The Road to Visaginas

Consider this: when Lithuania closed its nuclear plant in 2009, it lost access to a whopping 70 percent of its total electricity generation – enough to allow it to be a net exporter of electricity, especially to its Baltic neighbors, Estonia and Latvia. The reason one nuclear plant could so dominate the energy conversation is that Lithuania has an exceptionally small population – 3.5 million people.

And though the three Baltic states point their destinies westward, so to speak, there are enduring – or at least well-understood - ties to Russia. Consequently, Russian natural gas now fills in for Lithuania’s lost nuclear energy – reversing the previous arrangement and making the country a net energy importer - a situation the country is very eager to change.

But how to do that?

"I am happy a very important historic decision allowing the further development of nuclear energy in Lithuania ... has been made," {Prime Minister Andrius] Kubilius told reporters at parliament, which backed the concession deal with 74 out of the 141 seats in the house.

That’s how. Concession doesn’t mean conceding, it means that the parliament granted Hitachi the nuclear energy concession.

There are storm clouds:

But the main opposition Social Democrat Party, which leads opinion polls ahead of the election, boycotted the vote in protest at the cost of the project, estimated by the Finance Ministry at up to 6.8 billion euros ($8.64 billion).

Lithuania wants Baltic neighbors Latvia and Estonia, to share the cost together with Hitachi as a strategic investor.

That’s a lot of cash, especially for such a tiny country, but the benefits are exceptionally many. Aside from the obvious ones we mention here all the time, Lithuania really wants to set its own energy destiny. Yet – it’s a lot of cash.

PM Kubilius makes the case:

“This is a very wise and prudent decision. I am happy that the Seimas [parliament] has said yes to a further development of nuclear energy in Lithuania, to the development of the VNPP [the proposed site is called Visaginas] and thus to a possibility of having cheaper electricity in a decade or so, at the same time attracting substantial investments and creating many new jobs in the period of construction.”

That’s the argument that could be made almost anywhere about a big project – but it happens to be true.

PS: There is some movement on the renewable energy front, too, though pretty tiny so far:

The target capacity for 2010 is 200 MW from wind farms, 33 MW from biomass plants, and 132 MW from hydro power plants.

See here for more.

Lithuania’s capital city, Vilnius.