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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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Libya’s Energy Puzzle: Every Challenge is an Opportunity

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Libya’s energy sector remains divided between two authorities, the National Oil Corporation (NOC) and the Petroleum Facilities Guard, and three governments namely the House of Representatives in Tobruk, the General National Congress and the Presidential Council in Tripoli. Failure to conduct a fair and expedient election in late December 2021 is expected to prolong division of Libya’s oil wealth between East and West. This would cement the presence of foreign powers and mercenaries in and around Libyan oil and gas installations.

The country’s oil and gas reserves are estimated at approximately 48 billion barrels of crude oil and 52 trillion cubic feet of gas. Libya’s oil production was 1.3 million barrels per day (bpd) on average throughout 2020, with plans for oil production to reach up to 2 million bpd within the next five years.

These plans, however, can prove futile because of militant attacks on oil and gas installations, increased number of leaks due to lack of infrastructure maintenance, and the possibility of renewed months-long blockades on energy facilities. The December closure of Shahara field, Libya’s largest oil field in the southwest part of the country, by militants was translated into temporary reduction of oil production by around 350 thousand bpd. That means overall oil production easily decreased at approximately 700 thousand bpd, thus constituting Libya’s lowest production level within a year period.

In addition, months-old blockades on energy facilities, throughout the last few years, have led to the halt of significant part of exports. According to the central bank in Tripoli, oil and gas revenues for 2020 plummeted to 652 million dollars from around 7 billion dollars in 2019, which is, practically, a drop by 92 percent.

Overall, militant attacks and blockades prevent oil exports and deprive Libya from revenues that could be otherwise funneled to its reconstruction. It is also noteworthy that the under-funding of the NOC due to failure to pass a national budget has starved it of economic resources, preventing upgrades to the aging or damaged oil infrastructure, and limiting oil and gas production. 

Foreign Energy Investment Flows

Despite the challenges, foreign investment plans continue unabated. French Total, through its subsidiary Total Energies, foresees the execution of a 2-billion-dollar investment plan to increase the production capacity of the North Gialo and NC-98 oil fields.

Concurrently, Total Energies partners with American ConocoPhilips exploration and production company for the acquisition of American Hess Corporation’s 8.16 percent interest in the six Waha oil concessions located in the Sirte Basin in eastern Libya. The commercial deal will increase the French company’s stake in the concessions to 20,4 percent from the current 16,3 percent, thus solidifying the energy footprint of France in Libya.

On a parallel level, Royal Dutch Shell announced its plans not only to re-develop ageing fields like the block NC-174 in the Murzuq basin but also to develop new fields offshore the Cyrenaica basin and onshore the Ghadames and Sirte basins. Shell’s investment plans signal its re-entry in Libya after a decade’s absence attributed to the 2011 first Libyan civil war.

The attraction of substantial international investment in the energy sector of Libya, however, remains dependent on improved security and a stable and united government that is outcome of elections.

Russia and Turkey at the Forefront of Actions

In the meantime, foreign powers persist in their battle for control over Libya’s energy wealth, with Russia and Turkey being at the forefront of the evolving dominance process. Russian security contractors and Russian-aligned mercenaries are stationed in Libya to protect critical energy assets operated by Russian oil companies like Gazprom and Rosneft.  Moscow wants to export Libyan oil to Europe in accordance with the relevant provisions of a Memorandum of Understanding (MoU) signed between Russian major Rosneft and NOC that foresees the sale of Libyan crude oil to third markets, and the signing of additional energy deals that will allow Moscow to maintain its position as a leading supplier of energy to Europe.

Moscow also looks eager to get a piece of the reconstruction pie in Libya with the renewal of a 2.6-billion-dollar contract for a railway that will connect the city of Sirte to Benghazi, and with the execution of other infrastructure projects. On top of that, Moscow maintains military interests in Libya and persistently pursues its bid to gain a permanent naval facility on the 1,900-kilometer Libyan coast that will serve as a Russian gate to Africa.

