Baltic states will build new NPP in Lithuania

Ministers from the three Baltic States will continue to discuss the possibility of implementing such a joint project, which may cost billions.

Algirdas Btkevičius

“The Visaginas NPP issue has not been put aside. This year, the energy minister will meet with the energy ministers of Latvia and Estonia to discuss this,” Lithuanian Prime Minister Algirdas Butkeviius said at his annual press conference in Vilnius on Monday.

“You must have heard that, when a session of the Baltic Council of Ministers was held, the premier of Estonia said that he wanted to see final economic calculations. We provided all information and answered all the questions, and we hope to receive the answers in the near future,” he said.

Taavi Rõivas

Estonian Prime Minister Taavi Rõivas said in Vilnius in December that Tallinn was not refusing to take part in a NPP project, but it first wanted to make sure that this project would be economically feasible.

Lithuania’s current government, which came to power immediately after the 2012 referendum, has repeatedly given new dates when decisions concerning the Visaginas NPP were supposed to be adopted, but no such decisions have been made.

In 2011, Lithuania selected Japan’s Hitachi as a strategic investor in the NPP project.

Lithuanian Energy Ministry had started to calculate whether Lithuania would be able to build its new nuclear power plant with the help of Hitachi alone.

Nuclear Power in Lithuania

• Lithuania closed its last nuclear reactor, which had been generating 70% of its electricity, at the end of 2009, due to EU pressure.
• Electricity was a major export until the closure of Lithuania’s nuclear plant.
• A new nuclear plant is planned to be built by GE Hitachi. It involves vendor equity as well as the other Baltic states. While a 2012 referendum introduced some uncertainty to this, a 2014 multi-party agreement affirms it. However, it requires cooperation from other Baltic states, Poland and/or EU.
• A policy objective is to minimise energy dependence on Russia.

Lithuania has a population of about 3.5 million. In 2004, the last year of having two reactors online, the country produced 13.9 billion kWh out of a total 19.3 billion kWh. In 2007, electricity production was 14.0 billion kWh gross, 70% (9.8 billion kWh) from the only operating nuclear reactor, and 17% (2.4 billion kWh) from gas. Net exports were 1.4 billion kWh. Per capita electricity consumption in 2007 was about 3400 kWh. In 2011 electricity production was 4.82 TWh, including 2.67 TWh from gas, 1.06 TWh hydro and 0.73 TWh solar/wind, with 6.8 TWh net imports mostly from Russia (via Belarus).

According to Nortech Inc, to the end of 2014, almost 90% of the country’s gas comes from Russia, at a significantly higher price than paid by other EU countries. Following closure of its second nuclear power reactor at the end of 2009, over 60% of Lithuania’s electricity is imported. The country, along with its two Baltic neighbours is oriented to the West and keen to increase its independence from Russia, which accounts for 80% of its energy imports.

A new energy policy in 2012 was cast around the Visaginas nuclear plant (details below), a new LNG terminal, and rebuilding the power grid. Energy reliance on Russia is to drop from 80% in 2012 to 55% by 2016 and 35% in 2020. Gas imports from Russia halved when the new floating LNG terminal started commercial deliveries in January 2015, the first contract being with Norway’s Statoil, for about one-fifth of the country’s needs (0.54 billion m³/yr over five years). From the end of 2015 the new LNG terminal is expected to supply 4 billion cubic metres per year, almost 80% of the three Baltic states’ needs.

Due to the high cost of imported gas, 300 MWe of gas-fired generating plant is due to be closed in 2014 and 600 MWe more in 2015. This will leave a 455 MWe CCGT unit and two reserve units of 300 MWe each from 2016, with expanded transmission capacity (see below).

Electricity consumption in the three Baltic countries is expected to reach 29-33 billion kWh/yr by 2020, and without a large new power plant only two thirds of this will be covered by remaining capacity. The Baltic countries have been connected to Scandinavia and Europe by a single power transmission interconnection since 2007, the Estonian–Finnish “Estlink-1” of 350 MWe, undersea. Integration into the EU energy market is a strategic priority for all three countries as well as one of the goals of the Baltic Energy Market Interconnection Plan (BEMIP), signed by eight states of the Baltic region and the European Commission. The main goal of the BEMIP is to create a unified market of the Baltic Sea region. The plan also embraces the establishment of power interconnections with Poland “LitPol Link” (1000 MWe), with Sweden “NordBalt” (700 MWe) and with Finland “Estlink-2” (650 MWe, under construction). The new Visaginas power plant constitutes an integral part of the BEMIP. Apart from about 60 km of Lithuania’s border with Poland, the three Baltic states are bordered by Russia and Belarus.

Electricity imports from the EU are forecast to double by 2016, as the NordBalt power connection with Sweden and the LitPol interconnector with Poland enter into operation. However, imports will fall after the Visaginas nuclear plant begins operation. Electricity imports from Russia were projected to cease completely by 2016.