Kyiv's gas strategy: closer cooperation with Gazprom or a genuine diversification. OSW Commentary No. 110, 2013-07-16

In recent months Kyiv has been intensifying its efforts to diversify Ukraine’s gas supply routes with a view to reducing the country’s dependence on imports from Russia. One of the steps which Kyiv has taken has been to make the unprecedented decision to start importing gas from its Western neighbours. In November 2012, Ukraine’s state-owned Naftogaz began importing gas through Poland under a two-month contract with RWE (the imports continued into 2013 under a separate deal), while in the spring of 2013 Ukraine started importing gas from Hungary. Kyiv is also currently looking into the possibility of purchasing gas from Slovakia. Furthermore, since 2010 the Ukrainian government has been working on the construction of an LNG terminal near Odesa. The authorities have declared that this will allow Ukraine to import up to 5 billion m3 of LNG a year by 2015. The government has also taken measures to increase domestic production, including from non-traditional sources, and it plans to replace gas-based with coal-based technologies in local power stations. Finally, in January 2013, the government signed a 50-year production sharing agreement with Shell. This paves the way for the development of Ukraine’s shale gas deposits.

Russia's development assistance. OSW Commentary No. 62, 2011-10-10

In its attempts to catch up with the global trend, Russia began granting development assistance in 2004. From the onset of Russia’s commitment, the aid delivered has increased fivefold and reached approximately US$ 500 million in 2010. Russian aid, albeit distributed nearly exclusively via international organisations, has been granted above all to members of the Commonwealth of Independent States (CIS). In recent months work on the establishment of the Russian development assistance system has been accelerated (a national strategy is being prepared and a specialised agency is to be established). This move proves that the Kremlin attaches weight to activity in this area which is an element of soft power politics, the foundations of which Moscow is currently attempting to lay. In its commitment to development co-operation Russia has sought on the one hand to increase its prestige on the international stage and on the other hand to gain another instrument of exerting its ascendancy in the CIS. The scale of aid and the way of delivering it have not made Russia an important global actor. Over the last five years Russia increased the funding allocated to development assistance several times, however, compared to other donors its aid does not appear impressive. The resources dedicated to this end stand at a mere 0.035% of Russian GDP. Unlike other non-Western superpowers such as China or India, Russia is not a competitor for Western countries in this area on the global scale. Nevertheless, within the CIS, Russia’s aid is building the country’s position as a donor. The long-term results of this aid are however being counteracted by the fact that Russia is expecting measurable and direct political and economic benefits in return. Although this policy helps Moscow achieve its objectives in the CIS, it does not develop Russian potential in the sphere of soft power or create a positive image of the country.

EU development ministers discuss approach to Central Asia. EUCAM Commentary No. 16, July 2011

On 14 July European development ministers met in Sopot, Poland. Among a host of development related matters Central Asia was on the agenda and European Union Special Representative Pierre Morel and Development Commissioner Andris Piebalgs were invited to give political and development assistance oriented background to the European ministers. The Polish Presidency wants to devote special attention to EU development assistance to this often over-looked region, which the EU has traditionally viewed predominantly through a foreign policy lens. Development strategies to Central Asia need to be discussed in the context of the five year old political strategy, set to be reviewed this coming autumn.

Is the EU-Central Asia Strategy running out of steam? EUCAM Policy Brief No. 17, May 2011

The EU’s Central Asia Strategy approaches its fourth anniversary. In that time the EU has placed its relationship with Central Asia on a more structured footing. Although progress has been made in building dialogue and in furthering engagement, the strategy’s limitations are increasingly obvious. This brief argues that the driving force of the EU engagement should be based on a closer link between security and development. Engagement in this broad field should be underpinned by a values based approach that seeks to promote more explicitly reform on human rights, rule of law, governance and democracy. The momentous changes sweeping across the Middle East and North Africa have demonstrated that even the most apparently durable authoritarian regimes are vulnerable to sudden political shocks.

European Energy and Industrial Policy Realigned: Risk or Opportunity for EU Eco-Innovation Strategy? IES Policy Brief Issue 2014/03/February 2014

Summary. Europe’s eco-innovation strategy fuses industrial, energy and environmental policy together in a concept for sustainable economic growth in the 21st century. The latest debate about high energy prices and their impact on energy-intensive industry shows, however, that the emphasis among the three policies has shifted over the years. Some adjustments are therefore necessary in order to reduce evolving inconsistencies. This Policy Brief describes the different dimensions of the EU’s industrial policy, and assesses the options available to policy-makers to increase the competitiveness of energy-intensive sectors without compromising the eco-innovation and sustainability agenda. If several key principles of the European sustainability agenda remain unchanged, strategic development is possible.

