Tag Archives: #SCEEE

Energy Dependence: Politically cheaper than energy independence

The Soviet Union embedded into the landscape and economies of Central and Eastern Europe a system of technological and resource dependence. Political and social benefit derived from this energy system. Politicians still continue to benefit from this arrangement. This system fails to reflect current political arrangements and technological advances. Failure to build an energy system that is technologically and resource independent of Russia maintains the political and social ties established during Communism.

The centralized system created a continental oil and gas pipeline network to deliver the natural resources of the Russian heartland and Central Asia to the ‘satellite’ countries in Europe. Replication of this networked approach also extended to nuclear power through scientific knowledge and components. To create sufficient political independence a new energy system needs to be built. This includes a new gas networks and new electricity generation technology – all non-Russian sourced. Failure to build an alternative system maintains the historical status quo.

Picture of a young Communist worker building the foundation of Hungary's future energy system
Picture of a young Communist worker building the foundation of Hungary’s future energy system [Also, the Hungarian text on the side lauds the brotherly friendship of the Soviet Union and Hungary – I’m working on a translation]

The old- new energy system

The Soviet energy legacy was handed off to the Russian state which posses three key energy resources and technologies: 1) Oil, a global commodity that is easily shipped, and holds limited pricing differences. 2) Gas, relies on transit pipelines, industrial and household infrastructure and is susceptible to supply interruptions and monopolistic pricing, without sufficient storage or alternative supply routes. 3) Nuclear, rests on technological knowledge, spare parts, fuel processing and storage; technological lock-in occurs creating high switching costs.

Breaking the energy dependence network established by the Soviet Union requires Eastern Europe to establish a new regime of energy independence. This is done in two ways: First, alternative supplies of resource are required. This means building alternative delivery systems for resources currently delivered by Russia. New gas transit pipelines bringing non-Russian sourced gas will deleverage the region from energy dependency. Second, alternative technologies offer the ability to reduce long-term dependency. Nuclear power affects two generations of citizens, the high sunk costs prevent present and future political and social independence. Adding more energy alternatives rather than subtracting old infrastructure, over time, brings about greater energy independence.

The cost of energy (in)dependence

Resource independence holds two approaches. Poland pursues and energy independence strategy opposite Hungary and Bulgaria. Both are influenced by the cost of resources. For Poland, domestic and imported coal provide 90% of the countries electricity generation. Imported Russian gas is important for industry and cogeneration of electricity and heat. LNG now provides an alternative source of gas – but at a higher cost. The true cost of coal is not reflected in its market price. Environmental and health costs are not priced into the energy security argument for continuation of coal. Therefore, the cost of resource independence does come at a price.

Hungary and Bulgaria, in contrasts, seeks to maintain and increase their use of Russian gas. Alternative supply routes are sought through interconnectors to Slovakia and Romania. With the expansion of interconnectors, Western European gas can now reach the CEE region and act as a limited bargaining lever for lower prices. Nonetheless, both countries are slow to build and open up existing pipeline capacity to neighboring countries. The limited steps taken for infrastructure and market diversification prolong their resource dependence.

Resource dependence extends to upstream diversification. Both countries see Russian sourced gas, via Turkey as a ‘true’ route of energy diversification. Both countries are heavily dependent on Russian gas and use gas a political measure of their political devotion to Russia. Gas transit fees can help offset politically controlled gas pricing for consumers. The financial losses incurred by Bulgaria’s NEK are equal to the transit payments of Russian gas flowing to Greece. Hungary’s support for South Stream and Turk-Stream only excludes Ukraine, they do not break Russian resource dependency. Annual gas contract negotiations are always framed by the Prime Ministers of Hungary and Bulgaria as diplomatic successes and servility to Russia.

Technological dependence in Hungary and Bulgaria are present in the form of nuclear power. Poland rejected the Soviet offer for nuclear power in the 1980s.
The built facilities in each country provide ‘cheap’ electricity at a price consumers in both countries can afford. The centralized and state owned facilities enable the state to actively manage and influence the energy system in both countries. Low priced electricity can be supplied to households. Bulgaria was in talks with Russia to build another nuclear power plant at Belene (more on this elsewhere) but ultimately backed out of the deal during the financial crisis as demand plummeted. Hungary, after Prime Minister flew in secret to Russia, signed a (secret) deal to expand Paks nuclear power plant. Hungary is now technologically dependent on Russia for another 40 – 50 years.

