Introduction - OGEL Special Issue on The Impact of the War in Ukraine on the Energy Sector
Article from: OGEL 5 (2023), in Editorial
The Russian government's war of aggression against Ukraine in February 2022 had an enormous impact on energy markets. The attack demonstrated the interconnectedness of the global energy system. A shock in one part of the global system has consequences in all other parts. As an example, the significant reduction of Russian pipeline gas flows to Europe had a direct impact on the price of LNG, procurement options of Asian buyers, and contract negotiations with US suppliers.
Despite these global implications, the most significant energy impact of the Russian attack was felt within Europe. Crucially for EU energy markets, the decades-long discussions about diversification have gained momentum and accelerated the search for alternative supplies. The attack reinforced the EU's commitment to renewable energy, hydrogen, and other low-carbon solutions, not only as a climate change imperative, but also as an increasingly important aspect in the context of security of supply. At a political level, the attack also reinforced the role of energy solidarity in the EU.
Thus, the paradigm shifts in the European energy markets due to the significant decrease in the supply of the natural gas through the pipelines connecting Russia and Europe has led to an unprecedented need for alternative energy supplies, but also to a reassessment of the energy policies of the EU and non-EU countries. In line with these considerations, this special issue discusses the European energy policy, alternative supply routes and some of the difficulties in developing energy independence and dealing with the energy effects of the attack.
This special issue opens with an article by Kim Talus and Sirja-Leena Penttinen that looks at some of the aspects that led to the increase in the energy resilience of EU following the invasion of Ukraine, including a look at long-term gas storage, decrease of consumption, alternative supplies and other elements of EU energy policy.
Marzia Sesini and Andris Piebalgs then focus on the EU solidarity in and after the crisis. They discuss the challenges in the development of policies concerning solidarity and conclude that overall collective action and cooperation are crucial in maintaining energy resilience and security within the EU.
Ernesto Bonafé and Simina Suciu look in depth and the New EU Energy Platform and regulatory landscape set up by the European Commission as a new coordination mechanism between member states to overcome the energy supply crunch created by the war.
Looking beyond the EU's borders, Tuncay Babali focuses on the Caspian region as an alternative source of gas and oil, highlighting the crucial role of the Caspian export routes for the energy security of several countries, especially in Europe.
Salome Janelidze discusses the impact of the Russia-Ukraine conflict on Georgia's energy sector, with a focus on the implications of new infrastructure projects such as the Black Sea submarine cable and an LNG terminal in Georgia.
Ernesto Bonafé explains legal innovations brought forward by the UK The New Energy Security Bill to leverage investment in clean technologies, reform the energy system, protect consumers, and maintain the safety, security and resilience of the energy sector.
In the final article, Agnieszka Ason discusses the exponential increase in arbitration claims against Gazprom since 2022, examines the key substantive and procedural issues in these cases, and outlines the post-arbitration outlook.
As these articles so clearly illustrate, the unprovoked attack on Ukraine by Russia has profoundly changed global energy markets. This is particularly true for European energy markets: more diversification, more alternative energy sources, more decarbonization, more clean energy, more energy efficiency, and less Russian energy.
As the editors, we hope that you enjoy the collection of articles selected for this issue.
Agnieszka Ason, Konstantin Christie and Kim Talus