Russia 101111 Basic Political Developments
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Winner takes all?http://www.europeanvoice.com/article/imported/winner-takes-all-/69399.aspx By Gary Peach 11.11.2010 / 04:44 CET Lithuania, Belarus and Russia are competing to be the Baltic's energy power.
All three know that a costly power surplus would result if three power plants were eventually built in the region. And so each understands that the quicker their project gets under way, the likelier they are to succeed. Geographically, Russia and Belarus are pulling a flanking manoeuvre around Lithuania. Russia is building its plant in the Kaliningrad exclave, just 15 kilometres from Lithuania's western border, while Belarus has broken ground roughly the same distance from Lithuania's eastern border. Understandably, Lithuanians, who lament the EU-enforced closure of their Chernobyl-type reactor at Ignalina last December, are nervous, and they are demanding more environmental impact studies from both sides. More importantly, the Lithuanians are balking at any attempts to court them. So when Vladimir Putin, Russia's prime minister, and Alyaksandr Lukashenka, Belarus's president, invited Lithuania to join their respective projects, Andrius Kubilius, Lithuania's prime minister, was adamant: his country, together with Estonia, Latvia and possibly Poland, will build its own plant in Visaginas, on the same site as the old Ignalina facility. Vilnius hopes to select a strategic investor by the end of this year. Construction could begin in 2012. In the meantime, Russia is hoping to woo a Western partner – and thereby to discourage interest in Lithuania's plant. For Russia's state-controlled nuclear industry, this is an unprecedented privatisation. Rosatom, the country's integrated nuclear corporation, claims there is immense interest in the 49% stake available in the Kaliningrad plant; officials from Italy's Enel (probably prodded by Putin's friend in Rome, Silvio Berlusconi) have already visited the site. Still, it will be a tough sell for the Russians. They are promoting the plant's export potential to an energy-deficit region, but Kaliningrad is isolated and Moscow has no guarantees that it will be able to export output via Lithuania or Poland. Other proposed routes – undersea cables to countries such as Germany and Sweden – are long shots. Therein lies the irony of Russia's project: to be successful, Moscow will have to woo the very country it is trying to marginalise. Kubilius is well aware of this. He and Putin discussed their projects in March. “I asked him [Putin] ‘Where is the market for the electricity that will be produced in Kaliningrad?' He didn't answer,” Kubilius told European Voice in July. “I said that we're building our station for our market and our needs. Then I asked him again about his market, and [he] decided to switch the topic.” Russia, of course, could shrug off Lithuania and cut a deal with Poland, which is looking to build its first reactor by 2022 as the country weans itself off coal. But this presents its own problems. No grid links the Russian exclave to Poland, so infrastructure outlays would be daunting. “My general conclusion on the other projects is very simple: if we are successful with our project, I don't know if those other ones will be implemented,” Kubilius said. On a fast track in KaliningradFor now, Moscow is trying to gain the upper hand by fast-tracking construction of the Kaliningrad facility, the Baltic Nuclear Power Plant. And the pace is indeed unprecedented. The dual-reactor facility was announced in April 2008 and work began in February. That is less than two years from declaration to construction, far less than the worldwide norm of about five years. To do that, Rosatom has all but ignored the residents of Kaliningrad, who are broadly against the idea of an atomic plant in their largely unspoiled, albeit underdeveloped, province. The company wants to meet a 2016 deadline for the first of the plant's two 1,150 megawatt reactors to be up and running, and apparently nothing will stop it. Lithuania does not have the luxury of circumventing formalities as it seeks to regain its lost nuclear might. (Prior to Ignalina's shutdown, the only country in the world more dependent on nuclear energy was France.) All EU norms and regulations will have to be observed, particularly since Lithuania, which is still isolated from the European grid, is asking the EU to fund a grid connection with Poland and an underwater power cable to Sweden. Together with Estonia and Latvia, and with support from a majority of Lithuanians, who are decidedly pro-nuclear, Vilnius is assured that its plant will have its market. If it finds an investor, it will aim for a 2018 deadline.
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