European Energy Market Research Articles

The European energy crisis and the US natural gas market dynamics: a structural VAR investigation

The Russian invasion of Ukraine triggered severe disruptions in the European energy market, causing also significant shifts in global natural gas flows. We investigate how this European shock has affected the dynamics and altered the estimates of the elasticities on the US natural gas market. We use the Bayesian Structural Vector Autoregression framework proposed by Baumeister and Hamilton (Am Econ Rev 109(5):1873–1910, 2019, BH) for the crude oil market and applied by Rubaszek et al. (Energy Econ 103:105526, 2021, RSU) to analyze the dynamics of the US natural gas market. By extending the RSU model for natural gas exports and imports and deriving model’s posterior using most recent data, we approximate the impact of the European energy crisis on the US natural gas market. We show that the estimates of the US natural gas market elasticities change due to our modification, while simply updating the same prior beliefs with most recent data impacts the posterior estimates to a very limited extent. We also find that a shock even as major as the European energy crisis has only marginally affected the US natural gas market, thus confirming the results from the literature that the EU and US natural gas markets evolve independently.

Trend Analysis of Cross-Border Electricity Trading in Pan-European Network

The long-term global target of facilitating energy security and optimizing resource utilization while supporting the transition to sustainable energy systems has led the pathway towards regional cooperation in the context of energy infrastructures and trading. Recent trends highlight the development of transnational energy grids, pipelines, and renewable energy projects, facilitating efficient distribution of electricity, gas, and other energy forms. These advancements offer benefits such as increased reliability of energy supply, cost savings through shared resources, and strengthened relationships between countries. However, challenges persist, including regulatory differences, geopolitical tensions, alignment of market rules as well as substantial investment requirements in infrastructure and technology. Addressing these challenges necessitates harmonized policies, robust legal frameworks, and cooperative international governance, which are crucial for effective cross-border energy trading. The aim of the work is to present the current landscape as well as analyze the latest trends and developments in the dynamic field of electricity interconnectors, providing insights into its trajectory and implications for the European internal energy market.

ЕНЕРГЕТИЧНИЙ РИНОК УКРАЇНИ : СТВОРЕННЯ УМОВ ДЛЯ ЕФЕКТИВНОГО ЕНЕРГОЗАБЕЗПЕЧЕННЯ

The article analyzes the theoretical foundations of the formation of energy security on the energy market of Ukraine in the context of European integration processes, and states that energy security is a component of the state's national security. The main advantages of long-term contracts for all energy market participants are indicated. Features of the functioning of consumer companies in the competitive market are highlighted. The main risks for large consumers when working on the day-ahead market are presented. Factors of the expediency of functioning on the balancing segment are given. Current trends in the development of world energy and their impact on energy security are analyzed. The necessity of diversification of energy supply sources for Ukraine is substantiated. The influence of the European integration processes on the reform of the energy sector of Ukraine is studied. The current state of the energy market was analyzed, and the analysis of factors affecting development trends and ensuring protection in the energy market was carried out. The influence of the European integration processes on the reform of the energy sector of Ukraine is studied. The conjuncture of the energy market of Ukraine is determined, in which it is necessary to analyze not only the peculiarities of the domestic sphere, but also the influence of international relations, international trade and the world market. The PEST analysis of the energy industry of Ukraine is presented, which allowed to identify the level of influence and the neighborhood of the group of influencing factors on the formation of the strategic potential of the energy market of Ukraine. Directions for increasing the level of energy security through modernization of the energy infrastructure, development of renewable energy sources, and integration into the European energy space are proposed. It is noted that the creation of conditions for the effective use of internal resources and the development of appropriate technologies are of strategic importance. The country's government is working on integration into the European energy community, which requires compliance with European standards and the implementation of effective management models of the energy market of Ukraine. According to the results of the strategic potential of the energy industry of Ukraine, economic factors exert the greatest influence - 1.147, which just emphasizes the important role of the energy industry in the country's economy. In second place in terms of influence are political factors - 0.847. The analysis of the market just showed the rather important role of the political component in the functioning of the energy market of Ukraine, namely in the aspect of its joining the European energy market and the transformation of Ukraine into the European Union with the rights of an equal state. In third place are technological factors - 0.553, which confirm Ukraine's determination to decarbonize the energy market. And the fourth place is occupied by socio-cultural factors - 0.537, which are only marginally inferior to technological factors. This indicates a strong influence of consumer preferences when choosing interaction models in the market.

