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Sunday, October 19, 2008

The Baltic Race - Kalinigrad VS Visaginas NPPs

On a recent referendum in Lithuania, that we already have been following here, the citizens were asked whether they support the close down of Ignalina nuclear power plant in 2009. The plant currently gives up to 70% of the total amount of energy in the country. The referendum, however, was not recognized as valid, since less then half of the voters participated (about 48%). Still, most of those who voted were against the shut down of Ignalina plant until the new plant, Visaginas NPP, 4 GWt in capacity, will be launched on the same site.
Still, the first block of Visaginas will not be launched before 2016, second - 2020. The construction is sponsored and performed by the 4 interested parties - Lithuania, Latvia, Estonia, and Poland. The situation around the project still remains on the level of agreements and disagreements between these four. Moreover, the final project is not confirmed yet. Obviously, that will take some time.
On the other hand, Russians have already signed and confirmed the project of Baltijskaya NPP in Kaliningrad region, 2GWt in capacity, to be launched by 2015. The construction will be performed in cooperation with foreign companies, those interested in the project (for example, those from Czech republic). The project was also discussed with potential customers in Germany, Finland and Sweden.
Kaliningrad is a small enclave of Russia by the Baltic sea between Poland and Lithuania. By itself, it has no need for such a huge plant - most of its electricity needs are covered by a large heat station (ТЭЦ-1). The current electricity production in the region is about 500 MWt, and within a few years after the second block of heat station is launched, the figure will double.
What do we have finally in the Baltic region by mid-2010s? Here are some of my remarks on the base of Google Earth map of the area.

The yellow line shows the border of the European Union, green crosses - existing NPPs, red ones are planned, with approximate year of launching.
Once there will be 3 more nuclear power plants in the area - Visaginas (Lithuania), Baltijskaya (Kaliningrad, Russia) and the Belarusian one, the region might get overloaded with electricity generation capacities it does not actually need. This is when the competition for the export market might take place. The one who will be the first to occupy the niche of major electricity export supplier, will get hold of the local market and largest share of export. Ignalina closure will create a great shortage of electricity in Lithuania and the Baltic countries, and they will have to import it anyway until the new station is built. Even if that sounds politically "absurd" for some West-oriented politicians in the Baltic region, they will have to buy it from Russia - the neighboring EU countries do not have enough own capacities to supply one more country with 4 million population.
The question is whether Lithuania might also be able to use the electricity from Kaliningrad instead of building a huge own plant? From economical point of view, launching a huge plant when the local electric grids are already overloaded by cheap Russian and Belarusian energy, is a bit of an absurd. A nuclear power plant is less flexible then a heat plant when it comes to reducing the amount of energy produced when consumption is low. For an export-oriented plant, besides from the reactors itself, a huge infrastructure will be needed. In order to reach Sweden, there is a need of a transmitting line on the bottom of the Baltic sea. Again, here the Russian plant has more advantages from the point of location - their "Baltic bottom distance" will be a bit closer than that from Lithuania.
What we have now is Russian and Belarusian plants confirmed and ready for construction, and on the other side there is Ignalina about to be closed and some rumors about a new plant that the 4 countries did not yet agree upon. The one who wins the race will be the one who presses the start button on the new plant first.


the8thcircle.com said...

That's a good analysis. I don't know though if "first to the line" means immediately a winner. No doubt, getting to the finish first will be advantageous, especially if markets are allowed to function without interference, but since the entire thing is political loaded (i.e. reluctance to be overdependent on a single supplier), getting to the finish line first may not guarantee market domination since as soon as alternatives come online, import countries may decide to shift their business there. For now, there is quite a bit left to go.

Anonymous said...

Thank you for your detailed analysis. I didn't realize the Russian enclave was closer to Sweden by sea. I also enjoy reading about the issue as it is a window into EU-Russian different ways of operating.

One question I just thought of is if the demand in this area might grow larger than they are projecting. For example my province of British Columbia has 4.4 million citizens and we have 10.5-11 gigawatts of capacity. Thsi on top of a new natural gas grid providing heat to many homes.

And still the demand is growing, for example as people have bought more and more computers.


majk said...

Hmmm... In the article it states "...the new plant, Visaginas NPP, 4 GWt in capacity, will be launched on the same site."

I would recommend looking at the more recent numbers for the output of the reactor, as well as the fact that the output may be further downgraded in the future.

At the moment, it is doubtful that the reactor will even have an output of 3 GWt.

Besides, the investment in Kaliningrad is good for when it finally does secede from Russia proper.

Alexandra Prokopenko said...

2 majk

4 GWt is the most optimistic plan, for sure. Myself I am doubtful there will be more then 2Gwt. Currnetly running Ignalina is 1GWt, and the local infrastructure like grids were built accordingly.

You also wrote "Besides, the investment in Kaliningrad is good for when it finally does secede from Russia proper". Just curious if you are from planet Earth or some other one. If you think that Russians will ever leave this strategically important region populated mostly by Russians, I doubt you can judge the situation there.

Anonymous said...

Sorry, your analysis doesn´t hold. The key is:
- who owns the grids? The one that owns the grid can decide who gets access and who can supply and distribute electricity. muscovy doesn´t own or control any grid in the EU and it won´t be allowed to do that either. Sweden has already taken a decision to build a link between Sweden and Lithuania (http://in.reuters.com/article/oilRpt/idINLA48973820090710) so that matter is already dealt with. Ther link will probably be followed by more from Sweden since Sweden aims at dramatically increase it´s electrical production by building new nuclear power plants. The output increase can be up to 30 000 MW. So the though of exporting electricity to Sweden is unrealistic. Also, Sweden would never allow muscovy to link it´s grid to the Swedish grid. the same probably also goes for finland and Poland. The plan to build a muscovite nuclear reactor in Königsberg is an unrealistic fantasy that never will come true. If it is built then it´s a major vaste of money and I couldn´t care less.