Catalytic Power Europe and gas infrastructural policy in the Visegrad countries

Energy Policy xxx (xxxx) xxx

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Catalytic Power Europe and gas infrastructural policy in the Visegrad countries Andrea Prontera a, *, Peter Plenta b a b

Department of Political Science, Communication and International Relations, University of Macerata, Italy Slovak Foreign Policy Association, Slovakia

A R T I C L E I N F O

A B S T R A C T

Keywords: European Union Energy security Regulatory state Catalytic state Visegrad countries Gas infrastructure

By focusing on the natural gas sector and infrastructural policy in the Visegrad countries this article aims to reassess the EU’s role in energy security governance. It argues that the EU can be conceptualised as a catalytic state rather than a regulatory state. It develops the notion of Catalytic Power Europe to highlight the specific type of power that the EU (as a catalytic state) can deploy to achieve its objectives. Catalytic Power Europe differs from existing conceptions of Regulatory and Market Power Europe. It relies on nodality and treasury rather than authority and on mechanism of connectivity and mobilisation rather than enforcement. It highlights the role of the European Commission as a facilitator and coalition builder rather than a regulator and market builder as in the regulatory state perspective. This role is illustrated by analysing the major gas interconnector projects and liquefied natural gas importing terminal that are under development in the V4 and that can affect their energy security. Catalytic Power Europe influences the V4 inter-group dynamics reducing the scope for uncoordinated and unilateral strategies. In this way, it also affects the prospect of EU-Russia energy relations undermining Moscow’s divide et impera strategies in the region.

1. Introduction The European Union (EU) has strengthened its actorness and pres­ ence in European energy security since the late 2000s, including in the politically sensitive area of natural gas (e.g. Batzella, 2018). Some scholars argue that the EU has abandoned its original market building perspective to embrace a more geopolitical approach (e.g. Bocse, 2019; Siddi, 2019). This strategy is problematic due to the lack of political unity among member states – especially with regard to Russia – and the institutional and ideational constraints that the European Commission (EC) has to face in this policy domain. These include limited authority over energy matters, the resilience of the market-paradigm of the In­ ternal Energy Market (IEM) and the weak links between EU govern­ mental agents and European energy companies that have privileged ties with member states and act as ‘national champions’ rather than ‘EU-champions’ (e.g. Herranz-Surrall�es, 2016; Siddi, 2019). Because of these constraints, the EU continues to be conceptualised mainly as a regulatory state: an actor that uses regulatory tools and competition policy to achieve its objectives and that deploys regulatory and market power rather than hard power capabilities (e.g. Goldthau and Sitter, 2014, 2015; 2019; Andersen et al., 2016, 2017a; Godzimirski and

Nowak, 2017). Regulatory and Market (Energy) Power Europe illustrate the ‘external face’ of the EU regulatory state, which is related to the role of the EC as a gatekeeper, regulator and enforcer of the IEM and the impact of its actions on international energy affairs (Andersen et al., 2016, 2017a; Goldthau and Sitter, 2019). This ‘external face’ is partic­ ularly relevant concerning EU-Russia relations as Moscow is not affected by the EU normative power (it rejected the Energy Charter Treaty) nor by the export of the EU internal rules (such as in the case of Norway within the European Economic Area). By focusing on the natural gas sector and infrastructural policy in the Visegrad countries (Czech Republic, Hungary, Poland, and Slovakia), this article aims to reassess the EU’s role in energy security governance. It argues that the EU as an international structure of governance – or as an ‘international state’ (Caporaso, 1996, 36) – can be conceptualised as a catalytic state rather than a regulatory state. The catalytic state is based on a faire-avec approach to energy governance. It structurally combines market-oriented policy instruments (e.g. regulatory tools and competi­ tion policy) with more direct forms of intervention. It stresses the role of the EC as a ‘facilitator’ for market actors and energy projects rather than a regulator and enforcer as suggested by the regulatory state approach. Also, this article develops the notion of Catalytic Power Europe to

* Corresponding author. E-mail address: [email protected] (A. Prontera). https://doi.org/10.1016/j.enpol.2019.111189 Received 31 March 2019; Received in revised form 6 December 2019; Accepted 12 December 2019 0301-4215/© 2019 Elsevier Ltd. All rights reserved.

Please cite this article as: Andrea Prontera, Peter Plenta, Energy Policy, https://doi.org/10.1016/j.enpol.2019.111189

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highlight the specific type of power that the EU (as a catalytic state) can deploy to achieve its objectives. Reassessing the EU’s role in the Vise­ grad countries (V4) beyond the regulatory state approach is essential to shed light on the different mechanisms that the EU can activate to in­ fluence energy security dynamics in a region contended between Russian and Western suppliers, including US liquefied natural gas sup­ pliers (e.g. Goldthau and Boersma, 2014; Ostrowski and Butler, 2018). This article is organised as follows. Section 2 introduces and develops to the EU energy security realm the concept of the catalytic state (Prontera, 2017, 2018, 2019). First, Section 2.1 highlights the shift in the EU energy security strategy beyond the regulatory state model. Then, Section 2.2 contrasts the catalytic state model with the regulatory state and illustrates the notion of Catalytic Power Europe, which differs from the existing notions of Regulatory and Market Power Europe. Section 3 focuses on gas infrastructural policy in the V4. Research have underlined the ‘nexus’ between gas infrastructures – particularly inter­ connectors – and security of supply and market integration in this region €ner et al., 2013; Osi�cka and Ocelík, 2017; Osi�cka et al., (e.g. Dieckho 2018). The crucial role that the EU financial support has played in improving interconnectivity in the region has also been recognised (e.g. CEEP, 2018; Oravcov� a and Mi�sík, 2018). This empirical section expands these findings and reassesses the EU’s role through the lens of the cat­ alytic state model. In particular, section 3.1 briefly illustrates how the EU catalytic state manifests itself in the region analysing both its governance structures – in which the V4 are embedded – and its policy at aggregate level. Section 3.2 offers a project-level analysis of the main gas interconnectors and liquefied natural gas (LNG) receiving terminals relevant for the V4, both planned and under development. This analysis illustrates the combination of policy instruments that the EU as a cata­ lytic state can deploy to promote energy projects. It shows that the EC has emerged as a ‘facilitator’ and ‘catalyser’ rather than a regulator in the energy security realm. Section 4 then offers an assessment of the potentials and limits of Catalytic Power Europe with regard the V4 inter-group dynamics and the prospect of EU-Russia relations in the natural gas sector, including issues concerning energy security in Ukraine. Finally, section 5 concludes with insights and policy recommendations.

