Energy

A Baltic Brawl over Nuclear Reactors


In the dense pine forests where the European Union’s eastern border meets Belarus, two giant nuclear reactors sit idle. Lithuania’s 3,000-megawatt Ignalina plant was once one of the most powerful nuclear facilities in the world. The Baltic state has shut down both reactors as a condition for its 2004 entry into the EU, which wants nothing to do with Ignalina’s Chernobyl-style technology. Now the EU debt crisis has forced Brussels to slash its budget for dismantling old Eastern European atomic stations, threatening to leave Ignalina in limbo.

When a reactor is decommissioned, the first task is to shut it down, a job that requires a lot more than simply flipping a switch. The next step in dismantling the power plant: Spent fuel is removed and the reactors, turbines, and generators are taken apart, a complex task. Ignalina’s turbine hall alone contains 190 kilometers of pipes. The EU, which sets budgets on a seven-year cycle, originally earmarked €1.4 billion ($1.8 billion) for decommissioning Ignalina and an additional €1.5 billion for similar projects in Slovakia and Bulgaria: Both sums are expected to be spent through 2013.

The problem is that for its 2014-20 budgetary cycle, the EU has only allotted the three countries a total of €500 million for the next stage of work. Ignalina General Director Žilvinas Jurkšus says he needs €870 million for the next phase of dismantling. As Lithuania can provide only €100 million, the rest must come from the EU, he says. Brussels insists that Lithuania will get only €210 million—its share of the €500 million.

For the Lithuanians, shutting down the two reactors was a major sacrifice. Formerly an exporter of electricity, the tiny country now depends on Russia—once its occupier—for 80 percent of its energy. Electricity prices jumped 30 percent last year after the shutdown of the second reactor, reducing household spending and making industry less competitive because of higher fuel costs. “The closing of the plant was a very big shock,” says Ina Daukšienė, a resident of Visaginas, the village built to house Ignalina’s employees. “Just the price of heating increased five times.” Achema, the country’s biggest fertilizer and chemicals producer, had to invest more than 100 million litai ($37.6 million) in a new electricity generator once the Ignalina reactors were shut down.

Now the country says the EU is breaking its promise. In the language of the 2003 accession treaty, the EU pledged “adequate additional Community assistance” because the task presented “an exceptional financial burden not commensurate with the size and economic strength of the country.”

“The deal was that Lithuania closes Ignalina and the EU provides adequate assistance,” says Neilas Tankevičius, an adviser to Lithuania’s Prime Minister. “It wasn’t possible to define the time and cost since it was the first time that Chernobyl-type reactors were closed in an orderly fashion.”

Eight years and one Greek debt fiasco later, the European Commission is interpreting the treaty differently. The aid is no more than “an expression of our solidarity, a symbolic move,” says Marlene Holzner, the EC spokeswoman in Brussels. “We have no obligation whatsoever to give these countries additional financing. We are bound by the treaty to give a certain amount, but certainly not 100 percent.”

If Lithuania cannot raise the needed funds, dismantling will have to stop, says Jurkšus. Just maintaining the status quo of the plant would cost Lithuania €30 million a year, about a half-percent of government revenue. Such a situation would create long-term financial stress for Lithuania, says Michele Laraia of the International Atomic Energy Agency in Vienna: The tiny Baltic republic is the EU’s fourth-poorest country by gross domestic product per capita.

Overall, the shutdown will cost the country at least €2.8 billion, or 10 percent of Lithuania’s GDP, Tankevičius says. “Ignalina was a Soviet plant that happened to be on Lithuanian territory,” he adds. “The decommissioning was the EU’s decision, and now it affects the competitiveness of Lithuanian companies. It’s a burden.”

The bottom line: Decommissioning its two nuclear reactors will cost Lithuania €2.8 billion, a huge sum for one of the EU’s poorest states.

Bauerova is a reporter for Bloomberg News in Prague.
Seputyte is a reporter for Bloomberg News in Vilnius.

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