Impact of the Liberalization of Natural Gas and Electricity Markets to the Energy Security

Posted: 1 Nov 2013

Date Written: May 9, 2013

Abstract

The issue of energy security becomes very important for Lithuanian economic and political life. In the second half of 2013 the Lithuania will preside to the Council of the European Union. One of the priorities of Lithuanian Presidency is the enhancement of energy security. Lithuania will strive for the decisions to increase the energy security of the Lithuania and the European Union. This ambitious goal has led to the choice of the author to analyze the Lithuanian national policy of energy security. In particular, the impact of continuously evolving legislation, which liberalizes gas and electricity markets, on the country's energy security. The author aims to raise controversial issues and to draw attention of the reader to the potential threats. It is also worth to pay attention to the fact that according the data of the Eurostat Lithuanian dependency ratio on energy imports increased from 42.19 in 2002 to 81.92 in 2010. Only Ireland, Italy, Malta, Cyprus and Luxembourg had higher dependence rates on energy imports than Lithuania in 2010. The objective of the study - to reveal the concept of energy security and to assess impact of liberalization of energy markets to energy security of Lithuania. In the first part of the research, the concept of energy security is revealed. The second part of research analyses the division of competence between the Member States and the European Union. In the third review part, the Lithuanian energy security policy and liberalization of the electricity and gas markets are considered. At the end of the article, the conclusions are made. Energy security is understood much wider than just the continuity of energy supply. Energy security is linked to the economic, environmental, social, foreign policy, technical and security dimensions. Due to liberalization of energy market the energy is no longer considered to be public service but commodity. Market forces should ensure supply, competition and reasonable price of energy. However, the monopoly of services of energy transportation dominates in energy market. The construction of alternative channels of energy transportation is not economically viable and the possibility of the entrance of businesses to the competitive activity is highly dependent on the infrastructure of the total energy sector. For this reason, the legal regulation, which establishes the rule for the functioning of competitive market and is not adjusted to the existing market structure, can strongly harm to the energy security of all country.

Energetinio saugumo klausimas tampa labai aktualus Lietuvos ekonominiame bei politiniame gyvenime. 2013 m. antrąjį pusmetį vienas iš Lietuvos pirmininkavimo ES Tarybai prioritetų yra energetinio saugumo stiprinimas. Lietuva sieks, kad Europos institucijų lygmenyje būtų priimti sprendimai, didinantys Lietuvos ir visos ES energetinį saugumą. Šis ambicingas tikslas lėmė pasirinkimą išanalizuoti Lietuvos politiką energetinio saugumo klausimais nacionaliniu lygiu. Daugybė vis besikeičiančių teisės aktų, liberalizuojančių dujų ir elektros rinkas, daro įtaką šalies energetiniam saugumui. Autorė siekia ne pateikti apibendrinančias išvadas, bet ir iškelti diskusinio pobūdžio klausimus bei atkreipti dėmesį į kylančias grėsmes. Svarbu tai, kad Europos statistikos departamento duomenimis Lietuvos priklausomumo nuo energijos išteklių importo rodiklis padidėjo nuo 42,19 - 2002 m. iki 81,92 - 2010 m. Didesniu priklausomumo koeficientu 2010 m. yra įvertintos tik Airija, Italija, Malta, Kipras ir Liuksemburgas. Pirmiausia atskleisime energetinio saugumo sąvoką bei aptarsime, kaip energetinis saugumas yra suprantamas Lietuvoje. Toliau apžvelgsime kompetencijos pasidalijimą tarp Lietuvos ir ES priimant sprendimus, susijusius su energetinio saugumo klausimais. Trečioje dalyje apžvelgsime Lietuvos politiką užtikrinant šalies energetinį saugumą akcentuojant teisinio reguliavimo įtaką liberalizuojamose dujų ir elektros rinkose.

Keywords: energy security, liberalization, energy markets

Suggested Citation

Milčiuvienė, Saulė, Impact of the Liberalization of Natural Gas and Electricity Markets to the Energy Security (May 9, 2013). Available at SSRN: https://ssrn.com/abstract=2337952

Saulė Milčiuvienė (Contact Author)

Vytautas Magnus University ( email )

S. Daukanto 28
LT-3000, Kaunas, LT- 44254
Lithuania

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