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International Security Implications of the US-Russia Contention Over the Nord Stream 2

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The Nord Stream 2 gas pipeline has been a subject of heated debates all along the construction cycle. The pros and cons are abundantly exposed in the public domain and have been at the centre of technical and political discussions for several years. The project comes amid a wide range of comments and statements on the high political level, involving leaders of Germany, Russia, the United States and the European Union. The polemic around the Nord Stream 2 takes place in a particular context marked by the growing tensions between Russia and the West and recurrent security incidents in the East of Ukraine and the Crimea area. Those factors add further to a tendency to overemphasize political and security dimensions of the Nord Stream 2. Consequently, the project has been associated with far-reaching strategic implications. Referring to the opinions expressed by politicians and experts on both sides of the Atlantic, Western media have represented the pipeline construction as infringing on the NATO interests in the region and frustrating the unity of the European nations. The pipeline has also been presented as laying the ground for Russian military offensive into its European neighbourhood. This has created quite an exceptional environment for a project which was designed merely as an extension of the already existing pipeline route (Nord Stream 1). Indeed, the project could hardly be viewed in ‘normal circumstances’ as a very new element in, or a substantial change, to the European energy and security landscape.

Making an extra argument in favour or against the project will not be the objective of this article. What it will, however, try to explore is to what extent the contention around the Nord Stream 2 may interfere with existing security balances in Europe and how far it can impact strategic security relations in a triangle formed by Russia, the EU and the USA.

On the one hand, the developments around the Nord Stream 2 are quite similar to those which accompanied earlier projects of hydrocarbon transit from Russia to Europe, starting from the Nord Stream 1 and back to the Cold War times. This can be noticed by looking at the international reaction to the project. Indeed, many arguments currently advanced against the Nord Stream 2 have already emerged at the order of the day on several occasions. The narrative is commonly constructed along the lines of Europe’s energy vulnerability and its dependence on external energy supplies, from the Cold War era “red oil” threat to later Soviet and now Russian gas dependency. Ten years ago, the opponents of the first Nord Stream pipeline put on the table almost the same points of criticism. They considered the project as an attempt to bypass traditional transit countries, exert political and military influence on them, gain strategic dominance over Europe.

The diplomatic and political manoeuvres around the Nord Stream 2 are also not entirely new. Back in 1962 (a time when oil and not gas was the main product in energy trade relations between the USSR and Europe) NATO countries introduced a US-proposed embargo on oil pipes and connected technology for the Soviet Union. This strategy was enacted as an attempt to delay the construction of the pipeline named Druzhba (the Russian for ʻfriendshipʼ) intended to bring the country’s oil to Europe. Further embargo on pipeline technologies was implemented in the early 1980s by Ronald Reaganʼs government. The measure was supposed to prevent the construction of the Soviet export gas pipeline Urengoy-Pomary-Uzhhorod, in which several European companies and banks had a stake. For these past events, various features of the European and transatlantic policy were quite similar to the present times. The division of Europe into supporters and detractors of the pipelines from Russia, US and NATO attempts to block Russian energy deals with the European companies, and the national governments’ subjection in international affairs to the energy majors’ strategies, do not sound like anything new. Thus the actual contention over the Nord Stream 2 is inscribed into the longer-term turbulent history of the Russian hydrocarbon transit projects in Europe.

On the other hand, today’s context is different, and there are mainly two new elements which account for the change. First is that the world has entered a new historical period, security-wise far less structured, predictable and manageable than the Cold War times and even the post-Cold War era. Dramatically reduced level of trust between the USA and Russia, coupled with the harsh rhetoric of their leaders and continuous mutual accusations raise the conflictual potential in the bilateral relations. US-China competition over trade and economic leadership adds to further international complexity. The growing number of actual and potential military conflicts, including hybrid ones, brings about a higher risk of escalation with unpredictable consequences. Serious concerns hover over disarmament and non-proliferation regime, with its significant components fallen apart or remaining in limbo. While the demise of the time-proved mechanisms aimed at conflict prevention may be traced back to 2002, when Washington’s withdrew from the Anti-Ballistic Missile treaty (ABN Treaty), the recent developments, mainly the US decision to pull out from the 1987 Intermediate-Range Nuclear Forces (INF) Treaty and Russia’s suspension shortly after of its own compliance with the pact, have put the finishing touch to the arms control and disarmament agenda of the whole post-Cold War era.

In such a context, armed conflicts are likely to break out or grow in intensity along one of many existing fault lines. The cross-border energy projects also turn into dividing factors within the current confrontational conjuncture. Consequently, North Stream 2 has got the potential to impact the European geopolitical scene profoundly.