For its part, Turkey looks eager to collect Qaddafi-era debt owed to Turkish businesses, to participate in the 50-billion-dollar of reconstruction contracts, and to establish a Turkey-Libya axis that would disrupt the alignment between Greece, Israel, Cyprus, and Egypt. This was the specific goal of the Turkey-Libya MoU on the demarcation of maritime boundaries, which is nevertheless invalid for two reasons: Firstly, it was not ratified by the Libyan Parliament and, secondly, it was not approved unanimously by members of the Presidential Council in breach of the UN-sponsored Libyan Political Agreement.

Alarming bells have started to ring in western capitals over the alleged close cooperation between Russia and Turkey on the basis that they have practically divided Libya, on the patterns of Syria, into distinct spheres of influence between them. There are worries that Libya is divided along Islamic lines supported by Turkey. Turkish support of Islamic militias with military equipment is allegedly used to damage Libyan critical energy infrastructure. The ultimate Turkish goal is to control a large portion of Libya’s offshore gas, to disrupt the unimpeded flow of energy, and thus control a significant part of Libyan energy reserves.

The Way Out

To prevent a security breakdown and another round of civil conflict that will negatively impact development and production of energy resources in Libya, a new definite elections date must be declared. The UN can serve as valuable vehicle in this direction by ensuring that Libyan presidential and parliamentary elections are held as soon as possible, while enabling the resolution of pending matters that postponed them in the first place. Failure to meet a new elections’ deadline would trigger a constitutional crisis, undermine the legitimacy of the political system, create an opening for domestic spoilers, and provide a pretext for foreign powers to maintain their malign military presence in Libya.

Evidently, time is of essence. But still, there is a window of opportunity for Libya to escape the vicious cycle of instability and uncertainty that prevents the realization of its full energy potential. It is beyond the shadow of a doubt that the international community can play a constructive role to this end.

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Energy transition is a global challenge that needs an urgent global response

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COP26 showed that green energy is not yet appealing enough for the world to reach a consensus on coal phase-out. The priority now should be creating affordable and viable alternatives 

Many were hoping that COP26 would be the moment the world agreed to phase out coal. Instead, we received a much-needed reality check when the pledge to “phase out” coal was weakened to “phase down”. 

 This change was reportedly pushed by India and China whose economies are still largely reliant on coal. The decision proved that the world is not yet ready to live without the most polluting fossil fuels. 

 This is an enormous problem. Coal is the planet’s largest source of carbon dioxide emissions, but also a major source of energy, producing over one-third of global electricity generation. Furthermore, global coal-fired electricity generation could reach an all-time high in 2022, according to the International Energy Agency (IEA).

 Given the continued demand for coal, especially in the emerging markets, we need to accelerate the use of alternative energy sources, but also ensure their equal distribution around the world.

 There are a number of steps policymakers and business leaders are taking to tackle this challenge, but all of them need to be accelerated if we are to incentivise as rapid shift away from coal as the world needs. 

 The first action to be stepped up is public and private investment in renewable energy. This investment can help on three fronts: improve efficiency and increase output of existing technologies, and help develop new technologies. For green alternatives to coal to become more economically viable, especially, for poorer countries, we need more supply and lower costs.

 There are some reasons to be hopeful. During COP26 more than 450 firms representing a ground-breaking $130 trillion of assets pledged investment to meet the goals set out in the Paris climate agreement. 

 The benefits of existing investment are also becoming clearer. Global hydrogen initiatives, for example, are accelerating rapidly, and if investment is kept up, the Hydrogen Council expects it to become a competitive low-carbon solution in long haul trucking, shipping, and steel production.

 However, the challenge remains enormous. The IEA warned in October 2021 that investment in renewable energy needs to triple by the end of this decade to effectively combat climate change. Momentum must be kept up.

 This is especially important for countries like India where coal is arguably the main driver for the country’s economic growth and supports “as many as 10-15 million people … through ancillary employment and social programs near the mines”, according to Brookings Institute.  

This leads us to the second step which must be accelerated: support for developing countries to incentivise energy transition in a way which does not compromise their growth. 

Again, there is activity on this front, but it is insufficient. Twelve years ago, richer countries pledged to channel US$100 billion a year to less wealthy nations by 2020, to help them adapt to climate change. 

