VILNIUS - Lithuania picked Hitachi Ltd. over Westinghouse Electric Corp. to build a new nuclear power plant in the nation amid European concerns over the safety of atomic energy, reports Bloomberg. The government plans to sign an agreement with Hitachi this year and to complete construction by the end of 2020, Deputy Energy Minister Romas Svedas said at a news conference in Vilnius on July 14.
Lithuania closed its last nuclear reactor, the Soviet-era Ignalina plant, in 2009 to comply with European Union rules. Shutting the reactor, which had been generating 70 percent of the nation’s electricity, forced Lithuania to become a net importer of power and caused electricity prices to rise, according to the World Nuclear Association.
“We picked the most economically attractive proposal,” Svedas said.
A March 11 earthquake and tsunami at Japan’s Fukushima plant caused the world’s worst nuclear catastrophe since Chernobyl, prompting other European nations to reevaluate or reject atomic power.
German Chancellor Angela Merkel ordered in May the closure of all of the nation’s nuclear plants by 2022. Italians voted in June against building new reactors. The European Union has called for safety tests to evaluate whether reactors can withstand natural as well as man-made disasters at its 143 nuclear power plants.
Other nations, like Lithuania, continue to support nuclear energy, viewing it as a way to cut carbon-dioxide emissions and reduce dependence on Russian natural gas and oil. The Czech Republic is going ahead with its project to build two new reactors at the Temelin power plant near the Austrian border.
Lithuania Prime Minister Andrius Kubilius said last month the country’s nuclear project will help the region establish energy independence.
Hitachi, which was selected as the “strategic investor,” is joined in the project by GE-Hitachi Nuclear Energy, a U.S.- based venture with General Electric Co. The GE-Hitachi venture will provide support, equipment, supply-chain consulting and fuel, said Michael Tetuan, a spokesman for the unit.
Lithuania may have won this “attractive proposal” from Hitachi to build the power plant because of Germany’s decision to give up atomic energy, says DnB Nord Bank economist Jekaterina Rojaka. This is expected to be the biggest investment project in the Baltic region in two decades.
Germany unexpectedly boosted Lithuania’s leverage in the bidding process to build the planned Visaginas plant when Merkel decided to shut more than 25 percent of the country’s atomic capacity after the earthquake in Japan triggered a meltdown at a plant in Fukushima.
“That’s good timing for Lithuania,” Rojaka said by phone from Vilnius. “Germany is exiting nuclear energy, which opens more opportunities for Lithuania to pick an investor and also increases the interest of investors in the Lithuanian project.”
The Baltic region needs to diversify its energy resources after energy costs soared because of an increasing dependence on Russian energy sources. Lithuania imports almost 50 percent of its power. Russia’s OAO Gazprom supplies all of its gas.
Lithuania picked Hitachi’s bid over Westinghouse Electric Corp. because it was “the most-economically attractive proposal,” Deputy Energy Minister Romas Svedas said. He declined to disclose preliminary costs of the investment.
The project is seen as “commercially viable and attractive because of decisions in Germany” which is turning the country into a power importer, Svedas told the newspaper Verslo Zinios in an interview on July 15.
“For Lithuania and the whole region it is important to have independent capacity to generate electricity,” Kubilius said on June 1. “We are choosing a path that we believe is the best for Lithuania and for the whole region.”
Hitachi offered its ABWR (advanced boiling-water reactor) technology with a proposed capacity of 1,300 megawatts in output at the projected plant in Visaginas, about 160 kilometers (100 miles) northeast of the capital.
The Lithuanian government has said in the past that the strategic investor could be offered as much as a 51 percent stake in the new plant. Any agreement would require parliament’s approval. Lithuania, which is building the facility along with neighbors Latvia, Estonia and Poland, is continuing talks on the size of each stake with all parties in the project, Svedas said.
Hitachi and Westinghouse, a subsidiary of Toshiba Corp., bid for the project after Korea Electric Power Corp. withdrew its proposal.