The second new element pertains to the US domestic hydrocarbons production and the way it strains the competition for the European gas market sharply. Only about a decade ago, the United States was supposed to become the largest importer of liquefied gas. However, the shale revolution brought about a sharp increase in domestic gas production. Paradoxically, the infrastructure previously designed to import LNG to the USA was used later on to export gas. That contributed to a significant reduction in the cost of American LNG projects compared to similar endeavours in other countries (Qatar, Australia and Russia). By 2020, the production capacity of the six existing US LNG plants reached about 78 million tons, and the United States is now quite able to outrun Qatar in production volumes (this is apart from being currently the world’s leading exporter of refined oil products).

Meanwhile, domestic gas production in the European countries accounts today for less than 50 per cent of domestic consumption. The demand for imported gas is growing. Over the past six years, gas supplies from external sources have increased by an average of almost 4 per cent annually. In 2018, European countries imported 326 Bcm of gas, 4.8 per cent more than in 2017. In the first half of 2019, the total net gas imports in the EU amounted to 210 Bcm, which was 19 per cent more than in the first half of 2018, amid increasing consumption (+4.5 per cent) and decreasing domestic production (-7.6 per cent), pointing to further increase of gas import dependency in the EU. Russia remained the top pipeline gas supplier of the EU, covering the major part (almost 45 per cent) of total extra-EU gas imports.

The approximate market share volume in Europe for the US gas producers may potentially elevate up to 60 – 80 billion cubic meters, but only if supplies from Russia are effectively restricted. Because of the hurdles which the US LNG may face on the European market due to the growing competition with the cheaper pipeline gas from Russia, its export may find itself limited only to the markets of the Asia-Pacific Region and Latin America with only a marginal proportion going to Europe. That explains the rationale behind some non-market restrictive measures, or sanctions, which serve as an instrument to sideline the competitor and politically facilitate American LNG flows toward Europe. President Trump and high officials of his administration expressed on various occasions their opinions on the North Stream 2 project, which oscillated from lukewarm to overtly adverse. The US ambassadors in Berlin and the Hague overtly pressured local governments and private companies to reconsider their support for or involvement with the pipeline. In June 2019, the US House of Representatives’ Foreign Affairs Committee approved the Protecting European Energy Security Act, a bill which would impose sanctions on anyone who sells, leases, or provides pipe-laying vessels used in the construction of a Russian-origin energy pipeline that makes landfall in Germany or Turkey. A month later, the US Senate Foreign Relations Committee advanced the bill that would impose sanctions on the Nord Stream 2 as an effort to “protect European energy security and Ukraine’s stability”.

Finally, on December 20, 2019, the US President signed a sanctions package on the Nord Stream 2 and another offshore pipeline designed by Moscow, Turkish Stream (also called TurkStream). As an immediate effect, the Swiss-Dutch company AllSeas in charge of laying the pipes in both projects announced its withdrawal from the Nord Stream 2, causing presumably a one-year delay to its completion.

The surplus shale oil and gas production in the US has impacted the governmental approach toward diplomacy. Ever since the 1970s, Washington had criticized the use of energy as a political instrument; however, once the self-sufficiency was achieved, energy sanctions have become the tool of choice for American foreign policy. This new role of the US — that of the ‘energy hegemon’ — will likely have several effects on the transatlantic relations and international security.

First of all, overusing sanctions in the energy domain would affect the supply security of the EU countries and necessitate some innovative safeguards against further deterioration. A situation when almost all non-US sponsored energy supply projects in Europe may face fierce American opposition on political grounds is constraining for actual and potential investors into hydrocarbon transit business. As long as the US economic interests find their way in Europe under the guise of political considerations, the stakes of the European companies involved in the Nord Stream 2 (or other energy projects with Russia or Iran) will remain at risk. That kind of setting may result in a broader awareness within the EU about the diverging political priorities of Washington. It is also possible to expect the elaboration of some specific measures aiming to mitigate the effects of the US sanctions on what Europeans see as their legitimate business and security interests. It should be noted, that the big question is whether the EU will have enough of united political will and capacity to take a course of action that goes against the attitude of its central political and commercial partner, the US. However, the ongoing discussions in Europe about the de-dollarisation of the energy products trading, as well as some attempts made by France, Germany and the United Kingdom to set up a special purpose financial vehicle (INSTEX) to facilitate trade with Iran, are some early examples of a search for greater autonomy.

Secondly, fierce US lobbying against the Nord Stream 2 stokes tension to an already complex and sometimes explosive European security landscape. The US and some Eastern European countries used to strengthen the arguments against the project by stressing its linkage with the ongoing conflict in Ukraine. It purportedly followed therefrom that the raison d’être of the North Stream 2 was to slowly strangle Russian neighbour’s economic and political capabilities, particularly by causing Ukraine to lose around 2 billion euro annually in gas transit fees when the new pipeline becomes operational.

