Energy supply security and geopolitics: A European perspective

The security of energy supply to the EU is examined in the context of two storylines. Markets and Institutions exemplifies an economically and politically integrated, multilateral world with effective institutions and markets. Regions and Empires involves a world broken up in rival political and economic blocks, competing for resources and markets via political, economic and military power. It is shown that these storylines have a significant impact on the development of the energy market, on the way in which energy supply may be secured and on the effect and applicability of the several types of instruments available. The current EU is geared towards enlargement and a deepening of economic integration, based on the tenets of the post-1945 multilateral world system. The present world tends towards Regions and Empires and suggests that the EU may have to reorient its energy security policy. Energy policy must become an integral part of EU external trade and foreign relations and security policy. The EU should develop its own strategy, actively investing in dialogues with producer countries in the Persian Gulf and Africa and with Russia. Sustainable prosperity and governance in these regions will support EU energy security.     

Enlarging the EU's internal energy market: Why would third countries accept EU rule export?

Why would countries without a membership perspective seek integration into the EU's internal energy market? One major element of the EU's external energy policy is the export of EU energy norms and regulations to neighbourhood countries and beyond. A core legal instrument the EU uses in this context is the Energy Community Treaty (ECT). The ECT goes both geographically and regarding its depth significantly beyond neighbourhood or association policies, addressing potentially also countries in the ‘far neighbourhood’ and aiming at the creation of a Single Market for energy with these countries. While, however, EU candidate countries are obliged to adopt the “acquis” before accessing the EU and therefore comply to EU rules already before they enter the Club, I argue that countries with no or only a vague membership perspective – i.e. countries where the EU cannot apply the “conditionality” – approach (e.g., ENP countries)—aim at deeper integration with the EU because they are either eager to demonstrate their capability and potential to become part of the Club, they seek greater independence from a regional hegemon or they envisage significant economic gains as common norms, rules and standards are likely to increase economic exchange with the EU.     

Contagion,volatility persistence and volatility spill-overs: The case of energy markets during the European financial crisis

The aim of this paper is to investigate if and to what extent events in financially troubled EU markets (Greece, Ireland and Portugal) affected energy prices during the EU financial crisis. More specifically, (i) we test for contagion effects of bond prices on energy/commodity prices, (ii) we examine whether the nature of energy price volatility is affected and (iii) we investigate whether bond volatility from the financially distressed EU markets spills over to energy/commodity return volatility. Our results indicate the existence of significant contagion effects; notable changes in the nature of energy/commodity volatility during the EU financial crisis; and spill-over effects. The results are robust to the use of short-term yields instead of long-term bond price changes, and to the inclusion of Spain and Italy in the sample.     

Overcoming problems in Turkey's renewable energy policy: How can EU contribute?

Fossil fuels cover most of the energy demand in the world, and this creates significant social, economic and environmental problems. Many countries have taken measures to increase the share of renewable energy sources (RES), especially in electricity generation, and the review of literature shows that the success of a country in RES diffusion depends on a comprehensive renewable energy policy which combines political commitment with stable and long-term support measures that stimulate technological innovation. As the largest economy in the world, EU has also taken steps to increase RES usage in electricity generation in member states. Similar to other developing countries, Turkey is learning lessons from EU experiences regarding RES policies, and Turkey is also reforming its legal framework in line with acquis communautaire as a candidate country. As a result, EU has a multiway impact on Turkey's renewable energy policy. An overview of Turkey's renewable energy policy showed that EU has significantly contributed to Turkey in shaping its renewable energy policy, and Turkey should increase cooperation with EU in order to utilize its renewable energy potential.     

