Russia plans nuclear plant for Kaliningrad exclave

Monday, April 28, 2008

VILNIUS - An announcement by Moscow that it intended to build two nuclear reactors in the Kaliningrad region triggered dismay and alarm in neighboring Lithuania, which is struggling to get plans for its own atomic power plant off the ground.

Sergey Kiriyenko, head of the Rosatom nuclear energy agency, announced on April 16 that Russia would build two reactors with a combined 2,300 megawatts output in the region of Kaliningrad. He signed a framework agreement together with Kaliningrad Governor Georgy Boos.

The project’s tentative deadline is 2015 even though it was not included in Russia’s original list of nuclear project sites, which suggests there was a great deal of political maneuvering with the project.

Lithuanian government officials and analysts expressed a mixture of surprise and fright at the news – fright since Russia’s project could render Vilnius’ own project less profitable if not altogether superfluous.

Prime Minister Gediminas Kirkilas dismissed the news.

“This isn’t the first time such information has appeared,” he said in a radio interview, adding that Belarus was making similar announcements. “I think that all these PR moves only show that Russia doesn’t like that Lithuania, Latvia, Estonia and Poland are about to build an atomic power station.”

In his words, “This is a signal that we should take as the following: ‘You don’t have to build anything. You can rely on us – we will build [nuclear reactors] in Kaliningrad and Belarus.’ To me this is obvious.”

Analysts said Moscow’s intention boiled down to an attempt to subvert Lithuania’s plans for a new, 3,200 megawatt station in Ignalina that will replace the outgoing reactor. By erecting a 5 billion euro station in Kaliningrad that will have a 2,300 megawatt output capacity – far more output than the region of 1 million residents needs – Russia wants to discourage Lithuania’s sovereign partners from participating in the Ignalina project, which is way behind schedule and may not come online until 2020.

The original deadline for the project, originally announced in the beginning of 2006, was 2015. But numerous delays have led analysts to say that project won’t be up and running until much latter, though Lithuanian officials are sticking to the original deadline.

“If this strategic decision was really made in Russia, I think, that this is a serious checkmate for Lithuania,” Ceslovas Laurina-vicius, a political scientist, said of Kiriyenko’s announcement. “Such a little region certainly doesn’t need two nuclear power plants.”

Laurinavicius did not rule out the possibility that the announcement was a bluff. If not, then Lithuania has just one hope: cooperating with European Union institutions to the maximum, he said.
Jurgis Vilemas, chairman of Lietuvos Energija’s management board, said that, from a strategic standpoint, the Kaliningrad region, wedged between larger Western nations, is quite convenient for a nuclear plant.
After Lithuania shuts down the remaining reactor in Ignalina at the end of 2009 – an event that seems increasingly unavoidable – the Baltic region will become a net importer of electricity. What’s more, Estonia is poised to lose its shale oil-fired power plants in 2015, a event that will exacerbate the region’s energy dependence.

Each country is reacting differently to the inevitable. Latvia has announced intentions to build two new power plants, one fired on natural gas and the other on coal, while Estonia has hinted at building its own nuclear reactor.

Poland’s own energy needs have it mulling over whether it should order a reactor.

Russia’s region of Kaliningrad is heavily dependent on energy imports, and efforts to start up a new gas-fired power station, TETs-2, have encountered countless delays. Over the years there have been numerous suggestions to build a nuclear reactor, and last week’s announcement seemed to finalize the uncertainty. According to reports, the land has already been selected: near the center of the region some 120 kilometers east of Kaliningrad.

Russia is well aware of the looming energy difficulties in the Baltic Sea region post-Ignalina, and according to industry leaders and analysts, Moscow wants to capitalize on the opportunity. The Baltics, after all, are still hooked up to the same grid as Russia.

“The nuclear power plant is vital for that part of Europe in terms of market and energy security,” commented Kiriyenko.

Tatyana Sinitsyna, a political commentator for RIA Novosti, wrote, “The Kaliningrad plant will provide electricity not only to the exclave, but also to its close and distant neighbors.

According to experts, the plant’s two reactors will enable Russia to diversify its foreign trade by selling not only commodities but also high-tech nuclear generated electricity.”

She concluded: “In short, Russia plans to make a strong geopolitical move, and it is probably this that worries Europe most of all.”

Perhaps for this reason Russia will try to attract a foreign investor in the project, offering a 49 percent stake in the project. Given the plant’s immense export potential, there is reason to believe investors may be interested.

To sweeten the deal, Kiriyenko also said that foreign companies will supply some 40 – 50 percent of the equipment for the plant.

Similarly Russia’s AtomStroi-Export is cooperating with Germany’s Siemens and U.S.-based Westinghouse on a new nuclear power plant in Bulgaria.

Not all Lithuanians reacted negatively to the news. Birute Versaite, head of Parliament’s economic committee, said, “It’s normal that they’re trying to solve this question [of supply]. I can’t say how serious this is, but I think it is positive.”

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