However, by the end of 2019 Moscow and Kyiv reached a new five-year agreement on Russian gas transit through Ukrainian territory. Ukraine got the supply volumes it wanted: 65 billion cubic meters in the first year, and 40 billion the next year. In the absence of the Nord Stream 2, delayed by the US sanctions, Gazprom might have to supply some 75 Bcm through Ukraine in 2020.

Nevertheless, the critics of the project are already extending the strategic implications of the pipeline to the Baltic area. The standard argument here is that the pipe would give Russians a pretext to patrol the entire Baltic sea, as well as provide infrastructure for information transmission and for tracking the movement of naval vessels. From that reasoning follows that adequate countermeasures need to be designed and implemented by NATO in order to prevent a “blow” against security in Eastern Europe. As a consequence, the whole area is getting locked in a highly conflictual conjuncture aggravated by already existing regional security challenges, such as the demise of the Intermediate-Range Nuclear Forces Treaty and the ongoing military buildup on the NATO’s Eastern flank.

Thirdly, the recurrent difficulties in involving Europeans into sustainable and smooth economic partnership in the gas sector, as well as the American sanctions which could eventually apply to any additional lines to the Russia-sponsored pipelines in Europe, incentivize Russia to reconsider the geometry of its energy export routes. The deliveries of Siberian gas to China in the amount exceeding 1 trillion cubic meters in 30 years began via a new trunkline — ‘the Power of Siberia’, with the annual capacity of 38 Bcm . The reorientation of substantial gas volumes toward the East is a sign that the former Cold War allies seem to be on the way of upgrading their relationships while trying to fend off escalating pressure from the West. Washington clearly designates Russia and China as US strategic rivals, and this precipitates both countries to cooperate on a broader range of issues, like energy and related infrastructure, international security and domestic governance. With all the limitations which an alliance between Moscow and Beijing may face, this it is likely to become a consequential factor of the strategic landscape in Eurasia and beyond.

Fourthly, the growing US pressure both on Russia and on Europe to stanch the Nord Stream 2 construction causes discords within the EU and is likely to rebound badly for the European political unity already put to the test by many economic and security issues. The controversial reputation of Donald Trump’s international policymaking could pose a problem to those EU member states that follow American president in warning against the project. On the contrary, those who support the Nord Stream 2 or stay neutrally favourable toward it, are likely to be in a more advantageous position by representing their attitude as resistance to external pressure and uncompromising defence of national and European interests. The German’s pattern of political conduct fits well into this framework. Berlin supports the pipeline construction (regarded primarily as a business project) and defends it as a contribution to national economic development and secure energy supply for Europe. In a way, Germany has revealed the limits of pressure that President Trump is prone to exercise on the US allies and adversaries alike. What is happening proves that applying coercion, or just evoking it publicly, can bring about the opposite effect. That holds true for the Nord Stream 2 which has got broad public support within German society, and is now championed both by major ruling political parties in the current CDU/SPD coalition as well as three parties of the opposition: the far right AfD, the liberal FDP, and the extreme left, die Linke. The same holds in other cases as well. For instance, another President Trump’s favourite subject of anger concerning Germany is its defence spending. However, pushing Berlin into increasing it up to 2 per cent of its GDP makes it extremely difficult to do so. On the one hand, existing polling data proves that Germans oppose defence spending above the 1.5 per cent of GDP, already promised by Angela Merkel by 2024. On the other hand, hardly any politician in Germany wants to be seen succumbing to Trump’s overt forcing. Although there is no direct link between the German involvement with the Nord Stream 2 construction and its vision of the defense spending obligations, the underlying factor on both accounts is compelling American demand for clear-cut solutions to the issues, which turn out to be much more nuanced from the German standpoint.

The overemphasized political and military dimensions of the Nord Stream 2 increase pressure on the strategic relationship between Russia and the West. The anti-Russian rhetoric fans the continuous contention around the project in the American and European mass media. The moment when it happens is all the more inopportune, taking into account the deteriorated security environment in Europe which moves closer to the untrammeled arms race with the demise of the INF Treaty and the uncertainty about the future of the New START — one of the last pillars of the arms control regime. International energy supply projects have become — nolens volens — closely intertwined with political and security developments, be it escalation between the US and Iran at the Strait of Hormuz — a vital shipping route linking Middle East oil producers to global markets — or the simmering conflict in the East of Ukraine, in the vicinity of a transit corridor for Russian gas exported to Europe. Being a constant element of the strategic picture, energy is more and more regarded as a dividing factor which serves the interests of one party to the detriment of the other. The application of this conflictual paradigm to the Nord Stream 2 gives rise to yet another fault line amidst already strained European political and security environment.

