Fossil fuel component occupies one of the central roles in present energy crisis: hence, the states need an efficient use of existing sources of energy, coped with “green transition” in circular economy and active use of renewables, e.g. hydrogen and wind power. The EU recent REPowerEU plan is an integral part of a general solution to accelerate transition to clean energy and creating an EU-wide renewables’ process; the states around the Baltic Sea region gave a perfect example to emulate.
Starting in spring-2022, the EU institutions have been working on a new strategy to confront appearing energy crisis as a sequence of the Russian invasion in Ukraine. The critical conditions to follow, forced the EU to take urgent measures; one of the latest, the REPowerEU program facilitated the member states transition to secure and sufficient national energy systems.
The program is based on three main pillars: the first pillar is about substantial fossil energy saving measures in all EU states: present agreed level is to save 15% of energy by the end of March 2023. The second pillar is about both a “diversified way” from Russian fossil fuels to reliable/sustainable sources and filling-up the states’ storages capacities (the EU-average storage filling reached about 80%, acknowledged Commission President). The third pillar is about massive investment into renewable energy sources, i.e. clean, cheap, big and locally produced; the EU proposed to further increase the 2030 target for renewable energy to up to 45% presently. This means a renewable energy capacity of around 1,250 gigawatts by 2030, compared to about 340 gigawatts of wind and solar sources, or totally 500 gigawatts taking into account biomass.
Source: Introductory speech by the Commission President at the Baltic Sea Summit/30 August 2022, in: https://ec.europa.eu/commission/presscorner/detail/da/SPEECH_22_5244;
The Baltic “wind project”
With a new “Baltic wend project” the EU could reach the desired goal in activating renewables: eight Baltic States have committed at a summit in Denmark (30.08.2022) to multiply by seven the current offshore wind capacity in the Baltic Sea region to up to 20 gigawatts by 2030, which is already one-third of the overall EU ambition for offshore wind by 2030.
The benefits of regional cooperation are immense: when offshore wind turbines are connected to multiple countries, the costs are reduced, the impact on the environment is minimized, and the energy production is never wasted (it can flow towards different markets at different times). In this way, solidarity meets sustainability and security of supply; and the Commission is supporting this regional cooperation project: from planning and organizing, to issuing permits and financing.
The states around the Baltic Sea agreed to accelerate wind capacity with the investment in offshore facilities. In this regard the states –first- agreed to make a “hybrid approach” as a priority when planning interconnectors and offshore generation. Hybrid projects, which connect wind farms to several states could save up to 10% of the total project costs. A great example of cross-border cooperation is the ELWIND offshore wind project between Estonia and Latvia; the Commission selected ELWIND presently as an “important cross-border project” to be eligible for EU funding.
Secondly, wind-grid network development plans shall be fast in implementation based on common offshore commitments. The Commission, with ENTSO-E facilities, will provide during September technical guidance to support this work.
Thirdly, providing political backing will accelerate the permitting process: it often represents the biggest bottlenecks; hence, it is important to fast-forward the permitting within one year.
The Baltic Sea offshore wind project will cover the energy consumption of around six million households by 2030. That is more than the number of households in Denmark, Lithuania, Latvia and Estonia combined.
This sub-regional cooperation can incentivize using full potential of offshore wind in Europe; and the EU institutions will strongly support such initiatives, noticed Commission President. For example, the NextGenerationEU program makes available € 5.6 billion for the deployment of offshore and onshore wind capacities in Europe.
Reference to the statement by the Commission President at the Baltic Sea Summit/30 August 2022, in: https://ec.europa.eu/commission/presscorner/detail/en/STATEMENT_22_5245
There is another important issue – electricity price situation in the EU, which is connected to imported gas, mainly from Russia. Besides, the negative and even devastating impact of climate change is already threatening the states’ wellbeing. About 94% of the electricity price is composed of gas prices; the European emission trading system, ETS’ share is only 6%. But the states have to introduce the ETS to cut CO2 emissions because it is the CO2 that causes climate change. Evolution of the price shows that -compared to 2021 – the ETS increased by 58%, mainly because more coal is used, but gas increased by 580% – tenfold; the EU states should really address the driver of this electricity price increase.
Thus, European climate policy is a security policy too: the states have to invest in renewables, which clean, cheaper and nationally produced; it all makes the states more sovereign and independent of external supplies.
Besides, the pricing mechanisms of the electricity market shall be addressed: the EU intends to develop an emergency tool and to work for a long-term structural reform of the electricity market. However, the electricity market is no longer a functioning market because there is main part of the price-ingredient – gas import, which during last decades was systematically destroying the stability of prices.
As to electricity in the Baltic sub-region, since 2008, the so-called BEMIP high-level group was worked to implement the Baltic Energy Market Interconnection Plan on sub-regional cooperation to fully integrate the Baltic’s electricity systems with the EU states by 2025; strong EU budget financial assistance of more than €1.2 billion is available.
Main part of this support is directed toward all sorts of renewables available in the member states; some of the approaches were underlined by the Commission President at the recent meeting of the Baltic Sea area leaders in Copenhagen at the end of August 2022.