Hungary’s dependence on Russia, while masked by the technological dependence is also financial. As an interviewee in Bulgaria pointed out, the Russians have the whole package that no other company or country can compete with. They provide the financing, the technology and the fuel – they are the Amazon.com of nuclear power. Competing on these terms is almost impossible for other countries. Thus, if a country is serious about nuclear power, the Russian offer – particularly if you are a cost conscious country – is very appealing. If a country is open to non-centralized generation sources and able to finance its own energy system, then they will probably not choose nuclear power (this is a general statement and needs more support elsewhere).

Concluding Energy Dependence

For our discussion, I discounted the full environmental cost of nuclear and coal (including waste storage and CO2 emissions). Avoiding the environmental discussion (for the moment) enables engagement with the political prioritization of energy security and energy prices. Energy independence is not provided when the energy system is based on the old political-economic order. The Communist system linked the energy resources of Russia and Central Asia to the Communist satellite countries of Central and Eastern Europe. This system is perpetuated in Hungary and Bulgaria.

The overriding cost consciousness of governments and consumers results in continuation of the energy system. Investment continuity, just as private investors demand it, is provided to Russia through political agreements. Continuation of resource and technology dependency ensures Russia stays politically and economically connected to new EU member states. There is an inherent contradiction between neoliberal market requirements of the EU and the secret and centrally controlled monopolistic structure of the Russian energy system. So far, Bulgaria and Hungary accept this contradiction, while Poland strives for self-sufficiency from both systems.

Present and Historical Benefits of Nuclear Power for Hungary and the Soviets

Buda to Baja: Leg 1 of the South & Central European Energy Expedition (#SCEEE), post 2 of 2. Post 1, can be found here.

“Energy is ideology,” stated a Bulgarian energy expert in relation to Russia’s use of energy as a projection of power. But, he continued, the age of energy as a weapon is over, the options are now plentiful. While there are more options today, it is important to frame Soviet and Russian technology as a form of influence corresponding with particular ideologies and forms of governance. This is an emerging theme from my interviews and conversations on the historical role of the energy system in former Communist countries.

Picture of a young Communist worker building the foundation of Hungary's future energy system
Picture of a young Communist worker building the foundation of Hungary’s future energy system. Displayed at the Paks NPP Visitor Center.

Ideology is often perceived to be a function of governments. That is, it is a top down process – similar to building up the idea of nation. But we can also see that ideology – like market ideology in the EU – also works in the form of governance. And here I change from the use of ‘government’ to the use of ‘governance’. Because in academic literature (including mine) we perceive governance as a technocratic rule making process. This is invoked for the regulatory systems propagated by the EU. But even within the EU (and discussed elsewhere in this blog and in this project) we have the propagation of neoliberal market ideology.

The connection I want to make to nuclear power in Hungary and in former Communist countries, is the Soviet Union was able to use ‘governance’ to instill and propagate its own ideology of societal goals through technology, including scientific expertise and processes. Nuclear power was one element of the energy system used to integrate and build grand projects that modernized the economies of COMECON countries (see my previous post).

Looking at the history of Paks (and nuclear power in the region) integration of the eastern satellites into the Soviet Union was facilitated by the energy infrastructure, such as gas pipelines and nuclear facilities. This integration lends itself to political integration and resource dependency through fulfilling social contracts for the built up expectation the state will provide low cost energy – and not payed from the salaries of citizens.

Continuity of Investments

Recent Russian efforts to foster integration by building new nuclear power plants and gas pipelines in the region represents building on past investments. Continuity of investments, is an areas I’ve examined in the past for companies like E.ON and RWE entering new EU Member States, but I (and others) have overlooked and failed to perceive the sunk costs of the Russians/Soviets into the Eastern Members states’ energy infrastructure and knowledge networks. Previous rounds of investments are represented in the Paks power plant itself, built in the 1980s. There is considerable knowledge capacity (including the extensive training given to each worker) built up since the early 1980s.

Brief video of the Soviet Memorial at Dunafoldvar where I spent one night on my bike trip to Paks.