Paradoxically, with the Nord Stream 2 contention, the very concept of energy resources supply and sharing acquires a confrontational connotation in Europe. Whereas, the same idea was underlying regional integration back in the mid-20th century. The European Coal and Steel Community (ECSC) established by the Paris agreement in 1951 was intended to neutralize competition between European nations over natural resources and prevent further war with Germany. The visionary idea behind the transnational community implied that amidst dramatic lack of trust toward a particular country the best way to avoid conflict and to restore confidence was to involve the distrusted state into a large-scale energy project. Unfortunately, subsequent historical developments on the European continent resulted in a situation where the idea of promoting extended energy partnership as a pledge of lasting peace seems no longer attractive. The Nord Stream 2 case demonstrates quite clearly the lack of collective will on behalf of the European Union to engage on a long-term basis with its Eastern neighbour in the gas sector. Keeping in mind the limitations of any historical analogies, back than the ECSC represented a political option in dealing with a nation which was suspected of seeking regional domination. In the modern days, rather than making out of the Nord Stream 2 another squandered opportunity for building a more sustainable relationship with Russia, the West, and primarily the EU as a close neighbour, could have looked at the pipeline beyond its primary function of one-way gas supply. The connecting gas artery might also serve to send something back from Europe toward Russia, albeit in a virtual sense, like a better understanding of European priorities and concerns, trust, and a vision of a shared future. The project could have also been viewed as a safeguard against presupposed Russian military invasion into the countries of the EU Eastern periphery. The possible damage to the pipeline which would provide significant and much-needed export revenues for the national economy is a convincing disincentive for Moscow to mount some dubious warfare operation in its neighbourhood. However, this perspective was not able to make its way through alarmist rhetoric which depicted the Nord Stream 2 as a part of Russia’s sinister designs. The same reasoning certainly reinforces the aggressive image of Russia and gives additional sense to NATO’s raison d’être. At the same time, it leaves Moscow disenchanted with the European partners, locks the country out in a reactive posture and makes look for strategic alliances elsewhere.

Finally, the US-Russia contention over the Nord Stream 2 is likely to take a toll on the transatlantic solidarity. The trends going in that direction are gaining strength driven by the specifics of the current American foreign policy. It would be premature to argue that the European elites are ready to break ranks with Washington. However, on several issues, such as the nuclear deal with Iran (JCPOA), Middle East policy, the role of NATO or relations with China they show increased independence and greater consideration of their national interests. The way things will develop for the Nord Stream 2 will be partly determined by the unfoldment of the debates over the greater European strategic autonomy from the US. However, even if the outcome of these debates tilts the balance in favour of the Nord Stream 2, it is difficult to predict for how long that could last. The European position regarding the project has indeed proved to be a complicated, precarious symbiosis between internal strategic concerns, imposed security frameworks and economic motivations.

From our partner RIAC

[1] As Roberto Cantoni notes, those were not the only USA-proposed blockades aimed at hindering Soviet industrial projects: “…In 1946, a penicillin plant program launched by the United Nations Relief and Rehabilitation Administration to build up the capacity of the pharmaceutical industry in Eastern and Southern Europe was significantly delayed by an American embargo on extractor technologies. The State Department refused to grant export licenses for the necessary equipment to pass the Iron Curtain. Other products including radioisotopes and computer equipment were also embargoed to stifle Soviet technological progress”.

[2] Among the primary factors driving gas demand growth in Europe are the decline in domestic production, reduction in nuclear generation, and the decreased role of coal in the energy sector. Within the EU, the gradual capping on the extraction from the major Dutch Groningen gas field resulted in the production downturn of a magnitude similar to the increase of Russian gas imports (both roughly 40 Bcm).

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Is energy transition the answer to Africa’s Socio-Economic Development?

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The African Union Commission (AUC) through the African Energy Commission (AFREC) hosted a high-level online side event at the COP26, held under the theme: “Opportunities and Challenges for African Energy Transition: What will it take for Africa to reach net-zero emissions’’?

The meeting called for bold measures related to opportunities and challenges facing Africa, to accelerate actions towards the full implementation of the Paris Agreement and the UN Framework Convention on Climate Change. The meeting aimed at fully unlocking Africa’s position on climate adaptation, to expand modern energy access, reduce poverty and create jobs, whilst contributing to the global objectives of circumventing the lock-in of carbon into future development on the continent.

As impacts of climate change continue to worsen and pose significant threats to socio-economic development globally, speakers across governments, African Union Commission, African Development Bank, United Nations, leading policy influencers and private sectors deliberated through a virtual forum, co-organised by the African Development Bank (AFDB), United Nations Economic Commission for Africa (UNECA), and the African Union Development Agency (AUDA-NEPAD).

In her keynote address, H.E. Dr Amani Abou-Zeid, Commissioner for Infrastructure and Energy at the African Union Commission underscored that it is in the best interest of Africa to join global efforts, to transition towards Net-Zero emissions, in order to mitigate future impacts of climate change on the continent and also reduce the costs of adaptation.