The Organization for Economic Cooperation and Development estimates that the financial assistance failed to reach $80 billion in 2019, and likely fell substantially short in 2020. Governments say they will reach the promised amount by 2023. If anything, they should aim to reach it sooner.

There are huge structural costs in adapting electricity grids to be powered at a large scale by renewable energy rather than fossil fuels. Businesses will also need to adapt and millions of employees across the world will need to be re-skilled. To incentivise making these difficult but necessary changes, developing countries should be provided with the financial support promised them over a decade ago.

The third step to be developed further is regulation. Only governments are in a position to pass legislation which encourages a faster energy transition. To take just one example, the European Commission’s Green Deal, proposes introduction of new CO2 emission performance standards for cars and vans, incentivising the electrification of vehicles. 

This kind of simple, direct legislation can reduce consumption of fossil fuels and encourage industry to tackle climate change.

Widespread legislative change won’t be straightforward. Governments should closely involve industry in the consultative process to ensure changes drive innovation rather than add unnecessary bureaucracy, which has already delayed development of renewable assets in countries including Germany and Italy. Still, regardless of the challenges, stronger regulation will be key to turning corporate and sovereign pledges into concrete achievements. 

COP26 showed that we are not ready as a globe to phase out coal. The priority for the global leaders must now be to do everything they can to drive the shift towards green energy and reach the global consensus needed to save our planet.

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Pakistan–Russia Gas Stream: Opportunities and Risks of New Flagship Energy Project

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source: twitter

Russia’s Yekaterinburg hosted the 7th meeting of the Russian-Pakistani Intergovernmental Commission on Trade, Economic, Scientific and Technical Cooperation on November 24–26, 2021. Chaired by Omar Ayub Khan, Pakistan’s Minister for Economic Affairs, and Nikolai Shulginov, Russia’s Minister of Energy, the meeting was attended by around 70 policy makers, heads of key industrial companies and businessmen from both sides, marking a significant change in the bilateral relations between Moscow and Islamabad.

Three pillars of bilateral relations

Among the most important questions raised by the Commission were collaboration in trade, investment and the energy sector.

According to the Russian Federal Customs Service, the Russian-Pakistani trade turnover increased in 2020 by 45.8% compared to 2019, totaling 789.8 million U.S. dollars. Yet, there is still huge potential for increasing the trade volume for the two countries, including textiles and agricultural products of Pakistan and Russian products of machinery, technical expertise as well as transfer of knowledge and R&D.

Another prospective project discussed at the intergovernmental level is initiating a common trade corridor between Russia, the Central Asia and Pakistan. Based on the One-Belt-One-Road concept, launched by China, the Pakistan Road project is supposed to create a free flow of goods between Russia and Pakistan through building necessary economic and transport infrastructure, including railway construction and special customs conditions. During the Commission meeting, both countries expressed their intention to collaborate on renewal of the railway machines fleet and facilities in Pakistan, including supplies of mechanized track maintenance and renewal machines; supplies of 50 shunting (2400HP or less) and 100 mainline (over 3000HP) diesel locomotives; joint R&D of the technical and economic feasibility of locomotives production based in the Locomotive Factory Risalpur and other. The proposed contractors of the project might be the Russian Sinara Transport Machines, Uralvagonzavod JSC that stand ready to supply Pakistan Railway with freight wagons, locomotives and passenger coaches. In order to engage import and export activities between Russian and Pakistani businessmen, the Federation of Pakistan Chamber of Commerce signed a memorandum with Ural Chamber of Commerce and Industry, marking a new step in bilateral relations. Similar memorandums have already been signed with other Chambers of Commerce in Russian regions.

— Today, the ties between Russia and Pakistan are objectively strengthening in all areas including economic, political and military collaboration. But we, as businessmen, are primarily interested in the development of trade relations and new transit corridors for export-import activities. For example, the prospective pathways of the Pakistan-Central Asia-Russia trade and economic corridor project are now being actively discussed at the intergovernmental level, — said Mohsin Sheikh, Director of the Pakistan Russia Business Council of the Federation of Pakistan Chambers of Commerce and Industry. — For Islamabad, this issue is one of the most important. Based on a similar experience of trade with China, we see great prospects for this direction. That is why representatives of Pakistan’s government, customs officers, diplomats and businessmen gathered in Yekaterinburg today.

