bneGREEN: Will the Belarus NPP become the elephant in the room for Lithuania?

bneGREEN: Will the Belarus NPP become the elephant in the room for Lithuania?
The Baltic states want to stop importing power from Belarus and cut ties to the Soviet-era grid that still connects them, but so far they are still importing power from the Belarus' new nuclear power plant at Ostravets.
By Linas Jegelevicius in Vilnius August 24, 2021

Lithuania has passed legislation to ban electricity imports from Belarus, but power from Vilnius’s hostile and unpredictable neighbour keeps trickling across the border through four 330-kV interconnectors.

Lithuania wants to persuade neighbouring Latvia and Estonia to take a similarly strict line against power imports from Belarus' new Ostrovets (aka Astravets) nuclear power plant (NPP), just across Lithuania's border with Belarus. But they are much more keen on keeping their options open to buy some of the cheap power now being generated by Belarus. 

Vilnius' difficulties in reaching agreement on this could damage prospects for a more unified electricity network across the Baltic states as they attempt to connect their networks fully with the EU and cut ties to the Soviet-era grid. 

The Baltic states are still not producing enough power of their own to be able to cut those ties yet. Technical issues mean that it also difficult to separate power produced from Ostrovets from other imports.

“Unless we cut off the electricity flow through the four connectors completely, i.e. by shutting down the lines, electric power from Ostravets NPP will continue reaching us,” Arvydas Sekmokas, Lithuania’s former energy minister, told bne IntelliNews.

“And, alas, that’s not enough. To shun Belarusian electricity 100%, the Latvians, the Finns and the Russians ought to cease imports of Belarusian electricity. Otherwise, it will continue mixing up with electricity of other producers. You just cannot sort out the electrons (of electricity), I mean where they are coming from and where they will be headed to at one point or another, if there’s a connection with Belarus.”

Against this, the Lithuanian Energy ministry told bne IntelliNews that Lithuania obtains nearly all the electricity imports it needs from the Nord Pool Spot Exchange, to be exact, 96%. In the first half of 2021, 52% of Nord Pool power came from Latvia, 28% from Nordbalt (mainly Sweden), 16% from the Russian enclave of Kaliningrad and 3% from Poland, the ministry said.

The ministry maintains that no commercial electricity is reaching Lithuania from Belarus, despite the transmission connection via the four interconnectors. The bulk of the imports from Belarus came in before March 24, when Belarusian power exports were still in full swing, according to Dainius Kreivys, the Lithuanian energy minister.

"When Ukrainians stopped buying Belarusian electricity, Russia’s Inter Rao lost the possibility to conduct swap deals,” the minister said. “Russian electricity would come to Ukraine and be sold there as Belarusian, and Belarusian electricity would come to us and be sold as Russian.”

But Sekmokas shakes his head: “Unless the interconnections are shut down, Lithuania will keep receiving it.”

Even Litgrid, Lithuania’s transmission system operator (TSO), has recently admitted that significant amounts of power produced at Ostravets, worth around €16mn, was imported by Lithuania between January 1 and May 24.

Thanks to an unseasonably cold winter last year Ukraine and Lithuania – which both have bans – ended up importing record amounts of power from the new NPP: As bne IntelliNews reported, both countries imported more power in the first months of this year than they did in all of 2020.

Moreover, the bans on imports of power put in place for this year will expire in October, just before the heating season starts, as both countries may need to import power from Belarus this year as well when it starts to get cold again.

Neighbouring Latvia is also hungry for power imports and does not conceal its intention to buy electricity from Ostravets. The country has been seeing a rapid fall in domestic electricity output since 2018. It is 85% reliant on hydro and currently has one 330-kV interconnection with Russia, but has no direct links with Belarus.

Riga could easily be tempted to buy Belarusian electricity, and it does not support Vilnius’ safety-inspired bar on imports. The question of electricity therefore has the potential to weaken the Baltic states’ traditional political and economic unity.

Complex relations

Lithuania, which has long been worried about the Ostrovets plant's safety, has a complex relation to nuclear power. It was the host to the Chernobyl-design Ignalina NPP, which was closed in 2004 when the country joined the European Union, taking 4,000MW offline and requiring the country to find new power sources.

Asked to weigh in on the speculations that the unsafe Ostravets NPP may turn into a safe one should there be a change of government in Minsk, former minister Sekmokas maintained that this was “out of question”.

“Look, the International Atomic Energy Agency (IAEA) and some other international nuclear energy watchdogs have said the NPP does not comply with international standards. Even with a change of the [Belarusian] government, the facility will remain too close to populated areas and the EU border external [within 30 kilometres]. The assessment that the plant cannot withstand the impact of a aeroplane, deliberately crashed or not, will remain unchanged,” Sekmokas argues.