‘‘The availability of abundant renewable energy resources on the continent such as hydropower, solar, wind, geothermal and bio-energy can transform Africa’s energy sector to modern and sustainable energy through both grid and off-grid systems. These resources offer opportunities to accelerate clean energy access on the continent through energy transition and especially factoring natural gas as an energy transition fuel for power and clean cooking’’, She stressed.

Dr. Abou-Zeid also emphasized that Africa’s political will and commitment is highly significant to accelerate the uptake of renewable energy as evidenced by the targets within countries national plans reflected in their Nationally Determined Contributions (NDCs) to achieve climate and development ambitions. ‘‘COP26 should seek to stimulate concrete actions to address the huge financing gap to achieve net-zero emissions by 2050’’, she further stressed.

Though Africa contributes about 3.6% of the global CO2 emission, there is evidence that climate change impacts on Africa are more severe, bearing in mind that access to affordable clean energy remain one of the biggest challenges facing the continent. Thus, addressing persistent barriers to energy development on the continent through technical, financial, markets, policy and regulatory framework is essential.

H.E Dr Gerd Muller, the Federal Minister for Economic Cooperation and Development of Germany called for joint forces amongst nations to act now on issues of climate change and decarbonisation. He said that moving to renewable energy will create jobs and many other opportunities, which will make Africa a green continent. “Decarbonisation is necessary because the energy sector is the source of more than two thirds of all CO2 emissions’’ he emphasised.  Expressing Germany’s commitment to work with Africa in her energy transition ambitions, he hailed the proposed AU-EU Green Energy Initiative as an appropriate instrument for facilitating a bi-continental approach.

H.E. Mr. Benatou ZIANE, Minister of Energy Transition and Renewable Energy of Algeria noted in a statement read on his behalf by Mr CHABANE Merouane, Permanent Secretary, that Africa needs to diversify its energy sources and liberate itself from the dependency of hydropower, to guarantee energy security for the future generations for the development of an economy which is based on a model that is aligned with socio-economic needs, promote equality, employment creation and responds to Africa’s energy challenges. “Algeria has already started working on a policy framework for a new energy model, to balance a local energy mix which is favourable for transition and reducing emission by 2030. We are also working on developing renewable energy by increasing 15 GW by 2035’’ he stressed.  

In their panel discussion H.E Hon. Dr. Matthew Opoku Prempeh, Minister of Energy of Ghana, Mr. Jean-Paul Adam, Director Technology, Climate Change and Natural Resources Management of UNECA, Mr. Henry Paul Batchi Baldeh, Director Power System Development at AfDB, and Mr. Mamadou Diakhité, Acting Head of Division for Environmental Sustainability at AUDA-NEPAD highlighted the following:

  • Africa need to be realistic in  choosing  the energy transition pathways which address her unique requirements/circumstances;
  • Enhancing policy, legislation and implementation approaches across national, regional and continental level, to enable a favourable environment for development;
  • Leapfrog into the green development space without ignoring Africa’s infrastructure development and industrialisation ambitions;
  • Develop bankable projects to scale up access to funding and investment;
  • Adopt a mix of energy solutions to address the needs of each country including solutions to high tariffs and accessibility to sustainable energy options;
  • Promote energy efficiency which is necessary for energy transition;
  • Focus on building energy infrastructure and strengthening transmission corridors.

The African Union together with its various development agencies and partners have taken concrete actions by developing continental development programmes and projects such as, improving infrastructure to increase regional power system network by 2040, stimulating and expanding energy markets by providing evidence-based policy advise to member states and ensuring that frameworks and strategies which will enhance technology transfer, technical capacity building at continental and national level are adopted and strengthened. Mobilising adequate financing to accelerate the energy transition agenda in Africa is also one the challenges that the Commission has focused its attention.

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Energy Sector in Spain: Current State and Future Prospects

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Europe’s energy transition is under scrutiny following the region’s soaring electricity prices and the scarcity of fossil fuels. The inadequacy of renewable energies to efficiently respond to these problems has become apparent. Is it necessary to increase the commitment to renewable energies and accelerate the transition? Must Europe re-think the market for emission rights (responsible for 70% of the increase in electricity prices in Spain, according to the Bank of Spain)? Does Europe need to take a step back and stockpile fossil fuels to avoid a future energy crisis?

Spain, like the rest of its European neighbors, has been a victim of the current electricity price crisis and the authorities are still trying to resolve it. To understand it in depth, it is first necessary to understand the state of the energy industry in Spain. This article aims to present a detailed analysis of the most recent developments in the energy field in Spain, the current situation of the sector and its prospects. To this end, it studies fossil fuels, renewable energy, nuclear energy, and ends with an open discussion that seeks to address some of the main issues that will define the future of the energy transition in Spain.

