In Nuclear Gripe

By Daniil Rozanov

The main recent event, connected with the project of construction of new Visaginas NPP in Lithuania, can be considered that the Commission of Lithuanian Parliament on Nuclear Energy unexpectedly hasn’t approved a bill on nuclear power plant.

It’s worth to remind, that Lithuanian Sejm on May 17th in the first reading adopted a set of bills on Visaginas NPP construction. However, as it is obvious from further events, the Parliamentary Committee hasn’t adopted the bills. If the Parliament adopts the bills till the end of June, then on June 28th Lithuanians plan to sign a concession agreement with Japanese corporation Hitachi on the biggest energy project of Lithuania ever of the total cost of 16-18 billion LTL. In May the Government of Lithuania also approved a set of strategically important energy projects, which also includes the Visaginas NPP project.

We may assume that considering oncoming regular Parliamentary elections, the parties decided to make the issue of the NPP construction one of the elements of pre-election program. Obviously that is why the President of Lithuania Dalia Grybauskaite, who constantly calls this project as strategically important one together with the Prime Minister and all authoritative officials, invited for the meeting the leaders of Parliamentary opposition before oncoming voting on Visaginas NPP construction.

Traditionally Lithuanian political elite, also represented by the first person of the country, searches outside reasons for that the decisions on VNPP this or that way skid at different levels.

The President considers that pressure is still exerted on Lithuanian policy, political life through energy sphere, and a part of money of energy business is used for political corruption.

“I think that Lithuania could remain a nuclear country, especially when we see, as some neighbor states do their utmost, for NPP never to occur in Lithuania, as two constructions of other NPPs appeared in the near of Lithuanian border. There are attempts, for Lithuania to remain dependent from one energy supplier,” – said the President during the interview to the weekly Veidas.

Sergey Muravjov the Head of Lithuanian Division of the  International Governmental Organization also pointed at non-transparency of the Visaginas NPP project. According to him, such big strategic projects should be especially transparent, however yet transparency lacks in the Visaginas NPP project.

According to the information available, the strategic investor Hitachi shall possess 20% of shares of VNPP, Lithuania – 38%, Latvia – 20%, and Estonia – 22%. If Poland takes part in the project, then proportion shall change. In the end of April Parliamentary opposition members met with the representatives of Japanese company Hitachi and asked them to answer the questions regarding construction of the new nuclear power plant. According to MPs they haven’t definite answers on all the questions. Let’s remind that in the end of 2011 Poland declared its withdrawal from the project and there is no certainty about its participation.

On May 29th 2012 the Energy Minister of Lithuania Arvydas Sekmokas stated that Poland waits for political decisions in Lithuania in order to join the project of construction of the new nuclear power plant in Visaginas.

“In reality, Poland expects for Lithuania to give this project concession and thus eventually to get back to talks. Poland suspended its participation but it didn’t escape, they wait for the decisions of Lithuanian Parliament. Poland is ready, it is interested, as in 2016 standards in environmental protection shall be more severe. Maybe Poland hopes for, and we support, for these standards to be not that severe. But still there is lack of energy in North-East of Poland. Poland addresses to Lithuania, in order supply energy from Lithuania”, - said Sekmokas during the interview for Polish-language radio station of Lithuania Znad Wilii.

As for other neighbors of Lithuania, for example Latvia, then there they started to undertake some steps to take part in the project of nuclear power plant construction in Visaginas. The Cabinet of Ministers of Latvia approved the decision to establish an enterprise 100% belonging to the company “Latvenergo” to control investments into VNPP construction.

And in Estonia in the middle of May the Head of Nuclear Energy Division of the group of companies Eesti Energia Andres Tropp declared: “Estonia hasn’t still taken any financial liabilities regarding the project of a nuclear power plant construction in Visaginas ".

According to the estimations of specialists, investment of Estonia into NPP construction comprises approximately 1 billion Euro. As Andres Tropp noted, it is yet too early to say, whether this amount is reasonable, as the talks still go on.

Lithuania seems not really succeeding to convince neighbors in its nuclear plans, the same as there is no unanimity of public opinion in Lithuania itself on the Visaginas NPP project.

