Poland's PGE likely to pull out of Lithuanian nuclear power project
- By April Murelio -
Due to delays in the construction of the Ignalina II nuclear power station, an investment that was due to completed by 2020, the Polish Energy Group (PGE) might pull out of its participation in the project.
"If construction of Ignalina started earlier, as initially planned, it would have been a chance for PGE to gain some experience in the field of nuclear energy," said an expert in the energy industry.
The management of the power station in Lithuania wants foreign partners to acquire at least half of the shares in the project. The plant is to be built to replace the old power station that was decommissioned last year.
PGE deputy CEO Wojciech Topolnicki said, "Talks are still in progress and should come to an end within a month and then a decision will be made. We have to analyze the terms of the investment due to the recent changes."
Last week the country shutdown its only reactor. The shutdown was mandated by the EU, where the Chernobyl-type facility is considered unsafe due to inherent design flaws. Lithuania's Soviet-built nuclear power plant was shut down late Thursday as part of an agreement with the European Union, ushering in a new era of energy uncertainty for the country.
Engineers say the closure of the Ignalina plant in the town of Visaginas happened on New Year's Eve shortly before midnight local time.
The shutdown is bad news for the recession-hit country partly because it will lose a source of cheap electricity and be forced to import more expensive energy. But the shutdown was mandated by the EU, where the Chernobyl-type facility is considered unsafe due to inherent design flaws.
Arvydas Sekmokas is Lithuania's energy minister. Despite the setback, he was upbeat about the future energy needs of the small Baltic nation.
He says first, we are carrying out obligations before the European Union. Second, he says, Lithuania is taking a step forward into the electricity market - that he adds, will change the planned system of energy into a market based system. Eventually, as a result the consumers of electricity will win.
Lithuania - one of the most nuclear-energy dependent nations along with France - asked the EU to allow it to keep the plant open for another two to three years.
The EU refused but offered over $1.1 billion to help cover the costs of decommissioning the plant.
By 2013, Lithuania wants to have a new natural-gas power plant, but experts caution that this will not be enough to meet the country's energy needs.
The closure of the country's nuclear facility comes amid a debate on how to establish a more secure energy future for the European Union, which is heavily dependent on Russian energy supplies.
Lithuania's President Dalia Grybauskaite said recently it is important that all EU member states cooperate with each other.
"Of course what is important in this turmoil environment is that energy policy and energy common efforts for all Europe are important to avoid a crisis what we do have on the ground and to avoid the possible future crises," she said. "No matter that we do not have formally that in [EU] treaties, it is only about good political will."
Lithuania isn't the only EU country with concerns over energy supplies.
In December, Hungary, Slovakia and the Czech Republic faced a potential halt in oil deliveries from Russia which had a pricing dispute with neighboring Ukraine.
The oil crisis was avoided after Moscow and Kyiv reached a new deal this week.
But Russia recently called into question Ukraine's ability to pay its December natural gas bill. That dispute, experts say, could cause new disruptions for the rest of Europe following similar incidents in recent years.