The most important thing is having clarity about what kind of country we want to be and the direction in which the country’s economy should develop. Our energy policy will then adapt accordingly, says Václav Bartuška, Ambassador-at-Large for Energy Security in the Czech Republic, in an interview with Robert Schuster.
ROBERT SCHUSTER: The world powers have recently begun to once again use energy production as a political tool. Does this mean that countries the size of the Czech Republic will necessarily fall prey to new dependencies or spheres of influence?
VÁCLAV BARTUŠKA: Energy production has always been an important part of the economy and it was our own fault if we paid it less attention in the past. At the same time, it is an area over which the United States has traditionally clashed with Russia, and no amount of hugging between Presidents Donald Trump and Vladimir Putin in Helsinki will change that. The United States, an importer of oil and gas, have started exporting both commodities, and from having attained merely “Energy Security”, the country’s declared goal has become “Energy Dominance”. Americans have acquired the ability over the past few years to increase oil extraction by millions of barrels a day, something that had previously been Saudi Arabia’s prerogative and had enabled the Saudis to control OPEC in past decades.
I do not believe in small regional groupings. Visegrad is a good format for identifying things that need to be done, but in reality, very little happens as a result.
They have now been ousted from this position by the Americans, which has created a completely new dynamic in oil price formation. The US has been similarly successful in terms of gas production thanks to hydraulic fracking, effectively starting a third revolution in oil and gas extraction. This technology is still evolving, which means that its yield will likely keep growing.
Should the Czech Republic seek partnerships on energy issues within Central Europe? Or should it rely on the EU, or perhaps, go its own way?
In my view, the best option for us is to work with Europe, within the European Union, because it is an entity which everyone else has to take seriously. I do not believe in small regional groupings. Visegrad is a good format for identifying things that need to be done, but in reality, very little happens as a result. In June 2013 the prime ministers of the Visegrad 4 countries agreed at their summit in Warsaw that they wanted to create a joint market in natural gas.
In practice nothing at all came of this. And nothing could come of it, since Poland and Hungary effectively have state-controlled companies, Slovakia has renationalised a large part of their gas industry, while our gas industry has been fully privatised. We are currently in a completely different place from our V4 partners. We are fully integrated into the north-west European market, whereas Poland is seeking links with Norway and Hungary with Russia. Incidentally, last year we received 99.3 per cent of our gas from Germany, with only 0.7 per cent arriving via Ukraine and Russia. We are part of western Europe, and that is best for us. It is unrealistic to imagine that you can go and represent a country of 10 million in negotiations with Moscow and actually achieve something.
Are Europeans managing to stand up to Russia’s state-owned gas companies?
They are. The markets of north-western Europe comprise France, Germany, the Benelux countries, Great Britain, Denmark and, apart from us, effectively also Austria. Two hundred and fifty million people – customers: that is something a supplier has to take seriously. As for your question: when we speak of gas we are not talking only about Russia, which is something of an obsession here in Central Europe. The French are far more interested in what is happening in Algeria, for example, and the Brits in Norway. Sometime around 2008 the US stopped importing liquid natural gas, which pushed prices down—this is, of course, a problem for traditional suppliers in Algeria, Norway and Russia, but they had no choice but to reduce prices. That naturally begs the question why some other European countries to the east and south of us have not joined the European market, but this is related to their domestic politics. Hungary is a good example, with Viktor Orbán due to travel to Moscow soon to negotiate a fresh long-term contract for the supply of Russian gas.
Russia is planning to supply gas to Europe via the new Nord Stream 2 pipeline. A number of countries see a risk in depending on Russian gas. Could Nord Stream 2 threaten European cohesion?
Where your key raw materials come from significantly alters your perspective on the world around you. Once Nord Stream 2 is completed, the logical consequence will be that the map of the flows of natural gas in Europe will be redrawn. This would be positive for our economy because it would mean great volumes of gas passing through our territory. But at the same time, it is important that Russian gas should reach Europe by several routes and that is why it makes sense to maintain the routes via Ukraine and Poland. The Poles have an understandably negative attitude to Nord Stream, fearing some new deal between Germany and Russia at their expense. They are the only ones, however, who can judge how real this threat is.
While in terms of energy Hungary is clearly betting on close relations with Russia, Poland had, until a few years ago, pinned great hopes on fracking as a way of reducing the country’s dependence on gas supplies. Now, however, this strategy seems to have been sidelined. Why is that?
That option still remains, it just has to be pursued for much longer and with greater patience. The thing about fracking is that you have to realise that you can’t just drill a hole somewhere and four years later you are as rich as Kuwait or Qatar.
We are currently in a completely different place from our V4 partners. We are fully integrated into the north-west European market, whereas Poland is seeking links with Norway and Hungary with Russia.
That is why I think it is strange that after a few years Poland has put its fracking plans on ice. But this certainly doesn’t mean that they shouldn’t keep looking into it. Poland’s energy industry currently still relies heavily on coal and admitting that this source will not be available forever will be very di cult. It will also be a very sensitive political issue since the mines in Silesia were one of the cradles of the Solidarity movement in the 1980s.
Is renewable energy the energy source of the future?
It certainly is. We are witnessing a trend whereby these sources will increasingly make economic sense, not only in terms of large installations but also at an individual household level.
That naturally begs the question why some other European countries to the east and south of us have not joined the European market, but this is related to their domestic politics.