towards a ‘mixed’ regime, where the role of public authorities in infra­ structure planning and development significantly increased (Talus, 2013, 284). The Agency for the Cooperation of Energy Regulator (ACER) and the European Network of Transmission System Operators for Gas (ENTSO-G) were established to increase coordination among National Regulatory Authorities (NRAs) and Transmission System Operators (TSO), especially at the regional level. ACER and ENSTO-G were also mandated to develop Ten-Year Network Development Plans (TYNDP). However, these governance structures were still in line with the regu­ latory state perspective. It was the launch of the European Energy Programme for Recovery (EEPR) that decisively innovated the EU approach. This new programme was enacted in the wake of the 2008 economic crisis, which increased the fears of investment gaps in the development of European infra­ structure. With the EEPR the EC followed a more focused approach to identify priority projects respect the previous Trans-European Networks for Energy (TEN-E) schemes. Besides, with the EEPR, EU funds could support not only feasibility studies but also construction works, with a contribution of up to 50% of the total costs. The EEPR served as a basis for the launch of the 2013 TEN-E guidelines and the Connecting Europe Facility Energy (CEF-E) that institutionalised the new EU strategy. Only one category of projects, the ‘Projects of Common Interest’ or PCIs, was envisioned. PCIs are selected among those projects included in the TYNDP that involve at least two EU countries and contribute to market integration, sustainability, security of supply and competition.1 PCIs can rely on an improved regulatory framework both with regard to permit granting procedures and envi­ ronmental assessment procedures and for cross-border cost allocation decisions2 (CBCA). Nevertheless, the 2013 TEN-E guidelines went beyond a regulatory approach. Regulation 347/2013 better defined EU’s infrastructure pri­ orities and set out a bottom-up process to identify PCIs based on ‘regional groups’ defined according to priority corridors. These ‘regional groups’ are managed and coordinated by the EC (DG Energy). They include representatives from the member states, project promoters – TSOs or other energy companies – and national and EU regulators, although the decision-making body is restricted to the concerned member states and the EC (decision-making is based on consensus). Building on the works of these ‘regional groups’ every two years the EC adopts an EU-wide list of PCIs (the first was adopted in 2013). The CEFE, with a budget of €4.7 billion, was established to support the realisa­ tion of PCIs providing grants for feasibility studies but also for works, particularly to those projects commercially not viable and that have not received exemptions from the IEM rules. These innovations were paralleled by a growing involvement of the European public development banks – the European Bank for Recon­ struction and Development (EBRD) and the European Investment Bank (EIB) – in supporting energy projects through the leveraging of public and private financial resources (PCIs can have easier access to this financing). This emerging EU governance and financial framework for infrastructural development was improved after the conflict in Eastern Ukraine and the Russian annexation of the Crimea. The Energy Union further enhanced the regional approach to security of gas supply already

2. Catalytic Power Europe: rethinking EU’s actorness in energy security governance 2.1. EU energy security beyond the regulatory state According to the regulatory state perspective, the guiding principles (avoiding and preventing market failures), instruments (market and regulatory tools) and governance structures (regulatory bodies and network of regulators) of the regulatory state’s model are still the major yardsticks for analysing and assessing the governance and politics of the IEM and the impact of the EU in international energy affairs (e.g. Goldthau and Sitter, 2014, 2015; Andersen et al., 2016, 2017a, 2017b). The latter can be subsumed under the heading of the ‘external face’ of the EU regulatory state and relies on the ability of the EU to deploy regulatory and market power (Goldthau and Sitter, 2015, 2019; Andersen et al., 2016, 2017a, 2017b). The EU as a regulatory state perspective – and its corollary of Regulatory and Market (Energy) Power Europe – has been instrumental in highlighting that despite the fact that the EU cannot ‘speak with one voice’ in energy affairs its actorness and impact has increased, mainly because of the EC’s role as a regulator, gatekeeper and enforcer of the IEM. This perspective, however, overlooks important dynamics of the current situation. After the second Russia-Ukraine gas crisis and the Second Strategic Energy Review, the EU strategy in the area of infra­ structure and energy security has gradually changed to cope with a growing gap in investments and poor cooperation among member states. The Third Energy Package (TEP) marked a departure from the ‘pure’ market approach envisaged by the First and Second legislative package

1 With regard to security of gas supply the ‘N-1 formula’ introduced with Regulation 994/2010 is one of the key benchmarks in the attribution of the PCI status. 2 Regulation 347/2013 introduced instruments to support project promoters in all the stages of the implementation of their PCIs. PCIs could benefit from strengthened transparency, improved public consultation, accelerated permit granting procedures – a three-and-a-half-year time limit – streamlined envi­ ronmental assessment and a single national competent authority to act as a ‘one-stop-shop’ for permit granting procedures. Regulation 347/2013 also required allocating to PCIs the status of the highest national significance, where provided by national legislation.

2

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included in the TEP and the 2013 TEN-E scheme. Three High Level Groups (HLGs) gathering member states and coordinated by the EC (DG Energy) were launched: the Baltic Energy Market Interconnection Plan (BEMIP) (originally established in 2008 and upgraded in 2015), the Central and South Eastern Europe Energy Connectivity (CESEC) and the HLG on Interconnections for South-West Europe. Finally, the European Fund for Strategic Investments (EFSI), established in 2015 as part of the Investment Plan for Europe and managed by the EIB, widened the set of financial instruments at disposal for energy projects.

market is indeed the major strength of the EC according to the regula­ tory state perspective (Versluis et al., 2010, 55–57). And both the reg­ ulatory and market power views rely on the ability of the EC to enforce the EU’s rules (Table 2). Although in the first case (regulatory power) the EU adopts a non-targeted and ‘apolitical’ approach aimed at pro­ moting free trade and competition, and in the second (market power) it adopts a targeted and selective approach aimed at promoting its in­ terests (Goldthau and Sitter, 2019, 40–41). Prominent examples for the V4 and EU-Russia energy relations, are the antitrust procedures opened against Gazprom in 2012 (regulatory power) and the infringements procedures opened against Bulgaria regarding the onshore section of the South Stream pipeline that led to the cancellation of the project (market power). These examples well illustrate that the Regulatory and Market Power Europe perspectives are driven by a logic of ‘negative power’ – as the ability to stop some activity carried on by other actors (Rus, 1980) – that is sustained by a defensive use of the EU’s regulatory toolbox (Table 2). Catalytic Power Europe, like Market Power Europe, aims at pro­ moting the EU interests. However, it emphasises the nodality- and treasury-based resources of the Hood’s NATO formula (Hood, 1983). Nodality, in particular, is related to connectivity: the ability of govern­ mental agents to form networks and use information and knowledge resources to increase coordination and promote their objectives within these networks (e.g. Eliadis et al., 2005). Nodality highlights the role of the EC in promoting the structuration of networks of actors and in orchestrating their interactions, such in the case of the PCIs system and the HLGs. The HLGs, in particular, are managed by the EC, involve member states, and are open to the participation of energy companies (TSOs and non-TSOs) and other non-governmental actors (e.g. Interna­ tional Financial Institutions, NRAs, ENTSO-G). They are conceived as political-diplomatic venues based on ad hoc governance structures – outside EU regulations – aimed at fostering the completion of the IEM (market building) but also at improving cooperation between govern­ mental agents and market actors (coalition building) in order to facili­ tate the realisation of strategic infrastructures, i.e. ‘short lists’ of PCIs considered particularly important in each region and assessed according to common metrics. Treasury, on the other hand, is closer to the mechanism of mobi­ lisation. The focus, in this case, is on the financial tools and arrange­ ments (CEF-E, EIB and EFSI loans, etc.) that the EU governmental agents can use in order to leverage broader financial support (both public and private) and promote consortia for policy implementation. That is to say in order to mobilise other actors’ financial and organizational resources towards a common goal. According to Mertens and Thiemann (2018), these arrangements can create genuine supranational capacities by allowing other policy actors to ‘make use of Europe’ by accessing new institutional and budgetary resources (Woll and Jacquot, 2010). Finally, by relying on connectivity and mobilisation, Catalytic Power Europe also illustrates a different logic of power than the regulatory and market power views: a ‘positive logic’, as the ability to initiate activity (Rus, 1980). In this case, the EC has to work to promote cooperation and coalitions (among several state and non-state actors) in order to pursue its goals – this is different from the opening of infringement procedures or antitrust investigations. In doing so, the EC plays a catalytic role (Weiss, 1998, 2014) in facilitating policy processes and implementation.