However, the flagship project of the new era of the Pakistan-Russia relations is likely to be the Pakistan Gas Stream. Previously known as the North-South Gas Pipeline, this mega-project (1,100 kilometers in length) is expected to cost up to USD 2,5 billion and is claimed to be highly beneficial for Pakistan. Being a net importer of energy, Pakistan will be able to develop and integrate new sources of natural gas and transport it to the densely populated industrialized north. At the same time, the project will enable Pakistan—whose main industries are still dependent on the coal consumption—to take a major step forward gradually replacing coal with relatively more ecologically sustainable natural gas. To enable this significant development in the Pakistan’s energy sector, Moscow and Islamabad have made preliminary agreements to carry on the research of Pakistan’s mineral resource sector including copper, gold, iron, lead and zinc ores of Baluchistan, Khyber Pukhtunkhwa and Punjab Provinces.

A lot opportunities but a lot more risks?

The Pakistan Stream Gas Pipe Project undoubtedly opens major investment opportunities for Pakistan. Among them are establishment of new refineries; the launch of virtual LNG pipelines; building of LNG onshore storages of LNG; investing in strategic oil and gas storages. Yet, it seems that Pakistan is likely to win more from the Project than Russia. And here’s why. The current version of the agreement signed by Moscow and Islamabad has been essentially reworked. According to it, Russia will likely to receive only 26 percent in the project stake instead of 85 percent as it was previously planned, while the Pakistani side will retain a controlling stake (74 percent) in the project.

Another stranding factor for Russia is although Moscow will be entitled to provide all the necessary facilities and equipment for the building of the pipeline, the entire construction process will be supervised by an independent Pakistani-based company, which will substantially boost Pakistan’s influence at each development. Finally, the vast bulk of the gas transported via the pipeline will likely come from Qatar, which will further strengthen Qatar’s role in the Pakistani energy sector.

Big strategy but safety first

The Pakistan Stream Gas Pipeline will surely become an important strategic tool for Russia to reactivate the South Asian vector of its foreign policy. Even though the project’s aim is not to gain a fast investment return and economic benefits, it follows significant strategic goals for both countries. As Russia-India political and economic relations are cooling down, Moscow is likely to boost ties with Pakistan, including cooperation in economy, military, safety and potentially nuclear energy, that was highlighted by Russian Foreign Minister Sergey Lavrov during visit to Islamabad earlier this year. Such an expansion of relations with Pakistan will allow Russia to gain a more solid foothold in the South Asian part of China’s BRI, thus opening up a range of new lucrative opportunities for Moscow.

Apart from its economic and political aspects, the Pakistan Stream Project also has clear geopolitical implications. It marks Russia’s growing influence in South Asia and points to some remarkable transformations that are currently taking place in this region. The ongoing geopolitical game within the India-Russia-Pakistan triangle is yet less favorable for New Delhi much because of the Pakistan Stream Project. Even though the project is not directly aimed to jeopardize the India’s role in the region, it is considered the first dangerous signal for New Delhi. For instance, the International “Extended troika” Conference on Afghanistan, which was held in Moscow last spring united representatives from the United States, Russia, China and Pakistan but left India aside (even though the latter has important strategic interests in Afghanistan).

With the recent withdrawal of the U.S. military forces from Afghanistan, Moscow has become literally the only warden of Central Asia’s security. As Russia is worried about the possibility of Islamist militants infiltrating the Central Asia, the main defensive buffer in the South for Moscow, the recent decision of Vladimir Putin to equip its military base in Tajikistan, which neighbors Afghanistan, seems to be just on time. Obviously, Islamabad that faces major risks amidst the Afghanistan crisis sees Moscow as a prospective strategic partner who will help Imran Khan strengthen the Pakistani efforts in fighting the terrorism threat.

From our partner RIAC

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