Dieter Helm: European Energy & Climate Policy In Face Of The Ukraine Crisis

  • Date: 22/03/14
  • Dieter Helm, Energy Futures Network Paper

1. The Russian intervention in Crimea—and its effective annexation—comes in a  context in which Russian intervention in Ukraine has been a continuing  feature of southeast European politics for generations. This is Russia’s back yard, and from the mid-nineteenth century Crimean War to Stalin’s deliberate famine in the interwar years, the mass deportation of the Crimean Tatars after the Second World War, to today’s intervention, the underlying theme has been a combination of strategic interest and the belief that Ukraine is not a proper  country, but rather a Russian satellite.

2. This intervention is not going to be the end of the matter. The borders of Russia have not settled down, and Europe will face instability on its eastern borders for many years to come. The question here is what Europe should do about it. [...]

15. 2006 and 2009 should have been serious wake-up calls for the Europeans, and the lessons should by now be deeply embedded in the EU’s energy policies. Yet the curious feature of the energy policy that emerged from the middle of the last decade is just how little serious effort has been put into security—in particular Eastern security. Instead the main efforts have focused on the internal energy market and the climate change package. Whilst it is true that European politicians have tried to portray both of these as enhancing security, they are poor substitutes for a serious energy security policy.

16. A clue is that one of the pillars is called the “internal” and not the “external” energy market. Market integration no doubt helps, but it is the physical infrastructure that matters. Internal resilience to Russia’s threats and its market power come from interconnectors, reverse flows, and common access to storage. It is true that the Commission has kept banging on about interconnectors and the physical infrastructure, but it is also true that the actual impacts on the ground have been poor.

17. It has also been claimed that the climate package has led to diversification. Lots of solar panels and wind farms are at least European energy sources. But again these add very little to security, and arguably in some cases they make matters worse because they are intermittent. The one technology that might add significantly to security—nuclear—is being deliberately phased out in Germany, and is given a second rate role in the EU Energy Road Map. It does not figure in the renewables obligation. Indeed the biggest contribution to security has probably come from the economic crisis, deindustrialization and the consequent decline in demand. Economic failure has left many European countries with excess supplies.

18. The single fuel source that has added to security is the one that the climate package should be trying to close down—coal. It has made a remarkable recovery, making a mockery of the “greening” of Europe’s energy sector.

Full analysis