ENSURING ENERGY EFFICIENCY OF SETTLEMENTS IN UKRAINE AND EU COUNTRIES: LEGAL, ECONOMIC AND MANAGERIAL ASPECTS

The study examines energy and energy-related environmental policies in the international context and their impact on the economy and businesses in the context of energy efficiency. The focus is on Ukraine's integration into the European energy market and the legislative features of energy policy. The purpose of the article is to determine the content and features of the administrative and legal regime for the use of solar energy facilities in Ukraine in the light of ensuring the requirements for the viability of human settlements. The tasks of the article were to determine the EU energy efficiency policy, its economic and regulatory justification, which can be adapted to the needs of meeting the energy needs of Ukraine in the crisis conditions of war, and to determine the strategy for the development of energy efficiency of settlements in post-war conditions. The study used general scientific and special methods, the main of which were: abstract-logical, deductive, inductive, historical, modelling and forecasting, methods of system structural, system and functional analysis, economic-statistical (grouping, comparison, etc.). As a result, the authors conclude that the reason for this is its clear advantages over traditional sources, which are difficult to refute. In some countries, the government is implementing complex public programmes with huge financial investments for gradual replacement, but so far the results remain insignificant. Ensuring an adequate level of energy efficiency in Ukraine requires the activation of processes of harmonization of the current national legislation with the standards of the EU energy and climate policy, which is connected with: amendments to the Tax Code of Ukraine in order to create conditions for attracting investors to the market of energy services; further processes of decentralization of the energy system and the spread of alternative, independently separated energy subsystems and energy resource traders; formation of artificial raw materials as sources of thermal energy.

Electricity market crisis in Europe and cross border price effects: A quantile return connectedness analysis

As the interconnection of the European electricity markets and integration of renewables progresses, there is little known about interconnectedness across them at times of market turbulence. The electricity crisis of 2021 and 2023 were significant events that can also provide lessons in the behaviour of integrated markets with high renewables under stress. Despite the impacts of the COVID-19 pandemic and the Russia-Ukraine war on the European energy market, little is known about their effects on the transmission of risks between the electricity markets. We employ the quantile connectedness approach to quantify the return connectedness between eleven key European markets, as well as the natural gas and carbon markets. We then examine the effect of the two crises on the interconnectedness. We find significant return interconnectedness, driven by spillover effects, among the markets. Analysis of connectedness across quantiles shows that the spillover effects are much stronger at tail ends of conditional distribution. Moreover, our results reveal opposite effects from crises on market interconnectedness. While the COVID-19 pandemic reduced the interconnectedness, the Russia-Ukraine war intensified the return shock transmission. Finally, we find that the natural gas and carbon markets are net recipients of return shocks across the quantiles.

Сучасні рішення забезпечення оцінки та контролю безпеки постачання електричної енергії

The introduction of market relations in the energy industry brought the issue of energy security to a new level, defining one of its components in the market as the security of electric energy supply. In the work, a comparative analysis of the existing conceptual terminological apparatus related to the definitions of energy security and security of supply was carried out in order to establish the main differences. At the same time, assessment and control of the security of electricity supply, as integral indicators that make it possible to plan the activities of the single European energy market, have become fundamental issues for various countries. Assessment and control of the security of electricity supply in modern Ukraine is becoming an increasingly urgent task in connection with the connection of its unified energy system to the energy system of Europe and the need to ensure emergency-free parallel operation. Therefore, the purpose of the study is to form an idea of modern approaches to the assessment of the security of electricity supply in Ukraine and the EU countries, as well as to search for opportunities to improve the control system of security of supply. It was established that, apart from the prescriptive regulation of the basic principles of the formation of indicators, at the moment there are no unified approaches that would allow them to be used to create a national methodological base for a conscious and qualitative assessment of security of supply. Based on the results of the comparative analysis, the main ways by which the issue of security of supply assessment is considered have been identified. It has been proven that an important direction is the creation of a multi-level system of assessment and control of the security of electricity supply, as well as ensuring the control of the implementation of organizational measures aimed at improving the security of supply. Keywords: security of electric energy supply, electricity, law, monitoring, regulation, reliability, directive.