Russian energy in the EU market: Bolstered institutionsand their effects

The article examines institutional changes in EU–Russian energy relations since 2000. The article explores the ability of transformed institutions to limit the politicisation of energy and to reconcile the EU competitive-market approach with Russian state capitalism. More specifically, the article focuses on changes in intergovernmental, transgovernmental and transnational interactions. The article demonstrates that the gradual strengthening of transgovernmental and transnational institutions has inhibited the politicisation of energy relations and facilitated regulative cooperation between the EU and Russia. However, the potential of shared institutions is constrained by internal institutions on both sides. In Russia, these obstacles are insufficient top-down delegation of responsibilities in the government and its great power aspirations. In the EU, key barriers include inter-institutional rivalries, the EU’s propensity to impose its legislation on external partners and the integration of energy policy with foreign policy. The article presents several policy implications. First, it is futile to institutionally impose the regulative paradigm of one partner on the other; rather, mutual dialogue is needed. Thus, institutions should be structured appropriately. Second, current depoliticisation will require the involvement of not only the EU and Russia but also transit countries, such as Ukraine. Third, transgovernmental and transnational cooperation should be nurtured because this is a useful channel for both information exchange and a regulative convergence of policy implementing mechanisms. Finally, this incremental regulative convergence is the only option available today for the EU and Russia; this is also a way to further depoliticise energy relations.     

Towards a common renewable future: The System-GMM approach to assess the convergence in renewable energy consumption of EU countries

This paper investigates whether the contribution of renewable energy sources to primary energy consumption is characterized by a convergence process across core European Union (EU) countries over the period from 1990 to 2014. The System Generalized Method of Moments (GMM) methodology is employed for 5-year span panel data of 14 EU members. The findings indicate strong evidence for both the absolute (unconditional) and conditional convergence of renewables' share in primary energy consumption across EU-14 countries. Moreover, the control variables, namely CO₂ emissions per GDP, FDI inward stock and electricity prices contribute to the speed of convergence. Hence, the (implicit) rate of conditional convergence is higher than that of absolute convergence. The empirical evidence suggests that the energy mixes of core EU members have a tendency to become similar in the long-run as the shares of RES in primary energy consumption converge to the average level. Nonetheless, it does not necessarily imply that this average would be 20% target, which is to be achieved by 2020 according to EU directive 2009/28/EC.     

Heat Roadmap Europe: Combining district heating with heat savings to decarbonise the EU energy system

Six different strategies have recently been proposed for the European Union (EU) energy system in the European Commission's report, Energy Roadmap 2050. The objective for these strategies is to identify how the EU can reach its target of an 80% reduction in annual greenhouse gas emissions in 2050 compared to 1990 levels. None of these scenarios involve the large-scale implementation of district heating, but instead they focus on the electrification of the heating sector (primarily using heat pumps) and/or the large-scale implementation of electricity and heat savings. In this paper, the potential for district heating in the EU between now and 2050 is identified, based on extensive and detailed mapping of the EU heat demand and various supply options. Subsequently, a new ‘district heating plus heat savings’ scenario is technically and economically assessed from an energy systems perspective. The results indicate that with district heating, the EU energy system will be able to achieve the same reductions in primary energy supply and carbon dioxide emissions as the existing alternatives proposed. However, with district heating these goals can be achieved at a lower cost, with heating and cooling costs reduced by approximately 15%.     

Comparison of the evolution of energy intensity in Spain and in the EU15. Why is Spain different?

Energy intensity in Spain has increased since 1990, while the opposite has happened in the EU15. Decomposition analysis of primary energy intensity ratios has been used to identify which are the key sectors driving the Spanish evolution and those responsible for most of the differences with the EU15 energy intensity levels. It is also a useful tool to quantify which countries and economic sectors have had most influence in the EU15 evolution. The analysis shows that the Spanish economic structure is driving the divergence in energy intensity ratios with the EU15, mainly due to strong transport growth, but also because of the increase of activities linked to the construction boom, and the convergence to EU levels of household energy demand. The results can be used to pinpoint successful EU strategies for energy efficiency that could be used to improve the Spanish metric.     

