Baltic states to reopen talks on new nuclear plant

By bne IntelliNews December 1, 2014

bne IntelliNews -

 

The Baltic states are set to reopen talks on building a new nuclear plant, a Lithuanian official said on November 28. The success or failure of the effort will say much about the level of unity the percieved threat of Russian energy dependence can instill in the three bickering neighbours.

Lithuanian parliamentary speaker Loreta Grauziniene told media that the Visaginas nuclear power plant project would soon progress to the level of political talks between Baltic leaders. The resurrection of discussion over the €6.5bn nuclear facility for the region comes amidst growing concern over energy security in Estonia, Lithuania and Latvia, with imports from Russia covering a sizable chunk of the region's power needs.

“On a company level, discussions with Estonia and Latvia continued all the time. Now that discussion should move to a political level since, as far as technical things are concerned, everything has been considered and now we will open political discussions with Latvia and Estonia," Grauziniene told local radio, according to BNS. "Today, with Latvia’s parliamentary speaker coming on a visit, we will talk about energy."

Pushed by Lithuania's previous centre-right government, the Visaginas project was dropped after a non-binding referendum was called simultaneously with the October 2012 general election, with 63% voting against. That incoming centre-left administration led by Prime Minister Algirdas Butkevicius quashed the project after taking office.

However, with the tension with Russia rising since the start of the year, the government officially resurrected the project in April. Grauziniene said public opinion in Lithuania will need to be consulted once more.

Consensus

The project will also provide a good test of just how far the percieved Russian threat can promote Baltic cooperation. The trio of states  have argued for years over numerous pan-regional energy project. The were cut off from European energy networks because of their Soviet history, and remain highly dependent on Russian supplies of oil, gas and power. 

However, the size and cost of a nuclear plant means Lithuania has no choice but to build consensus. “If we did [the project] together with Latvia and Estonia, or with some other partner, it would definitely be cost-effective, based on the latest calculations and estimates,” Grauziniene insisted.

A contract on Visaginas was signed with Hitachi in 2011. The Japanese corporation, which would supply the reactor and hold a 20% stake in the project, is reported to be in talks with Lithuania, which  holds 38%, Estonia (22%) and Latvia (20%) on resurrecting Visaginas. Lithuania's energy ministry signed a memorandum of understanding with Hitachi late in July to set up an interim project company. Latvia and Estonia have been invited to join.

The project envisages a 1,350 MW unit built at Visaginas on Lithuania's north-eastern border with Latvia and Belarus. It would sit alongside the former Ignalina nuclear power plant that supplied about 70% of Lithuania's electricity before it was shut down under an agreement ahead of the country's EU entry. Lithuania currently imports over 60% of the power it consumes.  

Electricity consumption in the three Baltic countries is expected to reach 29-33bn kWh/year by 2020, and without a large new power plant only two thirds of this will be covered by its own capacity, according to an October update on the new plant by the World Nuclear Association.

Lithuania’s neighbours Russia and Belarus have been moving on with their own respective nuclear power plants projects, in the Kaliningrad region and the town of Ostrovets, respectively. Lithuania has been challenging these projects on the grounds that their environmental impact assessments do not meet UN standards.

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