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Troublesome InvesTmenTThe Belarusian nuclear Power PlanT in asTravyeTs
Joanna hyndle-hussein, szymon Kardaś, Kamil Kłysiński
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Troublesome InvesTmenTThe Belarusian nuclear Power PlanT in asTravyeTs
Joanna hyndle-hussein, szymon Kardaś, Kamil Kłysińskieditor: wojciech Konończuk
nuMBer 74warsawJuly 2018
© copyright by ośrodek studiów wschodnichim. Marka Karpia / centre for eastern studies
conTenT ediToradam eberhardt, wojciech Konończuk
ediTorhalina Kowalczyk
co-oPeraTionKatarzyna Kazimierska, anna Łabuszewska
TranslaTionosw
co-oPeraTionnicholas Furnival
GraPhic desiGn Para-Buch
PhoToGraPh on coverstepanPopov/shutterstock.com
dTPGroupMedia
MaPwojciech Mańkowski
PuBlisherośrodek studiów Wschodnich im. marka Karpia centre for eastern studies
ul. Koszykowa 6a, warsaw, PolandPhone: + 48 /22/ 525 80 00Fax: + 48 /22/ 525 80 40osw.waw.pl
isBn 978-83-65827-24-1
Contents
SUMMARY /5
IntRodUCtIon /8
I. nUCleAR eneRgY In the eneRgY polICY of BelARUS /10
II. ConStRUCtIon of the BelARUSIAn nUCleAR poweR plAnt /13
1. preparations and implementation of the project /132. Safety issues /18
III. the AStRAvYetS plAnt And RUSSIA’S StRAtegY In the nUCleAR And eleCtRICItY SeCtoRS /20
IV. lIthUAnIA on the BelARUSIAn nUCleAR poweR plAnt In AStRAvYetS /25
1. lithuania’s arguments against the plant /252. lithuania’s objections against Rosatom’s influence in the region /273. Steps taken by vilnius with regard to the Belarusian nuclear power plant /29
3.1. efforts to block trade in Belarusian electricity /313.2. Synchronising the Baltic energy grids with continental europe /343.3. the impact of the Belarusian nuclear power plant on energy policy
discussions within lithuania /35
V. the pRoBleM of UtIlISIng the poweR geneRAted At AStRAvYetS /37
VI. ConClUSIon /43
MAp /46
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SUMMARY
• WhenBelarusembarkedontheconstructionofitsfirstnuclearpowerplantinAstravyetsin2012,theofficialobjectivewastosignificantlyreducetheshare which imported Russian gas plays in the country’s electricity pro-duction.That,inturnwasintendedtodecreaseBelarus’seconomicanden-ergydependenceonRussia,itssolesupplierofenergyresources.However,theBelarusianleadership’sdecisiontobuildtheplantincloseco-operationwith Russian partners defeated that purpose. Even though the project isformallyaBelarusianinvestment,Russiahasinfacttakenoverfullcontrolof its implementation as it is financing the US$ 10 billion project almostentirely.Russiaistheproject’scontractor,isprovidingthetechnologyandwillalsoprovidethenuclearfuel.GivenBelarusexistingfinancial,trade,oil, gas and military dependence on Russia, the Astravyets power plantproject,inwhichtheRussiansplayadominantrole,willonlyperpetuateanddeepenMinsk’sdependenceonMoscow.Allthattheplantwillachievewillbetodiversifythefuelmixinelectricityproduction,butnotthedirec-tionofimports,withRussiaremainingtheonlysource.
