Swedes, Czechs 'interested' in Lithuanian nuclear plant

Sep 7, 2006, 15:59 GMT

Vilnius - Swedish and Czech energy companies are interested in cooperating over the building of a new nuclear power plant in Lithuania, Prime Minister Gediminas Kirkilas said Thursday.

Czech state energy provider CEZ and Swedish firm Eon Nordic are interested in providing equipment for the new plant, known as Ignalina-3, and investing in it, Kirkilas told Ziniu Radijas radio.

'Today I already believe in the success of the project,' the Lithuanian prime minister said.

Kirkilas met the CEO of Czech state-run energy company CEZ, Martin Roman, in Vilnius on Wednesday. The two men discussed 'cooperation in the whole energy sector,' including Ignalina-3, according to CEZ spokesman Ladislav Kriz.

But the discussions were 'really only a first step,' Kriz said, adding, 'We can't say if we are interested in Ignalina or not.' CEZ currently runs two Soviet-era nuclear plants in the Czech Republic.

Eon Nordic CEO Lars Frithiof also visited Lithuania this week and discussed the Ignalina-3 project, according to spokesman Stieg Claesson. 'We have said that if they want a partner we are prepared to take part,' Claesson said.

However, Eon is awaiting the outcome of the study currently being conducted by the energy companies of Lithuania, Latvia and Estonia, Claesson said, adding, 'It is up to them.'

The Ignalina-3 project foresees the construction of a new nuclear power plant at the eastern Lithuanian site of Ignalina, currently home to two Soviet-era nuclear reactors.

Lithuania closed down the Ignalina-1 reactor, which is built on the pattern of the Chernobyl reactor, in 2004. According to Lithuania's EU accession treaty, it has to close the Ignalina-2 reactor by 2009 - with a serious impact on its energy supplies.

'The most efficient scenario ... (would be) the continued operation of Ignalina 2 until the end of its technical life in 2017. In principle, this option has been foreclosed by the EU accession agreement,' Dr Holger Rogner, an economics expert at the IAEA, said.

In February 2006 the prime ministers of the three Baltic states signed a memorandum foreseeing the joint construction of a replacement power plant at Ignalina. Their national power companies subsequently signed up to the plan.

Energy security is an issue of concern across Central and Eastern Europe. Much of the region's power and heat are supplied from or fuelled by Russia - a situation which has caused unease since the Russian-Ukrainian gas crisis of January 2006.

Recently, Lithuanian and Swedish energy firms signed a deal to assess the possibility of constructing a subsea cable linking their power grids. The possibility of opening a power cable from Lithuania to Poland has also been discussed.

At the same time, Estonian energy company Eesti Energia is involved in building a sub-sea cable to link its network to Finland - thus bringing the Baltics into the EU's net for the first time.

'The Baltic states are an energy island. (Connecting them) to the European grids is fundamental for the creation of a single energy market in Europe, and to guarantee security of supply,' said Ferran Taradellas, spokesman for EU Energy Commissioner Andris Piebalgs.

Any investment from the Czech and Swedish companies would be a major boost for the Ignalina-3 project, which is seen as a cornerstone of national energy security. Kirkilas recently invited Poland to join the project, though no decision has yet been reached.

CEZ has expanded rapidly in recent years, snapping up power plants and distribution firms across Central and Eastern Europe. In May, the company paid a combined 588 million euro (752 million dollars) for two power plants in Poland and one in Bulgaria.

Eon Nordic, meanwhile, is the Swedish-based subsidiary of German energy titan Eon, the world's largest investor-owned energy firm.