Battery electricity storage as both a complement and substitute for cross-border interconnection

Cross-border interconnectors play a critical role in fulfilling the growing demand for cleaner and more affordable electricity. They are integral to completing the single energy market in Europe, so the European Union has set ambitious targets for the coming decade. Many challenges affect and delay the development of transmission infrastructure, and the deployment of non-wires alternatives such as battery energy storage systems may threaten the financial viability of these investments. We evaluate the potential impact of storage deployment on the profitability of cross-border interconnectors using the European electricity market model “EuroMod”. We find that higher battery penetration than projected in ENTSOE's TYNDP in 2030 significantly reduces transmission surplus (by €267 m to €506 m) under different battery uptake scenarios. To maintain the expected total surplus as projected by TYNDP in 2030, the continent-wide transmission capacity must decrease by 4.1–7.0%, potentially superseding 19–33% of planned transmission capacity expansions to 2030. Although cross-border interconnectors are of strategic importance for energy security and flexibility, the results highlight the pressing need for regulators, policymakers, and private investors to account for the rapid uptake of storage and integrate both storage and interconnectors in system planning.

The effect of the 2022 energy crisis on electricity markets ashore the North Sea

The European internal energy market has undergone institutional redesign during the last 30 years. It has the objective to deliver secure, affordable and increasingly decarbonized energy supply. Europe experienced its first inherent energy crisis after the global oil price crisis half a decade ago. With skyrocketing energy prices during 2022, electricity generation in Europe was under extreme stress. In this paper we analyse flows and prices of electricity in six distinctive (with respect to generation portfolios) European countries from 2018 to 2022 and investigate if market signals (prices) contributed to security of supply. For a long time, sceptics have argued that liberalized markets would not be able to provide security of supply, and this has not been challenged by real world events thus far. Our empirical results suggest that electricity did indeed move along cross-border transmission lines as the theory suggests, and that cross-border transmission lines were utilized as during normal periods. This is relevant for the current debate on restructuring energy market design and protecting consumers from volatile prices.

Prospects for replacing Russian fuel with Latin American fuel in the European market

The subject of the study is the potential of the Latin American energy market in the context of the demand of the European Union market for the replacement of Russian energy resources. The object of the study is the energy resources market of the European Union, Latin America, and Russia. The purpose of the study is to identify the possibilities of Latin American countries in replacing Russian energy resources in the energy market of the European Union. The author examines in detail such aspects of the topic as the dependence of the EU economy on Russian energy resources, changes in the conjuncture in the fuel and energy sector of the European Union, and also touches on the consequences for European economies in connection with the abandonment of Russian energy resources. Special attention is paid to the opportunities of the Latin American region in the development of the European energy market. The prospects of the Latin American energy market are being explored from the point of view of the availability of natural resources, as well as from the point of view of real opportunities for exporting energy resources. The methodological basis of the research is a systematic and comparative analysis, a method of generalization, methods of grouping and classifying quantitative and qualitative data, methods of analyzing quantitative data. The main conclusions of the study are that in the short and medium term, the role of Latin America in Europe's energy security is small due to geographical remoteness and the lack of technological opportunities for Latin American countries to increase production capacities in the shortest possible time to increase energy production. For this reason, in the near future, the countries of the Latin American region will not be able to significantly replace Russian fuel in the European market of traditional energy resources. However, European companies are interested in the potential of the Latin American region in the field of "green" energy. In the long term, cooperation between the EU and Latin America in this area seems to be the most mutually beneficial for both sides. A special contribution of the author to the research of the topic is the study of the conjuncture of the EU fuel and energy complex in the context of energy imports. The novelty of the research lies in the fact that for the first time in the domestic literature the question of the prospects of the Latin American energy market as a substitute for the Russian energy market for the European one is raised.

