In Pursuit of Energy Justice

Here is a journal article I’ve written focused on the emerging academic area of energy justice. Energy justice stems from the environmental justice movement and has the potential to incorporate a wide variety of issues that are policy relevant in the energy sector. Energy poverty, including access to energy resources and political representation are the more common areas that have been examined to date by scholars. There is also the definition that the full costs of the energy system should be reflected in the end price. This would help expose those areas where there are subsidies. If you take just these two different perspectives, you can see that there are contradictory and also a wide area of justice questions that energy justice is engaged with.

My approach (as is the approach on this blog) is to consider the interaction of companies, government regulations and policies and how these either benefit or hurt consumers. Thus I push for full cost accounting of our energy system – and even where financial losses are being hid (such as in Hungary and Bulgaria). My presumption is that if financial losses are hidden, then the energy system itself is not built on a sustainable and stable platform that can finance and transition towards a low carbon energy system. In addition, there is an inability by market players and governments to invest in the latest technologies which can provide lower cost energy services to consumers, rather than just creating perpetual debt in the energy system.

This article (just submitted to a special issue of a journal – so it is under review), is more theoretical and even philosophical in understanding our energy system. I separate out different forms of energy justice. The first form is the ‘particular energy justice’ which is based in cultural and national norms. The second form is the ‘universal energy justice’ definition which argues everyone in the world has the right to access energy services and be able to afford them – otherwise they are denied other human rights, like a job and education. I then attach this discussion to the tumultuous experience in Bulgaria and the inability to make it financially sustainable.  You can see this differentiation in the picture below.

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Download article: In Pursuit of Energy Justice

Abstract:

Energy Justice provides a framework to perceive disparities in our energy system. The foundation of energy justice draws heavily from the environmental justice movement, grounded in larger socio-political issues of representation, economic relations between the state, firms and social groups, including a universal and local application of justice. This article extends this differentiation by exploring universal and particular forms of energy justice. 1) Universal energy justice holds to socio-historical values stemming from judicial and philosophical groundings based in procedural justice issues, including recourse through administrative or judicial means. 2) Particular energy justice relies on cultural and environmental factors influencing choices around energy technologies and policy preferences for the distribution of energy services. Empirically, this article examines tensions within the energy system in the European Union. It does this first, by examining how universal energy justice is spread through National Regulatory Authorities (NRAs) in energy to satisfy ‘universal energy justice’ standards. Second, particular energy justice is exemplified in Bulgaria’s use of historical socio-political relations to usurp institutionalized universal energy justice. The aim of the article is to show the pursuit of energy justice attempts to resolve tensions between groups and differing politics to both access and provide energy services.

The expense of low energy prices in Bulgaria and Hungary

What’s wrong with low energy prices? In this book chapter Atanas Georgiev and myself look at the mounting debts and political maneuvering in Bulgaria and Hungary. Countries where energy regulators were both sidestepped and politically maneuvered to ensure household consumers would pay low energy prices. The results? Unnecessary debts throughout the energy systems.

The chapter is written for the book, ‘Energy Law and Energy Infrastructure Development for a Low-Carbon World,’ edited by Raphael Heffron, Darren McCauley, Angus Johnston, and Stephen Tromans QC to be published by Cambridge University Press – early 2017

Full text of the chapter

 


Authors:

Michael Carnegie LaBelle

Assistant Professor, Central European University, CEU Business School and Department of Environmental Sciences and Policy

Corresponding author, Contact: labellem@ceu.edu

Atanas Georgiev

Assistant Professor, Sofia University, Faculty of Economics and Business Administration

Abstract
Energy regulation underpins the European Union’s efforts to establish competitive energy markets in each Member State. Since the 1990s a system of regulatory governance was established, shifting the oversight of the energy sector from a government and politically centric system to one based on independent national regulatory authorities (NRAs). In some Member States the movement towards market pricing and regulatory governance is prompting political action to reassert and challenge the EU’s institutional architecture. This chapter will look at the underlining concept of energy regulation and how it is implemented in two Eastern European countries, Bulgaria and Hungary. Intense efforts are made in both countries to keep energy prices low in an attempt to address energy poverty. These actions call into question the ability of these countries to modernize and decarbonize their energy systems. Political efforts to maintain low prices create a system of contested governance, marked by political efforts to undermine regulatory tools balancing long-term investments with short-term pricing pressures.