• InitiallyRussiaintendedtocarryouttwonuclearprojects:theBalticNu-clear Power Plant (BNPP) in the Kaliningrad Oblast, and the AstravyetsPower Plant in Belarus (Belarusian NPP). Both were intended to exportelectricity,althoughtheBelarusianplantwasalsoexpectedtodeliversomeelectricitytotheinternalmarket.WhennoPolishorLithuanianpartnersfortheBNPPprojectcouldbefound,andnoexportmarkettosellitselec-tricitywasinview,RussiachangeditsprioritiesandfocusedontheAstra-vyetsprojectwhilesuspendingtheBNPP.ThesizeoftheBelarusianproject(tworeactorswithatotalcapacityof2,400MW)indicatesthatfromthestart,theaimwasnottomeetthedemandintheinternalBelarusianmar-ket,buttoexportelectricitytotheEU,andespeciallytotheBalticstatesandPoland.AsPolandandLithuaniahaverefusedtobuyelectricityfromtheplant,Belarusnowfacesthechallengeofutilisingtheenergysurplusthatwillemergeafterthelaunchofthefirstreactor(in2019)andespeciallyafterthesecondonebecomesoperational(in2020).TheoutputofthetwounitswouldsufficetocoverhalfofBelarus’scurrentenergyconsumption.MinskhastakenstepstodirectalltheelectricityproducedinAstravyetstotheinternalmarket,e.g.byexpandinggridsandmakingmassiveplanstoreplacegas-firedheatandpowerboilerswithelectricunits.However,thedecisionsmadedonotguaranteethattheoperationwillsucceed,especiallysinceitseemsthattherearenotenoughfundstofinanceit.Therearealso
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other important unanswered questions about the plant’s operation, e.g.thequestionofreservecapacity,whichLithuaniahasrefusedtoprovide,andbalancingthenight-timedecreaseinenergyconsumption.Asaresult,BelarusmayendupwithasurplusofpowerandbeforcedtorestricttheoperationofotherpowerplantsoncetheAstravyetsplantislaunched.
• Therearemanyindicationsthat–despitetheBelarusianleadership’sdec-larations–thepriceofenergyproducedattheAstravyetsplantwillnotbelow.DuetothefinancialtermsoftheloanimposedonitbyRussia,BelaruswillhavetorepayaroundUS$1billionannually intheyears2021–2036.TheBelarusianstatebudgetisinadifficultsituationandthereisariskthatifMinskisunabletomeetitsrepaymentcommitments,Russiacouldthentakeoveraportionofsharesintheplant(includingacontrollingpackage).Moreover,thereorientationoftheAstravyetsplantfromexportstodomes-ticsalescallsintoquestiontheproject’seconomicjustification.
• RussiaandBelarusmaybeassumingthatinfuture,CentralEuropewillfaceacapacitydeficitthatwillpushtheEUmemberstatestoreconsiderenergyco-operationwithBelarus.However,suchascenariodoesnotseemprobableinthe lightof theEU’senergyproductionandconsumptionprojections. Itismuchmorelikelythat–quiteagainstMoscow’soriginalintentions–thesurplusenergygeneratedbytheBelarusianplantwillendupintheRussianmarket;Russia’sannouncementsaboutscrappingsomepreviouslyplannednewnuclearunitprojectspointinthatdirection.However, inthecurrentconditions,withBelarushavingtorepaytheloan,theAstravyetsplantwillnotbeabletoofferitselectricityatcompetitivepricesintheRussianmarket.
• The decision to build the nuclear power plant so close to the Lithuanianborder has triggered a conflictbetween Vilnius andMinsk, engenderingadeepcrisisinbilateralrelations.WhiletheBelarusiansideisstillinter-ested in developing economic co-operation, and especially in using theKlaipedaportfortransit,Lithuania’seconomicinterestsinrelationswithBelarusarecurrentlyunderthreatandVilniusisnolongeractingasanin-termediarybetweenMinskandBrussels.LatviahastakenadvantageofthetensionsinBelarusian-Lithuanianrelationsandhasbeensendingpoliticalsignalsthatitwouldbeinterestedineconomicco-operationwithBelarus.This,inturn,hasaffectedLithuanian-Latvianrelations.
