Each member state of the Eurasian Economic Union (EAEU) has its own energy system. And while they each possess individual characteristics, they are all having to deal with deteriorating generating capacities and an ageing energy infrastructure. The creation of a common electricity and energy resource market could help ensure the self-sufficiency of EAEU member states – something which is key to the five nations’ economic growth. That was the conclusion reached by representatives of various EAEU energy-related bodies at the second Eurasian Economic Forum. The participants were speaking at a session entitled Energy Security and Economic Growth.
Energy security is a common objective for EAEU member states
“Energy is a strategic area in relation to moving forward with Eurasian integration. It is what largely determines the pattern and rate of economic growth in our countries. Therefore, when building common energy resource markets, one of our priorities is creating a common system to ensure energy security. This should be based on shared goals and approaches in the five member states’ government policies,” Arzybek Kozhoshev, Member of the Board, Minister in Charge of Energy and Infrastructure, Eurasian Economic Commission.
“The energy security of an individual EAEU member state cannot be ensured in isolation. No matter what, we need to work on ensuring energy security for our economic union,” Nikolay Shulginov, Minister of Energy of the Russian Federation.
Western sanctions have highlighted the need for EAEU member states to bolster energy security
“Global energy markets are undergoing a transformation against the backdrop of the global energy crisis, external restrictions, and sanctions. This is pushing us to come up with new approaches and ways of bolstering energy security, the union state, and the Eurasian Economic Union as a whole,” Viktor Karankevich, Minister of Energy of the Republic of Belarus.
“The discriminatory sanctions make it essential to look for new markets. However, there are difficulties in this regard. <...> We do not have a collective energy security programme for the EAEU. However, if we were to decide that this needs to be done, then one of the main points would probably be the greatest possible use of our total energy potential in order to ensure that supplies get to the consumers,” Nikolay Shulginov, Minister of Energy of the Russian Federation.
Ageing equipment is a common problem across EAEU member states
“Of course, there are problems that all countries in our union share. I am speaking about the problem of deteriorating equipment in generation and the power grid,” Arzybek Kozhoshev, Member of the Board, Minister in Charge of Energy and Infrastructure, Eurasian Economic Commission.
“The infrastructure we shared has already deteriorated to a certain point. It is my view that over the next three to five years, if we do not develop the electric power industry in a coordinated manner, we will experience much bigger problems. We will encounter a situation in which we will not be able to help one another during an emergency, even if we have the resources to do so,” Taras Kupchikov, Chairman, Executive Committee of the Electric Power Council Commonwealth of Independent States.
“It is not enough to possess energy resources or have access to them if you want to ensure energy security. I can cite the example of South Africa. They have their own coal and 70% coal-fired generation. However, they lack a serious approach to power engineering and other forms of engineering in the country. This led to the situation in May 2023 that 30% of their capacities were unavailable due to the need to carry out emergency repairs,” Alexandra Panina, Member of the Management Board, Inter RAO.
A number of EAEU member states have experienced a shortage of energy resources
“Our country is rich in water resources However, due to dry spells, we periodically experience electricity shortages. This happens every five years due to climatic conditions. As things stand, our electricity shortages are covered by imports from neighbouring countries and EAEU partner countries. <...> We have the potential to increase electricity generation. We are modernizing existing hydropower plants and building new ones. Our region is also rich in sun and wind... By fulfilling our designated tasks, we will be able to ensure energy supplies for the population and protect the country’s economy,” Taalaibek Ibraev, Minister of Energy of the Kyrgyz Republic.
“After the collapse of the Soviet Union, we experienced major problems and an energy crisis. That was not only because we had problems with gas or nuclear fuel. The problem was that... our power system could not operate in a separate state and regulate the frequency. We built power lines with Iran. <...> We are now building new power lines to operate in parallel with Georgia [via a DC link – ed.] and EAEU member states. <...> Our isolation means we are unable to have an accessible transit for gas. However, our diversification today is good [in terms of the use of primary energy resources: nuclear energy, hydropower, sun, and gas – ed.],” Hakob Vardanyan, Deputy Minister of Territorial Administration and Infrastructure of the Republic of Armenia.
Russia needs its own national price indicators in the energy market
“We still sell a lot of energy resources to the global market. We sell them at prices... based on what various pricing agencies say. <...> In the current environment it has become absolutely clear that we need to have our own national price indicators. That is because, first of all, foreign indicators could cease at any moment. <...> Secondly, the price signals they provide could be distorted, as indeed they are,” Alexey Rybnikov, President, St. Petersburg International Mercantile Exchange.
Creating a common energy resource market which could ensure stability for EAEU member states’ energy systems
“Of course, the main goal of the common market is to ensure stability for the five member states’ energy systems. <...> The largest energy companies in each country are keeping their domestic markets running. Accordingly, only these companies can keep a united market running,” Andrey Ryumin, General Director, Chairman of the Management Board, Rosseti.
“I would look beyond just the EAEU countries, because there are countries that are not members of the union, but which work in parallel with Russia,” Taras Kupchikov, Chairman, Executive Committee of the Electric Power Council Commonwealth of Independent States.
Developing generating capacities to meet electricity needs
“The priority right now is the development of generating capacities and capitalizing on our energy potential. Overall, we think that this package of measures will enable us, over the medium term, to solve current problems related to ageing infrastructure and a certain shortage of basic electricity supplies,” Almasadam Satkaliyev, Minister of Energy of the Republic of Kazakhstan.
“Belarus does not possess large reserves of traditional energy resources. The country has therefore focused on the development of nuclear energy. The passage of time has confirmed this to be a well-considered and prudent decision. <...> While other states are just starting to implement national nuclear energy programmes, Belarus already has its nuclear infrastructure in place,” Viktor Karankevich, Minister of Energy of the Republic of Belarus.
Boosting cooperating within the EAEU and joining forces to achieve carbon neutrality
“Specifically, technological cooperation is firstly helping to lower costs, and secondly improving the reliability and efficiency of the EAEU member states’ energy systems,” Andrey Ryumin, General Director, Chairman of the Management Board, Rosseti.
“It seems to me that new technologies are precisely what should lie at the heart of the EAEU’s integration processes. We must join forces, not only with the view to building a common energy system and using each other’s resources, but specifically with the view to integrating in relation to accessing the latest technology, and in relation to communication and coordination in the field of power engineering,” Alexandra Panina, Member of the Management Board, Inter RAO.
“It seems to me that we will need to harmonize legislation [in relation to carbon neutrality across the EAEU – ed.]. Perhaps we will also need to create some kind of common market in terms of green certificates. <...> Big power systems always win,” Maksim Bystrov, Chairman of the Board, NP Market Council.
