A MP-IDSA Fellows Seminar by Dr. Swasti Rao, Associate Fellow, on “The Geopolitics of Europe’s Quest for Energy Security: Significant Achievements amid Myriad Challenges” was held on 7 February 2023. It was chaired by Prof. Gulshan Sachdeva, Professor, Jawaharlal Nehru University, New Delhi. The external discussants were Dr. Lydia Powell, Distinguished Fellow, Observer Research Foundation (ORF), and Mr. Rajeev Lala, Associate Director, S&P Global. Ms. Anandita Bhada, Research Analyst at MP-IDSA, was the internal discussant.

Executive Summary

Almost a year into the war in Ukraine, European nations have fast-tracked their energy diversification in order to reduce their dependency on Russia. The main issues are policies adopted by Europe to diversify, the available options, and prognosis for the future.

Detailed Report

The Chair, Prof. Gulshan Sachdeva, in his opening remarks, stated that diversification of energy supplies would likely have a major geopolitical implication. For example, Europe moving towards the US for oil and Russia diversifying its energy exports away from Europe, towards Asia would significantly impact the international arena.

Dr. Swasti Rao began her presentation with a question – “Does Europe want to diversify its energy requirements from Russia?” She replied in the affirmative but pointed out that the main issue is implementing this vision. The speaker then highlighted the structure of her paper before briefly delving into the ongoing developments in Russia-Ukraine war.

Dr. Rao stressed that Europe is seeking to completely wean itself away from Russian crude oil, natural gas and coal. She highlighted Europe’s dependency on Russian energy amidst the differentiation in patterns and volume of such trade. She elaborated on the internal and external differences in Europe regarding the diversification process. She pointed out Europe’s plans to focus on alternative fuels in the form of hydrogen and nuclear, apart from creating new energy maps and import corridors. The fact is that today Europe is looking into both short-term and long-term energy measures, anchored to avoiding any potential dependency. For Europe, the supply chains should not only be cost-effective but also more resilient. 

Dr. Rao highlighted the diversification measures undertaken by Europe. These include import diversification, short-term energy imports, protection of the most venerable cohorts, and acceleration to new renewables. 

The speaker elaborated on the macro and micro energy trends in Europe – both before and since the conflict started. At the macro level, there has been a systemic and sustainable shift away from Russian energy. At the micro-level, Europe has sought to cut down domestic demand apart from transition to renewables. These steps are, however, hampered by limitations that include pipeline disruption, oil re-routing, global liquefaction capacity, and failure to meet market goals.

Moving to the issue of transition to renewables such as green hydrogen, blue hydrogen, and bio-methane, Dr. Rao highlighted the sense of urgency in the form of new European pathways to develop these alternatives. She also referred to Europe’s attempts at developing new import corridors. She emphasised that one of the reasons for Europe’s ongoing support to Ukraine is anchored to Ukraine emerging as a promising option for green hydrogen.

On the issue of expanding avenues of energy cooperation between India and Europe, Dr. Rao referred to the Trade Technology Council and ongoing bilateral discussions in the field of hydrogen.

Dr. Rao concluded by stating that Europe appears to have shown a strong political will to diversify yet it would need strong political leadership in what would likely be a very painful period ahead.

Dr. Lydia Powell:

Dr. Powell, while complimenting the author for her presentation, felt that there is scope for enhancing the analytical rigour of the paper by moving beyond the summarizing and descriptive aspects. This includes a more rigorous analysis of the post-Ukraine energy situation in Europe and its future. She observed that the speaker could qualitatively improve the section on “geopolitics of Europe’s quest for energy security”.

Dr. Powell gave a few more suggestions to improve the paper. First, she suggested revising the opening section, particularly the framing of whether the European Union (EU) can replace Russia in the context of energy. Second, one needs to dwell on who the winners and losers of the current geopolitical scenario are – this includes Russia, EU and the US. Also, whether Russia’s calculations are long-term vis-à-vis short term? Third, the speaker could address the question of whether the fossil fuel and nuclear industries are the winners in this climate. Fourth, the speaker should address whether Asia has become the winner given the renewed focus on the continent amidst Russia’s growing energy exports to India and China. Similarly, has the developing world lost out in the short term on account of their energy crisis? Fifth, the paper must address its policy relevance, particularly for India.

Mr. Rajeev Lala:

Mr. Rajeev Lala highlighted the need to add a caveat around hydrogen – “hope”, especially on green hydrogen. Meanwhile, there exists two proponents around hydrogen; one is the blue hydrogen proponent (led by Saudi Arabia) and the other being the green hydrogen proponents (led by Japan, Korea, Switzerland, and South Korea). The key issue is financing, as both technologies are expensive; hence it is still most policymakers’ hope.