• LithuaniahasconcernsaboutthesafetyoftheAstravyetsplant.Thisdoesnot chiefly regard the reactor technology, which technically meets all
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international safety standards. The Lithuanians feel unsafe mainly be-causetheBelarusiansidedoesnothavefullcontroloverthe–effectivelyRussian–project,andfactorssuchasapoorworkingcultureordisregardfor safety rules may lead to an accident caused by major negligence. TheLithuaniansarealsoconcernedthatMinskwillnotkeeptheminformedaboutthesituationattheplant,forcingtheLithuaniangovernmenttode-velopitsownemergencyresponseplans.
• GovernmentinstitutionsinLithuaniahaveraisedtheissueoftheAstravy-etsplantwiththeBelarusiangovernment,theEUandinternationalorgan-isationscapableofinfluencingtheBelarusianprojectmanytimes.Howev-er,theyhavethusfarfailedtoobtaininternationalbackingfortheireffortstostoptheproject.ThishasforcedLithuaniatochangeitsstrategyanditisnowfocusedonblockingthetradeinBelarusianenergyintheBalticregiontounderminetheeconomiccasefortheRosatominvestment.SteppedupeffortsaimedatthedesynchronisationoftheBalticelectricitygridswiththeenergysystemofRussiaandBelarusandsynchronisingthemwithcon-tinentalEuropeareanimportantelementinLithuania’sstrategy.Oncethiseffortiscompleted,inaround2025,LithuaniawillbeabletoclosedownitsexistingtransmissionlinkswithBelarus.
• Lithuania’soppositiontotheAstravyetsprojectandtothebuild-upofRos-atom’sinfluenceintheregionhasresultedinadeclineoftheLithuanianpublic’ssupportfornuclearenergy.In2016,theLithuanianselectedanewgovernmentwhichpledgedtoscraptheplanstobuildanewnuclearpowerplantinVisaginasnearthedecommissionedIgnalinaplant.TheVisaginaspowerplantprojecthasnotbeenincludedinthedraftnewNationalEnergyStrategywhichprioritisesrenewableenergysources.ThismeansthattheLithuaniangovernment’senergyplansdonotcurrentlyenvisageanypro-jectsbasedonnucleartechnology.
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IntRodUctIon
Belarus’sfirstnuclearpowerplanthasbeenunderconstruction inthecityofAstravyetsforadecadenow.TheprojectwasabletostartwhenBelarussignedanintergovernmentalagreementwithRussiain2012,underwhichtheRus-siansideagreedtofinancetheprojectalmostfullyandprovidethetechnology.ThenuclearpowerplantinAstravyetssignalsthefirsttimethatgroundhasbeenbrokenonanuclearpowerprojectinEuropesincethe1986Chernobyldisaster.1AlthoughtheBelarusianNuclearPowerPlant(BelarusianNPP),astheprojectisofficiallycalled,isbeingbuiltjust200kmfromthePolishborder,itrarelyappearsinPolishorEuropeannewsandawiderdebateaboutitssafetyisyettotakeplace.LithuaniaistheonlycountrywheretheAstravyetsprojecthasstirredmajorcontroversy.Theprojectisnotonlydebatedthere–ithasbecomeakeyissueinLithuania’srelationswithitsalliesintheEuropeanUnionandNATO.Lithuaniaisconcernedabouttheplant’slocation,lessthan50kmfromVilnius,whileLithuanianexpertsbelievethattheproject’sexecutiondoesnotcomplywithinternationalsafetystandards.AsaresultoftheeffortsmadebyVilnius,theBelarusian-Russianinvestmenthasnowbeennoticedinterna-tionally.
TheBelarusianNPPisgoingtoproduce18TWhofenergyayear(whichcorre-spondstohalfofBelarus’scurrentconsumption)andisastrategicallyimpor-tantprojectthatwillconsiderablyaffecttheenergyandpoliticalsituationintheregion.EspeciallysinceitwasinitiallydesignedprimarilyasaplanttogenerateenergyforexportstotheEU.Thepurposeofthepresentreportistocompre-hensivelydiscussthekeyaspectsoftheconstruction,thefuturefunctioningandtheimpactoftheAstravyetsproject.