2.2. Catalytic Power Europe versus Regulatory and Market Power Europe The EU strategy has been gradually shifting since the late 2000s, to the point that a different state model can be adopted to frame EU energy security governance and readdress the role of the EC. This model is the catalytic state3 (Prontera, 2017, 2018, 2019). Differing from the EU as a regulatory state, which is based on a faire-faire approach, the EU as a catalytic state perspective is based on a faire-avec approach to energy governance (Table 1). This approach still focuses on avoiding and pre­ venting market failures. However, in a more specific sense, the actions of the catalytic state aim at supporting market actors and facilitating their efforts to realise investment projects by structurally combining market-oriented policy instruments (e.g. regulatory tools and competi­ tion policy) with more direct forms of intervention. These include new modes of planning and governance arrangements to address coordina­ tion problems, promote coalition building and signal ‘credible com­ mitments’ for investments projects (e.g. the PCIs system and the HLGs) and tools for financial support and leveraging (e.g. the CEF-E and the EIB loans). The EU as a catalytic state perspective stresses the role of the EC as a ‘facilitator’ for market actors and energy projects rather than a regulator (Table 1). Furthermore, as a catalytic state, the EU can deploy catalytic power (Table 2). The concept of catalytic power resonates with the notion of ‘collaborative power’ (Slaughter, 2011a, 2011b; Weiss, 2014). This form of power relies less on actors’ own resources and more on mechanisms of connectivity and mobilisation (Slaughter, 2011a). These mechanisms, in turn, are supported by a different set of resources that those traditionally at the disposal of the EU regulatory state. The latter mainly focuses on authority-based resources, as underlined by the Hood’s NATO formula (Hood, 1983). Authority over the EU’s single Table 1 The EU as a Regulatory vs. as a Catalytic state in energy security governance. Guiding principles Public authorities’ role in the implementation of projects Main policy instruments

Governance structures

Role for the European Commission

3

EU as a Regulatory state

EU as a Catalytic state

Avoiding/preventing market failures Rule-making and enforcing

Supporting/facilitating market actors Rule-making and enforcing/facilitator

Market-oriented instruments (e.g. regulatory tools and competition policy)

Market-oriented instruments/direct forms of intervention (e.g. planning system, grants, leveraging, public-private partnerships) Regional groups coordinated by the EC Ad hoc framework for cooperation and coalition building Facilitator of strategic energy projects

EU level regulatory bodies and network of regulators Regulator/enforcer of the IEM

3. The EU catalytic state and gas infrastructural policy in the Visegrad countries 3.1. The rise of the EU catalytic state in the Visegrad countries As anticipated, the establishment of the EEPR marked a shift in the EU approach to infrastructure development. Many of EEPR gas projects involved the V4 (5 in Hungary, 4 in Poland, 4 in Czechia and 3 in Slovakia) and improved their gas interconnectivity promoting reverse flows and new transmission lines (European Commission, 2016a, 2018).

On the catalytic state, see also Lind (1992) and Weiss (1998, 2010). 3

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Table 2 Regulatory, market and catalytic power Europe.

Regulatory Power Europe Market Power Europe Catalytic Power Europe

Which type of actor is the EU?

EU goals

EU tools

EU resources

Power logic

Mechanisms

Regulatory state

EU interests

Negative (stop some activities) Negative (stop some activities) Positive (initiate some activities)

Enforcement

Catalytic state

Regulation, applied apolitically (not targeted approach) Regulation, applied selectively (targeted approach) Non-regulatory tools (e.g. HLGs, CEFE)

Authority

Regulatory state

Trade by EU rules EU interests

The EEPR financial support (often covering the 50% of the costs for works) was a critical factor in mobilising both public and private re­ sources and in increasing state-to-state cooperation in the region. In � �scie LNG Poland, the EEPR contributed to realisation of the Swinouj terminal with €80 million (additional financial resources were provided through the European Regional Development Fund, ERDF). The V4 governments supported the 2013 reform of the TEN-E scheme and the idea to improve the EU financial instruments for infrastructure development and energy security (Visegrad Group, 2011, 2012). Among the four priority gas corridors established by Regulation 347/2013 the V4 especially supported the concept of the North-South gas in­ terconnections in Central Europe and South Eastern Europe corridor (NSI East Gas). This corridor aims at promoting a system of gas infra­ structure for regional connections between and in the Baltic Sea region and the Adriatic and Aegean Seas for enhancing diversification and se­ curity of gas supply. The Baltic Energy Market Interconnection Plan in gas (BEMIP gas), that aims at increasing interconnections and diversi­ fication of supply in the Baltic Sea region, is also important for the V4 as Poland is included in this corridor. Finally, the V4 were initially included in the Southern Gas Corridor (SGC) as well, which extended the reach of the EU framework beyond the IEM. However, after the 2013 no project of the SGC has involved the V4. With the launch of the 2013 TEN-E and its ‘regional groups’ a new governance framework for infrastructural planning and development orchestrated by the EC was established in the region. The Visegrad countries (and their TSOs and NRAs) have been included in this framework, which was further enhanced with the launch of the BEMIP HLG (that includes Poland) and CESEC HLG (that includes Slovakia and Hungary, but not the Czech Republic) in 2015 (Fig. 1). Since the first PCIs list in 2013, the major part of the projects has been located in the NSI East Gas corridor (Table 3). This situation resulted from the numerous projects proposed to increase inter­ connectivity in the region (ACER, 2016, 2018). The 2015, 2017 PCIs lists brought a general reduction in the total number of gas projects. This reflected a better focus of the PCIs system and the fact that 22 gas projects from the previous PCIs lists have been completed in early 2018. However, NSI East Gas has maintained its prominent position with almost the 50% of all the gas projects (Table 3). This corridor along with BEMIP and the SGC has been able to attract significant financial

Authority Nodality, Treasure

Enforcement Connectivity, Mobilisation

Table 3 PCIs (2013, 2015 and 2017) and CEF-E Funding per priority gas corridors. Corridor BEMIP Gas SGC NSI East Gas NSI West Gas Tot.

