MUNI FSS Energy Policy of the Baltic States Martin Jirusek, PhD 1 State % of ethnic Russians 1989 2001 2011 2020 Baltic States Strong influence of Russian supplies & infrastructure Rapid post-war industrialization, need for fuel imports (O&G) Energy self-sufficiency (1990): Estonia - 51 % Latvia - 8 % Lithuania - 25% Energy security widely recognized as a part of national security Complicated history of relations with Russia Former integral part of the USSR, ethnic resettlement Retained a strong spirit of independence and identity regardless Higher living standards compared to the rest of teh USSR Heavy Soviet military presence during the CW Independence restoration - 1991 Structural dependence persisted Estonia3 30.3 28.1 24.8 24.7 Latvia4 34.0 31.2 24.9 Lithuania5 6.31 5.81 5.37 4.5 INTERNATIONAL BESTSELLER "The most important work of history for years." -ANTON1 BEEVOR. TELEGR M'll. Book OF THE 1E \R 016474 Baltic States - Oil and gas supply curtailments (1992, 1993, ...) - Strategic considerations as a feature in the Baltics' energy policies - state stakes in key facilities - e.g. Klaipedos Nafta (LIT) - Energy security was hinged on infrastructural development - Implementation of the Internal Energy Market rules as crucial but not sufficient condition - Gazprom as the most impacted entity (similar to other CEE countries) - Its behavior (pricing strategy, infrastructural situation) contributed to security concerns - Strong growth of renewables - High potential especially in wind power - Persisting heavy dependence on fossil fuels (esp. EST) means a lot of work to do given the EU's decarbonization goals - EST initially resisted (along with CZE, HU, and PL) the 2050 goal in 2019 MUNI FSS FIGURE 2 - KNOWN OR PROBABLE POLITICALLY DRIVEN ENERGY SUPPLY OR PRICE MANIPULATIONS BY RUSSIA (1990-2015) o on On ön on s on s 3 On lt) On on r-. On on 00 On On 1999 2000 o o 2002 2003 2004 2005 2006 r-. o o 2008 ON o o 2010 O fM 2012 2013 o rsl 2015 Belarus Georgia Estonia Lithuania I Latvia Moldova I Poland ■ Slovakia Turkmenistan Ukraine ■ ■ ■ I instances involving crude oit ore shaded gray; those involving natural gas are shaded blue. interruptions that caused systemic effects on oil or gas supplies in Europe occured during the years highlighted in orange. Baltic States Complicated relations with Russia -former parts of the Soviet Union -fears of revisionism -EU and NATO membership as game changers Nord Stream as an issue Energy policy securitized -energy transition as a secondary issue Energy island -power grid synchronized with Russia (BRELL) -2025 European grid synchronization -EstLink, Estl_ink2, LiPol, NordBalt power lines - Astravets NPP as an incentive to speed up the process 5 Nuclear Power and related Issues The conundrum of Astravets NPP (BEL), Visaginas NPP (LIT), and Neman NPP (RUS) Astravets as a safety issue for Lithuania - Allegations of safety violations during the construction - The NPP is located close to LIT borders (26 km) and the capital city Built by Atomstroyexport (RUS) - The only of the three projects, which was built and put into operation (2020) Neman NPP as a prop to undermine Visaginas NPP? Meant as a source for exports to the Baltic region - The same could be said about the Astravets NPP - The potential capacity concentration in the region did not make sense - The project at the Ignalina NPP (closed as a part of the EU accession process) site was abandoned after referendum in 2012 The closure of the original Ignalina NPP was the cause of rapid gas demand increase Radviliškis o Kupiškis Seduva Panevézy o ."Stetiškiaio °Velžys Dusetos Kelmé o Tytuvénai Raseiniai o , Krekenava m ta Anykščiai o Kédainiai ° Uli Mjory Mépw Sharkaúshchyna LUapKaýujMbiHa Ukmergé Molet. 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Mikotajki Oŕiš Ruciane-Nida pisz: Ašmjany AujMHHbl Smarhoŕi CMaproHb l>: 1 Vilejka B reŕKblHCK Skidzyeľ Novogrodek HaBarpyflaK 0 v I l7rta ■ https://www.entsog.eu/sites/default/files/2023-01/ENTSOG GIE SYSDEV 2021- 2022 1600x1200 FULL 240 clean.pdf ■ https://ec.europa.eu/energv/infrastructure/transparencv platform/ map-viewer/main.html 8 Baltic States Baltic States - BEMIP - Baltic Energy Market Interconnection Plan Denmark, Germany, Poland, Finland, Sweden, Lithuania, Latvia, Estonia Under the auspices of the European Commission - Electricity: Estlink (EST, FIN), Nordbalt (LIT, SWE), LitPol Link (LIT, POL) - Gas: GIPL (2022), Balticconector (2020), intra-Baltic infrastructure Balticconnector \ 10 Estonia Large share of TPES > 1/4 of electricity constituted by domestically produced shale oil and peat -increases energy security but also emission intensity ■ Gas demand ca. 0,5 bcm/y with projection of a rather limited increase industry, heating - 100% imported from LIT (LNG), LAT (Incukalns storage facility) Experience of cut(s) (1990s) and price hikes 2005-2007 (due to EU& NATO accession?) ■ Gas network connected to Russia LAT and, recently, Finland interconnectors are still missing 'Balticconnector' with Finland - as of 1/2020 - ended Finnish isolation successive interconnectors to connect the Baltics with Poland/Europe (see further) 11 Total energy supply (TES) by source, Estonia 1990-2021 12 MUNI FSS Estonia - Aims at bulding LNG terminal(s) -small-scale -Muuga (Tallin), Paldiski (in progress) -up to 2,5 bcma (est.) - Unclear economic rational due to the existing LNG terminal in LIT and small EST demand -investment attractivity rather low -possible change if LIT exports more gas southwards (GIPL) -building interconnectors as a crucial precondition in any case -new impetus given by the Russian aggression Estonia - Gas Market - Gazprom sold its minority share in the country's largest supplier Eesti Gaas in 2016 - Gas market dominated by Eesti Gaas - Sources of import: LIT LNG Klaipeda, LAT underground storage Incukalns - Connected to FIN - LNG imports growing - Joint effort in terms of market regulation among the Baltics - ongoing works on EST-LAT interconnection - Inkoo (FIN) LNG terminal innaugurated in 3/2023 (4 bcma) 14 MUNI FSS Latvia Nat. gas concumption ar 1,2 bcma (imported) - heat and electricity (declining) Incukalns gas storage - crucial for the region (LIT Syderiai storage project put on hold) capacity of ca 2,5 bcm Skulte LNG (2024?) Latvijas Gaze dominates the sector - 34% owned by Gazprom, 16% by Itera Latvia (subsidiary of Rosneft) Principial opposition to the Nord Stream project Total energjy supply