Thepaperconsistsofsixparts.TheinitialtwodiscussthepositionofnuclearenergyintheenergypolicyofMinskandpresentthemostimportantfactsaboutthepreparationandimplementationoftheBelarusianNPPproject,includingRussia’sroleintheundertakinganditsimpactonBelarus’sfutureenergymix.Thefinancialaspectsoftheprojectarealsodiscussed,includingthoserelatedtoBelarus’sobligationtorepaytheloansacquiredfortheproject.PartThreefocusesonanalysingthepositionoftheAstravyetsprojectinRussia’sstrategyforthenuclearpowersector.ItemphasisesthelinkbetweenthefailedBaltic
1 After1986,onlytwoEuropeanstatesbuiltnewreactorunitsatexistingpowerplants:Rus-siaatRostovskayaAESin2014andatNovovoronezhin2016,withplanstolaunchanewunitattheLeningradskayaAESin2019),andFinland(Olkiluoto,tobelaunchedin2019).
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NuclearPowerPlantintheKaliningradOblastandMoscow’sfinancial,techno-logicalandpoliticalinvolvementintheBelarusianproject.
PartFourofthepaperanalysesthepositionofLithuania,presentsthecountry’sargumentsagainsttheAstravyetsproject,andrecountsVilnius’sstepstostopit,suchasthemeasurestopreventBelarusfromsellingitselectricityintheBalticregionandtheeffortstospeedupthedesynchronisationoftheBalticgridswiththesystemsofRussiaandBelarusandtosynchronisethemwiththecontinentalEuropenetwork.ThispartalsoshowshowtheBelarusianprojecthasaffectedLithuania’senergypolicyandVilnius’srelationswithMinskandRiga.
KeyissuesconcerningthefutureoftheAstravyetsplantarediscussedinPartFive,whichdelvesintothechallengesthatBelaruswillfacetryingtousetheelectricitygeneratedbytheAstravyetsplantifitdoesnotgainaccesstotheEUenergymarket.InthatcaseBelaruswillneedtofindalternativemarkets;andsinceBelaruscaninternallyconsumeonlypartoftheplant’soutput,itwillhavetosellelectricitytoRussia.
Thefinalpartpresentstheconclusions,althoughmanyimportantquestionsconcerningtheprojectremainunanswered,mainlybecausethereisverylit-tletransparencyovertheinvestmentandtheprojectismotivatedbypoliticalconsiderationsmuchmorethanbyeconomicones.
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I. Nuclear eNergy IN the eNergy polIcy of Belarus
TheBelarusianSSRwasaffectedbythe1986ChernobylnucleardisastermorethananyotherformerSovietrepublic.Alargepartofthecountry’sterritory(mostly the Gomel region) suffered radioactive contamination, the after-mathofwhichisstillfelttoday.Settlinginsomeareasisprohibitedorsubjecttorestrictions,thefoodproducedtherecontainsharmfulsubstancesandsta-tisticsstillshowhighermorbidity,andthememoryofthetragedyisstillalive.2
Yetdespitethosenegativeexperiences,theleadershipofindependentBelarusstartedtoconsidernuclearelectricitygenerationalreadyinthe1990s,seeingitascrucialforthedevelopmentoftheBelarusianenergysystem.3ThisviewwasreinforcedinthefollowingyearsbythemoreorlessfrequentdisputeswithRussia,relatedtoBelarus’stotaldependenceonRussiangassupplies.In1993,the concept for the development of nuclear energy, the first in the historyofindependentBelarus,wasdrafted,andthesubsequentstrategydocumentsonenergyinvariablylistednuclearenergyamongthetoppriorities.Inthelate1990s,however,securityconcernsprevailedandin1998aten-yearmoratoriumonnuclearprojectswaspassed.
