The Baltic states: from energy islands to an energy peninsula

ENLong known as “energy islands,” the Baltic States have significantly improved their energy links to the rest of the EU and the wider world. Energy markets have been liberalised, which is allowing for greater energy trade between Estonia, Latvia, Lithuania and their EU neighbours. Most remarkably, the advent of liquefied natural gas deliveries to Lithuania is solving a vulnerability that has in the past seemed intractable – the absence of alternative natural gas suppliers to the region. Now that all three Baltic countries can depend on heat and electricity from a range of sources, and even buy natural gas directly from the United States, has the challenge of energy security in the Baltics been solved? Not yet. The problem of energy security in the Baltic Sea is no longer existential, but two main challenges remain. The first is political. Can the Baltic countries help build a European energy market based on principles of not only interconnection but also true solidarity? This year’s dispute between EU countries on the expansion of the Nord Stream pipeline between Russia and Germany illustrates the distrust between EU members on energy issues.The second challenge is technological. Will the region be able to embrace a digitised and electrified energy future? The increasing electrification and digitisation of economies will change the way energy systems are structured. Are the Baltic countries ready to lead the way on digitised energy? And in this energy future, are the risks of cyber-attack sufficiently taken into account? Estonia is spearheading efforts to address cyber security and data in the energy sector through its presidency of the Council of the European Union and through its cyber defence expertise. This paper will track the progress made in securing the electricity and gas resources of the three Baltic States and will discuss existing and future political and technological challenges in the region.