Key words: Neoliberal, electricity, regulation, governance, risks, energy poverty, Hungary, Bulgaria

Prepared for ‘Energy Law and Energy Infrastructure Development for a Low-Carbon World,’ edited by Raphael Heffron, Darren McCauley, Angus Johnston, and Stephen Tromans QC to be published by Cambridge University Press

A Political Life Extension for Nuclear Power

Here is my article I wrote for the Budapest Business Journal. The final version can be found in the BBJ . My description of the Iron Gates dam is from my bicycle trip down the Danube in the summer of 2015, when I also visited Paks NPP. 

The Iron Gates Dam, the largest on the Danube, sits between Romania and Serbia. Each side has its own generator hall with an identical black and white tiled mural hanging above the whirling turbines. The white tiles are slightly raised on one side, representing the waves of the Danube, complimented by an interplay of semi-circles representing the interdependency of Romania and (former) Yugoslavia. Completed in 1972, the dam’s output is equivalent to Hungary’s Paks Nuclear Power Plant. Both facilities are products of the Soviet and Socialist industrial policy of cooperation and coordination on energy infrastructure.

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The mural is important as a point of reference. This piece of art sits within a concrete structure that holds back the force of nature. It expresses social and political cooperation between two countries and the joint engineering expertise of both. Energy infrastructure is not simply highly engineered machinery, but reflects political forces working together for economic and social ends. In light of this dual purpose, costs associated with power production may be secondary to political and social goals.

Nuclear power in Europe appears to be gaining a new lease on life due to this necessity of politics over economics. The trend in the European Union, since the 1990s, was to establish a competitive market in electricity and gas, where types of generation would compete to promote lower prices for consumers. Interestingly, as the anti-EU rhetoric builds, so does the rejection of the idea of a single market in electricity and gas.

The governments of Hungary and the United Kingdom have now taken strong decisions to build more nuclear power, aligning more with political justifications rather than economic ones. The cost of new nuclear in both the UK and Hungary is between 75% and 100% more than current or projected power prices. Meanwhile, trends in energy technologies leads to a dropping of prices[BK1] . As both countries push to be politically and socially separated from the European project that brought Europe together after the Second World War, they seek external partnerships to reinforce their economic base.

In the UK, the expansion of the Hinkley Point Nuclear Power Plant, was placed on hold with the entrance of Prime Minister Therasa May into Downing Street. However, this pause lasted less than two months, as the realities of sidelining Chinese financing of the French designed plant became apparent. With the UK soon to be negotiating an exit from the EU, both trading partners will be important as UK industry is pushed towards a new trade reality.

The Hungarian government’s choice to extend Paks, even before the current reactors end their lifecycles, is also based on politics rather than economics. In 2014, Hungary signed an agreement with Russia to build two new reactors, more than doubling its current size. This agreement places an old trading relationship back in play. Nuclear power and the gas and electricity network in Eastern Europe was an explicit outcome of cooperation between the Soviet Union and COMECON countries in the former Eastern bloc.

This relationship dates back to 1958 when the Soviets made it an explicit strategy to shift countries away from self-sufficiency in energy production to an integrated approach. Just as the Hungarian government disparages the economic and social policies of the EU, it too must ensure good relations with countries outside of the member bloc. Functionally, nuclear power tethers generations of engineers and citizen taxpayers to Russia’s energy industry. Consequently, geopolitics trumps lower priced energy technologies.

The black and white mural sitting below the waterline between Romania and Serbia represents not just their interdependence, but the deliberate choice that once the facility is built, it cements decades of cooperation between the two countries. Nuclear power provides inter-generational cooperation and mutual dependency between states and societies; this needs to be recognized as the part of the cost of the technology. The choice of nuclear power in the twenty-first century is not based on lower cost electricity for society, but political and economic relationships.

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