Energy Perspectives for the Kaliningrad Region as an Integrated Part of the Baltic Sea Region

October 28, 2010 | 00:00

Energy Perspectives for the Kaliningrad Region as an Integrated Part of the Baltic Sea Region

This report hopes to provide a basis for a better dialogue on energy policy and energy planning in the Baltic Sea region. The report is a continuation of the 2009 study on regional energy scenarios that presented various alternatives for a more integrated energy sector in the Baltic Sea Region. The energy scenarios were discussed at the 2009 BDF Summit in Stockholm and proved to be a very effective way of promoting a dialogue on priorities for the regional energy cooperation. The scenarios offered opportunities rather than fixed solutions. This report looks more closely on Russia and Kaliningrad as an integrated part of the Baltic Sea region.

Russia is a crucial energy supplier for the EU countries in the region. As Russia is the world’s largest energy exporter, the EU countries are dependent on Russia as a reliable energy supplier, not least when it comes to natural gas. Hence, Russia is very important in terms of energy security. At the same time, Russia’s economy depends on the revenues from the export of oil and natural gas, and this influences many of Russia’s policy areas.

Energy policy and security policy are increasingly seen as closely linked in international politics. Therefore, most analyses on Russia’s external energy policies take their starting point from a political perspective where energy is often seen as Russia’s opportunity to influence international relations. This
report, however, has chosen a technical approach that takes its starting point from an optimal energy planning perspective and explores the different investment strategies by considering Kaliningrad and the neighbouring countries as almost one integrated area without borders. In other words, it does not look at politics and the crucial issues regarding security of energy supply but rather focuses on optimal energy investments and energy efficiency. The intention is not to disregard politics but rather to create a
dispassionate analytical basis for a better energy dialogue and for closer energy partnerships.

Due to Kaliningrad’s geographical position, a balanced energy relationship between Russia and her neighbours in the region seem likely. The strong integration of the electricity systems in this area of the EU also adds to the point that Russia’s need to cooperate with her neighbours. This is one of the
starting points of this report, which focuses on the electricity sector and the plans to build a nuclear power plant in Kaliningrad as well as other nuclear power plants in the neighbouring countries. The question that needs to be answered is how these plans impact the region and the wider energy markets, since it seems doubtful at a first glance that there is a market for both the Kaliningrad nuclear power plant and the new Lithuanian nuclear power plant, which is to replace the closed-down Ignalina plant.

The report provides many new and interesting conclusions. It identifies that Russia’s main interest in building a nuclear power plant in Kaliningrad might not so much be her interest in the local and regional markets in the Baltic Sea Region but rather the bigger, central European energy markets. A likely future target might be to provide Europe not only with gas but also with electricity.

In line with the previous scenario report, the findings are based on transparent and accessible energy data, open analytical sources and wide policy discussions and consultations on the issue. The Baltic Development Forum Summit in Vilnius 1-2 June 2010, initiated the debate on the issue and it is our hope that the discussions will continue with this final report. In this sense, the report is in itself a confidence building measure going beyond media statements and press releases on the plans to build new nuclear power plants. Finally, the overall ambition is to promote energy efficiency, which must be the centre of attention for all energy infrastructure developments in order to be able to combat climate change.

Read the report here.

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