The energy crisis in Central and Eastern Europe (CEE) has lost some of its bite after a mild winter and record LNG imports led to a slump in natural gas prices. The EU has made good progress in replacing Russian energy supplies. But the crisis will have long-term consequences as countries rush to remake their energy systems. CEE is amongst the most vulnerable, as it is landlocked and deeply integrated into the Russian energy complex.
CEE has three options to break its dependency on Russian energy: solar, wind and nuclear. Most of the countries in the region have largely ignored all three until now.
The challenge facing CEE is how it can overhaul its infrastructure and tackle energy security. The war in Ukraine exposed the region’s dependence on Russia as the dominant energy supplier and the need not just to develop a more diversified energy mix but also to reduce import dependence and boost domestic energy sources. That needs to be balanced with the long-term objectives of decarbonisation and the phasing out of coal.
The task ahead is huge. CEE countries have limited domestic reserves of hydrocarbons, excluding coal, and have relied on energy imports since the 1990s. Energy infrastructure in the region is centred around Russia, including pipelines and refineries designed to use Russia's oil blend, Urals. Modifying such infrastructure, as in the case of Hungary, will cost billions and take years.
Wind energy presents a different challenge for CEE. Coastal countries have large potential for offshore wind, but landlocked countries must settle for onshore wind development.
Modelling from the EU’s Research Institute in 2019 showed that, under standard assumptions, Czechia, Hungary, Romania and Bulgaria have among the largest potential for onshore wind capacity in Europe over the next few decades, Capital Economics said in a report.
“In coastal countries such as Germany, Poland and the Baltic States, wind accounts for at least 25% of electricity generation. But in Czechia, Hungary and Slovakia wind accounts for less than 2%,” Capital Economics reports. “Governments in these countries have set targets for increased wind power capacity by 2030 and new infrastructure is being built. But in most cases the targets are unambitious. In Czechia, for example, wind power is only expected to generate 3% of electricity by 2030, compared to 0.5% now.”
Factors such as wind speed, the landscape, and the electricity grid will determine the amount of wind energy each country can generate.
Solar energy is also progressing slowly in CEE. While some countries, like Hungary, are utilising solar power to generate electricity, it remains a minor part of the energy mix in others. Despite a promising start, investment in solar energy is progressing slowly.
Wind and solar are often seen as the most desirable solutions but the reality is that they cannot solve the energy security problems alone. Nuclear energy has gained significant attention as a way to address security problems and phase out fossil fuels.
There is a long history of nuclear energy in CEE, and it already plays a significant role in the region's energy mix. In Slovakia, nuclear energy accounts for 60% of electricity generation, while in Hungary it contributes to 40%. Other countries in the region, such as Czechia, Bulgaria, and Romania, generate around 30% of their electricity from nuclear sources. However, in other countries, such as Poland and the Baltic States, the use of nuclear energy is virtually non-existent.
CEE countries are looking to expand their nuclear capabilities over the next decade. For instance, construction of Poland's first nuclear power plant (NPP) is set to start in the near future, and by 2035, it is expected to provide 20% of the country's electricity. In Czechia, Hungary and Romania, the share of electricity generated from nuclear sources is expected to increase by 10-30 percentage points. The Estonian government is also evaluating the feasibility of nuclear power.
Despite the many benefits of nuclear energy, including reliability and low emissions, it also comes with its own set of challenges. The investments required to expand nuclear capabilities are significant and can take an average of ten years. There can also be public opposition to nuclear power, and securing uranium supplies, which is a market dominated by Russia, will be a significant challenge.