Itwasonlyin2008thattheBelarusianSecurityCouncilchairedbypresidentLukashenkafinallydecidedtogivethegreenlighttothenuclearpowerplantprojectandselecteditslocation.IntheEnergySecurityConceptoftheRepublicofBelarus,adoptedinDecember2015,thelaunchofthenuclearpowerplantwasidentifiedasthemostimportantelementofthepolicytodiversifytheenergymix.Theinitialplanalsoenvisageddiversifyingtheprovidersoftechnologyandnuclearfuelsup-pliers,butwiththeselectionofaRussiancontractorfortheprojectitbecameclearthatthenuclearpowerplantwouldinfactentrenchBelarus’senergydependenceonRussia,whichhasbeenthecountry’ssoleoilandgassupplierforyears.
Aspertheobjectiveslaiddowninthedocument,themainaimofthediversifi-cationistodecreasetheshareofgasinelectricityandheatgenerationfromthe
2 Formoreinformation,seethewebsiteoftheDepartmentfortheEliminationoftheEffectsoftheChernobylDisasterattheMinistryforEmergencySituations:http://www.cherno-byl.gov.by/index.php?id=105&Itemid=54&option=com_content&
3 Thefirstattemptatbuildinganuclearpowerplantwasmadeintheearly1980s.Backthen,preliminaryconstructionworkstartedonasitelocatedaround40kmfromMinsk.TheCher-nobylaccidentstoppedtheprojectandtheplanstobuildanuclearpowerplantindirectvicinity of the capital city never resurfaced, http://n1.by/news/2016/05/04/645565-kak-segodnya-rabotayut-belorusskie-tets-i-pochemu-posle-zapuska-aes-tarify-na
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present90%to70%in2020andbelow50%by2035.Nuclearenergyissupposedtomakethebiggestcontributiontothediversification,asitisexpectedtoaccountforaround20%oftotalelectricityproductionby2020andaround40%by2025.4Itshouldberemembered,however,thatthoseobjectivesarelargelydeterminedbythecurrentpoliciesoftheBelarusianleadershipwhichseeks,byanymeansavailable,toutilisetheelectricitysurplusthatthelaunchofthenuclearpowerplant will generate, in the domestic market. Hence the considerable uptickindomesticconsumptionenvisagedintheBelarusianleadership’sstrategy.
table 1. Expected changes in the electricity generation and energy mix of Belarus in the years 2015–2035 (TWh)
2015 2020 2025 2030 2035
Annual energy production 34.4 39.9 41.6 42.1 43.8
CHP plants (mostly gas-fired) 34.2 31.8 21.8 22 23.2
Renewables 0.27 0.95 1.8 2.1 2.6
Nuclear -------- 7.1 18 18 18
Annual energy consumption 37.3 39.9 41.6 42.1 43.8
Electricity imports 2.82 0 0 0 0
Share of the dominant fuel (i.e. natural gas in electricity and heat generation (%) 90 70 60 50 <50
Source:EnergySecurityConceptoftheRepublicofBelarusto2035
The Belarusian leadership assumes that nuclear electricity generation willconsiderablycontributetoimprovingthefinancialefficiencyoftheBelarusianenergysystem.Accordingtoofficialestimates,thelaunchofthenuclearpower
4 The Belarusian government does see a role for renewable energy sources, but they areregardedasasecondarycomponentinthecountry’senergymixthatwouldmerelycom-plementgasandnucleargeneration.AccordingtotheEnergySecurityConcept,theshareofrenewablesinelectricityandheatgenerationwillnotexceed1%by2035,http://www.government.by/upload/docs/file5a034ca617dc35eb.PDF
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plantwillallowthecountrytocutitsRussiangasimportsfromaround23bil-lionm³ayeartoaround18billionm³.That,inturn,isexpectedtoenableBelarustoreducetheretailpriceofelectricitybyaround30%,i.e.fromthecurrent11.3centsperkWhto7.8-7.95centsperkWhby2020or,intheworst-casescenario,bytheendof2021.5However,itshouldberememberedthatthissimulationdoesnotincludethecostoftheRussianloangrantedfortheconstructionoftheplant(seebelowfordetails),therepaymentofwhichwillstartwhentheplantislaunched,i.e.asof2020.