Scenarios for Diversification of EU Natural Gas Supplies from Algeria

The Russian-Ukrainian war contributed to significant turbulence in the European energy market. The existing energy relations with Russia have been almost destroyed. The European Union found itself in a difficult situation and quickly began to look for ways to replace Russian gas. Naturally, Algeria was found on the list of countries of special European interests. Rich oil and gas potential and proximity to the European energy market were the main reasons to strengthen energy relations with Algeria after February 24, 2022. This article examines how Algeria’s gas policy towards the EU has changed since the start of the Russian-Ukrainian war and the main scenarios for its implementation in the future. The following hypotheses are adopted in the article: after the Russian invasion of Ukraine, Algeria and the EU changed their approach to gas policy by trying to resuscitate long-forgotten projects, such as the Trans-Saharan gas pipeline (NIGAL) or Galsi, and to increase imports. The chances of building the Galsi pipeline are high. The main tools of Algeria’s gas policy are political and economic instruments. Algeria’s gas policy has a significant impact on the EU’s energy security. The main research methods used are synthesis and analysis, comparison, statistical analysis, and forecasting approach.

The TANDEM Euratom project: Context, objectives and workplan

The TANDEM project is a European initiative funded under the EURATOM program. The project started on September 2022 and has a duration of 36 months. TANDEM stands for Small Modular ReacTor for a European sAfe aNd Decarbonized Energy Mix.Small Modular Reactors (SMRs) can be hybridized with other energy sources, storage systems and energy conversion applications to provide electricity, heat and hydrogen. Hybrid energy systems have the potential to strongly contribute to the energy decarbonization targeting carbon-neutrality in Europe by 2050. However, the integration of nuclear reactors, particularly SMRs, in hybrid energy systems, is a new R&D topic to be investigated. In this context, the TANDEM project aims to develop assessments and tools to facilitate the safe and efficient integration of SMRs into low-carbon hybrid energy systems. An open-source “TANDEM” model library of hybrid system components will be developed in Modelica language which, by coupling, will extend the capabilities of existing tools implemented in the project. The project proposes to specifically address the safety issues of SMRs related to their integration into hybrid energy systems, involving specific interactions between SMRs and the rest of the hybrid systems; new initiating events may have to be considered in the safety approach.TANDEM will study two hybrid systems covering the main trends of the European energy policy and market evolution at 2035's horizon: a district heating network and power supply in a large urban area, and an energy hub serving energy conversion systems, including hydrogen production; the energy hub is inspired from a harbor-like infrastructure. TANDEM will provide assessments on SMR safety, hybrid system operationality and techno-economics. Societal considerations will also be encased by analyzing European citizen engagement in SMR technology safety.The work will result in technical, economic and societal recommendations and policy briefs on the safety of SMRs and their integration into hybrid energy systems for industry, R&D teams, Technical Safety Organizations, regulators, Non-Governmental Organizations and policy makers. The TANDEM consortium will involve 17 partners from 8 European countries (Belgium, Czech Republic, Finland, France, Germany, Italy, Spain, Ukraine).The TANDEM project has the ambition to become a pioneer initiative in Europe in gathering efforts and expertise around development of SMRs integration into hybrid energy systems. The dissemination and the exploitation of the project outcomes as well as the proposed Education & Training activities shall serve as a basis for a number of new R&D and innovation projects addressing the safety issues of SMRs and their integration into hybrid energy systems.