Number of PCIs

(% of total PCIs)

CEF-E funding (m ¼ million)

2013

2015

2017

2013

2015

2017

15

10

9

15%

13%

17%

€ 547 m

13 52

12 41

6 26

13% 50%

15% 52%

11% 49%

€ 345 m € 257 m

23

15

12

22%

20%

23%

€ 63 m

103

78

53

100%

100%

100%

€1212 m

Sources: Authors’ elaboration from ACER (2015, 2016, 2018) and CEF-E (2018).

resources from the CEF-E (Table 3). Project promoters in the V4 coun­ tries (mainly national TSOs) have been particularly active in the PCIs system. Of the 78 gas projects included in 2015 PCIs list 21 involved the V4 (27%) and 21 projects (out of 53, almost the 37%) involving the V4 were included in the 2017 list (Fig. 2). Poland, which is part of both the NSI East Gas and BEMIP gas corridor, along with Hungary have been the most active among the V4 (Fig. 2). 3.2. Gas infrastructural policy in the Visegrad countries: a project level analysis This section focuses on a sub-group of major PCIs – interconnectors and LNG importing terminals – that are significant for the V4’s (and Central and Eastern Europe’s) energy security. The goal of these projects is to increase the physical links among the national markets of the member states and enhance the diversification of supply in a region that is highly dependent on Russian gas. In line with the catalytic state approach, this project-level analysis aims to a) highlight the combina­ tion of policy instruments – both regulatory instruments and more direct forms of intervention based on treasury and nodality – that the EU de­ ploys to support the realisation of gas infrastructure and the establish­ ment of national or transnational consortia for policy implementation (Section 3.2.1) and b) show the new role of the EC as a facilitator of strategic energy projects (Section 3.2.2). This project-level analysis also emphasises the main issues that can negatively impact the effectiveness of the EU as a catalytic state. These issues mainly concern the different positions among the governments involved in regional projects. Despite a general support for ‘using Europe’ in order to increase inter­ connectivity and energy security, not all the PCIs have been equally � and Mi�sík, 2018; backed by the V4 (Diallo et al., 2018; Oravcova Ostrowski and Butler, 2018; Mi�sík, 2019). Different national agendas and interests have translated into diverse preferences concerning spe­ cific projects. These issues will be further discussed in Section 4, which focuses on the limits and potentials of Catalytic Power Europe. 3.2.1. Combining policy instruments and promoting consortia for projects implementation Table 4 comprises the interconnectors included in the 2015 and 2017 PCIs lists which involve at least one of the V4 members and that are under development or planned (as of September 2019). Table 5

Fig. 1. Mapping the EU catalytic state in the V4. Notes: dotted lines ¼ HLGs; solid line ¼ Priority gas corridors/Regional groups mandated by Regulation 347/2013. 4

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Fig. 2. PCIs gas projects in the V4 (2015 and 2017 PCIs lists). Sources: Authors’ elaboration from ACER (2016, 2018).

considers the LNG importing terminals of interests for the V4 as they are connected with North-South gas corridor concept. These are the Poland � �scie (operational since 2016 but under expan­ LNG terminal in Swinouj sion) and the Floating Storage Regasification Units (FSRU) planned in Croatia, near Krk island, and Northern Greece at Alexandroupolis. Ta­ bles 4 and 5 further illustrate some technical features of these projects, their status (as of September 2019), the project promoters, their share­ holders and the type of EU support. As PCIs, all the projects considered in Tables 4 and 5 enjoyed EU support within the context of the 2013 TEN-E planning system. They also have access to the regulatory support granted by the 2013 TEN-E scheme, notably improved permit granting and environmental assessment procedures. Hence, the ‘EU support’ column in the tables includes additional forms of assistance. The first (only in Table 4) is the regulatory support provided by CBCA decisions for the interconnectors, with the specification of the division of costs among the states involved (PCIs are eligible for grants for works after having received the CBCA decision). The second (both tables) is the EU financial support: grants for works, as a percentage of the total costs, and loans from EU public banks and the EFSI. The third (both tables) is the EU diplomatic support, considered as the backing of the projects at the level of HLGs. Tables 4 and 5 also include a ‘issues’ column and a ‘notes’ column. The latter provides additional info about the rationale and goal of the projects in terms of interconnectivity and security of gas supply, whereas the former highlights the presence/absence of (major) issues concerning different positions among the governments involved undermining (or delaying) the project. Finally, the last column specifies if project promoters have resubmitted an application for the 2019 PCIs list (this list will be finalised in October 2019). As Table 4 illustrates all the interconnectors in the V4 were proposed by consortia of state-owned companies (national TSOs), except the STORK II and the BACI pipelines that also involve the private Czech NET4GAS. This reflects the preferred mode of national energy gover­ nance in the region that assigns to the state a key role (e.g. Mi�sík and Nosko, 2017; Szulecki, 2017). It also explains the differences between the V4 and other member states in Western Europe, where gas projects have been often implemented through public-private partnerships (Prontera, 2018). The two projects involving Poland in the BEMIP gas corridor are under development. They faced no significant issues, are backed in the context of the BEMIP HLG and enjoyed (especially the GIPL) EU finan­ cial support. The CBCA decisions for these PCIs were taken in 2014 (by the ACER for the GIPL pipeline) and 2018 (for the Baltic Pipe). With regard to the NSI East Gas corridor, the picture is more complex because

of divergencies in national positions. Besides, not all the countries of this corridor take part in the same HLGs (see Fig. 1). The Poland-Slovakia interconnector received is CBCA decision in 2014. It has been granted financial support from the EU (CEF-E and EIB) and it is currently under construction. The Phase 1 of the BRUA pipeline is under construction as well (CBCA decision was taken in 2015). It has received wide financial support from the EU (CEF-E, EBRD, EIB and EFSI) and diplomatic sup­ port under the CESEC. Issues arose in 2017 when Hungary has unilat­ erally decided not to build the connection with the Baumgarten gas hub – the Hungarian-Austrian bidirectional capacity upgrade (HUAT) – suggesting the utilization of the already built Slovak-Hungarian inter­ connector to deliver gas to Austria (the so-called HUSKAT route) (see below). Phase 2 of the BRUA has been postponed due to delays in the development of the upstream investment in the Black Sea. In both cases, however, project promoters have resubmitted an application for the 2019 PCIs list. The Poland-Czech Republic interconnector was unilaterally post­ poned by Poland in June 2016 though the CBCA decision was taken in 2014. The issue lied in the Poland worries that this interconnector would possibly allow the shipping of Russian gas through the Nord Stream II and EUGAL pipeline, which connects Germany to the Czech Republic �, 2016). This issue was not addressed in the framework of the (Denkova HLGs – Poland is part of the BEMIP HLG but Czech Republic is not in this group nor in the CESEC – but of the V4 cooperation.4 The BACI is mainly supported by the Czech and Austrian TSOs. Nevertheless, it is opposed by Slovakia (currently Czech Republic and Austria are connected only through Slovakia) (Table 4). Conversely, EASTRING is mainly supported by Slovakia and its TSO (Eustream), although its main rationale is not entirely clear (see below). In both cases, project promoters have resubmitted an application for the 2019 PCIs list and are looking for EU financial support. However, the BACI and EASTRING are not supported by the CESEC. The latter in particular has been explicitly excluded from this HLG because for its ‘size, objective and scope’ could ‘not be appropriately assessed in the CESEC regional modelling framework’ (CESEC, 2018). The situation regarding the LNG terminals is different (Table 5). State-owned companies are involved in these projects as well. Yet, no relevant issues, in terms of divergent national positions, are at stake. As

4 STORK II received political backing at the September 2016 V4 summit when Poland and Czech Republic signed a Memorandum of Understanding baking this project (Oravcov� a and Mi�sík, 2018).