Spotlight-Europe - March 2015: The EU neighbourhood in shambles. Some recommendations for a new European neighbourhood strategy

Executive Summary. An “arc of instability” stretching from the European Union’s (EU) eastern borders down to the Mediterranean basin has undermined its flagship European Neighbourhood Policy (ENP). This policy was designed to deliver prosperity, stability and democracy to countries surrounding the EU. It has manifestly failed and needs to be radically rethought. Starting with a tabula rasa, the EU should abandon the very concept of a heterogeneous “neighbourhood” in the face of glaring differences among the 16 countries affected, not least because some are uninterested in reform; others may even be failed states. EU member states are themselves pursuing divergent interests and goals. A fundamental review of the ENP should lead to more differentiated, targeted measures to promote “transformational change” within neighbouring states ready to accept it. The EU should offer revised incentives such as participation within the proposed “energy union” or freer trade designed to aid local economic development. It should embrace a wider range of actors, including civil society, promote entrepreneurship and help reform countries’ police and military forces. The review should reassert common EU institutions in negotiating and working with neighbours and give them a central role in preventing and resolving conflicts as well as promoting democratic reform and economic stability. This revised ENP should help underpin the EU’s efforts to forge a genuine Common Foreign and Security Policy.

Renewables: The great uncertainty of the EU energy strategy. Egmont Paper No. 71, November 2014

Summary. For more than two decades, the development of renewable energy sources (RES) has been an important aim of EU energy policy. It accelerated with the adoption of a 1997 White Paper and the setting a decade later of a 20% renewable energy target, to be reached by 2020. The EU counts on renewable energy for multiple purposes: to diversify its energy supply; to increase its security of supply; and to create new industries, jobs, economic growth and export opportunities, while at the same time reducing greenhouse gas (GHG) emissions. Many expectations rest on its development. Fossil fuels have been critical to the development of industrial nations, including EU Member States, which are now deeply reliant upon coal, oil and gas for nearly every aspect of their existence. Faced with some hard truths, however, the Member States have begun to shelve fossil fuel. These hard truths are as follows: firstly, fossil fuels are a finite resource, sometimes difficult to extract. This means that, at some point, fossil fuels are going to be more difficult to access in Europe or too expensive to use.1 The problem is that you cannot just stop using fossil fuels when they become too expensive; the existing infrastructure is profoundly reliant on fossil fuels. It is thus almost normal that a fierce resistance to change exists. Secondly, fossil fuels contribute to climate change. They emit GHG, which contribute greatly to climate change. As a consequence, their use needs to be drastically reduced. Thirdly, Member States are currently suffering a decline in their own fossil fuel production. This increases their dependence on increasingly costly fossil fuel imports from increasingly unstable countries. This problem is compounded by global developments: the growing share of emerging economies in global energy demand (in particular China and India but also the Middle East) and the development of unconventional oil and gas production in the United States. All these elements endanger the competitiveness of Member States’ economies and their security of supply. Therefore, new indigenous sources of energy and a diversification of energy suppliers and routes to convey energy need to be found. To solve all these challenges, in 2008 the EU put in place a strategy based on three objectives: sustainability (reduction of GHG), competitiveness and security of supply. The adoption of a renewable energy policy was considered essential for reaching these three strategic objectives. The adoption of the 20% renewable energy target has undeniably had a positive effect in the EU on the growth in renewables, with the result that renewable energy sources are steadily increasing their presence in the EU energy mix. They are now, it can be said, an integral part of the EU energy system. However, the necessity of reaching this 20% renewable energy target in 2020, combined with other circumstances, has also engendered in many Member States a certain number of difficulties, creating uncertainties for investors and postponing benefits for consumers. The electricity sector is the clearest example of this downside. Subsidies have become extremely abundant and vary from one Member State to another, compromising both fair competition and single market. Networks encountered many difficulties to develop and adapt. With technological progress these subsidies have also become quite excessive. The growing impact of renewable electricity fluctuations has made some traditional power plants unprofitable and created disincentives for new investments. The EU does clearly need to reassess its strategy. If it repeats the 2008 measures it will risk to provoke increased instability and costs.