So will it be 2015, 2020, or perhaps even 2025?

  • 2008-02-27
  • By TBT staff

RIGA - When the three Baltic prime ministers an-nounced in February 2006 that they had agreed to join forces to build a new nuclear power plant by 2015, there was a spike in optimism and cheer about regional cooperation and how together the three countries could build a secure energy future.
Two years later, the situation is starkly different. Talks on building the plant have crawled, stalled and even stopped completely. Part of the reason lies with Lithuania's decision to bring Poland on board; another was homegrown infighting over how to create a company that will be charged with gathering finance for Lithuania's part in the project.

The long and short is that no one can say for sure when the plant will be up and running, much less when construction will start (though this could happen in 2009 theoretically).
Lithuanian officials have so far refused to reconsider the original deadline of 2015. It is, after all, an election year.
The project's foreign partners, by contrast, have had no qualms about speaking frankly about the snail's pace progress.

During a recent visit to Vilnius, an official from Areva, the French-German nuclear engineering corporation, hinted that Lithuanian leaders needed a reality check as far as the project was concerned.
"One can dream about anything," the official was quoted by RIA-Novosti as saying. "But given the lack of an agreement between the partners, it is unrealistic to build a new nuclear power plant by 2015," he added.
"It is only to talk optimistically about 2020," the official said.
Latvia, which is hoping to procure about 400 megawatts of output from the new atomic plant, has fast-tracked the construction of two new power stations (see story on next page) since its leaders have realized that a new Ignalina plant won't come online anytime soon.

"We do not expect the project to be completed before 2025, even though Lithuania recently spoke about 2015-17," Ugis Sarma, head of the energy department at Latvia's Economy Ministry, was quoted as saying.
"Two years have passed in talks. In the first year the work and initial research were performed successfully, but after the fourth partner everything started from scratch after Poland joined," explained Sarma, adding that in the past six months Lithuania was dealing with its internal problems.
Specifically, Lithuanian politicians had to hammer out details of a deal according to which NDX Energija, owner of the western half of the country's grid, could own a chunk of the so-called "national investor company" that will raise finance and eventually run the plant.

In Estonia, President Toomas Henrik Ilves said in an interview with Lithuanian Television that the project has hit stumbling blocks but that Estonia was still interested in the project.
"At present the most rational decision would be to participate in the Ignalina project, but if it isn't progressing then we can't sit around and wait," Ilves said. 
He reiterated that Eesti Energia (Estonian Energy) is the arbiter about whether Estonia should participate. "If [the company] considers that the project is worth it, then Estonia will support it. If it decides that the project is a bad one, then we'll have to reconsider the deal," the president said.

And the Lithuanians have yet to even encounter the most challenging aspects about nuclear power plants: building them. The Reuters news agency reported last week that Finland's fifth nuclear power plant is two years behind schedule and 50 percent over budget 's and this is a country known for its efficiency in both business and governance.
There are currently some 440 nuclear reactors operating around the world, and with a new slew of orders expected, costs are going to soar. A few countries are likely to lose their appetite for cheap nuclear energy due to its enormous start-up costs and eventually may cancel plans.

"We can expect some nuclear reactors to be built but not the numbers that are predicted," Frank Barnaby, a consultant at the Oxford Research Group, was quoted as saying in a recent article.
The Baltics, of course, are a special case and are dead-set on having a new reactor as a guarantee against fickle Russia, which has shown that it is an unreliable supplier.
But whether the Balts and Poles will pay $2 billion for 1,000 megawatts of output or, say, $2.5 or even $3 billion remains to be seen.

Though no final decision has been made, Lithuania hopes to build two reactors with a total output of 3,200 's 3,400 megawatts. This could prove a huge financial challenge for the plants owners.
The 1,300 megawatt reactor currently operating in Lithuania is slated to close on Dec. 31, 2009 as part of the country's pre-accession agreement with the European Union.
Another reactor of the same size closed on Dec. 31, 2004.
Lithuanian officials are hoping to convince the European Commission to extend the life of the second reactor, but it is unclear whether Brussels will want to establish the precedent of leniency on the issue, particularly given the sheer size of EU taxpayer money spent to decommission Ignalina.
In 2001-2003, the EU granted 828 million litas (240 million euros) for preparatory work to close the first unit. It then approved 1.1 billion litas in assistance for the 2004-2006 period and another 2.8 billion litas in 2007-2013.