5

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Table 4 Major interconnectors under development/planned in the V4 (projects included in the 2015 and 2017 PCIs lists).

NSI East Gas

BEMIP Gas

Interconnection project

Status (as of September 2019)

Project promoters/ shareholders (state-owned/ private)

BulgariaRomaniaHungary-Austria Bi-directional Transmission Corridor (BRUA) Phase 1 þ Phase 2 (1.75 þ4.4 bcm/y)

Operation expected in 2020 (Phase 1) and 2022 (Phase 2) Phase 1: under construction

Poland-Slovakia Interconnector (bi-directional capacity), 5 bcm/y

EU support Regulatory (CBCA decision)

Financial (Grants and loans) (m ¼ million) (EU grants as % of total costs)

Diplomatic

Phase 1: Transgaz (TSO, Romania, 58% stateowned) FGSZ (TSO, Hungary, MOL Group 25% stateowned)

2015: CBCA (HU: 41%; RO: 59%)

CEF-E (works): €179 m Total cost (Phase 1): €479 m (EU: 40%) EBRD loan: €60 m EIB, EFSI loan: €50 m

CESEC (‘priority project’, 2015) CESEC Ministerial meeting (2017 and 2019)

Operation expected in 2021 Under construction

GAZ-SYSTEM (TSO, Poland, 100% stateowned) Eustream (TSO, Slovakia, 51% state-owned)

2014: CBCA (PL: 73%; SK: 27%)

CEF-E (works):

–

Poland-Czech Republic Interconnection (bi-directional capacity), 6 bcm/ y (STORK II)

Operation expected in 2022 (no Final investment decision)

NET4GAS (TSO, Czech Republic, private) GAZ-SYSTEM (TSO, Poland, 100% stateowned)

2014: CBCA (PL: 59.8%; CZ: 40.2%)

2015: the EC had decided to allocate a grant of €63 million for STORK II from the CEF-E (funds lost due to delays)

–

Bidirectional Austria-Czech Republic interconnection, 6 bcm/y (BACI)

Operation expected in 2020 (no Final investment decision)

–

–

–

Bi-directional BulgariaHungaryRomaniaSlovakia (EASTRING), phase 1: 20 bcm/ y phase 2: 40 bcm/y

Operation expected in 2025 (no Final investment decision)

NET4GAS (Czech Republic, TSO, private) GAS CONNECT AUSTRIA GmbH (TSO, Austria, 51% owned by OMV, 31% state-owned) Eustream (TSO, Slovakia, 51% state-owned)

–

–

Explicitly not included in the CESEC

Poland-Lithuania (GIPL) 2.4bcm/y from Poland to Lithuania a 1 bcm/y from Lithuania to Poland

Operation expected for 2021 Under construction

GAZ-SYSTEM (TSO, Poland, 100% stateowned) AB Amber Grid (TSO, Lithuania, 97% stateowned)

2014: CBCAACER decision: PL:60.2%; LT: 34.2%; LV (nonhosting): 5.3%; EE (non-

CEF-E (works):

BEMIP

€107 m

Issues

Goal of the project (expected regional impact)

Resubmitted for the 2019 PCIs list

2017: Hungary (unilaterally) decided to not build the connection with Baumgarten 2019 (February): Phase 2 postponed due to delays in upstream investments in the Black Sea –

Increase regional interconnectivity, exploit Romanian gas resources, increase diversification of gas supply in the region

Yes

Diversification of gas supply in the region, by completing a missing link between the Poland and Slovakia (access to the Poland LNG terminal) Increase regional interconnectivity, diversification of gas supply (the project aims to connect the Czech system with the Polish LNG terminal enhancing Czech Republic energy security)

Yes

Total cost: €269 m (EU: 40%) EIB loan: 70 m to Eustream

€266 m

Total costs:

€443 m

(EU: 60%)

2016 (June): Poland decided (unilaterally) to postpone the project (the project lost EU financial support) 2016 (September): new Poland-Czech Republic MoU (a new application to CEF-E is required) 2017: Slovakia sent a formal letter to the EC claiming that the project ‘negatively impact the successful usage of existing and reliable Slovak infrastructure’(*)

Especially supported by Eustream to possibly compensate from the reduced utilization of the Brotherhood pipeline after expected decreased of gas transit via Ukraine –

Yes

Increase regional interconnectivity (currently there is no connection between Czech Republic and Austria, which are linked through Slovakia)

Yes

Increase regional interconnectivity and diversification of supply (new gas resources expected from the Caspian Basin and Turkey)

Yes

Increase interconnectivity in the Baltic region, increase diversification of supply

Yes

(continued on next page)

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Table 4 (continued ) Interconnection project

Poland-Denmark (Baltic Pipe) (10 bcm/y)

Status (as of September 2019)

Operation expected for 2022 (Final investment decision made in November 2018)

Project promoters/ shareholders (state-owned/ private)

GAZ-SYSTEM (TSO, Poland, 100% stateowned) Energinet (TSO, Denmark 100% stateowned)

EU support Regulatory (CBCA decision)

hosting): 0.3% 2018: CBCA (DK: 51.2%; PL: 48.8%)

Financial (Grants and loans) (m ¼ million) (EU grants as % of total costs)

Diplomatic

CEF-E (preparatory works): €33.1 m CEF-E (reinforcement of gas transmission systems in Poland and Denmark): €18.3 m

BEMIP

Issues

Goal of the project (expected regional impact)

Resubmitted for the 2019 PCIs list

–

Increase diversification of supply (the project will provide Poland with a direct access to Norway’s gas fields)

Yes

Sources: authors’ elaboration from data provided by the EU, energy companies website and specialized press. For the ‘issues’ column see also the citations in the text. (*) ¼ ACER (2017: 11). Table 5 Major LNG receiving terminals under development/planned relevant for the V4 security of gas supply. Site, Country (capacity in bcm/y)

Status (as of September 2019)

Project promoters/ shareholders (state-owned/ private)

BEMIP Gas

� Swinouj� scie, Poland (5 bcm/y) Terminal operation started in 2016

Capacity extension to 7.5 bcm/y expected for 2023 Under construction

Polskie LNG (Poland, 100% state-owned)

NSI East Gas

Krk, Croatia (2.6 bcm/y) (FSRU)

Operation expected in 2020 (Final investment decision made in January 2019)

