PONARS Eurasia
  • About
    • Contact
    • Membership
      • All Members
      • Core Members
      • Collegium Members
      • Associate Members
      • About Membership
    • Ukraine Experts
    • Executive Committee
  • Policy Memos
    • List of Policy Memos
    • Submissions
  • Podcasts
  • Online Academy
  • Events
    • Past Events
  • Recommended
  • Ukraine Experts
Contacts

Address
1957 E St NW,
Washington, DC 20052

adminponars@gwu.edu
202.994.5915

NEWSLETTER
Facebook
Twitter
YouTube
Podcast
PONARS Eurasia
PONARS Eurasia
  • About
    • Contact
    • Membership
      • All Members
      • Core Members
      • Collegium Members
      • Associate Members
      • About Membership
    • Ukraine Experts
    • Executive Committee
  • Policy Memos
    • List of Policy Memos
    • Submissions
  • Podcasts
  • Online Academy
  • Events
    • Past Events
  • Recommended
  • Ukraine Experts
DIGITAL RESOURCES
digital resources

Bookstore 📚

Knowledge Hub

Course Syllabi

Point & Counterpoint

Policy Perspectives

RECOMMENDED
  • The Desire to Possess: Russia’s War for Territory

    View
  • Russia at War and the Islamic World

    View
  • Ukraine’s Ripple Effect on Russia’s Indo-Pacific Horizon

    View
  • The Determinants of Assistance to Ukrainian and Syrian Refugees | New Voices on Eurasia with Volha Charnysh (Feb. 16)

    View
  • Conflicts in the North Caucasus Since 1991 | PONARS Eurasia Online Academy

    View
RSS PONARS Eurasia Podcast
  • The Putin-Xi Summit: What's New In Their Joint Communique ? February 23, 2022
    In this week’s PONARS Eurasia Podcast, Maria Lipman speaks with Russian China experts Vita Spivak and Alexander Gabuev about the February meeting between Vladimir Putin and Xi Jinping, and what it may tell us about where the Russian-Chinese relationship is headed.
  • Exploring the Russian Courts' Ruling to Liquidate the Memorial Society January 28, 2022
    In this week’s PONARS Eurasia Podcast, Maria Lipman chats with scholars Kelly Smith and Benjamin Nathans about the history, achievements, and impending shutdown of the Memorial Society, Russia's oldest and most venerable civic organization, and what its imminent liquidation portends for the Russian civil society.
  • Russia's 2021 census and the Kremlin's nationalities policy [Lipman Series 2021] December 9, 2021
    In this week’s PONARS Eurasia Podcast, Maria Lipman chats with social scientist Andrey Shcherbak about the quality of the data collected in the recent population census and the goals of Vladimir Putin's government's nationalities policy
  • Active citizens of any kind are under threat [Lipman Series 2021] November 5, 2021
    In this week’s PONARS Eurasia Podcast, Maria Lipman chats with Alexander Verkhovsky about the Kremlin's ever expanding toolkit against political and civic activists, journalists, and other dissidents.
  • Russia's Legislative Elections followup [Lipman Series 2021] October 4, 2021
    In this week’s PONARS Eurasia Podcast, Maria Lipman chats with Tanya Lokot and Nikolay Petrov about the results of Russia’s legislative elections and about what comes next.
  • Why Is the Kremlin Nervous? [Lipman Series 2021] September 14, 2021
    In this week’s PONARS Eurasia Podcast, Maria Lipman chats with Ben Noble and Nikolay Petrov about Russia’s September 17-19 legislative elections, repressive measures against electoral challengers, and whether to expect anything other than preordained results.
  • Vaccine Hesitancy in Russia, France, and the United States [Lipman Series 2021] August 31, 2021
    In this week's PONARS Eurasia Podcast episode, Maria Lipman chats with Denis Volkov, Naira Davlashyan, and Peter Slevin about why COVID-19 vaccination rates are still so low across the globe, comparing vaccine hesitant constituencies across Russia, France, and the United States.  
  • Is Russia Becoming More Soviet? [Lipman Series 2021] July 26, 2021
      In a new PONARS Eurasia Podcast episode, Maria Lipman chats with Maxim Trudolyubov about the current tightening of the Russian political sphere, asking whether or not it’s helpful to draw comparisons to the late Soviet period.
  • The Evolution of Russia's Political Regime [Lipman Series 2021] June 21, 2021
    In this week's episode of the PONARS Eurasia Podcast, Maria Lipman chats with Grigory Golosov and Henry Hale about the evolution of Russia's political regime, and what to expect in the lead-up to September's Duma elections.
  • Volodymyr Zelensky: Year Two [Lipman Series 2021] May 24, 2021
    In this week's episode of the PONARS Eurasia Podcast, Maria Lipman chats with Sergiy Kudelia and Georgiy Kasianov about Ukrainian President Zelensky's second year in office, and how he has handled the political turbulence of the past year.
  • Policy Memos | Аналитика

The Baltic States and Energy Security: How Else Can the EU Foster Their Energy Resilience in the Face of Russian Pressure?

