The Energy Dependence of Central Europe – the Other Side of the Resource Curse

“Resource Curse” term is usually used for the countries that have plenty of resources. But what a country has to do without any of them? Hungary is an example of the other side of the resource curse.

The energy issue is a hot topic in whole Europe. The European Union is working hard on achieving energy independence, or at least diversification, in order not to be a subordinate to one single energy source. Moreover, its ambitious goal is to do this in a sustainable way, through renewable energy, as much as possible.

While some European countries have some energy resources and thus relative independence, others are defenceless. For example, France has much uranium and many nuclear power plants, Poland and the Czech Republic have coal, Austria has rivers suitable for hydroelectric power stations – but Hungary has none one of them, nor any other kind of energy resource in significant quantities.

Hungary is not alone in this situation, for example Slovakia and Slovenia face the same problem. What can a country like this do?

As shown above, different European countries have different possibilities to cover their energy consumption. Still, they are connected with each other, by gas pipelines on the one hand, and by common plans and strategies for energy independence on the other. In this system, Central and Eastern Europe holds a strategically very important position – crucial and fragile at the same time. This creates a strange situation and a very delicate issue of energy in the region.

What are the choices to get energy?

1. Own resources: if some kind of energy resource is available, an obvious solution is to use it. This happens even when the given resource is already said to be outdated or dangerous for the environment and for ourselves. We still use it, mainly because of economic reasons. It is ours, so it is cheap(er).

This was very often the case during the time of socialism, when this part of the world belonged to the Soviet bloc. Forced industrialisation, encouragement of heavy industry and lack of environmental responsibility were common features in this region then. Moreover, heavy industry needed more energy, so all possible sources were needed to be used in production.

One more thing is worth to mention: the planned economy ruling back then lacked the logic of efficiency (while it was predominated by the logic of 100% employment guaranteed by the socialist governments). It happened quite often that a new mine was opened, while the available material was worth less than the costs of mining.

Another frequent case was that the mines were cost-effective at the time of start, but during the decades they ran out of resources until finally the exploitation stopped. (The same happened globally, but there is a difference in the time span: in the structure of a planned economy it was much faster.) In Hungary, for example, there are many former mines which were designed to reach the relatively small amounts of lignite, brown coal, even less black coal or uranium. (Some power plants are still working.) In Poland or in the Czech Republic, however, coal power plants are still widely used, simply because these countries are still rich in coal.

The lignite power plant in the Mátra Hills, Hungary

2. Renewable energy is the desired solution that every country wants to choose, but not all of them have the possibility to do so right now. Besides being environmentally friendly, its biggest advantage is that on the long run, it is cheap. Once a facility is built, it will not run out of resource. The problem, as we will see, is to build the facility (and occasionally some legal complications show up as well). Renewable energy has different types like solar energy, hydroelectric power, wind power, and so on. Here they are treated as one group, because they represent the same idea, the same way to answer the energy question.

In East-Central Europe, renewable energy is not dominant yet. The main reason is the lack of funds. It is, of course, connected with the rather low level of the technology: something goes wrong relatively often. Moreover, as the time goes on, more cost-effective solutions show up. Thus, when there are other possibilities to cover the energy consumption, countries in the region tend to choose them instead of risking new, expensive solutions.

This is not a constant situation, though: the European Union is encouraging actively to increase the amount and proportion of renewable energy usage, both legally and financially. Here, the crucial question is how effectively the countries in the region can use the possibilities provided by the EU. Most of them joined the Union in 2004 or in 2007 – some of them still have to learn the routine how to use EU funds.

Country by country, geographical location determines the type of the energy resource to choose. In our region, all the countries can find one or more suitable types. Hungary, for example, does not have high mountains and long rivers, so hydroelectric power can not be dominant. The country is situated in the Carpathian Basin, so it is quite protected from strong wind – good for agriculture but disadvantageous for wind power. (Still, even if it is not the number one solution, we have some wind turbines and windmills on the territories where it makes sense to deploy them.) On the other hand, Hungary is relatively rich in sunlight, so solar power can be a working solution – later, when its price will fit Hungary’s budget.

No place for windmills in Hungary. Map of Installed wind power capacity

3. Nuclear energy. At the beginning, a few decades ago, nuclear energy was a highly popular way to solve the energy problem. It was seen as cheap on the long run, clean, risky, but – based on the belief in technological development – reliable. In this respect there was no difference between Western and Eastern Europe. Then Chernobyl, and now Fukushima happened and the public opinion changed radically. (It changed in Hungary, too: while, according to Eurobarometer, in 2005 Hungary was the most enthusiastic EU member about nuclear energy (65 percent supported it), in 2011 itt fell to only 41 percent.)

The delicate position of the Eastern and Central Europe can probably be seen here the most. Being a part of the European Union, thus following its norms, meanwhile having a post-Soviet heritage makes it more difficult to give up usage of power plants. While Italy and Germany can opt out from nuclear energy relatively easily (and while France has no intention to do so at all), Austria, a ’clean energy warrior,’ is trying to force its neighbour, Slovakia to shut down its nuclear power plants.

Nuclear power usually covers 30-60 percent of energy consumption in the region. Replacing it with renewable energy will take a very long time – and costs much more than what these countries now can afford. There is only one other way to go: increasing energy dependence.

4. Import – „The Russian Gas”: countries in the region know very well how it feels to be dependent from Russia. Today it is still the case. Not politically any more, but in the energy sector. We could not make it without the natural gas coming from Russia.

Russian natural gas pipelines to Europe, Source: Wikipedia

This is valid not only for East-Central Europe. Diversification of gas import is a common European issue. Projects like the Nabucco pipeline point to this direction. (Meanwhile we can not forget the rivals, such as the South Stream, coming from Russia.) Today, however, for Central and Eastern Europe, resource curse means not only the lack of energy resources still means but also the unambiguous dependence from Russian gas supplies.

To sum it up, there are some options from which Central and Eastern European countries can choose from to diversify their energy sources. They can use their own resources – if they have them. They can go for different kinds of renewable energy. Efforts in this direction are being made, and encouraged by the EU as well, but it takes time and money.

There’s also a nuclear option. It is highly unpopular nowadays, but once they have the power plants (and the geographical risk is relatively low – which basically means no strong earthquakes) and until they do not have a better solution, it makes sense to use them – at least economically.

Last but not least, they have the dependence option. This is what they would like to avoid, but it is not so easy. The basic structure can not be changed overnight, only the emphasis can be put onto different sources – more and more to energy independence, hopefully.