LNG Croatia LLC (HEP, Plinacro, Croatia, 100% state-owned)

LNG Northern Greece, Alexandroupolis (6 bcm/y) (FSRU)

Operation expected in 2020 (no Final investment decision)

Gastrade, DEPA (Greece, 65% stateowned) BEH EAD (Bulgaria, 100% state-owned)

EU support

Issues

Goal of the project (expected regional impact)

Re-submitted for the 2019 PCIs list

BEMIP

–

The terminal extension, along with the new interconnectors under development, aims at enhancing diversification of supply in the region

No (not necessary)

CESEC (Terminal ‘priority projects’, 2015) CESEC (LNG evacuation system towards Hungary ‘priority projects’, 2015):

–

Increase security of supply (diversification) in the Balkans and Central and Eastern Europe (through pipeline connections with Hungary)

Yes (both for the terminal and the evacuation pipeline towards Hungary)

CESEC (‘conditional projects’, 2015) (Included in 2017 PCIs list)

–

Increase security of supply (diversification) in the region (through pipeline connections with Bulgaria, Romania and Hungary)

Yes

Financial (Grants and loans) (m ¼ million) (EU grants as % of total costs) (x)

Diplomatic

Terminal constructions’ works (2010–11): EFRD: € 223 m EEPR: € 80 m Total cost: € 869 m (EU: 30%) Capacity extension (2019): EFRD: €128 m CEF-E: € 108 m (for the terminal) Total cost (first phase): € 234 m (EU: 28%) CEF-E: € 16 m (for evacuation pipeline) EIB loan: € 339 m (proposed in 2016, under appraisal) –

Sources: authors’ elaboration from data provided by the EU, energy companies website and specialized press. For the ‘issues’ column see also the citations in the text.

anticipated the EU widely supported the Poland LNG terminal. Financial and diplomatic support has been granted for its expansion as well, also in this case trough the ERDF. Similarly, EU financial and diplomatic support has been granted to the FSRU project in Krk. In this case, financial and diplomatic support has been also granted to connect the LNG terminal with Hungary and hence increase its regional impact in terms of diversification of gas supply. Within the CESEC, a CroatiaHungary Memorandum of Understanding has been signed, in 2017, to

back the project that is considered a ‘priority project’ for this HLG. Finally, the CESEC has supported the FSRU project in Northern Greece. Through the CEF-E, the EU has also allocated €1.8 m for its feasibility studies and the companies involved are looking for further EU financial assistance. This project is part of the North-South gas corridor concept. It should work in tandem with the Greece-Bulgaria Interconnector. If realised, it will allow the transportation of LNG to Southeastern Europe, enhancing diversification of the gas supply particularly in Bulgaria, 7

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Romania, Serbia, Macedonia, Hungary and, possibly, Ukraine.

(however, EASTRING is also a PCI). The Slovakian TSO (Eustream) and government claim that EASTRING aims at increasing the diversification of supply in South-eastern Europe and the Balkans with new gas re­ sources from the Caspian Sea and Turkey. The EU has also supported its feasibility studies (with a CEF-E grant), and the Commission’s � �covi�c, has backed it, Vice-President for the Energy Union, Maro�s Sef claiming that it would reduce South-eastern Europe’s reliance on Russian supplies (The Slovak Spectator, 2018). However, a detailed analysis pointed that the energy security aspects of the projects high­ lighted by its Slovakian supporters are not as important as the efforts to guarantee maximum utilization of the national transmission capacity for commercial purposes owing the possible reduction of the utilization of the Brotherhood Pipeline, with an expected decrease in Russian gas transit towards the Ukraine after 2019 (Mi�sík and Nosko, 2017).

3.2.2. The EU as a facilitator Gas infrastructural policy in the V4 has been affected by the rise of the EU catalytic state. The EU supports cross-border gas infrastructure and LNG receiving terminals by combining regulatory tools – the regu­ latory incentives provided for the PCIs, including the CBCA decisions – with more direct forms of intervention based on nodality and treasury (the PCIs planning system, the HLGs, the CEF-E grants, the EIB loans, etc.). In line with the catalytic state perspective and its faire-avec approach, the EC has emerged as a facilitator of strategic energy projects in the V4 region and beyond. It promotes collaboration between governmental agents and market actors and helps coalition building and coordination among several policy actors. This role is crucial because the IEM – and its implementation in the V4, although still a work in progress – has produced a fragmentation of the decision-making struc­ tures that can hinder market integration and interconnectivity (Osi�cka et al., 2018). As illustrated in section 3.2.1 all the interconnectors in the V4 are developed by consortia of national TSOs, which are mostly state-owned companies. State-owned companies are also developing LNG projects relevant to the region. The EU has not the organizational and financial resources to achieve (directly) its energy security objectives in the re­ gion, i.e. diversification of supply and reducing gas dependency from Russia. Yet, the EC can play a ‘catalytic role’ in facilitating policy pro­ cesses and the implementation of those projects that contribute to the realisation of such objectives. The EU financial support has been instrumental in mobilising other financial and organizational resources. On the one hand, member states can ‘use Europe’ to pursue their na­ tional agendas. On the other hand, with its treasury-based resources, the EU can trigger the implementation of projects with a more extensive regional impact that otherwise would be very difficult to realise. As a ‘facilitator’, however, the EC cannot impose cooperation on the V4, as illustrated by the cases of the Poland–Czech Republic inter­ connector and the BRUA pipeline. With regard to the former, bilateral negotiations within the V4 framework were instrumental to resolving the stalemate and easing the Warsaw’s concerns about the possibility that the STORK II would be used to supply Russian gas. However, the risk of losing EU financial support was also a factor in establishing a deal between Poland and the Czech Republic (Reuters, 2016). With regard to the BRUA, Hungary claimed that using already existing interconnections between Hungary and Slovakia (the HUSKAT route) would deliver gas to Austria in a less expensive way than the HUAT route (Dragan, 2018). In this case, the issue mainly lies with the willingness of the Hungarian government to advance the country’s role as an energy hub for the re­ gion (Solodkyy, 2019). Although also pressure from Russia to under­ mine a project like BRUA that could increase competition for Gazprom supplies in the region might be a factor (Theisen and Szabo, 2019). Despite the fact that the Hungarian claims have been rejected by EU institutions, this issue has not yet been resolved. However, the pipeline is considered a ‘priority project’ within the CESEC (Table 4). High-level ‘political commitments’ to its realisation have been provided within this framework (European Commission, 2017). In addition, the BRUA received diplomatic support during the 2017 and 2019 CESEC ministe­ rial meetings. This mounting pressure from the EU to continue on with the original route could reduce the scope for unilateral action by Hungary. In addition, as a facilitator, the EC is not always able to (clearly) define and promote a common approach to energy security. It risks being caught by the different agendas pursued by national actors. The BACI pipeline is mainly supported by Austria and the Czech Republic on the grounds that it serves to increase regional energy security (Mi�sík, 2019). However, Slovakia claims that this project would undermine its national energy security. And although BACI is a PCI project, it is not supported by the CESEC. At the same time, Slovakia supported EASTRING, which was explicitly excluded by the CESEC framework

