Estonia proclaims pan-Baltic nuclear plant project is dead

By bne IntelliNews May 23, 2013

bne -

The plan to build a pan-Baltic nuclear power plant at Visaginas in Lithuania is not economically feasible, and now looks certain to be officially dropped, Estonian power company Eesti Energia said on May 22. The claim keeps the merry-go-round between the three Baltic states on proposed regional projects spinning.

"Eesti Energia has received confirmation that at this point the Visaginas project is not economically feasible," claimed Andres Tropp, head of the nuclear power project for the company, according to Baltic Business News. The official was speaking following his return from a meeting held in Lithuania last week. The Estonian power company is now reportedly confident that the project, which has been under preparation for seven years, will be terminated.

The Estonian Ministry of Economic Affairs has until now insisted that work on the Lithuanian nuclear power project is still progressing. However, it has shown signs recently of a desire to back out. Estonian Prime Minister Andrus Ansip insisted on May 3 that his country will not take part in the project unless Lithuania were to carry out a referendum and win approval from the population.

"We are naturally interested in proceeding with the Visaginas project, but unfortunately a referendum has been held in Lithuania and two thirds of the people said a clear 'no'," said Ansip, according to Leta. "The Estonian government and Eesti Energia won't go to Lithuania to develop activities that are against the will of the Lithuanian people. First the Lithuanians have to come to an understanding whether they want it or not."

The idea of a Lithuanian nuclear power plant has been doing the rounds for years, but has regularly fallen victim to successive changes of government. Heavily pushed by Lithuania's previous centre-right government as a strategic project to increase independence from Russian energy imports, a non-binding referendum on the €5bn-7bn project was attached to the election ticket which saw Prime Minister Algirdas Butkevicius voted into power in October. The project was promptly suspended when he took office two months later.

While neighbours Latvia and Estonia were somewhat taken aback by the aggressive stance of the former Lithuanian government towards Russia - which exports power to the region due to its lack of capacity or connection to European power grids - they expressed frustration that all discussion of a shared nuclear facility simply ground to a halt under Butkevicius.

However, the Lithuanian PM reopened the discussion in April, when he said Vilnius is ready to restart talks over a plan to build a pan-Baltic nuclear power plant with its neighbors, as well as Japanese investor Hitachi, albeit only if the cost can be reduced. With the three tiny Baltic states apparently destined to bicker forever over every single suggested shared energy project - a regional LNG terminal has been on pause for years - it now appears Lithuania and Estonia have swapped positions on Visaginas.

Earlier this month, Lithuanian business paper Verslo zinnias suggested that if Estonia were to drop out of the Visaginas project, Vilnius would turn back to Poland - another regular in the endless discussions on improving Baltic energy security - to fill the void. "Estonians are demonstrating an increasingly cautious approach [to Visaginas] and have not guaranteed that they will take part in its realization," the newspaper wrote. "For that reason, Lithuanian politicians have been increasingly active in looking in the direction of Poland. They are trying to convince Poland to return to the nuclear power project."

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