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Eastern Europe’s nuclear race

Published at: Jun 10, 2010
source: Financial Times, Energy Source

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A new nuclear race appears to be brewing in eastern Europe. Fortunately, this one involves reactors rather than weapons. Three countries have announced firm plans to build nuclear power plants within a relatively small area of the Baltic region.

Lithuania is planning a replacement for the Soviet-era Ignalina reactor shut down last year; Belarus has proposed a reactor just across the border from Lithuania; and Russia is vowing to build one in its Kaliningrad enclave between Lithuania and Poland.A fourth country, Estonia, has also floated tentative plans for a reactor of its own.

Andrius Kubilius, Lithuania’s prime minister, could barely conceal his exasperation with the situation when he spoke to the FT this week. Fears of an energy shortage after the closure of Ignalina have been replaced by concern over a potential future supply glut.

“Even without nuclear they have [electricity] over-capacity in Kaliningrad, so where is the market for them?” he asked.

It seems highly unlikely that all four reactors will be built. So the race is on to establish which of the projects have most credibility.

At stake is not only domestic energy security for each country, but also the ability to make money — and wield regional influence — by exporting electricity to neighbours.

Lithuania’s proposed reactor is supposed to be a regional project co-financed by Poland, Latvia and Estonia, with the power shared among them. But progress has been slow as the Baltic financial crisis has strained public finances.

Estonia’s threat to build its own reactor reflects frustration in Tallinn over the delays to the Lithuanian project and concern that the Baltic states could be left without their own independent nuclear power source.

Kubilius insisted he was “quite confident” the reactor would be built, pointing to a recent joint communiqué by the four countries re-stating their commitment. A tender process is under way to find a strategic investor, with several international companies believed to have expressed interest. A partner is scheduled to be chosen “in the second part of this year”.

“I am quite sure we will be successful,” Kubilius says. “And then it will become clear who is building and who is not building.”

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