Can the EU unite over energy?

Simon Taylor hears renewed calls for common external energy policy at the Vilnius energy security conference.

No fewer than four presidents of EU countries plus energy ministers from six other member states met in the capital of Lithuania last week to discuss the challenges of energy security. But with representatives of the Russian and German governments conspicuous by their absence, the resounding view from countries east of Berlin was that the EU’s common external energy policy was a good idea. It just needed to happen.

• The Samartia pipeline

The main achievement of the Vilnius energy security conference, which was co-hosted by Lithuanian President Valdas Adamkus and Polish President Lech Kaczysnki, was the signing of an agreement for a new Samartia pipeline to bring Azeri oil from the Caspian Sea to Gdansk in Poland.

Adamkus hailed the signing of the agreement by Poland, Lithuania, Ukraine, Georgia and Azerbaijan as a "historic achievement" in diversifying energy supplies.

The planned pipeline will link an existing connection, between the Ukrainian cities of Odessa on the Black Sea and Brody near the border with Poland, to Gdansk. But the Odessa-Brody pipeline has not been used to deliver oil westwards and some analysts doubt whether the planned link will ever be viable. Nevertheless, the assembled presidents competed to make promises to move the project forward.

Ukraine’s President Viktor Yushchenko, who knows more than most about threats to energy supplies, invited his fellow leaders to a successor conference in Kiev next year to agree the details of the scheme.

Adamkus and Kaczysnki were at pains to stress that the agreement was not "directed at any one country", a barely hidden reference to Russia. Adamkus pointed out that a representative of the Russian government had been invited to the conference because "we believe lasting agreements are formed in open debate".

But, as he later pointed out, Lithuania’s supplies of Russian oil through the Druzhba oil duct had been cut off since July 2006 when the company started repair work. Adamkus said he did not expect the supply to be restored.

• Russian power

Gazprom’s power through its control of energy supplies in the region cast its shadow over the conference proceedings, despite leaders’ denials that the Samartia project was aimed at circumventing Russia’s stranglehold.

Alexandr Vondra, the Czech deputy prime minister, said: "Manipulation or interruption of energy supplies is as much a threat as military action."

Vondra was one of several politicians from the central and east European member states who stressed the need for a genuine EU external energy policy to respond to the Russian influence.

Adamkus said that the EU had been successful in bringing stability following the collapse of the Soviet bloc. But, he said: "Seventeen years after the Cold War, energy grey zones still continue to exist in Europe." What was needed was "a more ambitious and decisive integrated European energy policy".

While Adamkus said that he welcomed the EU’s package of energy measures designed to create a more integrated internal market and more provisions for solidarity among member states, he warned that "an EU internal energy market will not work without an EU external energy policy". Europe was strongest when it was united, he said. But some countries choose to deal with energy challenges individually, he said, possibly referring to Germany’s dealings with Russia over issues like the Nordstream Baltic pipeline.

• EU energy policy

While there was a clear need to deal with energy security challenges, Vondra doubted whether the EU had made up its mind whether it wanted a common policy towards suppliers from the Caspian and Black Sea regions. "The division within the EU is palpable," he said.

The Latvian President Valdis Zatlers added his voice to the complaint about a weak focus on the external flank of energy policy within the EU’s energy concept. "We still lack a common EU energy policy. We have a range of measures on renewables …but they don’t add up to a coherent policy," he said.

• Liberalisation

Politicians from the Baltic region were generally supportive of the energy market liberalisation package presented by the European Commission on 19 September although they flagged up national concerns.

Poland’s Economy Minister Piotr Grzegorz Wozniak said that the energy package was extremely well-balanced but that there was a need to differentiate between gas and electricity markets.

Only Romanian President Traian Basescu firmly backed the European Commission’s call for ownership unbundling, where energy firms with generating assets have to sell off their shares of transmission networks. Bulgaria, Latvia and Slovakia are opposed to ownership unbundling.

• Renewables

Poland’s minister also issued a stark warning that his country was not in a position to boost its use of renewable energy resources to help the EU meet its overall target of obtaining 20% of energy from non-fossil fuels.

Although Latvia leads the EU in its share of energy from renewables with around 40% from non-fossil fuels, mainly from biomass, the countries of the Baltic regions are looking to nuclear power to square the circle of securing energy, supplies while reducing carbon emissions. Vondra said: "If the EU wants to make itself less vulnerable in the hunt for global energy, it should reopen the debate on nuclear energy." Referring to the plan to build a new nuclear power station at Ignalina in Lithuania to replace one that the EU closed because of safety fears, Vondra said: "The successful completion of Ignalina will help." The three Baltic states and Poland are working together on the new Ignalina plant, which is expected to be completed in 2015.

• Energy and solidarity

The voices from the east joined in a chorus calling on the EU to show greater unity and solidarity on energy policy. But the Ignalina issue exposed that the countries of the region have their own difficulties in agreeing a common energy strategy.

One of the hopes for the conference was that Poland and Lithuania could announce a deal on the planned Power Bridge, an electricity interconnector. But the two parties have failed to resolve their differences over each side’s share of the link’s capacity, with Poland insisting that it must have 1,200 megawatts of the interconnector’s capacity. The fight over the shares is academic for the moment as the bridge will only come on line when the new Ignalina plant is operational. As Latvia’s Zatlers pointed out, the real issue was not electricity supply but gas where countries were 100% reliant on Russian imports.

But when it comes to energy policy it seems easier to criticise others for showing of a lack of unity than to practise it yourself.

Simon Taylor hears renewed calls for common external energy policy at the Vilnius energy security conference.