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Moldova Faces Down an Energy Crisis and Protests

Author(s): Jakub Pieńkowski / Language(s): English

Western support has helped Moldova through a deep energy crisis. The crisis, manufactured by Russia by limiting gas supplies in winter, violating a contract, is part of an attempt to persuade the Moldovan public to join protests organised by the pro-Russian Şor Party. It is in Poland’s interests to ensure further support from the European Union for Moldova, as it would align with Moldovans' determination for a pro-European transformation.

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EU Responds to Transatlantic Competition in Green Technologies

Author(s): Marianna Skoczek-Wojciechowska / Language(s): English

The U.S. Inflation Reduction Act challenges the competitiveness of the European green technology sector. The European Commission (EC), through its Green Deal industrial plan, proposes to increase the production capacity of European industry by simplifying regulatory rules, accelerating access to finance, and other initiatives. The EU also aims to reduce its dependence on Chinese raw materials. An obstacle, though, is in the need to reconcile the differences between the Member States as to the direction of further EC actions, for example, in terms of financing the plan.

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States Successfully Conclude Negotiations of the High Seas Treaty

Author(s): Stefania Kolarz,Zuzanna Nowak / Language(s): English

After two decades of discussions, UN states have completed work on a treaty on the conservation of ocean biodiversity, allowing the creation and management of protected areas in international waters. The agreement can help counter climate change, biodiversity loss, and ocean pollution. However, its real impact on the environment will depend on swift ratification and subsequent effective implementation.

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EU Retreats from Russian Nuclear Energy

Author(s): Marianna Skoczek-Wojciechowska / Language(s): English

The Russian nuclear energy sector continues to develop after Russia’s invasion of Ukraine. Exports of nuclear technology bring direct revenues to the state corporation Rosatom, which actively supports the war. That is why a group of EU countries (including Poland) proposed to put sanctions on the Russian nuclear energy sector. Efforts to phase out nuclear fuel from Russia in the EU are also progressing. Providing alternative sources of uranium enrichment and fuel production capacity is possible, but will be time consuming and costly.

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The Czech nuclear showdown enters the final straight

Author(s): Krzysztof Dębiec / Language(s): English

The repeatedly delayed expansion of the Czech Republic’s nuclear power plants has recently started to take concrete shape. The next two years should see the signature of a binding contract for the construction of the fifth unit at the Dukovany nuclear power plant (NPP), which is expected to cover around 10% of the country’s electricity demand. There are long-term plans to build another unit at this plant, as well as two additional units at the other Czech nuclear power plant at Temelín. The US-Canadian company Westinghouse, France’s Framatome (EDF Group) and South Korea’s KHNP are bidding for the Dukovany contract. This line-up of potential contractors results from a decision by the previous government to exclude Russian and Chinese bidders from the tender. The Czech Republic has also taken other steps to wean itself off its dependence on Russia in the nuclear power sector: it has decided to replace the Russian supplier of nuclear fuel for the NPP Temelín and regained control of the key Czech nuclear company Škoda JS from a Kremlin-linked company.

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The Persian Gulf Monarchies and the War in Ukraine

Author(s): Sara Nowacka / Language(s): English

In March, Muhammad bin Zaid (MBZ) and Muhammad bin Salman (MBS), de facto rulers of the United Arab Emirates and Saudi Arabia, refused to answer Joe Biden’s call about the monarchies’ ability to increase oil production. Despite their declared neutrality, the positions of the Emirati and Saudi authorities regarding the war in Ukraine are becoming increasingly pro-Russian. The possible failure of further pressure from Western states on these monarchies would mean the beginning of a crisis in their relations with the EU and the United States.

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Romania's Energy Policy: Implementation of the Transformation Assumptions

Author(s): Jakub Pieńkowski / Language(s): English

Romania supported the European Union's independence from Russian energy resources. The cut-off from Russian supplies would not be particularly severe for the Romanian economy, which is highly self-sufficient thanks to gas extraction and nuclear energy. Therefore, by supporting the EU's climate policy, Romania was simultaneously part of a coalition of states that persuaded the EU to include nuclear energy in its energy taxonomy. Maintaining Romania's independence will depend on resolving problems with the development of the Cernavodă Nuclear Power Plant and the extraction of gasfrom the Black Sea fields.

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The EU’s Prospects for Decoupling from Russian Gas

Author(s): Maciej Zaniewicz / Language(s): English

The Russian aggression against Ukraine and cut-off of gas supplies to Poland and Bulgaria have strengthened the arguments of supporters of EU independence from Russian gas. However, the prospect of a total embargo is still distant because of opposition from some countries, including Austria, Germany, and Hungary. As a result, the EU will focus on a gradual reduction in purchases of Russian gas, which will have a negative impact on the effectiveness of the sanctions against Russia. It is in Poland’s interest to strive for increasing the pace of diversification of gas supplies to the EU and reducing use.