ВЛИЯНИЕ САНКЦИЙ НА ЕВРОПЕЙСКИЙ ЭНЕРГЕТИЧЕСКИЙ РЫНОК И ЭКОНОМИКУ РОССИИ

This article reviews the views of prominent Russian economic figures on the imposed economic sanctions, as well as their foreign colleagues. An analysis is made of the benefits of sanctions against Russia for the main participants in the “Western coalition”. Using the example of the natural gas market, the inappropriateness of blocking energy supplies from Russia is shown. The financial losses from the unfinished Nord Stream 2 project are presented, and how instability in interstate relations between Russia and the EU affected the price of natural gas on the European energy market is considered. In conclusion, conclusions are presented and prospects for economic development for Russia under conditions of sanctions pressure are outlined.

Energy Potential of Urban Green Waste and the Possibility of Its Pelletization

Due to ongoing changes in the European energy market, there is currently a need to find new and additional uses for waste materials. Horticultural waste, which has not yet been fully recognized, offers a relatively wide potential in this area. Although the properties of these wastes are not ideal for combustion, they can be used as a solid biofuel. The pellets that are produced, however, may have useful properties, either energetic or environmental, and are valuable when utilized in boilers. In this study, six examples of typical input raw materials were selected, analysed, and subsequently pelletized. The experimental results provided an overview of the physio-chemical properties of the evaluated samples. Specifically, the moisture content (9.2–27.8%), bulk density (131.4–242.8 kg·m−3 wt), ash content (3.0–28.0%), lower calorific value (11.3–16.2 MJ·kg−1), and major and minor elements, were evaluated. The pelletization process and resultant pellet characteristics, such as durability (96.3–98.8%), moisture content (7.5–11.5%), and dimensions, were also evaluated. In the statistical evaluation, significant differences were found between individual samples. In particular, both the branches and the mixture of perennial plants met the industry standard limits, showing that they are of sufficient quality. On the contrary, the sample of fallen leaves was particularly problematic with regard to a number of parameters (moisture, ash content, and calorific value). The overview of the analyses performed expands the current state of knowledge on the potential to use selected types of horticultural waste in the field of energy and for the production of shaped biofuels.

European equity markets volatility spillover: Destabilizing energy risk is the new normal

AbstractWhile energy risk is increasingly recognized as a systemic risk, there is limited comprehensive analysis of the risk propagation in regional contexts. In this study, we examine oil and natural gas price changes and shocks in relation to equity market returns and volatility for 24 European Economic Area (EEA) countries. In addition to traditional panel regressions, we also deploy the Diebold‐Yilmaz (2014) spillover index for a closed network analysis. We differentiate in the cross‐section across the core EU block, PIIGS countries, EU enlargement countries joining after 2004, and other non‐EU countries, to provide insights into the ongoing debates on the European energy market stability. While we find evidence of the manifestation of energy risk throughout the sample period, we find that until 2019 the primary sources of volatility spillover in the EEA economic network arose from economic or political uncertainty. Energy risks, measured by large crude oil and natural gas price shocks also significantly contributed to equity market volatility, with increasing volatility risk arising from natural gas, a green labelled energy source after 2019. Last, we show that CEEC equity markets are more sensitive to oil and natural gas price shocks when domestic currencies depreciate against the Euro.

High-resolution mapping of land use changes in Norwegian hydropower systems

The Transition towards sustainable energy systems requires phasing out fossil fuels. Hydropower is a key source of renewable energy and can contribute to reaching a 100 % low carbon-based energy system. Uncertainty remains about land cover changes due to hydropower deployment with a widespread perception of major losses in the land from inundation and associated habitat loss in the surrounding areas due to improved access and recreational use. Norway has a dominant share of hydropower generation in Europe with knowledge gaps in the associated land cover changes. We conducted one of the first retrospective analyses of land use change associated with hydropower development in Norway during the last 80 years. Using remote sensing data, we performed object-based analysis on sets of aerial images representing land systems before and after hydropower construction. We quantified the change in the land due to development of 40 hydropower schemes representing 24 % of the total Norwegian installed capacity. Our analysis revealed that 88 % of analyzed reservoirs were developed by regulating or expanding natural lakes. Vegetation growth was observed in the surrounding regions of 22 of 40 schemes, while urbanization was limited to only 0.9 % of the total surrounding area, primarily located within 400 m from reservoir's borders. Our findings provide insights into interaction between land use change and hydropower development in Norway. Our work provides a basis for further assessment of relevant environmental impacts and can be used to quantify expected land changes due to an increase in Norway's hydropower with integration into the European energy market.