For this analysis, the article takes official documents of the Spanish government as its main basis: the Energy Book 2018 of the Ministry of Ecological Transition and Demographic Challenge, the National Integrated Energy and Climate Plan 2021-2030, the Law 7/2021, of May 20, on Climate Change and Energy Transition. It also uses sources like the Red Eléctrica de España website, multiple Spanish press articles and the IEA Spain 2021 Energy Policy Review.

Fossil Fuels

As of 2018, fossil fuels held a major share in the Spanish final energy consumption. Oil (51% of final energy consumption) is mainly imported from Nigeria, Mexico and Saudi Arabia. Yet, Spain is a net exporter of oil products and has 9 refineries. Gas (16,4%) is mainly imported from Argelia (51% of imports), followed by Nigeria, France and Qatar. Around half of the supply arrives in LPG. Finally, coal (1.8%) is mostly imported from Russia, Colombia and Australia.

The government expects a 34% reduction of the fossil fuels contribution to primary energy by 2030 (with compared to 2017 data). In final consumption, oil participation is forecasted to drop by 28% between 2015 and 2030. Gas will maintain a stable share, due to its key role in the combined cycle electricity production that will support the development of renewable energy. Finally, coal will become insubstantial, in line with the Decision 2010/787/EU of the Council of the EU and the closing of the coal extraction in Spain.

Renewable Energy

Renewable energy made up 7.2% of the total final energy consumption in Spain, a figure that has experienced constant growth since the 1990s, but that has been mostly stable since 2011. In terms of electricity production, data in August 2021 renewable energy accounted for 49% of total production. In addition, a steady growth in thermic renewable energy (1.6% per year, thanks to biomass) and transport renewable energy (thanks to biofuels) should be noted.

Nowadays, the renewable energy sources that have the most installed power capacity in Spain are hydroelectricity and wind power. Wind power and solar PV are expected to experience fast growth, while solar thermoelectric and pumped- storage hydroelectricity will undergo a slower development. Hydroelectricity will remain stable.

The rapid development of renewable energy in Spain is supported by a strong legislative framework. This includes domestic laws as well as the EU policy for Renewable Energy and Climate Change as well as international agreements (the most important of which, the 2015 Paris Agreement, was ratified by Spain in 2017).

Until recently, the main regulatory documents were the 2007 Spanish Strategy on Climate Change and Clean Energy for 2020 and the Renewable Energy Plan 2011-2020, based on EU Directive 2009/28/EC. However, along with the Paris Agreements, Spain is developing a new Legal Framework of 5 documents:

  • Law 7/2021, 20th of May 2021, on Climate Change and Energy Transition: sets the minimum targets for 2030 and 2050.
  • National Integrated Plan of Energy and Climate 2021-2030: published in 2020 the law sets the medium-term prospects and milestones.
  • Strategy for Low Emissions in 2050: has a long-term perspective.
  • Strategy for a Fair Transition: attempts to address the problems of regions of Spain connected to technologies that will be displaced because of the National Integrated Plan of Energy and Climate 2021-2030.
  • National Strategy against Energy Poverty.

This legal basis is supported by a set of institutions: CENER (National Center of Renewable Energies), IDEA (Institute for Diversification and Saving Energy), CIEMAT (Center of Energy, Environment and Technology Research), and CECRE (Center of Control of Renewable Energy). In addition, the government has created the Inter-ministerial Commission of Climate Change and Energy Transition (for coordinating between the different ministries) and has committed to establishing the Commission of Coordination of Climate Change politics (for coordination with the Spanish regions).

The objectives set by the Renewable Energy Plan 2011-2020 for 2020 of at least 20,8% of the final consumption of energy and at least 39% on the total of the electricity consumption coming from renewable energy were achieved. The Law 7/2021, 20th of May 2021, on Climate Change and Energy Transition sets new binding goals: 42% of renewable energy in total final energy consumption in 2030 and 74% of generation of electricity from renewables in 2030.

The National Integrated Plan of Energy and Climate 2021-2030 draws goals and prospects that are in accordance with the new law. For achieving this, it expects the renewable energy power by 2030 to consist of 50 GW of wind power, 39 GW solar PV, 27 GW combined gas cycles, 16 GW hydraulic, 9,5 GW pumped-storage hydroelectricity and 7 GW solar thermoelectric. The plan expects the price of energy generation to drop by 31% by 2030, carbon centrals to be non-competitive, and a governmental investment of 91.765 million euros in renewable energy (80% of which will be allocated to the private sector). It also forecasts that energy dependency will diminish from 73% in 2017 to 61% in 2030.