Energy efficiency trends and policy in Slovenia

The energy dependency of Slovenia is high (52.1%), but it is a little lower than the average energy dependency in the EU 27 (53.8%). Slovenia imports all its petroleum products and natural gas and partly coal and electricity. The energy intensity of Slovenia is higher by about 50% than the average in the EU 27. The target of the EU Directive on energy end-use efficiency and energy services adopted in 2006 is to achieve a 9% improvement of EE (energy efficiency) within the period 2008-2016. The new target of the EU climate and energy package “20-20-20 plan” is a 20% increase in EE by 2020. Since 1991 the Slovenian government has been supporting energy efficiency activities. The improvement of EE was one of the targets of strategic energy documents ReSROE (Resolution on the Strategy of Use and Supply of Energy in Slovenia from 1996 and ReNEP (Resolution on the National Energy Programme) from 2004 adopted by the Slovenian National Assembly (Parliament) in previous years. The Energy Act adopted in 1999 defines the objective of energy policy as giving priority to EE and utilization of renewable energy sources. The goals of the “National Energy Action Plan 2008-2016 (NEEAP)” adopted by the Slovenian government in 2008 include a set of energy efficiency improvement instruments in the residential, industrial, transport and tertiary sectors. The target of the NEEAP is to save final energy in the 2008-2016 period, amounting to at least 4261 GWh or 9% of baseline consumption. The indicators of energy efficiency trends show considerable improvement in the period from 1998 to 2007. The improvement of EE was reached in all sectors: manufacturing, transport and households. The paper analyses the structure, trends of energy consumption and energy efficiency indicators by sectors of economic activity. A review of energy efficiency policy and measures is described in the paper.     

Energy research and technology development data collection strategies: The case of Greece

The European Union (EU) from the beginning of 2007 has focused its emphasis on the development of a new policy that puts energy back at the heart of EU action. Indeed, it has very often been stated that the difficulty and complexity of achieving green energy targets in the EU will require strengthened measures to promote implementation of new energy technologies (NET), as well as measures to support the related energy Research and Technology Development (R&TD). Often forgotten is the fact, that most of all, a European-wide co-ordinated forum is needed to continuously develop and sophisticate the monitoring and methodology results, bringing together specialised statisticians, energy researchers and experts on energy socio-economics. Today a nebulous picture prevails on the existence of categorized data with regards to energy Research and Technology Development (R&TD) expenditure. In this context, aim of this paper is the presentation of energy R&TD data collection strategies, as well as the related findings for the Greek energy market.     

The perspectives of energy production from coal‐fired power plants in an enlarged EU

The aim of this paper is to present the current status of the coal‐fired power sector in an enlarged EU (EU‐15 plus EU member candidate states) in relation with the main topics of the European Strategy for the energy production and supply. It is estimated that 731 thermoelectric units, larger than 100 MW_e, are operating nowadays, and their total installed capacity equals to 200.7 GW_e. Coal contribution to the total electricity generation with reference to other fuel sources, is by far more intensive in the non‐EU part (EU member candidate states), compared to the EU member states. It is expected that even after the enlargement, the European Union will strongly being related to coal. Enlargement will bring additional factors into play in order to meet the requirements of rising consumption, growing demand for conventional fuels and increasing dependence on imports. Besides the technology, boiler size, efficiency, age and environmental performance will determine the necessities of the coal‐fired power sector in each country. Depending on the case, lifetime extension measures in operating coal‐fired power plants or clean coal technologies can play an important role towards the energy sector restructuring. Low efficiency values in the non‐EU coal‐fired units and heavily aged power plants in EU countries will certainly affect decisions in favour of upgrading or reconstruction. The overall increase of efficiency, the reduction of harmful emissions from generating processes and the co‐combustion of coal with biomass and wastes for generating purposes indicate that coal can be cleaner and more efficient. Additionally, plenty of rehabilitation projects based on CCT applications, have already been carried out or are under progress in the EU energy sector. The proclamations of the countries' energy policies in the coming decades, includes integrated renovation concepts of the coal‐fired power sector. Further to the natural gas penetration in the electricity generation and CO₂ sequestration and underground storage, the implementation of CCT projects will strongly contribute to the reduction of CO₂ emissions in the European Union, according to the targets set in the Kyoto protocol. In consequence, clean coal technologies can open up new markets not only in the EU member candidate states, but also in other parts of the world. Copyright © 2004 John Wiley & Sons, Ltd.     

