Latvia and the Baltic “Energy Island”: Catalyzing Integration via the REPowerEU Plan

Abstract

This paper examines how the EU’s REPowerEU plan transformed the Baltic states’ long-standing objective of energy decoupling from Russia into executable policy, using Latvia as a focal case. It asks how supranational intervention altered the constraints facing small states under acute geopolitical pressure. Drawing on policy analysis and recent scholarship, the study traces the interaction between EU-level instruments and national strategic assets. It argues that REPowerEU did not simply support integration, but restructured the domestic cost-benefit calculus by combining financial transfers, legal authority, and political justification, thereby enabling accelerated grid synchronisation and market reorientation. The findings show that Latvia has emerged as a regional security infrastructure provider, particularly through gas storage, while remaining constrained in renewable expansion by administrative limits and local resistance. The paper concludes that decoupling was not a market outcome, but a politically mediated shift in state capacity.