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This first part of the series “Gas, War, and Europe” aims to analyse the different factors that have shaped the longstanding dependency of the European Union (EU) on Russian gas, and how these have laid the foundations for the energy crisis triggered by the war in Ukraine. For this, the spotlight is placed on the interdependence of economic, political, and infrastructural issues as the main factors capable of explaining the current situation.
Critical minerals are important as they are essential in the construction of sustainable energy technologies that will be necessary to achieve net-zero emissions by 2050. Australia is developing towards becoming an integral part of the international critical minerals supply chain. But to become one of the main suppliers of critical minerals Australia needs to attract investments and challenge China’s dominant position in the downstream of critical minerals.
“Central Asia, a region with significant strategic importance due to its geographic location and energy resources, is severely affected by the uneven distribution of energy resources, low investment, corruption and gross mismanagement that prevents them from harnessing energy security and from seizing opportunities in the energy market. Most importantly, the Soviet legacy in the five Central Asian republics—Kazakhstan, Kyrgyzstan, Uzbekistan, Turkmenistan, and Tajikistan—continues to have a negative impact on the region, which is reflected in their energy programs.”
Central Asia is among the most understudied regions of the world, but it represents an important area in terms of energy resources.1 This region, which is composed of a mix of high-, middle- and low-income economies, holds significant strategic importance due to its geographic location and natural resource endowments2, particularly energy sources. However, the uneven distribution of energy resources, low investment, corruption and gross mismanagement, prevent these countries from harnessing energy security and from seizing opportunities in the energy market.3 Most importantly, the Soviet legacy in Central Asia has served as a great benefit as much as a burden, due to the region’s inheritance of major oil and gas pipelines that still centered around Russia.
The energy relations of the now five Central Asian republics—Kazakhstan, Kyrgyzstan, Uzbekistan, Turkmenistan, and Tajikistan—were first organized by the integrated power system of the Union of Soviet Socialist Republics (USSR), and then by the Unified Energy System of Central Asia (UESCA).4 The former held Russia as its dominating centre and is mainly characterized by a resource-sharing system, where Kyrgyzstan and Tajikistan provided water to Kazakhstan, Turkmenistan and Uzbekistan in summer and received Kazakh, Turkmen and Uzbek coal, gas and electricity in winter.5 In terms of energy production, the latter consisted of 83 power plants located across the republics, with a total capacity of 25 GW, linked by a 220 and 500-kilovolt transmission line.6 But after the dissolution of the USSR (1991) and the disintegration of UESCA (2003), the five Central Asian countries were left deeply interdependent in the energy field, dealing with an energy security issue as a matter of national security.
For a region that was used to a unified power grid and a resource-sharing system, countries had to adjust their own energy policies and develop autonomous domestic energy systems by identifying and leveraging their own resources to enhance their domestic water, electricity and gas infrastructure. Yet, the dependency on Russia after this period remained evident, although different from country to country. 7 With the exception of Kyrgyzstan and Tajikistan, the Central Asian region became increasingly reliant on access to Russian pipelines in order to export their oil and gas resources to global markets. 8 Such are the cases of Kazakhstan, Turkmenistan, and Uzbekistan, which had abundant fossil fuel reserves, enabling them to meet domestic energy needs and earn money from exports, particularly to Russia, China, Iran and Afghanistan.9 Kazakhstan remains one of the top producers of energy in the European and Eurasian region, behind Russia and Norway and ahead of Azerbaijan10, whilst the gas reserves of Turkmenistan and Uzbekistan are respectively the 5th and 8th highest in the world. 11
In an attempt to gain full energy independence, Kazakhstan has increased its North-South energy transit capacity and has been betting on conventional renewable energy sources (RES).12 Uzbekistan increased thermal power plants (TPP) production substantially, and Turkmenistan has built several new power plants, including the first-ever combined-cycle gas-steam turbine power plant at the Mary State Power Station.13 On the other side, Tajikistan and Kyrgyzstan had plenty of hydropower potential but very little oil and gas of their own, preventing them to benefit from hydrocarbon exports and forcing them to rely heavily on energy imports of their neighbours.14 Nonetheless, both countries developed large hydropower plants (HPP) to compensate for the energy that their other power plants could not generate.15 At the moment, Kyrgyzstan uses just 10% of that potential, while Tajikistan uses only 5%; yet both countries already produce over 90% of their electricity from hydropower.16