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Israel’s Mediterranean gas: the potential for gas export to Europe and the dynamic of regional cooperation

Author(s): Karolina Zielińska / Language(s): English

Once gas extraction from the Karish gas field starts, which is scheduled for September 2022,Israel will have a gas surplus enabling it to export around 10 bcm of this fuel to the European Union states every year. To this end, it intends to use the infrastructure connecting its gas fields with LNG terminals in Egypt, in line with the provisions of a Memorandum of Understanding which Egypt, Israel and the EU signed in June 2022. For the time being, no contracts with gas recipients in Europe have been signed, and no details regarding the price of gas sold to the EU have been provided. The continued development of Israel’s gas fields and the expansion of its infrastructure (pipelines and floating LNG platforms) will further increase the country’s export potential. The Israeli government intends to keep prioritising the country’s domestic demand. Despite its increasing commercial significance, the importance of the sale of gas to foreign partners is mainly of a political nature, as it helps to foster the development of relations in the region. Aside from Egypt, Israel’s major partners in the energy sphere include Cyprus, Greece and Jordan. The role of the United Arab Emirates in this context is also increasing. Hezbollah may pose a threat to gas export plans, as it has been pursuing Iran’s interests, which in the context of gas issues are convergent with those of Russia, and ties between these two countries are growing ever closer.

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Russia Attempts Blackmail with Occupation of the Zaporizhzhia Nuclear Power Plant

Author(s): Wojciech Lorenz,Zuzanna Nowak / Language(s): English

Russia is trying to use the fear of a nuclear disaster at the Enerhodar power plant to reduce the scale of Western support for Ukraine and force it to accept unfavourable conditions for a possible ceasefire. The international community should adopt a two-track approach to counter this attempt. On the one hand, efforts should be made to increase the safety of the power plant by establishing a “safety and security protection zone” around it and, on the other hand, coordinate information activities to clearly indicate that Russia is solely responsible for the risk of nuclear catastrophe.

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A dangerous dependence on Russia. Germany and the gas crisis

Author(s): Michał Kędzierski / Language(s): English

The German economy is heavily dependent on natural gas, almost all of which it purchases from foreign suppliers. More than half of this is from Russia. For years, Germany underestimated the dangerous degree of its gas dependence on Russia because it was convinced that the two countries had common interests. The absence of the adequate diversification of supply sources has proven to be a mistake in Berlin’s energy policy. Stoked by Moscow, the European gas crisis has affected Germany and other countries. Combined with the threat of renewed Russian aggression against Ukraine, it made Germany increasingly aware of the scale of this dependence. Although the country’s energy cooperation with Russia will not change fundamentally in the short term, it is now more likely that Germany will take real action to reduce its vulnerability to similar crises in the future. Although it is likely to be only a provisional move, Berlin’s decision to freeze the certification process of Nord Stream 2 (NS2) indicates that its perception of Russia as a partner in energy cooperation is also changing.

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Lignite in the Czech Republic and Germany: controversies and prospects

Author(s): Michał Kędzierski,Krzysztof Dębiec / Language(s): English

Lignite still plays an important role in the Czech and German power industries, remaining one of their key sources of electricity. These countries, together with Poland, are the largest producers and consumers of this fuel in the EU. The share of lignite in both countries’ energy mix is trending downward under the influence of the EU’s climate policy ambitions, particularly the rising costs of CO2 emission allowances. The lignite industry in the Czech Republic and Germany is also linked to capital, with some mines in Eastern Germany being owned by Czech corporations. The activity of lignite-fired mines, power plants and heating plants in both countries has caused a number of controversies, including environmental ones. Local communities affected by the negative impact of the mines’ operation have engaged in protests, and the significance of environmental issues in national politics is also rising. Both Berlin and Prague are planning to stop mining and burning lignite. Germany has already set a coal exit date of 2038, and the debate in the Czech Republic is approaching a conclusion of setting the same date, or even five years earlier. The decision to give up using this fuel is posing socio-economic challenges for the coal regions, which face numerous structural problems.

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A hydrogen alliance? The potential for German-Russian cooperation in hydrogen energy

Author(s): Michał Kędzierski,Szymon Kardaś / Language(s): English

Joint hydrogen energy projects are components of the comprehensive Russian-German energy cooperation which has been ongoing for more than five decades. Due to increasing demand for hydrogen resulting from Germany’s energy transition (Energiewende) and to the potential of the hydrogen sector in Russia and its focus on export, the fundamental interests of the two states are well aligned. In 2020, Moscow and Berlin stepped up their political dialogue in this field, and companies from Germany and Russia went on to conclude their first agreements. The new aspect of this cooperation with Berlin is also important to Moscow in political terms.

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TurkStream on the diversifying south-eastern European gas market

Author(s): Agata Loskot-Strachota,Mateusz Seroka,Marta Szpala / Language(s): English

December 2020 saw the completion of another part (Bulgaria–Serbia) of the European section of the TurkStream gas pipeline, through which gas has been exported from Russia to south--eastern Europe since January 2020. The capacity of the entire route is not yet being fully used, but it has already reduced Russia’s dependence on transit via Ukraine. In 2020, around12 bcm of gas was sent via TurkStream instead of Ukrainian pipelines: half to Turkey, and the rest to Bulgaria, Greece and North Macedonia. Ultimately, the pipeline will also transport gas via Serbia to Hungary, Austria and Romania. The rapid implementation of the entire project, in a region where infrastructure investments usually take a long time, represents a success for the Kremlin. Neither the economic challenges linked to the COVID-19 pandemic nor the political opposition of the US to new links between Europe and Russia (which will mainly strike at the Nord Stream 2 pipeline) have got in the way of the project’s completion.

