Page 50 - BNE_magazine_07_2020

50 I Eastern Europe bne July 2020
undamaged by the earthquake that was only reported in the local paper based on the second-hand reports of two witnesses; nor were there any reports from the nearby village of Ostrovets, which is only 6km away, according to Rosatom.
Seismic studies were started in the
area in 1965 and there have been earthquakes, but of minor strength, according to the records. Moreover, Lithuania didn't factor in earthquake risk when building its own Interim Spent Fuel Storage Facility on the Belarusian border 24km away from the reported epicentre of the Gudogai earthquake.
But because of lingering doubts over
the safety of the plant, in October 2019 Lithuania’s president called for the EU to block the completion of the plant in the name of Lithuania’s national interest and to preserve Belarus’ sovereignty,
Rosatom. But as there are several other international companies from Europe, US and China offering both services
and nuclear fuel, Belarus could simply switch vendor if Russia tried to withhold fuel supplies, for example.
Business logic
In addition to meeting its own energy needs, Minsk is also hoping to make some money from power exports to its neighbours. Lithuania used to have its own NPP at Ignalina, but that was shut down in 2009 as it, unlike Ostrovets, used the old Soviet RBMK design.
The upshot is Lithuania has turned to natural gas to replace nuclear power, which has also pushed up its CO2 emissions by 13%, according to official figures. The neighbouring countries of Estonia and Poland suffer from similar problems and Poland in particular
would cost and the US has remained deaf to Vilnius’ entreaties for help and pressure on Minsk. European leaders are just as worried about maintaining energy security for their countries as they are of Russian machinations, as Germany’s insistence on pursuing the controversial Nord Stream 2 gas pipeline has shown.
If Russia were able to turn off the lights at will in the capital of a NATO member such as Lithuania, that would be a legitimate security concern, but the amount of power Lithuania would import doesn't make that possible.
According to Litgrid, the Lithuanian electricity transmission system operator, as of 1 January 2020, Lithuania had almost 3.6 GW of net installed power generation capacity of which, about
2 GW was natural gas. The LitPol and Nordbalt interconnection links with Poland and Northern Europe add 1.2 GW resulting in 3.2 GW of perfectly dispatchable power supply, independent from either Belarus and Russia.
The maximum capacity demand in Lithuania at peak load in winter is estimated to be between 1.8 and 2.3 GW, which means that Lithuania can meet
its entire demand with domestically sourced power and then some. Building Astravets gives Russia no extra leverage over Lithuania.
And importing power will reduce costs. Lithuania spent approximately €500mn on building the Klaipeda floating LNG (FLNG) terminal launched in 2014, but as electricity prices remain depressed, natural gas is still too expensive a fuel to make using LNG, imported from Norway and the US, a viable fuel. It is cheaper
to import power and in 2019 Lithuania imported 80% of its electricity.
The low costs of power go some way to explaining the resistance to Ostrovets, which will become yet another source of cheap power in the republic. In order to sustain the LNG imports the government has already resorted to mandatory purchase orders of LNG-based power for utilities as a way of maintaining its LNG infrastructure, which the government sees as part of its energy security setup.
“European leaders are just as worried about maintaining energy security for their countries as they are of Russian machinations ”
as allowing a Russian-built NPP would make the republic more dependent than ever on its larger eastern neighbour.
The last argument has been negated to some extent after Minsk and Moscow locked horns over Russian energy imports last year, making it even more imperative for Minsk to reduce its dependence
on Russian hydrocarbon imports. The Ostrovets NPP is anticipated to result in Belarus’ gas imports from Russia – its main source of energy – falling by 5bn cubic metres annually.
The c.$9bn Belarus has borrowed from Russia to pay for the plant could in theory be used as a new lever, but the loan was made on commercial terms and can be simply refinanced on the international capital markets. The amount is equivalent to some 10% of the republic’s total external debt, so while not insignificant, it is not enormous either. And the plant comes with a long-term service contract provided by
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remains heavily dependent on coal-fired power stations, making them amongst the most carbon-intensive energy producers in the EU, emitting over 900 grams per KWh of consumed electricity (twice that of the UK and nine times more than France).
Without the Lithuanian ban on imports and transits, the Belarus NPP could help reduce CO2 emissions by about 2mn tonnes per year (tpy) by replacing the most polluting and environmentally harmful coal output in Poland and Estonia.
Lithuania says that Ostrovets can be weaponised and used as a geo-political tool to increase the region’s dependency on Russian energy. To avoid that, Vilnius has been lobbying the EU to disconnect the former Warsaw Pact countries from the Soviet-era grid and build a new electrical “Iron Curtain”. However, Brussels has baulked at the billions of euros remaking the regional power grid