Changing energy policies in Central Europe

Dr. László Vasa

Deputy director general for research

Institute for Foreign Affairs and Trade

Core issues

• Dependence on Russia (oil, natural gas, supply routes, nuclear

• Natoinal preferences (competitiveness – lower prices)

• Social dimension (utility prices)• Energy Union• Climate change

Russia

• Extreme dependence (almost 100 percent of oil, and 75-100 percent of natural gas coming from RU)

• Infrastructure: Soviet-era pipelines, few new constructions

• No alternative source in the short- and mid-term• Looking for new sources: LNG (Australia, USA,

Central Asia), but infrastructural developments are needed first

• Nuclear developments: the relationship is here to stay• Normal, businesslike relations

National preferences

• Energy policy shall remain with the national governments• More cooperation is beneficial, but regulation shall remain

local• Competitiveness

– Lower prices– Reliable service– Good infrastructure– We are competing with each other

• Nat’l governments should have the chance to design an energy mix for the benefit of the country

Social dimensions

• Many residential consumers cannot afford high prices

• Governments are eager to help them for votes• Many countries tried to bring down prices –

supportive global climate (dropping oil prices)• Highly political– We don’t want Brussels to interfere with this

(Energy Union)

Energy Union

• Strong resistance to it:– Natoinal security– Competitiveness– Social dimension

• We can also benefit – importing cheaper electricity (intra-day and day ahead

markets)– Reinforce supply routes (interconnectors – with EU help)

• Delicate issue, we consider it as a political project

Climate change

• Significant issue (Hungarian President János Áder’s number one priority)

• We have exess ETS quotas (it was based on the 1990 values, but heavy industry in CEE collapsed since than)

• Renewables: put them on a market basis, cut subsidies

• Energy efficiency – ordinary people could save lot of money

• De-carbonization: competitiveness

Thank you for your attention.