At the end of the last year the Centre for Geopolitical Studies organised an international conference „Nuclear Energy Triangle: Regional and Global Challenges of Nuclear Power“. The focus during the conference was given to the Lithuanian, Russian and Belarusian NPP projects, their economic feasibility and geopolitical implications.
Each of the above projects has weaknesses and certain geopolitical significance. Kaliningrad Region does not need energy capacities guaranteed by the Baltic NPP. Without any doubt this is a project related to energy export with a clear geo-economic (geopolitical) logic. Russia seeks to dominate the Baltic Region’s electricity market and make Lithuania a connecting point toward Poland, Latvia and maybe Scandinavia (electricity connection between Kaliningrad and Germany is also considered). The Kremlin cannot guarantee this and wants to be the first to build the NPP.
After an advisory referendum held in Lithuania in October 2012, and formation of a new Government there is little hope that Visaginas NPP project would be pursued. The Conservative Party put a lot of effort in this project, yet the results of the referendum were determined by weak agitation campaign and non-public proceedings (including commercial secret). The economic feasibility of Visaginas NPP is really doubtful, especially without reaching an agreement with Latvia and Estonia and after withdrawal of Poland which played double game. But geopolitical significance of the idea is obvious: realisation of the project could facilitate establishment of a geo-economic block of the Baltic States which could better resist the monopoly of Russian energy. Here the price of the question is: is it worth overpaying energy security? It seems that there is nothing wrong in the Russian electricity, but is there a guarantee that its price will not increase? Besides, reliability of supply is also under question: the experience of shutting down the Druzhba pipeline for „repairs“ and Gazprom‘s policy is really worrying.
The economic logic of Ostrovets NPP (Belarus) also raises concern. Although it is considered that NPP will be oriented toward domestic market, yet, a) who will buy this amount of energy in the region where it’ll be built? b) maybe it is better to modernise the current thermal capacity (having in mind small gas price paid by Belarus)? The project seems to have different implications: for Moscow it is one more electric power distribution system in the region, whereas for A.Lukashenka it means USD 9 billion which could be used both for construction of NPP and for the economic development.
The Baltic NPP has the best start-up opportunities. According to one of the conference experts, the reason is very simple: Russians do not count billions when they speak about geo-economical (geopolitical) plans. The Ostrovets NPP could also be considered, but everything will depend on the relationship between Russia and Belarus and of course on Russia‘s decision. I don’t want to be a “bad prophet” but so far Moscow takes advantage of the situation.
When speaking about the alternative energy sources experts highlighted that each sector (oil, gas, nuclear and alternative energy) seeks influence and wants to discredit the competitor or demonstrate superiority. After the nuclear disaster in Fukushima (Japan), positions of nuclear energy have dropped significantly but this doesn‘t mean that nuclear energy has no future. Without any doubt nuclear power plants face multiple problems, but there is a possibility to build a brand new reactor in the near future which will be more effective and more secure. Meanwhile wind and solar energy producers are still getting state subsidies and hope to become more competitive. But why should an ordinary tax-payer feed the ones who are not able to compete in the market independently?
Shale is „breathing into the back“ of the above two sectors. If gas generation technology developments are successful and the U.S initiate shale gas exports to the international market, this will bear strategically important economic and geopolitical consequences. If this is the case, what will the Arabs and especially Russia do?
Finally, we could also expect the emergence of an absolutely new energy source. Maybe it has already been discovered, but trans-national oil and gas companies, and states rich with natural resources simply hinder transition to a new energy source...
Vadim Volovoj, expert of the Centre for Geopolitical Studies, Doctor in Political Sciences
13.02.2013