Shifting of the governance system – and also the accepted ideology – away from a centrally planned economy to one emphasizing market forces, building and operating the energy infrastructure, undercuts and devalues the previous round of investments (under the previous regime). This observation is extremely important in my later examination of the current expansion of Paks NPP. Paks therefore is not just a component of Hungary’s and the region’s energy system, but an ingrained technological, political and social element of the previous and current economic system (including the guiding ideology). Renewable energy may make market sense, due to its smaller scale and shorter payback periods, but in political and social systems operating in a governance system of centralized energy systems, nuclear power fulfills multiple five-year plans.

Nuclear power works within this centralized governance system on multiple levels, in the respective order: 1) physical; 2) knowledge; 3) economic; 4) geopolitical; and 5) social.

Physical integration into the environment
The physical location of Paks Nuclear Power plant on the bank of the Danube is as much of a technical requirement as it was for assembling the structure. Cooling towers are not necessary, as river water is used for cooling and steam generation. In addition, production of the nuclear power plant components was a regional endeavor, enabling key components to be shipped on the Danube. For example, the reactors were made in Czechoslovakia at transported on the Danube. The use of the Danube and the sourcing of the parts underscores the regional dimension and participation in nuclear power.

In my future bike trips on the Danube I will be visiting the other nuclear power plant facilities, documenting the role of the Danube in tying together both the nuclear facilities and the economies of the region.

Knowledge integration
Operating the nuclear power station required students and employees to travel to Russia and the German Democratic Republic (DDR). This extensive education and travel results in the acculturation of experts into nuclear science and operational cultures. Education and training was also done at the Technical University of Budapest, this is where the Hungarian nuclear experts formed the basis of their careers.

Interestingly, during the early years of operation at Paks, the shift of workers were duplicated. There was a Hungarian team and a Russian team of operators performing the same functions. This enabled training and assisted in double checking that everything was done according to procedures.

Economic and competitiveness
The focus here is on the role of nuclear power in laying the groundwork for lower energy prices. But let’s not lose sight that the slogan ‘too cheap to meter’ is also an American expression to demonstrate the projected prowess of nuclear power. Currently, over 50% of Hungarian electricity consumption is supplied by Paks NPP. The working assumption (by some experts) is the full cost of nuclear power is reflected in the market price. I’m currently researching the construction costs and how these were paid. But the working assumption by some Hungarian experts and politicians is the full cost of nuclear is reflected in the current electricity price. From their perspective future nuclear power is perceived to offer this price advantage over renewable or coal power. The dominant paradigm in Hungary, Bulgaria and Russia is nuclear is cost competitive, resulting in a competitive economy.

Geopolitical
The extensive physical and knowledge integration into the Communist economic system enables a legacy of Russia to remain embedded into the nuclear power industry. This extends the technical hand of Russia and keeps the former satellites close. Thus the current raging debate over expanding Paks and how this ties Hungary to Russia for another two generations. The debate is not only technological (nuclear or not) but an issue of sovereignty and political alignment. Does Hungary want to cut off a highly symbolic and historical tie that offers Hungary economic and social strength, and go with a more short-term neoliberal market based energy system? Under the current Orban government this is simply not an option – the centralized energy system remains reflecting the political governing style.

In a region that placed science in the highest regard, and energy infrastructure development as an expression of ideology along with a symbol of economic might, moving away from large scale energy projects goes against the grain. More deeply, the embedded physical assets, the developed knowledge and supply networks contribute to a legacy system that locks-in technology, engineering choices and geopolitical influence. Shutting down the nuclear power industry in these countries is akin to shutting down German solar or closing the coal mines. In a region and country with high support for nuclear power, it is unlikely that Hungary or Bulgaria will give up nuclear power. It is essential to consider these aspects and the embeddedness of energy technology into broader political-economic and social networks.