The economic potential of enhanced method of anaerobic fermentation with green ammonia production for European energy market

This scientific paper provides an analysis of the current state of biogas production and potential for improvement through optimizing biogas production and diversifying production. The analysis uses data from open sources and reports, such as EBA’s Statistical Report and analytical reports on market and digestate analysis. The authors present a comparison of electricity costs and biogas plant distribution in Europe, confirming that the higher the cost of electricity, the more widespread the introduction of biogas plants as an alternative energy source. The paper also discusses the potential of green ammonia production during anaerobic digestion, which can increase the efficiency and sustainability of biogas production technologies. The innovative technology of ammonia production from livestock waste during anaerobic treatment reduces the amount of water needed for dilution and transforms dissolved ammonia, which is toxic for anaerobic fermentation, into a useful final product. The paper highlights the potential for economically attractive approaches that use existing infrastructure and can contribute to energy independence and sustainability. The authors conclude that optimization in terms of more optimal process conditions and diversification of production approaches can increase the sustainability of biogas production technologies and ensure broader use.

EU HEADING FOR NET ZERO: REDEFINING THE EUROPEAN ENERGY MARKET

The European energy market plays a crucial role in the economic growth, security and sustainability of the EU as well as the European region. The imperative to combat climate change and achieve net-zero emissions has set the EU on a transformative path towards redefining its energy market. As the demand for energy continues to rise, it is vital to look into the challenges the European energy market faces, in order to analyze what positively af- fects the EU energy transition, and design the set of recommendations that foster competition, innovation, and environmental responsibility. This arti- cle outlines a comprehensive strategy to redefine and enhance the European energy market by addressing key challenges and leveraging opportunities for a sustainable and resilient energy future. While the EU has a significant opportunity to achieve the energy transition by 2050, sustained action is required from policymakers, industries, and citizens to address the chal- lenges. Strengthening the European energy market through robust policies, innovation, and inclusive engagement can lead to a sustainable, climate- neutral future, presenting not only an environmental imperative but also an opportunity for economic growth, job creation, and improved energy secu- rity. Collective efforts and steadfast commitment can propel the European energy market toward influencing global actions for a more sustainable and resilient planet for future generations. However, the transition is not with- out its challenges. Overcoming dependencies on fossil fuels, integrating intermittent renewable energy into the grid, securing adequate funding, and addressing social and economic impacts, especially for communities reli- ant on fossil fuel industries, require immediate attention. Technological ad- vancements, investments in clean energy technologies, and research and development efforts are vital for a successful transition. Global collabo- ration remains fundamental in addressing climate change effectively. The EU's continued engagement with other nations and the establishment of a cohesive global framework for combating climate change are crucial. Har- monizing regulatory and policy frameworks, implementing carbon pricing mechanisms, and promoting cross-border cooperation are essential for fos- tering a conducive environment for renewable energy investments and inno- vation. Additionally, engaging citizens and stakeholders through awareness campaigns, educational initiatives, and involving communities in renew- able energy projects are key components for successful energy transition.

Volatility and Spillover Effects between Central–Eastern European Stock Markets and Energy Markets: An Emphasis on Crisis Periods

The objective of this paper is to study the spillover effects between energy markets and stock markets with emphasis on the significant crisis periods of the last 15 years, the period of the financial crisis that officially started in 2008, the pandemic period, generically called COVID-19, and the recent confrontation in Eastern Europe. Understanding the volatility transmission mechanisms between the energy and capital markets and also from the energy markets back and the spillover effects that result is very important. We use multivariate GARCH models to highlight a spillover effect between energy commodities and equities in Central and Eastern Europe. The highest correlations are recorded for CEE stock markets with electricity and Brent, and the lowest for CEE stock markets with gas. The biggest symmetric shocks between energy and CEE stock markets occurred during the COVID-19 pandemic. In contrast, the biggest asymmetric shocks occurred during the financial crisis (for gas) and the Ukrainian invasion (for Brent). We also find that volatility is more sensitive to its lagged values in the marketplace than it is to new information. The impact and contagion of shocks caused by the oil market are greater than those of other energy markets.

