Nord Stream 2 Economic Significance

RISS senior expert, economist Ivan Bazhenov comments on the importance of the new pipeline for Russia and Europe. Despite numerous attempts to politicize the project and prevent it, the construction of the Nord Stream 2 gas pipeline was completed. The reason for this is that it serves the pragmatic and long-term interests of Moscow and its European partners, mainly Germany.

Summary:

  • The Nord Stream 2 project aims to provide the means for safe, secure and stable supplies of natural gas to the European gas market. It contributes to Europe's energy security and may cool gas prices in Europe.

  • European gas demand is projected to expand up until 2030. The share of electricity production from the renewables in Europe is yet not that big to ensure a stable energy supply during the green transition period. In this light Nord Stream 2 gas supplies could help fuel power stations, industry, and transport until renewables and synthetic hydrogen can successively supply the bulk of electricity in Europe.

  • The energy cooperation between the EU and Russia could benefit from the opportunities hydrogen brings about. Russia has the potential to be a major player in the production and export of hydrogen and the Nord Stream 2 pipeline could be repurposed for hydrogen.

  • Nord Stream 2 provides Germany with a long-term opportunity to become a transit hub for cheap Russian gas to Western European neighbors.
Ivan Bazhenov energy Nord Stream 2 EU interview