There also exists a significant variation in European countries dependency on Russia. This has a direct bearing on each country’s national position on Russia with the most critical stand being taken by countries which have the least dependency. Mr. Lala suggested the need for a chart to show this correlation by providing the examples of energy dependencies of Germany and the United Kingdom on Russia.

The discussant called upon Dr. Rao to focus on the interconnectivity issue and the status of interconnectors across Europe. Meanwhile, a section could be added on the risks for 2023 and what could go wrong.

Mr. Lala elaborated on ongoing discussions on “winter approaching” and its potential impact on Ukraine, and stressed that winter has in fact already arrived in South Asia in the June-August period since all the gas markets are interconnected. He referred to its impact on Pakistan which is undergoing a prolonged energy crisis. In the same vein, Europe’s energy diversification could impact the Indian gas market, which the author should also focus on.

Ms. Anandita Bhada:

The discussant stressed on the need to highlight the winners and losers of the ongoing crisis. She referred to the eastern European countries, who being less economically developed, have found cheaper Russian energy more attractive. Ms. Bhada felt that the importance of interconnectors must be emphasized since several eastern European countries are landlocked or have a small coastline. In this, the significance of Poland-Lithuania interconnector should be emphasised. She also referred to the concept of projects of common interests which help secure energy across the continent. This includes the Baltic Gas Pipeline connecting Norway via Denmark to Poland.

Apart from raising the question of financing, Ms. Bhada highlighted the use of rare earth elements sourced from China for energy transition to renewables. She wondered whether a significant focus on renewables would mean Europe would have an increased dependence on China for rare-earth elements? Ms. Bhada also observed that the Brexit deal must be resolved for any substantial gains between Europe and the United Kingdom. Finally, regarding the reduction of demand, she pondered that by the time there is a reduction in the market for Russian energy sources, the need for the substitute would increase; thus, how would Europe balance it out? 

Prof. Gulshan Sachdeva:

The Chair complimented the author for her work. He also highlighted some of the areas of the paper which could be further improved.

First, the title could be formulated for a more precise understanding. Too many aspects within the title may create problems. There is also a need for more in-depth analysis of the geopolitical factors at play.

Second, there is a need to have a discussion on the concept of energy security and what is the European understanding of energy security. There is also need to discuss the history of the European understanding of energy security from the past to the current era.

Third, Prof Sachdeva opined that the Literature Review might not be needed but gave the researcher the discretion to keep or remove it.

Fourth, he highlighted the need to re-arrange the paper. In the introduction, the researcher could highlight the European concept of energy security, and then delve into the current geopolitical situation as a result of which Europe has chosen to adjust its energy security policies.

Fifth, concerning the figures, there is a need for primary data, and the use of multiple graphics is confusing for the readers. For example, a graph could be there for the situation before the Ukraine war and the current situation.

Sixth, there is a need to refer to more primary documents from the European Union; for instance, the Repower EU Plan needs to be added.

Seventh, Prof. Sachdeva observed that on India-EU collaboration, the researcher could avoid the over-emphasis on hydrogen since it may divert from the crux of the paper. In this, the paper needs to focus more on the impact of energy diversification on India. A country like India is significantly dependent on Russian arms and energy, and there could be severe implications for the geopolitics of the Eurasian region.

Eighth, the author must expand the conclusion.

Questions and Comments 

Deputy Director General, Maj. Gen. (Dr.) Bipin Bakshi (Retd.)  agreed with the Chair on specific aspects of the paper which need to be reviewed. He observed that multilateralism is weakening, maybe to a certain extent even fracturing, which has led to multipolarity and emergence of regional groupings. In the past, regional groupings were linked to geography but several of those links are now fractured. In the same vein, he observed that geopolitics and ideology are fracturing existing trade agreements, for example, the EU- Russian energy mix and the US-China trade war. New alignments are shaping up, and old friends and alliances are finding themselves on opposite sides of the energy alignment; simultaneously, they are adapting and harmonizing with the current geopolitical situation.

On green hydrogen, he emphasised that Indian researchers have been active. Nevertheless, cost is a factor and the focus has also been more on blue hydrogen. The questions of economics trumping geopolitics and the success of the shift to hydrogen could be addressed.

The Q/A session broadly revolved around the themes of transition to greener energy, energy security, energy politics within Europe, nuclear energy option, North-South divide, India’s ability to deal with global risks and the need to focus on West Asia. 

The speaker responded to the comments and questions.

(Report prepared by Dr. Jason Wahlang, Research Analyst, Europe and Eurasia Centre, MP-IDSA)