“Powering the land-locked, post-socialist part of the monarchy”

Or Energy (read: economic) security in Central Europe: Czechs, Hungarians and Slovaks

By Andrej Nosko

Why Czech Republic, Hungary and Slovakia in one blog?
There can be dozens of reasons why to write about Hungary, Slovakia and Czech Republic. They all are small land-locked countries (size and geography still matters), they were once united in Austro-Hungarian Empire , in COMECON, (historical legacy matters as well) and now they are the ‘new’ members of the European Union (they are facing the same Brussels) and they are all more, rather than less dependent on the imports of their primary energy sources from Russia . But most of all, these are countries that I have kept a close look at already for some time, these are countries that I have lived in for longer periods of time, and thus can establish a closer familiarity with, beyond an armchair research.



Background – common issues
Let me start by giving you a bit of general introduction into the current issues which will be dealt with in upcoming blog posts. All CEE countries (I consider CEE countries, similarly to the PERG custom to be Visegrad 4, Baltic 3 and SI (CZ, EE, HU, LT, LV, PL, SK, and SI)Nonetheless as stated before, this blog section focuses on CZ, HU and SK) are facing very similar problems: including the post COMECON legacy of import infrastructure from Russia, lack of regional interconnectors, nontransparent energy contracts, and often unclear situation with strategic reserves. Irreconcilable requests for liberalization of energy coupled with requests for state providing almost absolute energy security and calls for greener and cleaner energy supplies. All these countries are also separated from their major suppliers by a string of transit countries, which don’t hesitate to take them hostage to negotiate their own economic interests vis-à-vis the common supplier. All of these countries are relatively small and just recent entrants into the EU bloc. In addition to these common issues, each country has its own specificity.

Czech Republic
Czech Republic has perhaps progressed the most on its way towards primary energy supply diversification. Czech Republic has diversified supplies of nuclear fuel (complicated Temelin story in an upcoming blog post), oil (IKL pipeline), as well as gas (two way connector to Germany). It is also a country with one of the highest share of alternative energy sources in the CEE. The all times pending issue in Czech Republic has been reversing of the IKL pipeline to export Russian oil rather than import lighter varieties from Adriatic through TAL pipeline. Other pending issues are role of state in relation to the (partly) privatized energy companies, and role of ‘renewable’ and alternative fuels and energy supplies. Its recently commissioned Nuclear Power Plant Temelin, in the southern part just over the border with Austria has been a target of numerous protests from environmental activists.

Slovakia
Slovakia, unlike Czech Republic is a situation taker, rather than setter. It has relied on the fact, that it is an important transit country with the major gas pipelines (Brotherhood) from Ukraine to Czech Republic and Austria. The issues that are every once in a while discussed are possibility of connecting to other countries’ plans for infrastructure diversification (mostly the Norht-South connectors), finishing additional reactors in Mochovce Nuclear Power Plant (NPP), complaining (by prime minister Fico ) about a (EU accession) contractual obligation to decommission NPP Jaslovské Bohunice, building of new energy sources (also questions what types - nuclear, conventional (Trebisov), steam-gas, support for ‘alternative’), and finally buy-back of shares of previously privatized (by Yukos Finance) of oil transport company Transpetrol. Since Slovakia has some undeveloped resources of uranium ore, prospects for its mining and the related environmental issues are also discussed.
Slovakia also occasionally likes to entertain herself with, a dream that it can be a bridge between EU and Russia, and this daydreaming has important implications on the policies that are (not) proposed or its lately proposed attempt at some strategizing in the area of energy security.

Hungary
Hungary, similarly to Slovakia, depending on the political forces controlling the steering wheel, also tends to dream of being bridge to Russia. More substantial issues are related to the role of national champion MOL and the still pending takeover bid by OMV, and occasional rumors who actually owns MOL, an important energy sovereign reigning also in Slovakia. Similarly to Czech Republic, some pondering on reversing the Adria pipeline were mentioned. Since Hungary out of the three countries has highest share of gas on its domestic and residential consumption, and both Nabucco as well as South Stream gas pipelines are projected to cross Hungarian territory, the role of Hungary in these projects is and will be vital.

by Andrej Nosko