Spatial misfits in a multi-level renewable energy policy implementation process on the Small Island State of Malta

One of the priorities of energy policies of the European Union (EU) is to generate 20% of EU's total energy consumption from renewable energy (RE) sources by 2020. The EU policy framework mainly emphasizes economical and technical aspects of RE sources, and promotes large scale projects. However the local implementation of RE EU policies can lead to spatial misfits if the policy implementation neglects the peculiarities of the place. It is important to understand the misfits and relationship between the EU RE policies and the local implementation process, as misfits can affect the policy implementation process and subsequently policy outcomes can be different from those intended, leading to inapt or inapplicable measures. This article presents findings of a qualitative in-depth study of Malta’s RE policy implementation. The paper shows that planning of central large-scale RE projects in Malta provokes land and marine use conflicts and can cause difficulties in implementation. The concerned key actors implement the policies according to their motivation, perception, and capacity, and the context in which they are embedded. Hence, both the EU RE policy framework and the national interaction process influence the implementation process, which can lead to spatial mismatches.     

A harmonized calculation model for transforming EU bottom-up energy efficiency indicators into empirical estimates of policy impacts

This study is an impact analysis of European Union (EU) energy efficiency policy that employs both top-down energy consumption data and bottom-up energy efficiency statistics or indicators. As such, it may be considered a contribution to the effort called for in the EU's 2006 Energy Services Directive (ESD) to develop a harmonized calculation model. Although this study does not estimate the realized savings from individual policy measures, it does provide estimates of realized energy savings for energy efficiency policy measures in aggregate. Using fixed effects panel models, the annual cumulative savings in 2011 of combined household and manufacturing sector electricity and natural gas usage attributed to EU energy efficiency policies since 2000 is estimated to be 1136 PJ; the savings attributed to energy efficiency policies since 2006 is estimated to be 807 PJ, or the equivalent of 5.6% of 2011 EU energy consumption. As well as its contribution to energy efficiency policy analysis, this study adds to the development of methods that can improve the quality of information provided by standardized energy efficiency and sustainable resource indexes.     

The potential role of renewable energy in Moldova

The European Union (EU) is developing an increasingly close relationship with Moldova, going beyond cooperation, to gradual economic integration and a deepening of political cooperation. This fact indicates that eventually the adoption of EU legislation in the energy sector is a necessity. Therefore, the provision of a clear picture of the country’s renewable energy potential is considered essential, bearing in mind the new EU Renewable Energy Directive, which sets a mandatory target of 20% of renewable energy sources by 2020 for each member state. The aim of this paper is to discuss the perspective of renewable energy in Moldova taking into account the current energy framework and to analyze, whether it is suitable to adopt similar methodologies and policy frameworks applied in other EU countries.     

Impact of energy policy instruments on the estimated level of underlying energy efficiency in the EU residential sector

The promotion of energy efficiency is seen as one of the top priorities of EU energy policy (EC, 2010). In order to design and implement effective energy policy instruments, it is necessary to have information on energy demand price and income elasticities in addition to sound indicators of energy efficiency. This research combines the approaches taken in energy demand modelling and frontier analysis in order to econometrically estimate the level of energy efficiency for the residential sector in the EU-27 member states for the period 1996 to 2009. The estimates for the energy efficiency confirm that the EU residential sector indeed holds a relatively high potential for energy savings from reduced inefficiency. Therefore, despite the common objective to decrease ‘wasteful’ energy consumption, considerable variation in energy efficiency between the EU member states is established. Furthermore, an attempt is made to evaluate the impact of energy-efficiency measures undertaken in the EU residential sector by introducing an additional set of variables into the model and the results suggest that financial incentives and energy performance standards play an important role in promoting energy efficiency improvements, whereas informative measures do not have a significant impact.     

The policy perspective for RES development in the new member states of the EU

The energy sector of the European Union (EU) is based mainly on fossil fuels and almost two-thirds of the energy demand is imported. In the future, fossil fuels are expected to strengthen their participation in the European energy balance and imports will amount to 70% of overall energy needs. On the other hand, the development of Renewable Energy Sources (RES) is a central aim of the European Commission's energy policy. RES hold a significant share in the 10 new countries recently joined the EU and the adoption of RES-related policies is of imperative importance for the joint cooperation of the new member states with the EU. This paper includes a review of RES status, related policies and prospects in each of the 10-new member states of EU.     