  • July 24, 2020
  • Gianmarco Riva

(PONARS Eurasia Policy Memo) In recent times, Baltic State policies toward Russia have displayed a relatively unified front. This became abundantly clear in the aftermath of major events such as the two gas disputes between Kyiv and Moscow in 2006 and 2009, the Russian-led incursion into Ukraine in 2014 as well as the subsequent annexation of the Crimea peninsula, and the military intrusion in the Donbas region. Broadly, these events have led to a convergence in the three republics’ perceptions about EU policies toward Russia. This notwithstanding, such a confluence has proved to be oddly absent in the energy field, where one instead finds a patchwork of national policies and endless debates on the optimal mix between unilateral or regional policies. The lack of a regional-level coordinated approach toward energy security challenges—reinforced by diverging national priorities in the geopolitical sphere of energy vis-à-vis Russia—has dual side effects. On the one hand, it facilitates Moscow’s assertive energy diplomacy toward the region, which routinely attempts to undermine the full implementation of the Baltics’ diversification and integration process into the EU energy network while wielding geopolitical influence. On the other hand, it exposes the inability of the Energy Union to fully implement a common European vision in energy policy. 

This memo advances proposals about what measures could be taken by the EU to better secure the Baltic States from dependence on Russia’s energy supply. In this regard, it argues that a coordinated diplomatic approach by Estonia, Latvia, and Lithuania is a sine qua non for fostering the three states’ energy sectors’ resilience in the face of pressure from Moscow. The memo also explains why collective energy security should be at the forefront of the bloc’s energy policy. 

Baltic State Energy Strategy: Diversifying Away from Russia 

Since independence was regained in 1991, energy reliance on Russia has become an ever-increasing concern in the Baltic States as it represented a major factor of subordination still bounding Estonia, Latvia, and Lithuania to their decade-long Soviet legacy. Heretofore, the three Baltic republics had, in fact, been completely dependent on Russian energy sources because of their supply network that had been developed during the Soviet era from the early 1960s. After independence, this condition continued and they remained energy islands isolated from EU markets, and, as such, they came to be the most vulnerable EU member states in terms of energy security. The reason for this is self-evident: all three countries were nearly 90 percent dependent on Russia for oil and roughly 100 percent for gas and electricity.

The structural conditions of the energy systems alone, however, was not the only reason behind the Baltics’ struggle for achieving energy independence. Another important driving factor for their energy diversification policies found its raison d’être in matters of a political nature. The interconnected energy network has allowed Moscow to take advantage of its privileged position as a monopolistic energy supplier to preserve a certain degree of geostrategic influence over its post-Soviet neighbors, making Estonia, Latvia, and Lithuania susceptible to possible supply cut-offs. This tendency manifested itself more frequently under the leadership of President Vladimir Putin, becoming a consistent means to achieve the objectives of Russia’s foreign energy policy. The most recent occurrences include the suspension of oil supplies to Latvian port operator Ventspils Nafta in 2003, to the Lithuanian oil refinery Mazeikiu Nafta in 2006 and, partially, to the oil supply rail route to Estonia in 2007. 

In the light of such controversy, over the following years, the three states have moved to increase the autonomy of their energy positions vis-à-vis Russia by putting into place a number of initiatives aimed at eliminating the vestiges of energy dependence while integrating into the European energy network. To this end, the EU has been taking various steps to help the Baltic States in advancing energy diversification through funding programs and implementation of new policy directives.

In response to regional energy security concerns, the Baltic Energy Market Interconnection Plan (BEMIP) was developed in 2008 with the primary objective of making the Baltic electricity and gas market fully integrated with the EU, thereby ending the energy isolation of the three states. As part of the BEMIP, a number of projects have been implemented.

In the electricity sector, key infrastructure initiatives include:

  • Two high-voltage direct-current (HVDC) submarine power cables, Estlink 1 and Estlink 2, linking Estonia and Finland;
  • The NordBalt power cable, also known as SwedLit, between Lithuania and Sweden;
  • LitPol, a link between the Lithuanian and the Polish electricity systems.

