Deal on new atomic plant could be signed in February, ownership structure still unclear

  • 2007-01-17
  • By Gary Peach

KEEP 'EM CRANKIN': Many Lithuanian lawmakers want the government to lobby Brussels for a several-year waver on the 2009 closure of Ignalina's turbines to reduce the country's dependence on imported power.

RIGA - The four commercial companies taking part in building a new atomic power plant in Lithuania agreed to set up an expert group to assess how to best involve Poland in the project, which could cost up to 4 billion euros and require eight years to complete. In Lithuania, meanwhile, calls for extending the life of Ignalina Nuclear Power Plant, which is scheduled to shut down in 2009, resurfaced again, with politicians asking the government to search for ways to convince Brussels to keep the plant's one working unit alive until 2015.

Speaking to reporters on Jan. 10, Lithuanian Prime Minister Gediminas Kirkilas said that the heads of government of the four countries 's the three Baltic states and Poland 's could sign a formal agreement for the project in February.
"I expect the prime ministers of the four countries to adopt such a decision in February," Kirkilas said.
The statement came one day after the CEOs of the four commercial parties to the project 's Eesti Energia, Latvenergo, Lietuvos Energija and Polskie Sieci Elektroenergetyczne 's met in Warsaw to discuss details on chartering a joint venture for the nuclear plant.

The sides failed to reach an agreement, and instead announced they would create an expert group that would pave the way for Poland to partake in the ambitious project.

Originally the three Baltic states in the beginning of 2006 agreed to build a new nuclear plant on their own; in December, however, Polish Prime Minister Jaroslaw Kaczynski declared Poland's interest in investing in the power project "on an equal basis."
But while Lithuania greeted Polish participation enthusiastically, Estonia and Latvia were lukewarm, if not skeptical.
"If we are inviting a fourth or fifth participant, then we should see that this participant will bring added value," Latvian Foreign Minister Artis Pabriks said in an interview.

If Poland comes on board, said Pabriks, then the Baltics would expect the Polish side to connect the region's grids with power cables and help provide fuel for the new atomic plant.
Other ways Poland could bring benefit to the project, Pabriks added, would be helping to increase capacity at the new plant, and to complete construction ahead of schedule, or by 2015.

In Estonia, officials from Eesti Energia (Estonian Energy) said in a statement that "PSE's interest to participate in the project is definitely different from that of the Baltic states, who take the new nuclear plant as the key in ensuring supply security."
"Estonian Energy finds that the Baltic states should have a leading role in project development," the company said.
Estonian Energy believes that the ownership structure should ultimately depend upon how much output capacity each country keeps for itself 's and that cannot be determined until the specific parameters of the reactor, or reactors, are established.
Estonia, which was arguably the most skeptical toward Polish participation, seemed to be more accommodating after the talks in Warsaw.

"After today's [Jan. 9] meeting we have knowledge of the Polish energy company and a more clear perception of added value involved if Poland is to participate in the project," said Sandi Liive, chairman of Estonian Energy's management board.
Liive said it was crucial that, in order for Polish participation to work, there needs to be a guarantee that the Lithuanian and Polish grids will be connected.

To complicate matters, at the start of 2007 Lithuanian officials, including Kirkilas, began hinting that Lithuania should have a larger stake in the project, which drew criticism from the other three countries.
Baltic partners expressed a willingness to consider the request, though it would appear Lithuanian negotiators faced an uphill battle.

"It's not just enough to say [the nuclear power plant] will be on Lithuanian territory," said Pabriks. "We want to hear qualified arguments," he said, adding that Lithuanians shouldn't forget that the new plant will be located near Latvia's second largest city, Daugavpils.

Lithuania continued to be an enthusiastic supporter of Poland. "We consider Polskie Sieci Elektroenergetyczne to be a strong partner, and we support its joining the project," said Rymantas Juozaitis, general director of Lietuvos Energija (Lithuanian Energy).
The expert group will consist of eight members 's two from each company 's and will be chaired by Marius Grinevicius, head of Lithuanian Energy's nuclear energy department.

Meanwhile, the Seimas (Lithuania's parliament), passed a resolution requiring the government to carry out a study of the country's energy needs to 2015 and to ensure sufficient energy output and supplies to meet domestic demand. If necessary, the government is expected to devise arguments to justify an extension of the Ignalina plant after it planned closure in December 2009.

Lithuanians fear a surge of dependency on eastern power supplies after losing their nuclear power capability in 2009 and before the new plant comes online around 2015.