VILNIUS - After years of talks and delays, Lithuania and Poland have finally signed a bilateral deal to build a high-voltage network that will help integrate the Baltics in the EU's energy-sharing system. The document was signed on Dec. 8, just one day after a verbal agreement was struck between the Baltic states to include Poland in the construction of a new nuclear power plant that would cost up to 4 billion euros and be ready by 2015.
Poland has expressed a desire to own 25 percent of the proposed plant. (See story on Page 5.)
Both agreements cap what was arguably the busiest week ever in the Baltics' energy industry, which began on Dec. 4 when Estonia and Finland launched the undersea power cable, Estlink, amid pomp and circumstance.
"We have been speaking about an electricity grid for a decade, and now we will start constructing it," President Valdas Adamkus said.
Together the production and delivery agreements reached on Dec. 8 in Vilnius aim to radically change the disposition of forces on the regional energy market in the next decade, primarily by reducing the Baltics' dependence on Russian electricity, which is expected to spike after Lithuania's existing atomic power plant shuts down in 2009.
The Polish-Lithuanian energy link, dubbed a "power bridge," will cost some 304 million euros, of which the next EU budget (2007 - 2013) will finance some 142 million, according to reports, including funds earmarked for the closure of Ignalina Nuclear Power Plant.
The agreement was signed by the chief executives of Lietuvos Energija and Polskie Sieci Elektroenergetyczne, Poland's grid operator, which will be responsible for construction of the project.
"The Polish side is inclined to do everything very fast, so we think that the electricity line will be built by 2012," said Rymantas Juozaitis, head of the Lithuanian utility.
For years Lithuania has been lobbying its historic neighbor to sign on the deal, but the previous government administration of Poland was lukewarm to the idea and instead preferred to focus its energies on other infrastructure projects. Poland's new conservative administration, however, sees things differently.
"My visit has produced concrete results in two important projects: the energy link and Poland's participation in the nuclear power plant construction," Polish Prime Minister Jaroslaw Kaczynski told reporters in Vilnius.
Juozaitis said that the link's ultimate price tag may turn out less than previously estimated due to a change in the route, which according to an initial plan would span Alytus in Lithuania and Elk in Poland. He also said a joint venture would be established in the second quarter of 2007.
"This is a big move forward and the beginning of actual works, which has revived decade-long negotiations. The importance of this interconnection is constantly increasing. This is also confirmed by the European Commission, which has enlisted the project into the revised Quick Start program," he said.
The energy bridge calls for the construction of 500+ kilometer high-voltage electricity transmission lines in both countries, as well as a 1,000 megawatt converter in Lithuania, according to Lietuvos Energija.
Now that Estlink is up and running, the power bridge will fill the "missing link" in the so-called Baltic power ring that connects the Baltic states with the Nordic and East European energy markets.
In the future, even more links may be built between the Baltics and other EU members. Most recently, Lithuanian and Swedish lawmakers discussed the possibility of building an undersea power cable connecting their two countries' networks.
Lietuvos Energija and Svenska Kraftnat, Sweden's utility, have pledged to study the possibility of connecting their grids via a 350 kilometer cable across the bottom of the Baltic Sea. Preliminary analysis has shown that such a link would cost some 400 million euros. (The 105-kilometer Estlink cost 110 million euros.) The two countries' energy networks could be interconnected as early as 2010.
Juozaitis said earlier this year that the link with Sweden would be of utmost importance for Lithuania once the second reactor of Ignalina's nuclear plant is shut down in 2009.