Energy security in the Baltic Sea Region: Transition within geopolitical constraints

The Russian attack on Ukraine in February 2022 shook continental geopolitics and led to a major shift in EU energy policy. The necessary speed of the combined diversification away from the Russian energy sources, fossil fuel phase-out and mass scale-up of low-carbon energy and technologies are having a tremendous impact on European national economies and societies. The Baltic Sea Region is no exception. Baltic Sea energy politics currently paints a complicated picture of competing pipeline projects, sprouting new LNG terminals, plans to build nuclear power infrastructure, a race to develop new energy technologies and to increase the interconnectedness, and digitalisation of the electricity grids. These developments will transform the regional energy landscape for decades to come and have important security implications. This policy report provides a comprehensive overview of the energy security situation in the Baltic Sea Region, zooming in on eight country cases (Denmark, Sweden, Finland, Estonia, Latvia, Lithuania, Poland and Germany). By locating the national energy policies in a historical context that shaped choices of energy infrastructure and technology, the analysis investigates how the energy policy and energy mix of each country was affected by cutting the energy ties with the Kremlin following the outbreak of war in 2022. The report looks into future investments in the energy sector that are meant to tackle the dual energy- climate crisis at the Baltic Sea. As the war in Ukraine and the European energy crisis are continuously unfolding, we conclude with five key points moving forward:
Regional interconnectedness of energy infrastructure and the development of a common energy policy approach will be crucial for building resilience in the Baltic Sea energy sector in the face of the unfolding energy crisis.
Short-term versus long-term trade-offs, such as the use of ‘black’ energy as a quick fix versus investments in green energy sources in line with climate goals, will be faced.
Technological and political lock-ins may be created by putting long-lifecycle energy infrastructure projects in place (eg pipelines, LNG terminals, NPPs) that risk creating new dependencies and hampering the green transition.
Speed, scale and competitiveness are all crucial in tackling the energy crisis and keeping the rise of global temperatures under 1.5°C; however, we may be counting on technology that is not invented or not yet ready for mass roll-out.
Political resilience and possible loss of momentum, as European businesses and consumers alike will increasingly feel the dire impact of the ongoing war in Ukraine and the energy crisis.