Wednesday, November 19, 2008

EU Strategic Energy Review II

Essential to back up a new energy strategy is the development of a fuller infrastructure which extends to the periphery and beyond the borders of the EU. What this means is that the EU must adjust it's energy policy and those of the Old Member States, must revise the energy strategy that was developed before the 2004 enlargement - and they must accept the concerns and development needs of those New Member States. (link to document)

The EU energy infrastructure was based on the role out of Ten- E Projects. The inadequacy of these throughout Europe have become apparent. One of the main problems is they were developed before what are now NMS joined the union. Not only have these projects been slow to be rolled out, while they are important projects themselves, they do not serve the purpose of today's energy requirements. In particular, they lack an effective vision for integrating the energy infrastructure of Central Eastern Europe and the Balkans into the rest of the EU.

The latest proposal includes a 'Baltic interconnection plan,' which is over due, particularly considering the historical orientation of these countries infrastructure towards Russia. What I like about this statement is "enabling solidarity" by creating this interconnection plan, i.e. you mess with the Baltics, Russia, you mess with the EU.

The second point looks at the development of a Southern Gas corridor - discussed before - this brings gas from the Middle East and the Caspian Basin.

LNG for all those countries dependent on Russia. I like this. What it means is that "we won't be sharing our North Sea/Antarctic gas with you former Russian satellites by building gas pipelines to send it to you. But if you would like, you can buy bottled gas for world market price + shipping and handling." Nothing like spreading that solidarity around - unless it will cost you money. The North -South gas pipeline actually refers to the NETS project for the Southeast of Europe+Hungary.

However, the next paragraph says that they can take the time and money to develop electricity and gas infrastructure with Mediterranean countries. Well, yeah, because that benefits OMS, nothing like have a gas link from Libya to Italy. I go along with the idea of importing the solar energy from Africa to Europe. As a grand project this one is sure to succeed. The only question is once the electricity arrives in Europe and everyone gets their cut, how much is electricity really going to cost. Will it be on par with nuclear energy? Large upfront infrastructure investment but diminishing costs as time goes on (although there is no waste storage). The question is there financing for such a project? [and just a note, there is nothing like buying energy from stable democratic North African countries]

I'll quickly skip over the idea of developing more infrastructure and regulatory capacity in Central and Southern Europe. I would like to return to the point tomorrow. Thus the third edition.

Finally, off shore wind farm infrastructure is mentioned. Great, fine. Just get the money and go for it.

Overall, when it comes to reorientating the infrastructure of the European Union, and particularly those NMS away from Russia and to build the infrastructure for renewable energy and any transition towards a post-carbon world then this is a good first step. But let's wait and see how these steps can be implimented. I think the best example can be drawn from the NETS project. This is a ground up initiative that seeks to lay the foundation before the EU can get too involved to interceed on how it develops. In addition it is a blocking strategy against Russia buying up the gas assets as it has done in all the countries to the north of Hungary. Therefore, it can serve as an example of how to collectively defend against Russian intrusion, work in the direction of the common good of countries and a region, and finally, unify small gas networks into a viable and more efficiently managed network.