EKATERINA KOROVINA: The integration of the Baltic states in the internal energy market of the EU. In my diploma thesis, I study the integration of the Baltic states in the internal energy market of the EU.
THEORETICAL APPROACH
- Integration and the role of energy resources in this process
- Key aspects of the theory of neo-functionalism
- Economic regional integration
- Neo-functionalists’ view on the first energy communities in Europe
- The value of energy in the Post-industrial and Information society
- Energy resources in the contemporary world
The theory of regional integration was based on the early experiences of the European Community. The energy relationship between the EU and Russia in the energy field is the main issue of European energy policy.
METHODOLOGY
The Meaning and Determination of Capabilities
In these reports the energy sectors of the Baltic States are presented and integration possibilities can be determined. It is necessary to examine whether the Baltic states should be integrated into the EU energy market and whether the states and the EU have the essential capabilities to implement integration. Assessing the existing possibilities to reconstruct the energy market in accordance with the EU energy system is important for the study.
To understand the states' options, I also use the countries' reports on their energy markets. The second step is to investigate the main supplier of energy resources and the owners of the main energy companies. There is a need to use EU documents and examine the energy projects in the particular region.
The Concept of Project
At the same time the citizens of the states must be able to pay high tariffs for electricity or gas. The main factor hindering market integration is the lack of the necessary energy infrastructure connecting isolated countries with other EU states. It is essential to determine what infrastructure is in place in the states and what additional facilities are needed.
The next step is an analysis of the process of building the necessary infrastructure, to understand what infrastructure needs to be built and what are the obstacles to building the infrastructure. If there is no time frame in the project it is another type of activity – procedure. This phase foresees the realization of the point of the plan to achieve the desired result.
Evaluation of Projects Feasibility
These should be documents containing the specification of the project and reports on the project implementation. To analyze the feasibility of the project it is necessary to use comparative analysis and compare five progress reports. This aspect can be estimated by comparing the time frame of the projects in the first progress report for 2009 and the final progress report for 2012.
In order to understand the reason for compliance or non-compliance with the timeline, there is a need to classify projects according to financial resources. Therefore, the third stage is the determination of the financial resources of the projects based on whether the projects meet the deadline or not. The method is the theoretical analysis of the documents, the action plan and the progress report.
INTERNAL ENERGY MARKET OF THE EU
The Concept and the Goals of the Internal Energy Market of the EU
The three main goals of the package are the separation of operators and suppliers in the field of gas and electricity, the protection of consumer rights and the independence of regional authorities to act. For example, according to the new energy rules, the supplier of energy resources cannot regulate the transition of energy. The other aspect is the creation of the Agency for the Cooperation of National Energy Regulators.
The agency should help develop cooperation at regional level, help realize 10-year network development plans and coordinate the development of the Internal Market for gas and electricity. The third energy package came into force in March 2011, but there are many EU members who have not accepted those rules. This EU energy policy should prevent any crisis related to energy supply, because the energy systems of the member states will be connected to each other.
Challenges in the Construction of the Internal Energy Market
An important problem in the construction of the internal energy market is the absence of the necessary infrastructure. This package includes infrastructure that should be built by 2020 to promote the construction of the EU's internal energy market. Latvia, Lithuania and Estonia must be connected to the rest of Europe to be part of the internal energy market.
In the energy infrastructure investment project, it is written that it is impossible to invest in all projects to complete the construction of the internal energy market. The investment issue should be discussed in the EU in order to decide on plans for the development of the energy market. One of the reasons for granting the deviation is the lack of investment in infrastructure development.
Role of the European Commission towards the Baltic States Joining the Internal Energy Market
There is a need to increase the efficiency of the energy network and to ensure access to transport systems for consumers. However, Latvia, Lithuania and Estonia did not accept some of the rules of the third package in the field of electricity and gas. Under the Treaty of Lisbon, the European Commission is responsible for taking action against EU members who do not follow EU legislation.
When the EC has not complied with the request of the country, he asks for. To be part of the internal energy system, the Baltic states must adopt the new energy legislation and follow the common energy policy of the EU. Currently, the energy networks of Latvia, Lithuania and Estonia are isolated from the internal energy market of the EU.
THE ENERGY POLICY OF THE BALTIC STATES
The First Steps of Energy Integration for the Baltic States
In 2005, the treaty on the construction of the electricity connection connecting Finland and the three Baltic States, EstLink, was signed. The main energy companies of Latvia, Lithuania and Estonia have created an electricity cooperation organization called the BALTSO. There were many treaties between energy companies of Latvia, Lithuania and Estonia on cooperation of the electricity systems of the countries.