Social integration
Politically the choice to remain with nuclear is a continued expression of national might and scientific prowess. Solar and wind energy represent – not just a decentralized system, but technology owned and developed by Western firms that also control and profit from selling this. Giving up on ‘Russian’ nuclear technology undercuts CEE politicians own political and social standings. The fond recollection by workers of how Paks was built and the role of KISZ (the young Communist party), holds a strong legacy throughout the country. The 1980s were a time of prosperity for Hungarians, Goulash Communism worked. So much so, that by the time reactors 3 and 4 were being built new Hungarian companies were supplying the technologies for these, rather than Russian ones. Entrepreneurship was alive in Hungary in the 1980s. (I’m concentrating on the nuclear up-sides of Communism, not the significant downsides of the political-social regime)

In the present day, the town of Paks thrives off the largess bestowed upon it by the power plant. The cultural life is said to be equal with cities much larger, sport and cultural clubs are prominent. It is probably the only ‘factory’ town from the 1980s still surviving in Hungary today (although maybe Gyor could be considered as well). The country as a whole is viewed benefiting from Paks. MVM (the state owned company and owner of Paks) holds significant sponsorship throughout the country of cultural events. Tangible benefits are perceived from nuclear power in Hungary. In a sense, in a political-economic climate dominated by corruption, the only law that still works is the law of physics, and the role of science (maybe things were not perceived so differently under Communism). Corrupting or swaying this scientific knowledge can only result in a disaster. At least some social faith can be placed in physics of the atom.

Conclusion
The term ‘governance’ has a much more modern connotation to it. Often this is expressed in reference to EU expansion and technical rule making. In relation to Soviet nuclear technology, the spread of technical knowledge and exchange of ideas among experts can also be viewed as a form of governance. Hungary’s decision to remain nuclear is set within these historical and broader networked elements that hold centralized systems essential for the political system. Socially, it is still expected government will assist in price support. Providing continuity to past investments – of a centralized system – attempts to fulfill political and social expectations. Whether this is financially sound, considering broader technological trajectories, remains to be examined.

Energy Expedition Summary: Nuclear Power and the Danube

Buda to Baja: Leg 1 of the  South & Central European Energy Expedition (#SCEEE). Post 1 of 2.

The Danube river proves to be an essential element to the energy system of Eastern Europe. The Danube integrated Eastern European Communist countries with the Soviet Union, facilitating economic cooperation through COMECON, the counterpoint to the Western OECD. To gain a unique and new perspective on energy technologies and relations I am biking down the Danube river from Budapest to the Black Sea and in a shale gas region in Poland. Here is a summary of the first Hungarian leg from Budapest to Baja.

I traveled by bike from Budapest to Baja, from May 21st to May 24th. On Friday May 22nd, I stopped at the Paks Nuclear Power Plant to meet with representatives of Paks and a local Paks politician. Honestly, after biking 140 km in the rain, over two days, their genuine hospitality and patience was outstanding. In another post, I’ll dive into the history of Paks and my visit, because first it is important to connect with the Danube river and its emerging meaning for me in the energy system of the whole Eastern European region.

Budapest to Baja: Basic route I took on bike - but there are some exceptions.
Budapest to Baja: Basic route I took on bike – but there are some exceptions.

Biking down the Danube began as a separate personal goal. It merged with my idea for a book and a research project when I realized nuclear power plants were located along the Danube. I wanted a method to connect with the average citizen to understand their perspective on regional energy politics and technologies. What I learned by this four day bike trip is the Danube serves as an essential conduit for the region’s energy infrastructure and facilitates political economic aims for integration of the region. It is a silent player in regional integration, but one which I hope to highlight through my research.

Reflecting on my trip (in a dry room back in Budapest) the perspective, I gained by riding a bike along and through the countryside surrounding the Danube, connected me to the land and water. This connection is essential when we consider the energy resources and technologies.

The natural beauty and history along the channelized Danube is striking. Contrasting these with the most technologically advanced and dangerous energy technology humans have created is profound. It is also this nature that cools and enables the technology to function. The contrast with farms, vineyards, and Roman ruins provides the historical context to frame how humans existed without electricity to the means we now use to generate electricity.

The building of Paks also relied on the Danube to transport materials: creating a regional supply chain of nuclear power plant components. For example, the reactors were made in Czechoslovakia and transported on the Danube.In addition the turbines were made in Germany, while the steam generators are Hungarian made by Ganz. The use of the Danube and the sourcing of the parts underscores the effort the Soviet Union went to create a regional involvement of countries in building a nuclear power industry – they embedded nuclear power in the region through knowledge and commercial networks.

I made it to Paks
I made it to Paks

Importantly, the building of the nuclear industry was based around COMECON (Council for Mutual Economic Assistance). COMECON served an important role in integrating the national economies of Communist states with the Soviet Union. This offered an economic and political framework to build NPPs in Czechoslovakia, Romania and Bulgaria. Poland, after giving the go-ahead, later opted out. In all these countries similar physical integration of parts networks and sourcing was done. Rather than the technological components emanating from Russia (as we think today), the parts suppliers drew on COMECON countries. We can now view the Danube as facilitating this relationship and construction of NPPs.

