energy security. After all, Nord Stream is gradually evolving to be a multinational pipeline, and all member states respect the EU's authority with regard to pursuing the anti-trust investigation against Gazprom. Gazprom has already announced that it is likely to cut long-term contract prices to Europe next year.

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