Looking for alternative energy supplies

VILNIUS - The energy supply issue, which is so important to Lithuania and the other two Baltic states, was the central issue at the 12th Baltic Development Forum held in Vilnius on June 1-2. European Commission President Jose Manuel Barroso, who arrived to both the forum and the simultaneously held Baltic Sea States Summit, stated after his meeting with Lithuanian President Dalia Grybauskaite that linking Lithuania to the rest of Europe, in terms of energy supplies, will be a top priority for the EU, and now 275 million euros of EU money are allocated for co-financing the construction of energy links between the Baltics and the rest of the EU.

“Energy, the sea, innovation, and competitiveness - these are the key words that best describe the peculiarities and challenges of the Baltic Sea region and define directions for close cooperation. When I say ‘cooperation’ I mean joint work by governments, businesses and public-private partnerships. The three Baltic States are isolated in the field of energy. The creation of a Baltic energy market is crucial for ending this isolation. We have already started the process by opening our energy market to competition and investment. We have also received EU support for strategic infrastructure projects. Lithuania’s first power pool was launched on Jan. 1, 2010. We are preparing to build electricity bridges to Poland and Sweden, and we plan to construct a new nuclear power plant. As there is no functioning natural gas market in Lithuania, gas prices exceed those in Germany by 38 percent. We are taking steps to change the situation. They include the EU 3rd Energy Package, a new gas pipeline to connect Lithuania with Poland, and a liquefied gas terminal in Klaipeda. In addition to resolute steps in conventional energy sectors, we must also accelerate the development of alternative energy sources,” Grybauskaite said, opening the 12th Baltic Development Forum in Vilnius’ Litexpo center, which was decorated with huge posters promoting the gas pipeline which would connect Lithuania and Poland, a liquefied gas terminal and the construction of the new nuclear plant in Lithuania.

In her short briefing after her speech, she emphasized that “any alternative is good for Lithuania” and the main problem for her country now is “the sole source of energy supplies.” “We have an electricity pool but we have no gas pool yet,” Grybauskaite said, adding that shale gas would be a good alternative to the Russian gas supplies as well.
At the moment NordBalt is the soundest project, breaking the isolation of the Baltics from the rest of EU. The project started to move forward when EU co-financing was promised by Brussels. In July 2009, Sweden, Lithuania and Latvia signed a memorandum of understanding regarding the power interconnection between Lithuania and Sweden, which was given the NordBalt name. This project’s goal is the interconnection of common electricity markets of the Baltic states and Nordic countries. The EU approved 175 million euros of financial support for the power link: 131 million euros to the construction of a power link between Sweden and Lithuania (the total cost of the Sweden-Lithuania link will be 552 million euros) and 44 million euros to the construction of domestic lines in Latvia to ensure power flows from Sweden to all three Baltic states. This interconnection between Baltic and Nordic power systems is expected to be finished by 2015. As early as the end of 2015, the Lithuania-Poland link should interconnect the power systems of the Baltics and the Continental European Network. The latter project also started to move forward only after a promise of co-financing from the EU.

While Barroso promised in Vilnius to investigate the possibility to support the Lithuania-Poland gas pipeline project, he was more reluctant to promise such support for the construction of the new nuclear plant in Lithuania, although he made no anti-nuclear comments. “The European Commission does not support any specific sort of energy source,” he said.
“In the nearest time, we’ll diminish the usage of natural gas by 70 percent due to alternative green energy,” Vilnius’ Mayor Vilius Navickas said at the forum, speaking about plans to use biofuels in the Lithuanian capital city.
“We get 35 percent from renewable sources. The biggest polluter and energy spender is the housing sector,” Latvian Prime Minister Valdis Dombrovskis said, pointing out the necessity to increase the energy-efficiency of the housing sector in Latvia and the rest of the Baltics.