Global energy security and the implications for the EU

The following article will analyse the global and geopolitical dimensions of the future international energy security and its implications for Europe and the EU-27. In this context, I will discuss to which extent the EU's newly proclaimed “Energy Action Plan” of the EU Spring summit of 2007 and its declared common energy (foreign) policy are a sufficient strategy to cope with the new global and geopolitical challenges. The article concludes the following: (1) The interlinkage between globally designed traditional energy security concepts – that rely just on economic factors and “market-strategies” – and domestic as well as regional political stability demands new thinking with regard to both energy supply security and foreign and security policies. (2) Although after the Russian–Ukrainian gas conflict in January 2006, energy security has forced its way up the European energy and foreign policy agendas, the EU-27 member states have largely failed to forge a coherent European energy security and energy foreign policy strategy after their Spring summit of 2007 because its declared political solidarity has been still lacking. But the 2nd Strategic Energy Review of November 2008 has recommended new initiatives to overcome this lack by promoting concrete infrastructure and other projects for enhancing Europe's supply security and its political solidarity as part of a common energy (foreign) policy. If the EU is able to implement the March 2007 and November 2008 decisions, the EU oil and gas demand will drastically reduce and freeze at current levels. In this case, Putin's energy policies by using Russia's energy resources and pipeline monopolies as a political instrument to enforce its economic and geopolitical interests will be proved as self-defeating in Russia's long-term strategic interests. It will reduce Gazprom's gas exports to a much smaller EU gas market than originally forecasted as the result of a deliberate EU policy of decreasing its overall gas demand and by diversifying its gas imports.     

Promotion of renewable energy in a liberalised energy market

Liberalisation of energy markets has been progressing among OECD countries since the early nineties. In Europe this trend was accelerated by the decision in December 1996 by the EU Council of Ministers to adopt a new EU directive on liberalisation of the electricity market. This decision was based on the assumption that a liberalised market with commercial competition would lead to higher efficiency and lower consumer prices. Most EU governments have accepted the new EU directive based on these commercial arguments. Denmark has, however, been in a different situation because its energy policy is based primarily on environmental considerations. Danish energy policy involves government promotion of energy conservation and of systems based on renewable energy sources. This type of policy may in some instances conflict with the principles of the unregulated commercial market.The official Danish target is that 35% of energy demand should be covered by renewables by year 2030. The present paper analyzes the problems and possibilities of meeting this target taking into account the rules of the new EU directive on liberalisation.     

The role of coal in energy policy and sustainable development of Turkey: Is it compatible to the EU energy policy?

This paper aims to assess the current and future role of coal in energy strategy of Turkey, and evaluates the compatibility of policies to the EU energy policy and strategy. Coal is regarded as the most important indigenous energy source in Turkey together with hydropower to strengthen the supply security of the country. Turkish government set targets to fully utilize coal reserves of the country in next decades. However, the country is also in the process of becoming an EU Member State, hence, it is expected that the energy policies have to comply with the EU. Moreover, Turkey ratified Kyoto Protocol in 2009, thus the country should limit CO₂ emission together with other greenhouse gases. The probable obstacles that Turkey may face due to the utilization of coal were determined as CO₂ emissions, lack of technology and application in Carbon Capture and Storage (CCS) and health and safety issues. It is concluded that coal is a very important domestic energy source for Turkey but new policies have to be developed and adopted immediately, and more realistic targets for the country should be set accordingly.     

The impact of international GHG trading regimes on penetration of new energy technologies and feasibility to implement EU Energy and Climate Package targets

The EU's new energy and environment policy - agreed by government leaders in their Council meeting in March 2007 - established a political agenda to tackle three core energy objectives: sustainability, economic competitiveness and security of supply. A triad of specific policies addresses these challenges: first, the 20/20/20 targets of the EU; then, the Second Strategic Energy Review of the European Commission; and finally, plans to liberalise energy markets. The European Union's ‘20/20/20′ targets for 2020: reduce greenhouse gas emissions by 20% comparing with 1990 level (to become a 30% reduction if other major global economies join), increase the share of renewables in the final energy consumption to 20% and to achieve 20% improvement in energy efficiency compared to the level in 2020 if existing trends were to continue.The aim of the paper is to analyse the feasibility of EU to implement 20/20/20 targets under the various international GHG trading regimes. GHG trading regimes were addressed by developing 10 energy scenarios until 2020 for EU by applying several energy modelling tools ranging from top down partial equilibrium to detailed technology based bottom up models.