Structural Changes in the Baltics and the Russian Presence: Ramifications for the Region’s Energy Future

Abstract

Although the Baltic States experienced similar successes in their post-Cold War economic transitions, and in their economic and foreign policy spheres as countries of the central part of the continent, their starting positions were remarkably different. The fact that the Baltics had followed a substantially different developmental trajectory in the second half of the twentieth century compared to central European states affected their starting position and hence the following development. As states that were an integral part of the Soviet Union, their energy sectors and economies were oriented towards the former communist hegemon, including the energy infrastructure. As these countries’ secession from the Soviet Union was far from being smooth, including intentional cut-offs of energy supplies coming from their eastern neighbour, most of the energy-related reforms have been done with the supply security aspects in mind. So much so, that these security-related concerns have become defining for these countries’ energy sectors and have even overshadowed the environmental aspects and energy transition issues for most of the past three decades. Even now, the energy-related affairs are being influenced by security concerns revolving around Russian projects in the vicinity of the region, most notably Nord Stream 2 and the Astravets nuclear power plant.