1. Stepping on the Gas: Future-Proofing Estonia’s Energy Market and Security
- Author:
- Andrei V. Belyi
- Publication Date:
- 05-2019
- Content Type:
- Special Report
- Institution:
- International Centre for Defence and Security - ICDS
- Abstract:
- The Baltic region is making a significant progress in developing functioning regional natural gas market, expanding and integrating the related infrastructure, and ensuring the security of supply. However, there are multiple factors—at the national, regional, European and even global levels—that prevent this from becoming an ideal market capable of delivering greater security at a reasonable cost. Liquidity of the market is low due to falling consumption; state aid and state participation in the energy enterprises discourage private investments and distort market conditions, while geopolitical tensions between the West and Russia add further complications. The report considers the trends in the overall natural gas sector—such as greater portion of trade being conducted in gas trading hubs; more reliance on spot pricing rather than long-term contracts; LNG glut in the global markets, introduction of “virtual pipelines” and flexible infrastructure, pressure to reduce CO2 emissions as well as the US entry into the global LNG market as a major player—and analyses their implications to Estonia. It puts forward a number of recommendations on how to create and sustain the conditions necessary for efficient natural gas market in the region as well as for improved energy security of Estonia.
- Topic:
- Security, Energy Policy, European Union, Economy, and Resilience
- Political Geography:
- Russia and United States of America