As for biomass, which accounted for only 4% of the total renewable energy generation in Spain, it is only recently that Spain took the necessary steps to promote this source. The National Integrated Plan on Energy and Climate 2021-2030 comprises the installed energy potential to double between 2015 and 2030, and states that there should be a further normative development.

Nuclear Energy

The share of nuclear energy in the total electricity generation in Spain was 22.20% in 2020, having remained quite stable over the years. It signifies close to 30% of the total clean energy production in Spain.

The main actors of the system are 4 ownership and production companies (Endesa, Iberdrola, EDP and Naturgy), the Ministry of Ecological Transition and Demographic Challenge, the Nuclear Safety Council and ENUSA and Enresa (national companies in charge of fuel supply and radioactive waste management). On the issue of fuel supply, ENUSA Industrias Avanzadas is the state-company that produces nuclear fuel for Spanish nuclear plants as well as for exports. As there is no uranium mining in Spain, the country imports the enriched uranium, mainly from the United Kingdom (Brexit was addressed in bilateral governmental contacts) and it is ensured by the Euratom Treaty and the European Supply Agency. Regarding the waste management, high radioactivity waste storage has been planned but not yet implemented, and there is one storage center for medium and low radioactivity already.

By the year 2035 Spain plans to close all of its nuclear energy generation plants, in collaboration with EU nuclear countries. Enresa and the nuclear energy companies agreed in 2019 on a calendar to shut down the 4 nuclear plants by 2030 and the resting 3 before 2035. This signifies the consolidation of the process of shutdown of the reactors: it establishes the necessary protocols and puts an end to continuous disagreements between the parties. It also makes sure that nuclear energy continues contribute to the clean energy production goals of 2030.

In line with this, the Law/2021, 20th of May 2021, on Climate Change and Energy Transition states that the government will not give or extend any prospecting and exploitation permits for radioactive minerals and that it will not allow for new nuclear plants to be built. With the closing of the current nuclear plants and the prohibition on new nuclear plants, the future of nuclear energy in Spain is being replaced by renewable energy.

Discussion

This article portrays the directions of Spanish energy policy. It notes a number of features: the decline of coal-produced energy and the mining of coal, the preservation of gas as a supporting resource for renewable energy complications, the abandonment of nuclear energy, and the commitment to renewable energy. While these goals are supported by a planned framework and milestones, factors that initially were not accounted for are impacting their progress.

Up until 2020 Spain was successfully closing down coal mining and coal-fired thermal power plants. By 2018 it had abandoned coal mining, and by the end of 2020 it had closed most of these plants. In 2021, however, Spain has had to increase the electricity generation of the remaining coal powered plants due to the storm Filomena and the shortage of energy sources that it is currently suffering. October is expected to be the month this year during which the highest amount of coal consumption. In addition to that, Spain has been buying Moroccan electricity originating from coal.

The use of gas in combined cycle plants is under scrutiny due to recent developments in the country’s main gas source, Algeria. Algeria has traditionally exported gas to Spain via the Medgaz pipeline (directly to Spain) and GME (via Morocco). In recent weeks Alger closed diplomatic relations with Rabat, and three days later hinted that it would not renew the GME pipeline agreement, which expires on 31 October.

Exclusive use of the Medgaz pipeline (which has recently been extended) would not be sufficient to cover Spanish gas demand. Even so, after bilateral contacts, Algeria guaranteed gas supply to Spain and will probably continue to do so via LNG tankers, which will increase prices.

The Spanish nuclear sector is one of the most important sources of clean electricity for Spain. Yet the infrastructure is too old, and its plants have already received too many extensions on their use. The government, therefore, plans to close down all nuclear plants by 2035. As a result, we can expect a rise in the importance of nuclear waste management can be forecasted, as well as problems with the relocation of the industry workers. However, following the electricity prices exponential rice of this summer, the Spanish government has entered into a conflict with the electricity companies (which own the nuclear plants). In response, the companies have threatened to close all nuclear power plants by 2021. Such an event would significantly damage the Spanish stand on clean energy as well as accelerate the termination of nuclear energy in Spain.

In contrast to coal or nuclear energy, renewable energy sources are the focus of government support. The trend in the sector this century has been one of steady development, which this is expected to continue. While hydropower has historically been predominant, wind and solar are set to see the greatest increase. With this, Spain hopes to reduce its dependence on fossil fuels and lower the price of electricity.

However, these plans have been called into question by the events of recent months. On one hand, there has been criticism on the stagnation of the development of solar photovoltaic energy (partly due to the inadequacy of the public administration in processing the requested projects as well as the opposition from local communities in rural areas). While this does not jeopardize Spain’s clean development goals, it does imply a certain slowdown. On the other hand, the current electricity price and energy supply crisis has highlighted the limitations of these developments in Spain, and has strained relations between government and energy companies, which may hinder future progress.