The major gas sector projects are:

  • Interconnection Poland-Lithuania (GIPL), which will connect the two countries’ natural gas transmission systems and is expected to be operational at the end of 2021;
  • Balticconnector, a bidirectional natural gas pipeline between Estonia and Finland that entered commercial use this year in 2020.

As evinced by the latest study produced by the Center for European Policy Studies (CEPS) on the topic, the BEMIP initiative has successfully promoted the creation of an integrated energy market in the region. It states that it has been “a useful instrument and collaboration platform” and that its large-scale projects have favored important developments in the EU Strategy for the Baltic Sea Region (EUBSRS).

According to the Commission, the Baltic States are today among the best interconnected regions in Europe with an interconnection level of 23 percent—a very positive result as compared with, for instance, the 6 percent of the Iberian peninsula. This seems to prove that the priority to diversify supply away from Russia set in the post-2014 European Energy Strategy has been satisfied. Nonetheless, it is still far off from accomplishing the process of energy integration of the Baltics with the European energy network: an essential condition for a truly integrated regional gas and electricity market. 

Common Goals, Diverging Actions

The Baltic States do not present a unified front on gas and electricity issues due to the lack of inter-regional agreements between key actors. As the 2019 Baltic Security Strategy report shows, “Regional cooperation is also limited by the domination of the self-help principle and the lack of trust among the states.” Arguments often arise about either the actual methods of implementing the synchronization of the Baltic electricity grid with the Continental European network (CEN)—the sense of extreme urgency that prevails in Lithuania over the issue does not figure in the other two countries —or where to allocate regional strategic projects such as LNG terminals. Moreover, “despite their strategic significance, become hostages to small-gain policies, which prolongs their implementation and extends the period of energy insecurity for all the actors involved.”

This is evident by the majority of the advocated diversification plans, which have either experienced delay and, in turn, have been (a) implemented unilaterally or (b) suspended (e.g., the Visaginas nuclear power plant that was halted in 2014), thus undermining EU goals for joint regional action. In this sense, examples of defecting outcomes are manifold. For instance, due to a lack of progress in trilateral negotiations over the allocation of a regional LNG terminal, Lithuanian authorities decided to pursue their own independent energy security strategy moving ahead with the construction of the terminal in Klaipeda.

The absence of union between Estonia, Latvia, and Lithuania when it comes to taking decisions about collective energy policies has thus resulted in an uncoordinated, regional-level approach. A recent (2015) contribution noted that the “combination of domestic political fragmentation and ongoing Russian influence in political and economic sectors precludes these states from making more decisive progress away from Russia dependency,” which in turn leaves Moscow with greater room in which to maneuver. 

The Way Forward: Harnessing Regional Cooperation

Regional energy integration in the Baltics may well help develop a more diversified and resilient energy market, thus reducing the dependency of these states on imported sources. For this to be achieved, however, some steps need to be taken with respect to the BEMIP initiative, within which shortcomings need to be addressed. Despite positive results, the initiative still lacks coordination with national energy strategies and does not guarantee a coherent energy development roadmap at either member state or EU level.

Differences in how Estonia, Latvia, and Lithuania address energy cooperation should be publicly addressed between the parties. Varying threat perceptions should not represent a barrier to the development of practical cooperation. The inclusion of a roadmap of Baltic Energy Cooperation within the BEMIP may be a good solution of how such divergencies can be reconciled. The roadmap should be used as a guideline for cooperation. Small-scale reconciliation might create trust and should be used to move the three states’ energy partnership forward. 

For its part, the EU is to be allowed greater oversight on energy policy so that the needs of individual member states are better taken into consideration when it comes to framing regional policies. Areas where improvements are necessary include data analysis and policy coordination. Current regional security coordination among Transmission System Operators (TSOs) is framed by the Baltic Regional Security Coordination Agreement. Coordination areas include coordinated security analysis and capacity calculations, outage planning, and management functions. With respect to the gas sector, cooperation has been restricted by (a) financial burdens of additional regional security measures and (b) the lack of a common understanding about the quantity of security measures deemed necessary to prevent accidents or possible hazards by third parties. This precluded the Baltic governments from carrying out common assessment of what role critical infrastructures play, which is an indispensable condition to advance creation of a single Baltic natural gas market. Common definitions of budget allocation schemes in relation to regional security measures is encouraged to facilitate common assessment of critical infrastructures’ role.

