Market or geopolitics? The Europeanization of EU's energy corridors

Abstract

Purpose -The purpose of this article is to explore an energy strategy for the European Union (EU) that could integrate the tensions between geopolitics and the market in a coherent and consistent external EU energy policy. Design/methodology/approach -The approach consists of combining the theoretical framework of international political economy and Europeanization to European energy corridors. Findings -The article finds that most qualitative energy security scenarios can be conceived as applications of international political economy paradigms. Its main result is to conceptually develop a geo-economic strategy consisting on the Europeanization of EU's external energy corridors along its own energy regulations and standards.Research limitations/implications -The article explores a distinct hybrid scenario, the Europeanization of energy corridors, which could be instrumental in overcoming the apparent dilemma between EU's market and geopolitical-based scenarios. Originality/value -The original contribution of the article lies in the application of international political economy and Europeanization theories to energy security scenarios, and the inclusion of governments' preferences in the process of hedging market and geopolitical scenarios.

Europeanization Processes of the EU Energy Policy in Visegrad Countries in the Years 2005–2018

“…Katsaris [10] noticed that Europeanization processes of the energy policy affect or Morocco and Algeria. Escribano [8] argue that the EU energy policy can be treated as the external macroeconomic Europeanization (geopolitics, especially in the context of Russia) and the internal macroeconomic Europeanization (market needs and the competitive, regulatory framework within the EU). Before evaluating the Europeanization processes of the EU energy policy, we need first to see how this policy has been shaped.…”

“…Thirdly, currently in the world economy, especially in highly developed countries, there is a shift from the use of fossil fuel towards green energy [2,3], what per se is very challenging for some countries in terms of implementation of EU policies [4][5][6] and still growing importance of the solar photovoltaic sector in the EU [7]. Fourth, the economic interests and the raison d'etre, and the geopolitical circumstances of individual member states are divergent and sometimes even mutually exclusive [8]. Fifth, processes, which means to check the gamma (γ) type of convergence [27].…”

Soaring electricity prices in the day-ahead Iberian market: policy insights, regulatory challenges and lack of system flexibility

“…However, as we pointed out, decision-makers often fail to also highlight the risks and some of the shortcomings. And if it is true that major events, like the COVID-19 pandemic and the war, were unpredictable – international externalities like geopolitical insecurity and its social costs are very difficult to objectify (Francés, 2011), it is also true that the focus of the regulatory changes was to strengthen market integration and the adoption of renewables, with a somewhat “blind” belief that the lower marginal operation costs of these technologies would drive the market prices down, with neglectable exceptions. As often the case, the “perfect” scenario does not exist, and the security of supply in the Iberian electric power system should not be taken for granted.…”

“…This is especially true in the context of an electricity market with a large-scale adoption of variable RES, which is why it is important to have a stable policy framework, reflecting a long-term vision that prioritizes system flexibility investments (Couture et al , 2021). In the near term, this implies a regulatory environment that supports security reserves or excess capacity at high(er)-capital facilities, which in a purely competitive environment (exclusively driven by the marginal costs) would not be ensured (Francés, 2011). In fact, larger shares of renewables are directly linked to an (unsolicited) higher volatility in electricity prices (Mwampashi et al , 2021), although, until 2019, there was a positive leverage effect in the wholesale electricity price in Portugal from the renewables contribution (Macedo et al , 2020).…”

A Guide to EU Renewable Energy Policy: Comparing Europeanization and Domestic Policy Change in EU Member States

“…Finally, directive 2009/28 on RES explicitly contemplates RES-E imports from third countries 1. Both pieces of the EU's energy acquis constitute a clear strategy of outward Europeanization differentiated for the Mediterranean and for the RES sector(Escribano, 2011a).Then the financial crisis came, biasing the EU's energy trinity of sustainability, security and competitiveness towards the latter. RES support schemes have been reduced, and the EU risks becoming a pioneer unable to exert leadership at the expense of newcomers like the US or China.…”