Energy, the European Commission believes, should flow freely to and between EU members. So Maros Sefcovic, the energy commissioner, has two adversaries.
One is Russia, which is trying to keep its chokehold on gas supplies to eastern Europe. The other is EU national governments and their state-owned companies. They like the clout of national energy markets and dislike the way that cross-border trade in gas and electricity erodes it.
On Russia, the EU has made progress. It has avoided, so far, any cuts in gas supplies this winter. Despite more Russian bluster this week, Mr Sefcovic is baby-sitting an agreement on bills and debts that the EU helped to broker between Ukraine and Russia. It has pushed his native Slovakia to send gas eastward to Ukraine, reversing the usual flow. The EU is pressing Ukraine to reform its energy business, in particular to put gas meters on the border with Russia rather than rely on measurements taken at pumping stations inside the country. Many see a lack of meters as a prime source of corruption.
The EU has also faced down the Kremlin over South Stream, a highly political planned gas pipeline under the Black Sea and across the Balkans. The commission ruled that South Stream as originally proposed was illegal: the same company is not allowed both to run the pipeline and to own the gas it pumps. Russia urged those countries in which it has some sway, such as Austria, Bulgaria and Croatia, to defy the commission, but in vain. So Russia’s president, Vladimir Putin, abruptly cancelled the project in December.
A smaller, EU-backed pipeline called TANAP is going ahead, but this will not help countries left stranded by the collapse of South Stream, notably Hungary and Bulgaria. Mr Sefcovic is trying to assist both. He is pressing Croatia to build a liquefied natural gas (LNG) terminal and allow the gas to flow to Hungary. A new LNG terminal in Lithuania has already won that country a better gas price from Russia. But the best way to help vulnerable countries is to build pipelines and electricity cables between them, and ensure that they work in both directions.
Promoting such “interconnectors” will be a big priority in the planned energy union, an EU project that Mr Sefcovic will outline at a meeting in Riga on February 6th. So far progress has been patchy, not least because of Russian influence: Bulgaria’s puzzling lack of interconnectors with Greece and Serbia is an example. But electricity interconnectors should be more widespread, too.
In 2002 the EU set a goal to members that electrical interconnectors should make up at least 10% of national capacity. But several countries have lagged behind in meeting this target, now set for 2020. And some countries, such as France, positively dislike cross-border power flows. Cheap wind-generated electricity from Spain would derail the French nuclear industry’s business model.
The energy union aims to make Europe greener, safer, cheaper, thriftier and more modern. But headaches abound. There is plenty of money to pay for new projects, but they take far too long — the average time for EU infrastructure projects is ten years, says Mr Sefcovic. And the business models are still unclear. Interconnectors are hard to finance because, when they are effective at equalising prices, they may not be used much, or even at all.
The trickiest issue over energy policy is not on Mr Sefcovic’s desk, but on a colleague’s. The competition commissioner, Margrethe Vestager, must decide soon whether to proceed with a prosecution of Gazprom, the Russian gas giant, for abusing the rules of the single market through its country-by-country pricing and other practices. Tensions with Russia over Ukraine held back this action last year. But having seen Mr Putin blink over South Stream, the commission may think it is a good time to show who is in charge.
businessinsider.com