Despite the fact that this region has great energy potential on the international level, these countries continue to face important challenges that prevent them from benefiting from their sufficient and sustainable energy supplies. Besides the unequal distribution of energy resources and infrastructural dependence on Russia, these countries maintain increasingly obsolescent energy systems that are severely affected by seasonal variations of power production with water-energy linkages.17 In addition, Central Asia’s oil and natural gas industry faces a great challenge in transporting their products from the landlocked region to global markets, mainly since the majority of the existing pipeline systems still lead to Russia and any new energy infrastructure is still likely to depend on Russia for funding.18In a region where there is no common definition of energy security, cooperating among the states of Central Asia seems to be the right answer. Some experts have recommended that the cooperation among these countries will not only diversify their energy resources but also their export destinations, leading to a decrease in the dependence of Russia for successfully achieving energy security in the region.19 In part due to the lack of regional cooperation among these states, the Central Asian transport route with the rest of the world has remained underdeveloped, intensifying reliance on Russia. Therefore, a joint management of these vital resources is considered crucial not only for the region’s energy security but also for their sustainable development, poverty reduction and climate resilience.20
1. Velázquez, S (2017) ‘Gas y petróleo en Asia Central, ¿alternativa para la dependencia energética de la UE?,’ Instituto Español de Estudios Estratégicos, p. 1.2. United Nations Economic and Social Commission for Asia and the Pacific, ESCAP. (2018) ‘Energy and Development in Central Asia: A statistical overview of energy sectors in Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan,’ [online] available from https://www.unescap.org/sites/default/files/Central%20Asia%20Statistical%20Perspective%202018_WEB.pdf , accessed on 12th June 2019, pp 4.
3. Domnin, S (2016) ‘Sergei Domnin: Hydro-energy problems in Central Asia: A View from Kazakhstan,’ Central Asia Bureau for Analytical Reporting [online] available from https://cabar.asia/en/sergei-domnin-hydro-energy-problems-in-central-asia-a-view-from-kazakhstan/ , accessed on 12th June 2019.
4. Ibid.
5. International Crisis Group (2014) ‘Water Pressures in Central Asia,’ [online] available from https://www.refworld.org/pdfid/5412a6444.pdf,, accessed on 12th June 2019.
6. ESCAP, pp 30.
7. Niklasson, C (2008) ‘Russian leverage in Central Asia,’ FOI, [online] available from https://www.foi.se/rest-api/report/FOI-R--2484--SE, accessed on 20th June 2019, pp 32.
8. Hendenskog and Larsson (2007), Russian Leverage on the CIS and the Baltic states, Stockholm: The Swedish Defence Research Agency (FOI), FOI-R--2301-SE, p. 45
9. Russell, M (2018) ‘Water in Central Asia: An increasingly scarce resource,’ European Parliamentary Research Service [online] available from http://www.europarl.europa.eu/RegData/etudes/BRIE/2018/625181/EPRS_BRI(2018)625181_EN.pdf , accessed on 13th June 2019.
10. Putz, C (2017) ‘Energy in Central Asia: Who Has What?,’ The Diplomat, [online] available from https://thediplomat.com/2017/06/energy-in-central-asia-who-has-what/ , accessed on 13th June 2019.
11. Ibid.
12. Wheeler, E (2017) ‘Kazakhstan's Renewable Energy Quest,’ The Diplomat, [online] available from https://thediplomat.com/2017/05/kazakhstans-renewable-energy-quest/, accessed on 13th June 2019.
13. Turkmenistan Today (2018) ‘President of Turkmenistan Launches New Power Plant,’ [online] available from http://tdh.gov.tm/news/en/articles.aspx&article14459&cat29 , accessed on 14th June 2019.
14. Russell, p. 9.
15. Smirnov, S (2009) ‘Разорвать нельзя оставить,’ Expert Kazakhstan №46, 237, [online] available from https://expert.ru/kazakhstan/2009/46/elektroenergetika/, accessed on 14th June 2019.
16. Russell, p. 4.
17. Aminjonov, F (2017) ‘Re-thinking Central Asian Energy Security: Pitfalls of Export Diversification Policies,’ Central Asia Institute for Strategic Studies, [online] available from http://library.fes.de/pdf-files/bueros/kasachstan/13546.pdf , accessed on 14th June 2019.
18. The Jamestown Foundation (2019) ‘Central Asia’s Biggest Energy Challenge,’ Oil price, [online] available from https://oilprice.com/Energy/Energy-General/Central-Asias-Biggest-Energy-Challenge.html , accessed on 15th June 2019.