In 2006, Latvenergo became the first member of the Scandinavian energy exchange, Nord Pool Spot AS. Latvia, Lithuania and Estonia signed energy agreements with Russia and reformed their energy market in line with EU requirements. This energy policy allowed the Baltic countries to buy cheap energy resources in Russia and join the EU at the same time.
The Energy Sector of the Baltic States
However, the Lithuanian gas system is not included in the EU single energy system. In the field of gas, there are two main projects: the construction of the Lithuanian-Polish and Latvian-Lithuanian connecting pipelines. As a shareholder of Nord Pool Spot, Lithuania now has the right to participate in the construction of the internal energy market.
The goal is the integration of the region into the internal energy market of the EU. Inčukalns underground gas storage plays an essential role in the country's energy system. The Baltic states lack energy connections with the rest of the EU and energy systems are isolated from each other.
The Plan of the Baltic Sea States Integration into the Internal Energy Market of the EU
- The Main Aspects of the Baltic Energy Market Interconnection Plan
- The Energy Projects of the BEMIP
- Implementation of the Projects in the Baltic States
The strategy implementation project is the Baltic Energy Market Interconnection Plan. BEMIP's spheres of operation are the electricity and gas systems of the Baltic States. In the gas system of the Baltic states, the most important projects concern the construction of infrastructure in the Eastern Baltic Sea region.
Latvia, Lithuania and Estonia have the lowest electricity prices among EU members in the Baltic Sea region. Almost all energy projects in the Baltic Sea region are long-term and complicated. The absence of energy interdependence between the Baltic states is particularly noticeable in connection with trade in gas.
THE RUSSIAN FACTOR IN THE BALTIC STATES’ INTEGRATION INTO THE INTERNAL ENERGY MARKET
Energy Partnership between Russia and the Baltic States
The main aspect of gas cooperation between Russia and the Baltic Sea countries is ensuring the security of gas supply. In the field of gas, the Baltic States are important transit countries for Russian gas. This project is aimed at the development of transport routes, the supply of energy resources and the supply of natural gas from Russia to the Baltic States. 104.
The head of the department for the Baltic States and its research and information center of Moscow State University S. The Baltic States intend to leave the unified energy system of Russia and join the EU energy system in response. Russian response to the Baltic States' integration into the EU's internal energy market.
Russian Reaction towards the Baltic States’ Integration into the Internal Energy Market of the EU
Roldugin reports that the energy company may raise gas prices and appeal to the court if Latvia follows the provisions of the third energy package before 2017. The most complicated situation with the approval of the third energy package is in Lithuania. After two years, the Russian Gazprom will not be able to own the shares of the energy company Lietuvos Dujos.
In the beginning of 2012, there were negotiations on the implementation of the Third Energy Package in Lietuvos Dujos. However, changes in the energy legislation of the EU have affected the agreements on energy supplies and activity of the company. He estimates the reaction of Gazprom to the new energy policy of the Baltic States as one of panic.
The Role of Gazprom in the Energy Market of the Baltic States Development
However, in March 2013, the Russian energy company sold its assets and the current owner is unknown. Gazprom does not want to lose its energy customers in the Baltic Sea region and continues to invest in energy projects in the Baltic states. Financing infrastructure projects in the three Baltic countries helps Gazprom spread its influence in the region and develop its energy policy.
CONCLUSION
The EU is interested in the integration of the Baltic States into the internal energy market. The Baltic states are just one of the regions where new infrastructure needs to be built. At the same time, these projects are of great importance for the energy systems of the Baltic States and necessary for cooperation with the EU.
It is clear that Russia's role in the energy sphere of the Baltic states is essential. Russia has instruments to influence energy policy, regulate prices and influence the energy integration of the Baltic states. However, Europe does not invest in gas projects or nuclear infrastructure in the Baltic states and refers to the countries' uncoordinated actions.
BIBLIOGRAPHY Sources
Политики и технократы в постиндустриальном обществе», http://ssr1.uchicago.edu/PRELIMS/Political/pomisc1.html. Информационное общество и его пределы. http://www.energybulletin.net/stories information-society-and-its-limits. 2012) Электроэнергетика Латвии от истоков до наших дней. Карваликс, Ласло З., (2007) Информационное общество - что это такое. Значение, история и концептуальная основа выражения).
A reappraisal in the light of the new dynamics of the EC” Millennium – Journal of International Studies № 20.1.