Another key area is information sharing. Operative coordination between TSOs is the main mechanism for the provision of operational security of the energy infrastructure. The exchange of information among TSOs allows for identification and mitigation or prevention of operational security disturbances and challenges. However, information-sharing between TSOs and power suppliers often comes to be slow with regard to operational decisions. In this regard, intensification of information sharing is needed to allow for a better promptness in decision- and policymaking.

As evinced by the latest Baltic Security Strategy report, there is a lack of common training, or intra-regional physical security exercise among TSOs in the three Baltic States. Also, regional-level exercises to test for blackout scenarios are absent. Existing intra-regional cooperation in critical energy infrastructure protection (CEIP), which is insufficient in a context of growing security menaces, is limited by the absence of regional awareness and understanding of the threats’ interconnectedness, notably those coming from the Eastern neighborhood. Improvement of inter-TSOs cooperation in common training and regular cross-border exercises (including the set-up of preventive action and emergency plans) may well contribute to enhance inter-regional energy security awareness, thereby unifying perceptions of threats to energy security.

Conclusions

Due to their long-lasting dependence on Russian resources, energy security has steadily been a sensitive issue for the Baltic States. Therefore, regional cooperation came to be recognized as a major tool for the conduct of energy diversification policies within the three countries’ energy sectors. To date, Estonia, Latvia, and Lithuania, with EU support, have actively endeavored to develop infrastructure-building measures to foster the integration of their energy markets. The steps taken so far have contributed to increased regional energy sovereignty, thereby opening up opportunities for the three to break their total dependence on Russia’s supply monopoly. However, there is a long way to go to create a truly integrated, unified, and resilient regional gas and electricity market zone. Striking the right balance between solving past energy security concerns and making full use of the potential offered by recent achievements will be challenging. But if done right, the Baltic States can be witness to how a collective energy security approach is the right way to speak with one voice on energy policy.

Gianmarco Riva is a Graduate Student of Interdisciplinary Research and Studies on Eastern Europe at the University of Bologna, Italy.

[PDF]

Homepage image credit.

Memo #: 665
Series: 2
PDF: Pepm665_Riva_July2020.pdf
Author [Non-member]: Gianmarco Riva
Related Topics
  • 2020
  • Baltic Sea Region
  • Baltics
  • Estonia
  • Latvia
  • Lithuania
  • Riva
  • Russia
Previous Article
  • Recommended | Рекомендуем

Wishnick: It’s going to be a mixed picture with a deepening Russia-China partnership as a whole

  • July 24, 2020
  • PONARS Eurasia
View
Next Article
  • Commentary | Комментарии

Путин уже продлил свои полномочия, поэтому ему незачем свергать Лукашенко

  • July 27, 2020
  • Vladimir Gel'man
View
You May Also Like
View
  • Policy Memos | Аналитика

Turning the Soviet Ethos into a Democracy Cause: Lessons From the 2020 Belarus Mobilization

  • Natalia Forrat
  • February 7, 2023
View
  • Policy Memos | Аналитика

Is the War in Ukraine Helping or Hindering the Relationship Between the EU and its Illiberal Member States?

  • Paula Ganga
  • February 3, 2023
View
  • Policy Memos | Аналитика

The Policy Implications of Russia’s Genocide in Ukraine

  • Kristina Hook
  • February 1, 2023
View
  • Policy Memos | Аналитика

National Security in Local Hands? How Local Authorities Contribute to Ukraine’s Resilience

  • Oleksandra Keudel and Oksana Huss
  • January 25, 2023
View
  • Policy Memos | Аналитика

Silence Matters: Self-Censorship and War in Russia

  • Guzel Yusupova
  • January 19, 2023
View
  • Policy Memos | Аналитика

Ethnic Variation in Support for Putin and the Invasion of Ukraine

  • Kyle L. Marquardt
  • January 12, 2023
View
  • Policy Memos | Аналитика

Russian Political Exiles: The Challenges of Forging an Anti-War Movement

  • Gulnaz Sibgatullina
  • January 5, 2023
View
  • Policy Memos | Аналитика

To Justify, Demonize, Normalize: Putin’s Language of War and Central Asian Neutrality

  • Emil Dzhuraev
  • December 23, 2022
PONARS Eurasia
  • About
  • Membership
  • Policy Memos
  • Recommended
  • Events
Powered by narva.io

Permissions & Citation Guidelines

Input your search keywords and press Enter.