Finally, it is important to reflect on the special view biking provides in connecting the Danube to energy infrastructure. Honestly, biking in the rain for over 160 km out of about 216 km wasn’t the most enjoyable (seriously, a little pity is earned). But I really gained a new perspective. From the bike I was able to reflect on and experience Hungary, which is dramatically different from what I (and most people) experience in Budapest. Hungary has four of the poorest regions out of 20 in the EU. Placing this poverty and the people within the broader energy debate enables a better contextualization of either justifying, or not, the pursuit of certain energy technologies and policies. I look forward over the next few months to provide this perspective more for Hungary and the region.

Some experimental videos made on the way

Launching of an Energy Expedition: #SCEEE

Today I’m launching the South & Central European Energy Expedition (#SCEEE). This project stems from my interests in the energy infrastructure in the Central Eastern European region. I also have a great interest in bike riding – particularly in Hungary. I established a goal this summer to bike from Budapest to the Black Sea. Combining the two interest seemed a natural fit that align with current research into efforts to keep energy prices low in Bulgaria, Hungary and Poland. These efforts are examined withing the broader context of the region’s market alignment to the European Union and its infrastructure alignment with Russia.

I am breaking the expedition into two legs. First from Budapest to Apatin, Serbia (where my great grandparents come from). This will only be about 4 days. In August, I’ll be biking then from Apatin to the Black Sea, passing through Bulgaria and Romania. Overall, I will be biking more than 1500 km and passing many of the regions nuclear power plants, hydroelectric facilities, thermal power plants and many, many farms.

The objective of this bike expedition is to observe firsthand and document both the centralized and decentralized energy infrastructure. The formal takes the shape in facilities like nuclear power plants, gas fields, district heating systems and damns. The informal are homeowners, farmers and communities using different energy sources like wood, coal, solar, wind, biomass for energy production. I also plan on interviewing and interacting with a range of stakeholders in these communities. Interviews are scheduled ahead of time and are also ad-hoc.

Picture from a bike trip around Lake Balaton in 2014. In front of a poster proclaiming the Hungarian governments slashing of utility prices.
Picture from a bike trip around Lake Balaton in 2014. In front of a poster proclaiming the Hungarian governments slashing of utility prices.

My aims are to establish from local officials, workers and ‘ordinary’ people how energy prices and energy technologies influence their everyday lives. In particular I want to contrast this everyday perspective with the those of policy makers, industry officials and representatives of organizations. The latter are often represented in a disproportionate way in my (and other academics) research on energy policy.

This back to basic approach is meant to infuse historical field practices often used in the discipline of Geography (I’m a Geographer by training). Much of this training I received as an undergraduate at the University of Minnesota Duluth under the influential Geographers of Professors Matti Kaups and Larry Knopp. In contrast, my MSc and PhD studies at the University of Bristol emphasized the theoretical approach – or at least the academic contribution stemmed more from the theoretical expression of the world, rather than expression of the world while using theory.

A final aim of the #SCEEE is to disseminate and educate to a wider audience what infrastructure exists and how local people interact with it. I will be blogging, tweeting (#SCEEE) and producing videos documenting these interactions. This real time data collection method and spot analysis will feed into more in depth research I am conducting with national level stakeholders and document analysis. Publications will be in the form of journal articles and a book on the pursuit of cheap energy prices and the social and geopolitical ramifications (and yes, I still need to find a book publisher – so offers are welcomed).

Finally, all expeditions are not launched solely in the interest of science. There is a personal interest that drives a person to explore and engage in a familiar or unfamiliar environment. This innate curiosity is what makes social science so much fun: The ability to break down larger social and environmental processes into categories that highlight systemic weaknesses or evolutionary trends (to name just a few themes). So I launch this expedition with the expectation of serendipity and chance to provide information to whet both my exploratory appetite and to inform the larger research project. My personal interest of energy and biking converge to propel both interests (literally) further down the road.

Nonetheless, looking out at the grey morning sky, I just hope my new tent repels the water that sinks many expeditions.