Besides, he says, the plant was built on the soil that is predisposed to tectonic shifts. “An entire study is devoted for that,” he said.

Vidmantas Jankauskas, the former head of Lithuania’s Energy Pricing and Control Commission, (VKEKK), when asked if the unsafe Belarusian NPP would become safe if Alexander Lukashenko leaves power, chuckled: “This is the biggest conundrum that few dare even to talk about.”

“Although we are talking about how horribly unsafe the plant is, other nations, where Russia has built nuclear power plants, are promoting the (Russian) technology that was used virtually 100% at the Belarus plant,” Jankauskas said, before adding: “The same IAEA has issued only a few concerns about it, just many in Lithuania keep mum about that.”

Wholly integrated

Since the closure of Ignalina, Vilnius has looked at various options to ensure its energy security and reduce reliance on Russian energy.

Most successful has been the installation of a floating LNG terminal at Klaipeda, the Independence, which has led a rapid fall in gas imports from Russia.

The biggest failure were attempts by Vilnius to build a replacement NPP at Visaginas, possibly together with Latvia and Estonia. Both Samsung and Hitachi expressed support, before the project fell apart on cost grounds by 2016.

Yet Lithuania is now finally wholly integrated with the Nord Pool market, and has cross-border connections with Sweden and Poland.

Jankauskas says that, effectively, Lithuania does not need any Belarusian electricity.

“The supply from the Nord Pool Spot Exchange is secure and reliable. Estonia has been having an excess of local electricity, so we are good with what we have,” Jankauskas told bne IntelliNews.

The three Baltic States are also working towards fully integrating their networks into the EU’s ENTSO-E system, allowing them to disconnect from the Moscow-supported BRELL system, also known as IPS/UPS.

Ostensible resolve

But as the three Baltic nations have not yet worked a uniform methodology for purchasing electric power from third countries like Belarus, Lithuania cannot still be sure that its hawkish stance on Belarusian electricity will not backfire.

Lithuanian TSO Litgrid said earlier this month that it has informed electricity transmission system operators of the BRELL countries – Belarus, Russia, Estonia, Latvia, Lithuania – about its readiness to reduce the total transfer capacity (TTC) of its power interconnection with Belarus.

Litgrid CEO Romas Masiulis explained that this was a technical change that aimed to implement Lithuania’s anti-Ostrovets Law by preventing the use of Lithuania's power system to transmit electricity from third countries.

This is a major issues as the Latvian and Estonian TSOs are now applying cross-border trading rules with Russia, which are not endorsed by the Lithuanian operator, and are using Lithuania's infrastructure to import electricity from third countries.

Vilnius wants to reduce the TTC from Belarus into Lithuania from 1,250 MW to no more than 400 MW, a level needed to ensure the system's stability. The new 400 MW capacity level will come into force on September 15.

But Sekmokas says that it is just a “show-off” of ostensible resolve.

“Effectively, the decision changes very little: we will be receiving a lesser quantity of Belarusian electricity from Ostravets, yet Minsk will continue filling its coffers with money from the lower trading volume,” he emphasised to bne IntelliNews.

Sekmokas hit out at the current liberal-conservative government, claiming it lacks “political will” to disconnect the power links with Belarus once and for all.

“Alas, few speak about the preposterous situation we’re seeing: The law barring Belarusian electricity is in effect (in Lithuania), but, with the connections intact, the authoritarian Belarusian regime is making money from the trade. My guess is that Vilnius is waiting to hear what Brussels has to say on the issue,” Sekmokas said.

Jankausas, the former VKEKK chief, also said the interconnections linking Belarus and Lithuania was a “complicated”question.

“I reckon Lithuania, still in the Moscow-controlled BRELL system, is bound with contractual obligations. You cannot just sever them without paying a price for that,” Jankauskas says.

 

 

 

Lithuania power imports - share of exchange traded

 

2019

2020

2021 (1H)

Imports, TWh (NPS)

13,17

11,08

5,63

Part of imports via NPS Exchange

98%

98%

96%

Source: official statistics

 

Lithuania power imports - by country

TWh

2019

2020

2021 (1H)

LV > LT

 1,30

 2,22

 2,94

BY > LT

 5,20

 1,74

 -

KAL > LT

 2,62

 1,91

 0,91

SE4 > LT

 3,69

 4,75

 1,59

PL > LT

 0,35

 0,46

 0,18

Import, TWh (NPS)

 13,17

 11,08

 5,63

Source: official statistics

 

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