4. The limits and potentials of Catalytic Power Europe As a catalytic state, the EU can deploy catalytic power. The idea of Catalytic Power Europe serves to highlight the dynamics that do not fit within the existing conceptualisations of Regulatory and Market Power Europe. These dynamics are sustained by mechanisms of mobilisation and connectivity rather than enforcement and rely on nodality and treasury-based resources rather than authority (see Table 2). With re­ gard to connectivity, through the PCIs system and the HLGs, the EU has been able to structure a network of actors involved in regional infra­ structural policy, with regions designed according to the functional needs of the IEM. The EC has a nodal position in this network – it or­ chestrates and manages both frameworks – and can influence policy outcomes. Mobilisation, instead, illustrates the EU’s ability to foster project implementation by using its financial resources to ‘mobilise’ other actors’ resources. This is important to achieve the EU objectives in a situation in which EU governmental agents have only limited financial and organizational resources and significant institutional (and legal) constraints as far as energy security is concerned (notably those of the art. 194 of the Lisbon Treaty). As illustrated in the previous sections, both mechanisms have been at work in the case of the V4. They have contributed to increased interconnectivity and diversification from Russian gas supplies in the region, facilitating the initiation of new ac­ tivities in line with the positive power logic of Catalytic Power Europe. Catalytic Power Europe has important limits as well. Because it relies on mechanisms of connectivity and mobilisation, the EU cannot force member states to cooperate. As illustrated also in the case of the V4, national agendas and interests can hinder the realisation of regional projects. However, the costs of uncoordinated and unilateral strategies – in terms of both inter-state coordination and financial assistance for large infrastructural projects – have increased in parallel with the rise of the EU catalytic state. In other words, it is more and more difficult for national decision-makers in the V4 to develop these strategies when a structured EU system for regional planning and negotiation is in place and when this would mean renouncing significant financial resources to implement infrastructural projects. The debate surrounding the EASTRING and the BACI pipelines il­ lustrates another limit of the EU as a catalytic state. Not only is the EU incapable of forcing the cooperation of national governments, but the EU planning process can produce incoherent and sub-optimal outcomes in terms of a common regional energy security strategy. Both projects are PCI, but they have been excluded from the CESEC. In addition, the rationale of the EASTRING it is not entirely clear. Because the new EU planning system is open to non-state actors – in line with the faire-avec approach of the catalytic state – it could also be prone to ‘capture’ by the special commercial interests of domestic actors. Finally, the EU catalytic state in the V4 (and in Central and Eastern Europe) more closely

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resembles a complex governance architecture – characterised by partially overlapping membership in its different components – than a unified and comprehensive institutional structure5 (see Fig. 1). The Czech Republic, for example, is not included in any of the HLGs that involve the other regional actors (i.e., the BEMIP and the CESEC). However, the Czech Republic is part, like the other V4, of the NSI East Gas group that is responsible for the PCIs list. This partially overlapping membership could further undermine the coherence, and hence the effectiveness, of Catalytic Power Europe. In addition, it could undermine the legitimacy of the EU catalytic state approach because countries that are outside the HLGs can be affected by the decisions made within such (informal) governance structures, which are outside EU regulations. These are important limits of the EU as a catalytic state/Catalytic Power Europe. However, it is worth noting that the EU as a regulatory state has important limits as well, especially with regard to EU–Russia relations. As anticipated, the EC has used its authority to enforce the rules of the IEM in the case of the antitrust procedure opened against Gazprom.6 The EC has also used, in a more targeted way, its authority over the IEM to halt the South Stream pipeline project. Regulatory in­ struments and enforcement mechanisms, however, have demonstrated their limits in promoting energy infrastructure and enhancing the diversification and security of supply in those regions that are more dependent on Russian gas, such as in the V4 and Central and Eastern Europe. These shortcomings have prompted the EU to adopt the more pro-active approach illustrated by the catalytic state model. As sug­ gested previously, both Regulatory and Market Power Europe are underpinned by a negative power logic; they mainly serve to halt other actors’ actions rather than initiate new ones. Besides, particularly in Market Power Europe, the use of regulatory tools in a targeted and (geo) political way can give rise to contestations of authority between the EU and the member states, as exemplified by the debate surrounding the Nord Stream 2 pipeline and the revision of the Gas Directive (e.g. Fischer, 2017; Yafimava, 2019). The political use of regulatory instruments can also hinder the legitimacy of the EU rule-based approach and the attractiveness of the EU market for external actors (Andersen et al., 2017b, 2019). Overall, the case of Nord Stream 2 well illustrates that because of its limited authority over energy security matters, even the EU as a regulatory state cannot impose a common approach on the member states. If important countries (like Germany) want to continue with an international gas project, and if this project complies fully with the EU rules (this was not the case with South Stream), the EC does not have the means to prevent its realisation, even if this project is overtly opposed by several member states and the EC, and even if it raises serious concerns about the coherence between the EU energy policy and the EU foreign policy to­ wards the Ukraine, which would be negatively affected by the Nord Stream 2 both from an economic and energy security perspective (e.g. European Political Strategy Centre, 2017). On the other hand, Catalytic Power Europe also has the potential to enhance the diversification of gas supplies and energy security in the Ukraine. In 2014, the EU reacted swiftly when Gazprom stopped gas deliveries to the country and a potential threat emerged to the security of gas transit through the Ukraine (European Court of Auditors, 2016). First, the EC organised trilateral meetings with the Ukraine and Russia and mediated between Naftogaz and Gazprom. It also offered financial