ESTONIAN ENERGY POLICY IN THE CONTEXT OF MODERN CHALLENGES

In today's political reality, the resilience and sustainability of Estonia's development depends on its ability to respond adequately to existing challenges and threats. Given the historical peculiarities of the development of the energy sector and the resulting dependence on Russian energy resources, energy independence is a key issue of national security. This raises the issue of developing the basic principles of energy policy, including the creation of new, potentially profitable gas and energy markets and the development of renewable energy. In developing its national energy sector, Estonia is taking into account EU initiatives aimed at overcoming dependence on Russian energy resources and transitioning to climate-neutral production. The subject of the study is the content and peculiarities of the Estonian energy policy formation. The purpose of the paper is to identify key areas and mechanisms for the implementation of Estonia's energy policy in the context of today's challenges. Research methodology: systematic approach, methods of analysis and generalization. The content of Estonia's energy policy is set out in a number of important documents, including the Strategy Estonia 2035 and the National Energy Development Plan until 2030. The key areas of energy policy implementation are synchronization with the power grid of continental Europe, participation in the formation of the European energy and gas market, renewable energy, development of cross-border cooperation in the energy sector, fulfillment of obligations under the European Green Deal to reduce CO2 emissions, and the role of shale production in Ida-Viru County. The issue of energy sustainability of Estonia and other countries in the Baltic-Finnish region is a key issue on the EU energy agenda. This is evidenced by the active public diplomacy of EU leaders to intensify cross-border cooperation of energy sector stakeholders in order to completely abandon Russian energy resources under the REPowerEU plan and to intensify the transition to climate-neutral production in the context of the European Green Deal. The EU's main energy security initiative is the Baltic Energy Market Interconnection Plan (BEMIP), which implements various projects. Estonia uses both economic and political mechanisms to implement its energy policy. Economic mechanisms include active participation in strategic projects (Baltic Synchronization, Balticconnector), 75% of which are financed by the Connecting Europe Facility. The potential of cross-border cooperation, especially with the countries of the Baltic-Finnish region, aimed at intensifying the development of renewable energy and regional energy and gas markets, is actively used. Estonian government officials pay considerable attention to the formation of dialogue and cooperation among energy sector stakeholders, which is evidenced by their participation in various special events and declaration of their intentions for mutually beneficial cooperation in the energy sector. Research findings: the key areas of implementation of the Estonian energy policy are synchronization with the EU energy system, participation in the formation of regional gas and energy markets, and intensification of energy production from renewable sources. The implementation of Estonia's energy policy is correlated with EU initiatives and is carried out through a number of economic and political mechanisms.

Accounting of installation and use of solar power plants

Through the using of solar power plants, a business entity reduces operating costs by using solar electricity for its own needs and generates income by selling this electricity on the market. The construction of solar power plants in Ukraine is an important factor in the development of the national energy market and a tool for integration into the European renewable energy market. The article examines the role and importance of using solar electricity as one of the types of alternative sources of electricity. The authors investigate the peculiarities of accounting for the initial cost of solar power plants depending on the method of its receipt by an enterprise. In particular, the author presents the correspondence of accounting accounts, which are drawn up upon receipt of a solar power plant when it is purchased for cash, in case of its construction by the enterprise using the economic and contractor methods. The procedure for recognition and valuation of solar power plants as an object of fixed assets is substantiated. It is noted that the costs of forming the initial cost of a solar power plant should be accounted for by using the relevant subaccounts of account 15 “Capital Investments”. The article also presents the results of the impact of establishing the useful life and depreciation method of a solar power plant on the financial results before corporate income tax.