The traditional energy industries will continue, however, to play a major role for decades to come. This means that our sources will consist of nuclear, coal, gas as well as renewable energy… I believe that the fundamental debate in the energy industry will be about the pace of wholesale transition to renewable energy and how much we can bet on technologies that have yet to be tested in practice. What will play a key role here is whether we succeed in finding an economically viable form of storing energy on a large scale—both electricity and heating.
But the Czech Republic’s energy strategy is almost exclusively focused on nuclear.
First of all, we have to be bear in mind the matter of scale. Right now, the total nuclear capacity of the Czech Republic is 4,000 MWe, with 2,000 MWe generated in Temelín and 2,000 MWe in Dukovany. If we are fortunate, Dukovany will supply the network until 2035, since the power station’s lifespan, as originally planned, was 30 years and it opened in 1985-1987.
In the case of Temelín, its period of operations could be extended up until 2050. Two-thirds of the country’s electricity is currently generated by coal, but by 2040 the majority of coal power stations will have been decommissioned. This means we will have to replace the 4,000 MWe currently supplied by nuclear and a further roughly 5,000 MWe by thermal, power stations.
In other words, to have a real substitute, we are looking at eight to ten new nuclear reactors, rather than one or two as present-day discussions might suggest. The decommissioning of nuclear power plants involves another problem no one has mentioned. As a by-product, these power stations provide heat for large urban agglomerations. Once coal power plants are decommissioned, new solutions for the heating industry will also have to be found. Energy is a sector that requires us to think decades ahead, while our electoral cycle is only four years… Our energy strategy envisages the share of nuclear energy growing from the current thirty percent to fifty per cent.
The salient question is whether we are capable of constructing so many reactors and whether we will need so much power at all—if our economy continues to rely on industrial production, we certainly will. If we want, however, our economy to generate a higher value-added, we will need less power. The west makes money by inventing and selling things, and they can be produced wherever the production margins are lowest. Energy is thus part of a fundamental discussion about the kind of country we want to be, and what structure our economy should take.
Is nuclear energy even pro table considering how rapidly the price of electricity fluctuates?
It has become fashionable to calculate the returns of power stations in terms of the current electricity price. But that’s like sitting on a see-saw: it may have made sense ten years ago, but it no longer does today. On the other hand, prices have been rising lately—two years ago they were half of what they are today. No one knows what the price will be in two years’ time. That is why I think it is much more important for our national economy to define what kind of economy we want to have, what we’re aiming for. And then we have to be frank about what we can build and what we can’t.
Plans for expanding the Hungarian nuclear power station in Paks have a strong political dimension. Does it mean that the decision of a particular supplier might, in the long term, herald future political developments?
Politics can never be separated from the energy industry, especially in the case of nuclear energy.
I believe that the fundamental debate in the energy industry will be about the pace of wholesale transition to renewable energy and how much we can bet on technologies that have yet to be tested in practice.
It involves a partnership with another country lasting decades and can redefine a country’s situation. That is why the choice of a partner for a project on this scale also provides an answer to the question of where we want to belong. We are members of the EU and NATO. Without the EU, we would be an economic wreck—but does the current political debate give you the impression that we are aware of that? Our security stands and falls with the US and NATO, but we don’t seem to fully appreciate that either. As for Hungary and the expansion of the Paks nuclear power plant, that is definitely not an example worth following.
Are Europeans sufficiently proactive when it comes to developing new technologies in energy?
We are doing what we can. We Europeans find it hard to admit that in science we are not as important as the US. Europe spends large amounts of money on research and development. But the US government and corporations spend considerably more. We have yet to fully realise how immensely our civilisation depends on technology, which fewer and fewer people can keep up with. This applies to the energy sector, but also to the water industry and food supplies. And this is bound to backfire at some point. The number of people studying at technical colleges is decreasing as are the number of students who are good at maths. The energy industry is just the visible tip of the iceberg. I would even go as far as to say that finance, which is constantly on everyone’s lips, may turn out to be less of an issue. You can always print more money but not even the best 3D printer can print a good engineer.
Politics can never be separated from the energy industry, especially in the case of nuclear energy. It involves a partnership with another country lasting decades and can redefine a country’s situation.
So it is also a question of insufficient support for relevant types of education?
Let me illustrate this with an example. In 2012, when the expansion of Temelín was put out to tender, it was the first time in the history of Czech Technical University (ČVUT) in Prague that its Nuclear Department (FJFI) and the Physics and Engineering Department had more first-year students than the Department of Mechanical Engineering. FJFI really savoured their moment because of their traditional competition. Now things have regressed, however, because cancelling the tender called into question the future of the nuclear industry in this country. It is only logical that young people are not attracted to these and other similar subjects offering uncertain chances of finding employment.
has worked at the Czech Ministry of Foreign Affairs as Ambassador-at-Large for Energy Security since 2006. He gained a public profile during the gas crisis of 2009, when the Czech Republic, which held the presidency of the European Council at the time, helped to restore gas supplies to the EU. From 2010 to 2014 he was the government’s plenipotentiary for the expansion of the Temelín nuclear power station. Since 2003 he has been teaching at New York University, Prague campus, and since 2017 also at the Electrotechnical Department of Czech Technical University, ČVUT. He is a graduate of Prague’s Charles University and a former Fulbright scholar at Columbia University in New York.
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