assistance for the so-called 2014–15 and 2015–16 ‘winter package’. It then facilitated and politically backed up solutions involving a V4–Ukraine cooperation, particularly concerning interconnections and the reverse flow of gas from Slovakia, Hungary and Poland7 (e.g. EC, 2014; Daborowski, 2015). In addition, in 2015, the reach of the EU catalytic state was also extended to the members of the Energy Com­ munity (the Ukraine joined the Energy Community in 2010), which has adopted, with some adaptation, Regulation 347/2013 on the TEN-E. In particular, the adapted regulation – Decision 2015/09/MC-EnC – established rules for identifying projects of Energy Community signifi­ cance: the Projects of Energy Community Interest (PECIs, which are those projects already included in the EU PCIs list) and the Projects of Mutual Interest (PMIs). These projects can benefit from financial assis­ tance from the Instrument for Pre-Accession Assistance and the Neigh­ bourhood Investment Facility. Decision 2015/09/MC-EnC also created a planning system that mirrors the one developed by the EU for the PCIs list. The members of the Energy Community, including the Ukraine, also began to take part in the CESEC activities, and the connections between the works of the two institutions increased (Energy Community, 2017a). In the context of this cooperation, several projects to further improve the interconnections between the Ukraine and its neighbourhoods are under discussion. The EC and the Energy Community Secretariat are seeking to facilitate collaboration among the actors involved and foster the implementation of these projects. In 2016, within the CESEC framework, the Ukraine signed an ‘interconnection agreement’ with Romania and a Memorandum of Understanding with Romania and Greece for the opening of the Trans-Balkan pipeline system between Greece and the Ukraine (European Commission, 2016a; 2016b). Among the new pro­ jects that involve the V4, it is worth recalling the Poland–Ukraine interconnector and the upgrading of the Hungary–Ukraine inter­ connector. The latter, which is also supported by the US, would possibly allow LNG from the Krk Croatian terminal to reach the Ukraine and increase its diversification of gas supply (Korany, 2018). The Poland–Ukraine interconnector is a PMI project, and the Energy Com­ munity Secretariat ‘acted as facilitator’ to promote its realisation (En­ ergy Community, 2017b). This interconnector is supported by the US as well. It aims to ‘decrease vulnerability of the Poland and Ukraine sys­ tems in case of supply disruptions from the Russian side’ and to increase the ‘diversification of gas sources and routes for Central and Eastern Europe by enabling an access to the global LNG market’ (Energy Com­ munity, 2019). To be sure, it is not yet clear whether and when these projects might be realised. The upgrading of the Hungary–Ukraine interconnector, for instance, is facing problems and has been scarcely supported by Buda­ pest so far (Energy Community, 2018). However, with the extension of the EU catalytic state to the Ukraine, the scope for uncoordinated and unilateral strategies towards Kiev has also been reduced for the V4. Moreover, with its positive power logic, Catalytic Power Europe can improve energy security in the Ukraine better than those strategies based on a negative power logic, – i.e. Regulatory and Market Power Europe – which have shown their limits as far as EU–Russia relations are concerned. 5. Conclusions The rise of the EU catalytic state has affected gas infrastructural policy in the V4. Like in other regions of the IEM (Prontera, 2019), in this

5 On complex governance architectures and their problems, see Biermann et al., (2009) and Keohane and Victor (2011). 6 The Commission sent to Gazprom a ‘Statement of Objection’ in April 2015 contesting the company’s breach of EU antitrust rules in Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland and Slovakia. The set­ tlement reached on March–May 2018 by DG Competition and Gazprom did not impose financial penalties, but imposed several binding obligations on Gazprom in order to enable free flow of gas at competitive prices in Central and Eastern European gas markets.

7 This process was not easy. Problems arose, especially with regard to Hun­ gary–Ukraine and Slovakia–Ukraine cooperation. Hungary, in particular, temporarily froze its deliveries to the Ukraine shortly before the visit of Russian representatives to Budapest in 2014. The Hungarian Prime Minister (Viktor Orban) claimed that the country could not afford to run the risk of losing its Russian gas supplies (The Guardian, 2014). This move provoked a sharp reac­ tion from the EC, and the deliveries were renewed in the following months.

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case as well the EC has emerged as a facilitator for energy projects rather than a regulator (as in the regulatory state perspective). To be sure, regulatory tools and competition policy, as well as enforcement mech­ anisms, remain a key asset for the EU to both improve market integra­ tion and oppose unwelcome strategies put forward by external actors, such as Gazprom and Russia. However, the notion of Catalytic Power Europe helps illustrate different dynamics that are driven by a positive rather than negative logic of power and are sustained by mechanisms of connectivity and mobilisation rather than enforcement. By deploying these mechanisms, which rely on nodality and treasury-based resources rather than authority, Catalytic Power Europe influences V4 inter-group dynamics and affects the prospect of EU–Russia energy relations. With the rise of the EU catalytic state, the scope for unilateral (national) en­ ergy security strategies has been reduced. In parallel, regional gover­ nance structures to increase cooperation and solve coordination problems have increased. Incentives for cooperation have increased as well, with a growing EU financial involvement in energy project implementation. This, in turn, can reduce the vulnerability to divide et impera strategies pursued by external actors, such as Russia. With the extension of the reach of the EU catalytic state to the members of the Energy Community, Catalytic Power Europe can also address energy security concerns with regard to the Ukraine. In this case, Catalytic Power Europe seems better equipped than Regulatory and Market Power Europe, which, as exemplified by the case of the Nord Stream 2, have been (so far) poorly effective. Catalytic Power Europe, however, also has important limits. First of all, as under the other ap­ proaches, under Catalytic Power Europe, the EC cannot impose coop­ eration or common EU positions on the member states. Furthermore, the faire-avec approach of the catalytic state can expose EU policy makers to the risk of capture by private interests. Thus, it is important to improve the accountability and transparency of the decision-making processes that take place in the PCIs regional groups and the HLGs. With regard to the former, Regulation 347/2013 allows several stakeholders (not only companies and regulators) to express their views in the consultation process that is launched for the PCIs. But the visibility of the process remains very low, and the technical complexity and asymmetry of in­ formation can further complicate a balanced assessment of the different projects proposed by promoters. The HLGs, on the other hand, are poorly institutionalised and relatively closed to public scrutiny. In addition, the EU catalytic state mirrors a complex governance architecture rather than a coherent institutional structure. This reflects the fact that its components have been established in a pragmatic and incremental way to overcome the shortcomings of the EU regulatory state and promote bottom-up processes able to accommodate different regional situations. Yet, this incoherence can undermine the effective­ ness of the EU catalytic state. In the case of the V4, we noted projects that were supported in the PCIs framework but not at the level of the HLGs. This incoherence can also undermine the legitimacy of the EU catalytic state if member states are outside political venues (e.g. the HLGs) with significance for regional energy security, as in the case of the Czech Republic for the V4. With the new Regulation 2018/1999 on the governance of the Energy Union – which requires member states to draft National Energy and Climate Plans that also cover energy security and regional cooperation – a new layer has been added to this complexity. The member states involved in the CESEC have already decided to use this framework ‘to start regional cooperation on the draft National En­ ergy and Climate Plans’ (CESEC, 2019). However, explicit policies to manage this growing institutional complexity and promote coherence among the different components of the EU catalytic state are required.

Declaration of Competing Interest The authors declare that they have no known competing financial interests or personal relationships that could have appeared to influence the work reported in this paper. References ACER, 2015. Consolidated Report on the Progress of Electricity and Gas Projects of Common Interest for the Year. ACER, 2017. Opinion No. 13/2017 on the Draft Regional Lists of Proposed Gas Projects of Common Interest 2017. ACER, 2016. Consolidated Report on the Progress of Electricity and Gas Projects of Common Interest for the Year 2015. ACER, 2018. Consolidated Report on the Progress of Electricity and Gas Projects of Common Interest for the Year 2017. Andersen, S.S., Goldthau, A., Sitter, N., 2017. Conclusions: liberal mercantilism?’. In: Andersen, S.S., Goldthau, A., Sitter, N. (Eds.), Energy Union: Europe’s New Liberal Mercantilism? Palgrave Macmillan, London, pp. 237–241. Andersen, S., Goldthau, A., Sitter, N. (Eds.), 2017. Energy Union. 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Author contribution statement Andrea Prontera: conceptualization, methodology, investigation, supervision, writing original draft. Peter Plenta: investigation, data curation, writing original draft.

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