19. Bahgat, G (2011) Energy Security: An Interdisciplinary Approach,: Wiley.
20. Shrestha, P (2019) ‘EU and World Bank agree €7m for energy and water security in Central Asia,’ Energy Live News, [online] available from https://www.energylivenews.com/2019/05/24/eu-and-world-bank-agree-e7m-for-energy-and-water-security-in-central-asia/, accessed on 15th June 2019.
In an increasingly open and interconnected market, one of the most vital elements of the European Union (EU) common market project is lagging behind: energy. The European Energy Union is an ongoing project of the EU to create an open and interconnected energy market throughout the EU providing secure, affordable and climate-friendly energy.
By Dorien van Dam
In an increasingly open and interconnected market, one of the most vital elements of the European Union (EU) common market project is lagging behind: energy. The European Energy Union is an ongoing project of the EU to create an open and interconnected energy market throughout the EU providing secure, affordable and climate-friendly energy. The initiative was launched in 2014 and published its last progress report in November 2017 [1]. These reports monitor the advancement of the EU towards its 2020 and 2030 energy and climate targets. The reports repeatedly draw the same unsatisfactory conclusion: more work will be needed. So, what exactly is going wrong?
The road towards this Energy Union is outlined in a framework, and can be roughly divided into four pillars: (1) more interconnection, (2) higher energy efficiency, (3) higher share of renewable energy and (4) cuts in greenhouse gas emissions. Some countries, however, are struggling more with their targets than others.
As per the 2014 numbers of Eurostat, nine member states have already met their national renewable energy targets for 2020. The states that are the furthest away from reaching their targets are France, the Netherlands and Ireland [2]. Ironically, these are countries with relatively high GDP per capita within the EU. Irish officials argue that their progress towards the targets were hampered by slow recovery following the financial crisis. Ireland was however not disproportionately affected by the financial crisis; it was a truly global crisis [3].
A possible explanation is that the four countries were not politically equipped to surpass the tragedy-of-the-commons problem. Renewable energy is a typical good that everyone wants but nobody wants to pay for. In the Netherlands, even after a sharp increase in ‘green’ voters during the 2017 election, the new government coalition agreement was exceptionally weak from an environmental perspective. The French system, on the other hand, is infamous for its layered bureaucracy with high amounts of red-tape. This system, in addition to a well-organized fossil fuel lobby are severely hindering the development of a green energy sector [4].
On a more positive note, the EU is expected to surpass their goals in cutting greenhouse gas (GHG) emissions by 1%. Even though this goal does not include ‘embedded emissions’: GHG emissions involved in the production of imported goods [5], it is still a hard-needed win for the EU in the realisation of their 2020 goals.
Another area where progress is being steadily observed is that of energy efficiency. Per capita energy consumption in the EU has decreased from 2007 to 2014. Yet, 2015 and 2016 witnessed small increases, likely due to cooler winters. This resulted in the repetition of the EU Energy mantra: “additional efforts may be needed.” Despite these cooler winters, the EU is the first economic bloc to decouple economic growth from energy consumption.
Finally, the EU has a range of projects on their way to increase energy interconnection. These projects, however, are facing their own geopolitical issues. To conclude, the EU has set out a structured path towards the creation of its Energy Union, but along the way it has had to face multiple political—and meteorological—realities. Most of the 2020 goals are legally binding targets, resulting in possibly hefty fines for the countries that fail to meet their targets. Yet it is doubtful that the European Court of Justice will accept a cold winter as a justification for a breach, but imposing fines when the EU is suffering from low levels of support might prove a politically risky move. All in all, 2020 will prove to be an interesting year, not just for the Energy Union, but for the wider European Union as well.
[1] European Commission. 2018. Energy Union and Climate. [ONLINE]
Available at: https://ec.europa.eu/commission/priorities/energy-union-and-climate_en.
[Accessed 3 March 2018].
[2] TheJournal.ie. 2017.
Ireland is expected to miss its EU renewables target - and cop a multimillion-euro bill.
[ONLINE]
Available at: http://www.thejournal.ie/ireland-eu-2020-energy-fines-2-3231942-Feb2017/. [Accessed 3 March 2018].
[3] Ibid.
[4] ICIS. 2017. ICIS Power Perspective: France likely to miss 2020 renewables target. [ONLINE]
Available at: https://www.icis.com/resources/news/2017/10/06/10149918/icis-power-perspective-france-likely-to-miss-2020-renewables-target/?redirect=english. [Accessed 3 March 2018].
[5] European Commission. 2018. Energy Union and Climate. [ONLINE]
Available at: https://ec.europa.eu/commission/priorities/energy-union-and-climate_en. [Accessed 3 March 2018].
