Six Central and East European nations, heavily dependent on coal, have been very cautious about the pace of the EU’s transition. For them – Bulgaria, Czechia, Hungary, Poland, Romania and Slovakia – the political and economic disruption looks far harder to bear. E3G has just released a report that suggests this picture can change. The report’s authors – Felix Heilmann, Rebekka Popp and Ada Ámon – explain that coal is becoming less profitable, making renewables more attractive. Slovakia and Hungary have already announced coal phase out dates. But renewables still need more infrastructure for integration, along with incentives and support. There is an energy security angle too: all six countries plan to increase their gas and nuclear capacities, leading to increased dependency on Russia. It will help that public awareness about energy sources is growing, though the emphasis is more on pollution from coal than climate change. The report explains how EU funds – already making up 40-60% of national public investment in all these countries – can be aligned with clean energy and, crucially, the community support that must come with the Just Transition. The expansion of cross-border grid interconnections, electricity markets, and knowledge sharing are also important parts of the solution. The six nations will no doubt be watching the progress of the EU Commission’s European Green Deal very closely.
Central and Eastern European countries are often perceived as a uniform bloc opposing increased European climate action, such as the EU 2050 climate neutrality target. However, our report shows there are important differences in the state of the energy and climate transition in these countries – some are further ahead than others.
The transition will likely be accelerated by the EU Commission’s European Green Deal, which combines high levels of climate ambition with the offer to financially support the transition through the Just Transition Mechanism.
Renewables are gaining on Coal
Although the phase out of coal remains a central challenge in Bulgaria, Czechia, Hungary, Poland, Romania and Slovakia, the countries reviewed in this report, the economic profitability of coal power is declining.
Slovakia and Hungary were the first countries in the region to announce phase out dates. Coal will decline further while the costs of renewable energy are falling. Conditions for an increased role of renewables are thus improving, and some countries are slowly beginning to again invest in new renewable energy capacities.
…but stumbled with feed-in tariffs, price rises
In its current state, however, renewable energy infrastructure is not yet capable of replacing coal power generation. Negative past experiences with feed-in-tariffs associated with energy price increases resulted in unstable policy frameworks and stagnation at a low share of renewables in the electricity mix in most countries.
Dependency on Russian gas, nuclear
At the same time, the six countries studied are planning to increase their gas and nuclear power generation capacities, which would lead to increased dependency on Russia as a supplier of technology, fuel and finance.
Growing public awareness
A further area with major potential for achieving emissions reductions is energy efficiency, as economies across the region are very energy intensive compared to the rest of the EU. Public support for better efficiency measures, as well as the wider energy transition, may be increased by worries over exceptionally high levels of air pollution caused by coal burning. More generally, public concern about climate change, while still low, has recently been increasing. New climate movements are raising their voices in the region.
Aligning EU funding with clean energy, Just Transition
We suggest measures that policy makers in the EU and other Member States can take to accelerate the transition in the region. With EU funds making up 40-60% of national public investment in all these countries, aligning climate objectives with support for the Just Transition is key. The impact of EU funds can be increased by providing direct support to regions and cities that have ambitious programmes for climate action in place.
Regional markets, grid interconnections
Cross-border cooperation is an opportunity to develop large scale, high profile renewables projects, provided the EU supports improvements in regional and cross-national market integration as well as in electricity interconnections. This also requires ensuring EU energy network priorities are in line with climate neutrality and do not include fossil gas projects.
Member States more advanced in the energy transition could share experiences with less advanced countries on strengthening clean businesses, setting up the legal structures for phasing out coal and managing the transition in affected regions. This could include lessons on creating quality employment in the renewables sector.
Lastly, strengthening civil society organisations in Central and Eastern Europe will help facilitate Just Transition processes that suit local needs and attract increased attention to the energy transition at the domestic level.
Read the full report, The Political Economy of Energy in Central and Eastern Europe: Supporting the Net Zero Transition, here.
Felix Heilmann is a Researcher at E3G
Rebekka Popp is a Researcher at E3G
Ada Ámon is a Senior Associate at E3G
This article is published with permission