Foreign Policy and Security in the energy sector
The Foreign Policy and Security dimension is of particular relevance as far as energy sector is concerned. Foreign policy encompasses other dimensions and easily influence one another, while energy security, understood primarily as security of energy supply and actual security of particular state’s integrity in a broader sense, belong to one of the vitally important pillars of every state's’ interests.
We are highly dependent from energy usage not only in our daily life, among others while charging our notebooks and mobiles. A lot of sophisticated infrastructures of our countries, especially security, is built on electronic devices. Therefore energy plays a crucial role both on political and economic level, becoming an important political instrument frequently used either directly or indirectly while making pressure on energy importing countries. Mainly because of such high importance of energy, the voice of energy exporting and import-independent countries prevail. Foreign policy dimension moreover, depending on political will of relevant stakeholders, not only countries as such but also private ones, can easily influence other dimensions, especially environmental, technological and social one.
- Export/import relationship
- Energy trade on internal and external markets (i.e. local internal power exchange markets and trade agreements involving third countries)
- Security of Supply (European and global level)
- grid and pipelines system
- logistic: location, length, maintenance
- ownership: public vs. private facilities (both owned by private and public stakeholders)
- energy transmission by private companies or third countries
- Energy mix
- Percentage of self-generated and imported energy by either:(i) particular country in relation to EU member countries and third countries, and (ii) EU 28 in relation to third countries,
- Percentage of energy generated with fossil fuels and green energy
- Potential risk of generating energy with particular energy sources, e.g. fossil fuels burning may cause respiratory diseases,
- Potential risk of locating power plants in unstable regions, e.g. atomic plants in earthquake zones.
- “Energy Union”
- Political implications (e.g. Russian-Ukraine conflict and Iran nuclear talks)
- EU agreements and programmes with third countries (e.g. European Neighbourhood Policy – Eastern Partnership, TTIP)
Latest developments in the key areas
Energy as a political instrument in foreign policy
Energy develops more and more into an important political instrument in Europe. Political and economic ties with the biggest exporter of oil and gas in our region have loosened but at the same time energy relationship between European countries and Russian Federation have to co-exist. Europe, with differences between particular EU Member States, is still the biggest importer of oil and gas from Russia and in result Russia exports the most of its fuels to Europe. Both Russia and the EU try to loosen this dependence by finding new solutions for political impasse and new export/import markets. On the one hand Russia focuses on a strategic energy relationship with China, while Europe tries to create better relationships with Arabic countries, as a result of nuclear talks with Iran and probable future cooperation. Proportion between export and import cannot be changed dramatically in few years as building of huge infrastructure takes money and time. The coexistence of both parties remains necessary and requires taking diplomatic steps.
Worth mentioning is the background of other relations between Russia and EU countries which indirectly influence the cooperation in the energy sector, in particular reaction on conflicts in Syria, including the approach towards ISIS, other proxy wars in the region and help for refugees.
Energy mix has a direct impact on every dimension. In relation to foreign policy, balanced division of energy and diversity of energy sources serves as bargaining chip while making more equitable relation between export/import countries.
In terms of security of supply, higher market share of internal energy sources gives particular Member States more independence. The energy mix of every EU Member State is different, which can be seen especially on the examples of France, Germany and Poland, and current trends and policies of the EU go more and more into the direction of energy produced with renewable energy sources. The aim is therefore not only production of less carbon emissions, but both (i) a diversification and independence from foreign sources, e.g. Russian oil and gas, and (ii) export of high-tech renewable energy solutions worldwide.
The dependence of countries on fossil-fuel imports as one indicator of energy security
In 2013, the European Union spent around $555 billion on the import of fossil fuels, followed by China ($304 billion), the United States ($278 billion), Japan ($259 billion) and India ($135 billion). In the Intended Nationally-Determined Contributions (INDC) Scenario, existing and proposed policies successfully reduce, or at least stabilise, current levels of import bills in most industrialised countries by 2030. Strong rise in energy demand in developing countries leads to a situation when countries relying on the import of fossil fuels become increasingly exposed to global price developments (the fossil-fuel import bills of China and India currently doubles the one in the INDC Scenario). In the Bridge Scenario, the total spending on fossil-fuel imports in importing regions by 2030 is generally lower than in the INDC Scenario. In exporting regions, the lower demand for fossil fuels in the Bridge Scenario generally results in a reduction in export markets and a loss in revenues compared with what they would achieve under existing and planned policies in the INDC Scenario. The impacts vary by country and region.
The idea of former Polish prime minister and current president of the European Council Donald Tusk has been taken up by the European Commission as one of 10 priorities and therefore resulted in the nomination of a special Commissioner, Maroš Šefčovič, to steer the project. College of Commissioners discussed the plan for the first time in February 2015. Their findings include an annex of “concrete proposals”, including legislation, decisions and analysis. The aim of the Energy Union is to cut across a number of policy sectors including energy, transport, research and innovation, foreign policy, regional and neighbourhood policy, trade and agriculture.
The European Council concluded on March 19th, 2015 that the EU is committed to building an Energy Union with a forward-looking climate policy on the basis of the Commission's framework strategy, with five priority dimensions:
- Energy security, solidarity and trust
- A fully integrated European energy market
- Energy efficiency contributing to moderation of demand
- Decarbonising the economy
- Research, innovation and competitiveness.
The strategy includes a minimum 10% electricity interconnection target for all Member States by 2020, which the Commission hopes will put downward pressure on energy prices, reduce the need to build new power plants, reduce the risk of blackouts, improve the reliability of renewable energy supplies, and encourage market integration.
- EU Member States
- Third countries, in particular countries such as: Russia, Ukraine, U.S., Iran, China
- Private stakeholders e.g. petroleum companies, transmission and distribution system operators, private investors and shareholders
- Companies producing components to energy power plants (e.g. wind turbines, solar panels, nuclear reactors)
- International energy projects e.g. ITER
- should the EU be still focused (as its predecessor: European Coal and Steel Community ‘52 and European Community ‘58) focused on primary energy sectors (i.e. coal and steel)?
- will further lack of strong and common voice and transparent regulations in key economic sectors of all Member States influence EU energy and environment policy?
- needed at all?
- decision made by European institutions (EU Commission, EU Parliament, EU Council) or directly by EU Member States?
- who and in what proportion shall bear its future costs?
- any differentiation between EU Member States more dependent on energy import from third countries?
- in which direction will they evolve?
- what implications will it have on EU supply security by pipelines situated in conflict zones?
- will it result in higher energy prices or energy blackouts?
- diverse number of import/export destinations
- diverse energy mix and stabilization of energy demand
- Energy blackmail? To what extent acceptable (if at all)?
International conflicts next to the borders of EU Member States influencing energy security:
Diversity of energy sources:
Energy as political instrument: