Shake-up coming for energy industry

VILNIUS - In an important step toward Lithuanian energy independence, Klaipeda City Municipality has granted a business permit for the construction of a new waste-to-energy plant to be built in the city, set for completion by 2013, at an investment cost of 140 million euros. The first of its kind for the Baltic region, Finland’s energy giant Fortum has secured a 70 million euro corporate loan from the Nordic Investment Bank (NIB) to get the project underway.
“The NIB loan will contribute to introducing state-of-the-art, efficient and environment-friendly heat and power production in Lithuania,” said Johnny Akerholm, CEO of NIB.

The plant will also potentially open up marketplace opportunities within the country. “It’s a new possibility for waste and fuel markets,” announced vice-president of Fortum’s Baltic sector, Jaakko Vaha-Piikkio. “Until now, almost all waste was deposited in landfills, and there was almost no recycling in the Baltics. For industries which make waste, we offer a competitive alternative for depositing it.”

Rather than ending up in a landfill, the waste transported to the energy plant will end up incinerated and utilized as fuel. Fortum has claimed emissions from the plant will go towards lowering Greenhouse gases, but there has still been a wave of outcry from Klaipeda residents worried about the plants environmental impact, which Klaipeda Municipality has dismissed as unfounded.

“We hope [the plant] will destroy the myth in society about uncontrolled pollution produced by waste-to-energy plants, and show a clear economic benefit, as the combustion of waste will provide cheaper heat and electricity to the city,” said a spokesperson for the Klaipeda City Municipality.
The Lithuanian Ministry of Energy has said the development of the new plant could mean a step in the right direction against what the country’s President Dalia Grybauskaite described last year as Lithuania being “in energy isolation and dependant on a single source.”

“The use of waste for energy is seen as one of the measures to reaching energy independence due to decreasing consumption of imported fossil fuel,” adviser to the minister of energy, Kestutis Jauniskis, told The Baltic Times. “The draft national energy independence strategy foresees building waste-to-energy plants in the largest cities of Lithuania.”
The proposals for an alternative energy source couldn’t come at a better time for Lithuania, with lone gas-energy supplier, Russian monolith Gazprom, being accused of unfair pricing and heaving political pressure onto the Lithuanian government.
“At this moment, it is difficult to make detailed projections for [future household] energy prices,” said Jauniskis. “In any case, the idea of using waste instead of fossil energy resources, which are rapidly getting more and more expensive, is related not just with the target of energy independence, but also with the need to reduce energy prices for consumers.”

The Lithuanian government prepares to face the courts against Gazprom, as a bitter stalemate continues between the two forces. Lithuanian Prime Minister Andrius Kubilius recently announced the government was battling to have gas prices cut by 15 percent by the company, to which Gazprom responded with a counter-lawsuit which claimed Lithuania had not complied with a current agreement holding between them.
The Ministry of Energy confirmed the new waste-to-energy plant will indeed mean not having to rely so heavily on energy from Gazprom, as did Lithuania’s EIA.

“The district heat produced at the plant will replace natural gas-based heat production capacity. The power plant in Klaipeda will supply about 40 percent of the required annual heat amount for Klaipeda city consumers. Electricity will be supplied to the joint Lithuanian energy network,” announced a statement from Lithuania’s Environmental Impact Assessment (EIA) group. 
As to whether Gazprom had any opinion on the plans for the new plant to be built in Klaipeda, media officials from the company failed to respond to questions from The Baltic Times.

Other than energy, the new plant will also offer employment opportunities in the region. A statement released by Fortum claimed, “A new team of employees who will be ready to operate the most modern plant in Lithuania safely and reliably should be fully assembled by the end of 2012.”

“The building of this plant will encourage bigger municipalities, such as Kaunas and Vilnius, to build such plants,” said senior member of the Ministry of Environment, Migle Masaityte. “There had previously been proposals for a similar plant in Vilnius, but the local minister in charge had opted for a negative decision, probably as it was such a new activity in Lithuania,” she said.

Klaipeda locals have pressed the city’s municipality and the Ministry of Environment with complaints to find out why the country’s capital would deny such an opportunity, but Klaipeda would accept it. “It happened because the municipality in Klaipeda was more interested in it than in Vilnius. In Vilnius, it was the developer standing alone,” said Masaityte.
The first pieces of equipment to be used in constructing the plant’s “waste and biofuel boilers,” should arrive as soon as May or June this year, the Fortum Web site announced last month.

In an unfortunate human aspect to the corporate developments, in order to begin building on the plant’s proposed site, occupants living in what is now Klaipeda’s ‘Free Economic Zone,’ on rural Lypkiai street, have been evicted from their premises. “Fortum Klaipeda, in compliance with the partnership treaty between the Lithuanian Ministry of Economy, Klaipeda City Municipality and JSC ‘Fortum Heat Lietuva’ have transferred the outstanding balance in the amount of 4.5 million litas (1.3 million euros) to be used for compensation for land and property taken to be used for society’s needs,” chimed a statement from the company.

According to Klaipeda newspaper Vakaru Ekspresas, “25 people live in the village, but only six are located inside the property to be taken for public use.”

Plans for the evictions should be finalized during this year.