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Climate ambivalence: Russia’s climate change policy

Author(s): Szymon Kardaś / Language(s): English

Although the importance of global climate challenges is systematically growing, the actions which the Russian authorities have undertaken in this area to date have been very limited. Moscow has not evaded international cooperation to combat climate change, but at the same time it has not undertaken any very ambitious commitments in this regard. The benchmark for the reduction of greenhouse gas emissions that Russia has agreed to is exceptionally favourable to it. Thus, the reduction goals which the Kremlin has announced do not require the authorities to make radical changes to the Russian economy. Individual Russian companies are showing greater interest in the climate agenda, but it is difficult to consider the results of their activities as significant, especially compared to the experience of international companies. The measures undertaken to change the Russian energy mix are also poor: renewable energy sources only account for a marginal share in electricity production in Russia (in total, about 0.4%). It is true that the Russian authorities have begun to notice the importance of climate challenges; this has been confirmed, among other things, by the latest editions of the strategic documents regarding the development of the state. However, these documents do not offer any ambitious climate policy measures. The authorities’ lack of determination and the interests of lobbying groups from the oil and gas sector may prove to be the most serious barrier to changes in this area in the coming years.

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More EU, less Russia. Transforming gas transmission rules in Central and South-Eastern Europe

Author(s): Agata Loskot-Strachota / Language(s): English

In recent months, the rules for gas transmission through the countries of Central and South-Eastern Europe have been changing at an ever faster rate. There has been much talk about opening new routes for exporting Russian gas to the European Union along routes which would bypass this region, which has led to a decline in its transit importance. The ongoing expansion of the network of interconnectors and alternative connections is changing the routes of gas transmission on the Central European market. No less important, although still somewhat less noticeable, are the changing rules for the transport of gas from Russia to the EU. With the expiration of a succession of long-term transit contracts (Ukraine’s at the end of 2019, Poland’s in May 2020, and also those of Slovakia and Bulgaria over the next few years), it will be possible for all of the region’s gas transmission to operate on the basis of EU regulations, namely the Third Energy Package, including its network codes. As a result, there is an increase in transparency and competition, and access to the infrastructure is becoming more attractive, which encourages European companies to use it. At the same time, however, gas transmission from Russia is becoming more unpredictable. This is illustrated by the changes this year in the flow of gas through the Yamal gas pipeline, Ukraine’s main lines and the Trans-Balkan route. The future of gas transmission in the region will also depend on external factors: the processes taking place in Ukraine, the actual physical levels of Russian gas transit, and the situation in the European gas market.

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The Development of Offshore Wind Energy in the Baltic Sea

Author(s): Bartosz Bieliszczuk,Kinga Raś / Language(s): English

Along with the development of renewable energy sources (RES), the interest in using the wind energy potential in the Baltic Sea is growing. Regional cooperation in this field will be conducive to the implementation of EU climate policy and, through the development of electricity connections, will contribute to the development of a more competitive electricity market in the Baltic Sea region. This creates opportunities for Poland, whose investments in offshore wind energy will not only help reduce emissions but also enable the dynamic development of innovation in the renewable energy industry. At the same time, the development of offshore wind farms requires cooperation, for example, between Poland and the countries of the region.

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The EU’s Plans to Reduce Methane Emissions in the Energy Sector

Author(s): Zuzanna Nowak / Language(s): English

Later this year, the European Commission (EC) will present draft legislation aimed at increasing the standards of monitoring, reporting, and leak detection of methane emissions. Although there is a consensus in the EU regarding the need to reduce emissions of this second-most harmful greenhouse gas after CO2, the implementation of the EC’s methane strategy and its expected costs are of concern to energy companies, including Polish ones. The EC will have to consider implementing a system of compensation and incentives to mitigate the effects of the proposed reforms.

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Russia’s Role in the European Gas Crisis

Author(s): Zuzanna Nowak,Maciej Zaniewicz / Language(s): English

Gas prices in the European Union have reached the highest levels in 13 years. In view of the tighter supplies, EU Member States have started to implement support mechanisms for the most vulnerable consumers. Gazprom, however, is trying to exacerbate the crisis to again increase Europe’s dependence on Russian gas. The effects of this manipulation will be felt across the entire EU economy and may adversely affect its energy transformation plans. Ukraine, though, will be affected most by this situation.

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The Dispute over Nord Stream 2 after the Navalny Poisoning

Author(s): Bartosz Bieliszczuk / Language(s): English

The assassination attempt on Russian opposition leader Alexei Navalny has sparked a heated debate within the EU on the rationale behind Nord Stream 2 (NS2) and the political implications of its construction. Despite the growing criticism (e.g., in Germany, a key partner of the project), it is almost certain that the German leaders will maintain their support for the 95%-completed pipeline. Therefore, U.S. sanctions remain the main threat to the project.

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