According to the last poll of the weekly Veidas, a half of citizens of big cities of Lithuania don’t approve the construction of the new nuclear power plant, only one fifth supports this idea, and the same number of citizens doesn’t have clear opinion on this issue. However, almost one third of questioned people would purchase the shares of the power plant.
An economist, lecturer of Vilnius University Raimondas Kuodis is generous with critics towards the plans of the politicians on nuclear power plant construction. In the air of Žinių Radijаs he related ambitions of the Government in this case with selfish desire to immortalize themselves and erect themselves a monument:

“For many years, Lithuania was the country with nuclear energy. And it was mentioned in strategies, that we shouldn’t shut down the old NPP, as it is the same as to state that we need to build a new one. Old NPPs generally have already reimbursed the expenses at its capital, and usually they are pretty safe. For example, in case of Germans – it was absolutely nonsense to refuse of nuclear energy, but maybe, it is at the same time wise not to build a new one as it is extremely expensive ".

Except for that, also a movement for referendum on the new NPP construction in Visaginas gains power, despite non-approval of this idea by the ruling (the patriarch of conservatives Vytautas Landsbergis declared, that “conservatives should clearly say, that referendums are supported by investments from the places where there are “free millions”, and they are assigned to prevent energy dependence of Lithuania”).

Except for that, one shouldn’t forget also about “nuclear” processes of neighbors. Thus works at the Blatic NPP in Kaliningrad enclave (West Russia) go on, despite that there is only one investor from Russia known. This is the Russian Federation.

After a recent visit to Lithuania neighboring Belarus of the President of Russia Vladimir Putin, in course of which they discussed also the issue of Belarusian NPP construction in Ostrovets, near Belarusian-Lithuanian border, it was decided that the general contract on Belarusian NPP construction should be signed on June 18-19th this year.

Let’s remind that the intergovernmental treaty on NPP construction in Belarus was signed in Minsk on March 15th 2011. It anticipates that the construction of Belarusian NPP shall be performed by Russia at “erady-to-operate”.

The analysis of Russian analytical estimations and calculations proves that Belarus itself shall purchase power from Belarusian NPP during 20 years under the price, that is much higher the one specified by the experts. Even in the last calculations 0,125 USD for kWt-hour they didn’t consider the growth of credit from 6.5 to 10 billion USD. Remote hidden expenses are also not considered, which shall be detailed below. In Finland for example, already only by construction of NPP “Olkiluoto-3” the price of yet unfinished object has increased for 2.5 billion Euro (we should suggest that this is not a final number yet).

Consideration of all expenses shall increase the price of kWt-hour at BelNPP in 2-3 times – up to 0.30 USD per kWt-hour. To compare: the base price of European power exchange – 0.077 USD per kWt-hour, and Russian energy we buy now for 0.045 USD per kWt-hour. According to the results of recent tender on NPP construction in Turkey, the announced power price from Russia produced energy blocks comprised 0.208 USD per kWt-hour (!). This number reflects a real cost of nuclear energy, by this without consideration of the cost of social infrastructure of the NPP.

The given data shows that construction and operation of a nuclear power plant in Belarus are economically insolvent. Moreover, the NPP shall blow deadly the economy of the country (up to 1 billion USD annually of overpayment for “cheap” energy and plus 0.5 billion – payment of interests for 10 billion USD credit). Thus, overpayment for electric power, from “own” NPP, for 20 years shall exceed the forecasted indicatives for 20-30 billion USD.

And Lithuania yet finds itself in some kind of nuclear gripe of Russia – from one side Baltic NPP, from the other – Belarusian in Ostrovets. The only thing, that is noted by all independent experts is that neither in Lithuania, nor Kaliningrad enclave nor in Belarus there is complete clarity on all the issues – investors, the course of the project and the main definite prospects of the projects.

NOTE ”The opinion of the European Commission on the Visaginas nuclear power plant project is quite favorable. Thus the Commission has opened doors for the strategic project of Lithuania, that shall be able to assure energy independence of the country and integration of Baltic states into European energy market”, - said the European Commission’s member A. Šemeta”.

According to him, the view of the EC was presented to the Government of Lithuania.

Energy Minister of Lithuania Arvydas Sekmokas in the beginning of May said that the conclusion of the EC on the new NPP is extremely important.

In the end of April he stated that positive conclusions of the EC on the project of the new NPP construction shall allow to reduce planned billions loans. The Prime Minister Andrius Kubilius earlier has said that the loans price would also depend on Lithuania’s ratings.

The construction of the new nuclear power plant shall demand the loan of 50-70% of all suggested funds – of about 17 million LTL, Lithuania shall cover almost 6 billion LTL, 3-4 LTL of which Visaginas nuclear power plant shall have to loan.