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October 12, 2018 www.intellinews.com I Page 3
Belarus becomes a regional powerhouse
Compared to its neighbours Belarus is a major producer of power. When Astravets comes online Belarus’s installed capacity will rise to 10.8GW compared to Lithuania’s 3.6GW, Estonia’s 2.7GW and Latvia’s 2.6GW. Belarus will be generating
a surplus and will be in a position to export enough cheap nuclear power to meet most of the demand in all three Baltic states. For example, while Lithuania has 3.6GW of installed capacity and access to another 1.3GW via the LitPol and Nordbalt interconnection links with Poland
and Northern Europe, its average consumption is 1.1GW, rising to a peak of 2.3GW in winter, according to Eurostat.
With so much excess generating capacity, there
is no danger that Russia, using Belarus as a tool, can put itself in a position to turn off the lights in Vilnius so the Astravets power plant can’t be used as an overt foreign policy tool in the same way as Gazprom’s gas supplies to Kyiv have been used as a club on several occasions in the past. However, the cheap power Astravets produces will upset the economics of the power sector and have led Vilnius to fiercely resist the construction of As- travets.
Power in Lithuania is expensive, making it the most vulnerable of the countries in the region. After it closed its only nuclear power plant at Ignalina in 2010, consumers experienced a 33.3% increase in electricity rates, and of its 3.6GW of generating capacity 2GW burn gas that has to be imported, which is expensive.
To break its dependence on Russia, the govern- ment invested some half a billion dollars into
the Klaipeda floating liquefied natural gas (LNG) terminal launched in 2014. The trouble is that LNG costs some 30% more than piped gas and is not competitive with the other sources of power available to Lithuania. Consequently the Klaipeda terminal is currently working at 20% of its capaci- ty and the government has been toying with forced purchase orders of LNG to keep it functioning. If
a new supply of even cheaper Belarusian power
comes onto the market then Klaipeda will be even more unprofitable.
Currently electricity prices in the region are so low burning gas to generate power costs more than importing power from Lithuania’s neighbours. In 2017 Lithuania imported 80% of its power, mostly from Sweden and Poland, largely ignoring its do- mestic utilities.
From this perspective an addition 2.4 GW of Bela- rusian power on the regional market would drive electricity prices down even further. Lithuania’s utilities would be priced out of the market and useless in pure economic terms.
All three Baltic states have been trying to diversify away from traditional fossil fuels to renewables to improve their security and indeed Lithuania al- ready produced 178MW from wind power in 2016. But the other two Baltic states have progressed much further and already reduced their exposure to risks from a boost in Belarusian power genera- tion or Russian games with gas supplies.
In Latvia hydropower production leapt by 73.2% in 2016 and wind power was up a healthy 17.1%. Over the last ten years the share of gas fuelled power has fallen by 5% to reach just 23.4% in 2017, with the share of renewables overtaking gas to make up 32.9%. Fuel wood makes up another third.