European reliance on Russian energy must come to an end, and Ukraine could prove to be a viable replacement, argue Dr Alexander Lanoszka, James Rogers and Patrick Triglavcanin.
In this Report for the Council on Geostrategy, entitled ‘A new energy policy for Europe: The significance of Ukraine’, the authors highlight how the EU has become increasingly reliant on Russia for energy imports. Over the past 10 years, the EU has transferred just over €1 trillion to Russia in exchange for fossil fuels. This revenue has almost certainly helped the Kremlin rebuild the Russian Armed Forces, which have been used to dramatic effect to launch Russia’s invasion of Ukraine. Alongside combating climate change, there is now a strategic rationale for the EU to wean itself off imports of Russian energy..
The Report makes the case that in order to achieve this objective, the EU will need to reach out to new partners. Ukraine will be key in this endeavour due to the country’s considerable potential as an energy provider:
- Ukraine has the second largest gas reserves in Europe;
- Ukraine holds equivalent to 27% of the EU’s gas storage capacity;
- Ukraine has abundant wind and solar resources that can be better harnessed and exported to the EU.
To maximise its potential and to facilitate a closer energy partnership with the EU, Ukraine would do well to undertake a ream of reforms to its energy sector. These reforms, supported by the EU, should address:
- Fully integrate the Ukrainian energy sector with the EU;
- Decrease regulatory interference in Ukraine’s electricity market.
Security of supply:
- Implement a stimulus package for oil and gas extraction;
- Introduce capacity mechanisms in support of medium and long term electricity supply security;
- Improve financial instruments to ensure a green energy transition;
- Reform the coal sector;
- Implement smart grids and improve cross-border connectivity.
- Boost policy support for the development of new technologies.