The prospects for energy in Spain are clear: renewable energy. The speed, however, at which Spain plans to reach its targets may be affected by factors not initially foreseen. The need to resort to coal, doubts about gas supply, and the conflict between state and energy companies that has endangered the continuity of nuclear energy in the country are examples of obstacles that need to be overcome. This is not to say that Spain will not achieve its goals, but rather that it is in a transition phase, and that the success of this process depends on how it responds to the problems that arise. This is why the future of energy in Spain, although moving in a very specific direction, is still open.

From our partner RIAC

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Energy

The Importance of the South China Sea: Energy Perspective

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Authors: Budi Prayogo Sunariyanto and Akhmad Hanan

Territorial disputes for many countries in the South China Sea has become a hot issue for several years until today. The South China Sea, which mostly consists of ASEAN countries and part of the Asia Pacific region, is currently facing a unilateral claim from China. The dispute is not an intra-ASEAN conflict but involves some ASEAN members, Vietnam, Brunei Darussalam, and the Philippines, against China (outside ASEAN) as an aggressive claimant in the South China Sea. Indonesia is also indirectly involved (as a non-claimant state) because fishers from China often engage in Illegal, Unreported, and Unregulated Fishing (IUUF) activity in the North Natuna Sea – the Indonesian Exclusive Economic Zone.

The issues in the South China Sea have drawn global condemnation as it is considered that China could threaten the peace and security of the ASEAN region. Furthermore, the issues provoked the United States and its allies to stabilize the ASEAN regional security to maintain peace and security in the Asia Pacific region through a trilateral defence pact between Australia, the United Kingdom and the United States (AUKUS) in September 2021. Under the pact, the United States and the United Kingdom will assist Australia in developing nuclear-powered submarines and deploying allied military forces to the Asia Pacific region. This action marks a new Cold War era in the Asia Pacific region, especially in the South China Sea region.

Then the question: is it really just a matter of peace and security issues? We have to look at the geopolitics aspect of the South China Sea from another perspective for the answer. The South China Sea is an area that has abundant natural resources, especially energy resources. China and the ASEAN countries knew that the South China Sea has potential oil and natural gas on the seabed. Quoted from the Asia Maritime Transparency Maritime Initiative, the US Energy Information Agency has estimated that the South China Sea holds about 190 trillion cubic feet (TCF) of natural gas and 11 billion barrels of proven and probable oil reserves. The amount of energy reserves is fantastic and has economic value for any country with territory in the South China Sea.

On the other hand, the total final consumption (TFC) of energy by source in the Asia Pacific region reached almost 175 million Terajoules (TJ) in 2019 and is projected to increase in proportion to the population and economic growth in the Asia Pacific. The Asia Pacific region is home to about 60 percent of the global population. With this fact, many countries in the Asia Pacific are competing to find energy resources to meet their needs, as depicted in the South China Sea dispute to claim energy resources. 

China, which also lies in the Asia Pacific region, has the same goal of obtaining energy resources in the South China Sea. China’s nine-dash line claim in the South China Sea is certainly aimed to secure energy resources to meet China’s energy needs. In 2014, China National Offshore Oil Corporation (CNOOC) conducted a deepwater drilling rig in the Vietnamese waters and began seafloor drilling operations for natural gas. The location of the drilling activity is in Vietnam’s exclusive economic zone and only almost 17 nautical miles from Triton Island in the South China Sea. Then in April 2021, it was reported that Chinese scientists on a marine research vessel “Sea Bull II” had drilled deep in the South China Sea to retrieve sediment core from the seabed. This drilling activity is to explore natural gas hydrate resources in the seabed. China is undoubtedly looking for evidence of energy resources in the South China Sea.

Meanwhile, the US and its allies do not directly target the energy resources in the South China Sea. The US and its allies are interested in blocking China’s influence in the Asia Pacific. More than 30% of global maritime crude oil trade moves through the South China Sea, including crude oil trade from Europe, the Middle East, to the United States. In other words, the US and its allies are interested in securing South China Sea passage and ensuring energy supply for the US and its allies.

The Middle East considers that the South China Sea is a major trade route. In 2016, crude oil shipments from Saudi Arabia mostly passed through the South China Sea. In addition, around 90% of Japan and South Korea’s imported crude oil from Middle Eastern suppliers is transported through the Strait of Malacca and then the South China Sea. With this fact, the security of the South China Sea is essential for energy supply in the Asia Pacific region. 

The conflict in the South China Sea must be resolved immediately through diplomatic mechanisms by the Asian Pacific countries. No one can unilaterally control the South China Sea with the defence power of each country. Moreover, making territorial claims that are contrary to the sovereign rights and international law of the sea. The Asia Pacific countries are responsible for maintaining peace and security because the South China Sea has a vital role in energy security in the Asia Pacific region and globally.

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