Energy in transition: From the iron curtain to the European Union

The fall of communism left some of the most polluting and wasteful energy sectors of the World in Central and Eastern Europe (CEE). After 15 years of restructuring, eight of these countries have joined the European Union (EU), closing an era of economic transitions. What progress has been made in these countries in the field of energy from the perspective of sustainability? Has the transition agenda been completed, or do any of the socialist energy sector legacies prevail? The purpose of this paper is to review the period of economic transition in the energy sector, focusing on sustainability, in three selected CEE countries, and to use Russia as a comparison. First, the paper argues that at the core of the unsustainability of energy sectors at the end of the communist era were among the highest energy intensities in the world. Then, we identify the legacies of the centrally planned economy that contributed to these high-energy intensities. We outline a policy agenda for the transitions which addresses the identified legacies. Next, we look at the energy landscape at the end of the restructuring, and review the developments in energy intensities during the period of economic transitions. We conclude that, while energy and economic restructuring is very important to bring down the high-energy intensities of former communist countries, a sizeable gap remains in intensity levels between CEE countries and the old EU states. Therefore, economic and energy system reforms alone will not close the gap, and targeted policies and measures are needed to improve energy efficiency levels. Beyond a more serious governmental commitment, a concerted effort is needed from regulators, corporations, utilities, consumer organisations and the civil sector to catalyse the remaining progress to be made in combating the socialist legacy in the field of energy efficiency.