AccordingtotheBelarusianMinistryofEnergy,thechangeofBelarus’senergymixandtheconsiderablereductionoftheshareofgasinfavourofnuclearenergywillensurethestabilityofelectricitysuppliesandshieldthecountryfromgaspricefluctuationsforaperiodofatleastoneyear(thisishowlongtheBelarusianplantcanoperatewithoutnewsuppliesofnuclearfuel).6ThosecalculationswerepresumablythebasisonwhichtheBelarusianleadershipassumedthattheRussianloantogetherwithinterestwouldberepaidwithin15yearsoftheplant’slaunchwhentheplantbreakseven.7
5 ThepricecutwillmainlyconcernbusinessesinBelarus,whichaccountfortwothirdsofthecountry’sheatconsumptionandthreequartersofelectricityconsumption.Theratepaidbyhouseholds iscurrently5.49centsperkWhandhasbeenkeptartificially lowthankstoacrosssubsidymechanismwherebytheindustrialsectorcoversasubstantialportionof thecostofgenerating energy forconsumptionbyhouseholds.TheBelarusiangovern-menthasbeengraduallyphasingoutthemechanismforseveralyears,whichhasaffectedthelevelofhousingcharges,https://news.tut.by/economics/502590.html
6 Доля ядерной энергетики в энергобалансе Беларуси с пуском АЭС составит около 40%,12.12.2013,http://atom.belta.by/ru/belaes_ru/view/belaes_ru/view/dolja-jadernoj-ener-getiki-v-energobalanse-belarusi-s-puskom-aes-sostavit-okolo-40-2003/t_id/1
7 Thisispartofabusinessplanforthenuclearpowerplant,draftedbyitsmanagement.However,thedetailsofthedocumenthavenotbeencommunicatedtothepublic,Т.Маненок,Поможет ли БелАЭС снизить энерготарифы для предприятий на 30%?,23.10.2017,https://www.belry-nok.by/2017/10/23/pomozhet-li-belaes-snizit-energotarify-dlya-predpriyatij-na-30
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II. coNstructIoN of the BelarusIaN Nuclear power plaNt
1. preparations and implementation of the project
Twenty-eightlocationswereanalysedwhenthefeasibilitystudyforanuclearprojectinBelaruswascarriedoutintheearly1990s.On20December2008theBelarusianleadershipfinallydecidedthatthattheplantwouldbebuilttheareaofAstravyets,adistrictcapitalintheHrodnaRegion,20kilometresfromtheLithuanianborderand50kilometresfromVilnius.Thedecisionraisedalotofcontroversy,notonlyamongAlyaksandrLukashenka’spoliticalopponentsandindependentenvironmentalgroups,8butalsoamongsomeBelarusianaca-demicswhopointedtotheseismicactivityinthearea.Theywarnedthattheconstructionsitewaslocatedontwotectonicfaultlines,whichcreatedtheriskoflocalearthquakes.TheirargumentwasbasedonanexpertopinionbyBelaru-sianscientistswhohadadvisedagainstlocatinganuclearpowerplantinaseis-micallyunfavourableplacealreadyin1993.Theproject’scriticsconcludedthatthedecisiontolocatetheplantinAstravyetshadbeenpoliticalandmotivatedbytheplanstoexportelectricitytotheBalticstatesandPoland.9
InMay2008,internationalcorporationsfromthenuclearsectorwereinvitedtosubmitbidstobuildtheplant.Atomstroyexport(Russia),AREVA(Germany/France)andToshiba-Westinghouse(Japan/USA)expressedinterest.TalkswerealsoinitiatedwithChina’sCNGP.However,contrarytotheBelarusiangovern-ment’sinitialdeclarations,noopentenderprocedurewasconductedandinMay2009,theRussiancompanywasdesignatedasthecontractor.Thedecisionwastheresultof(orwasforcedonBelarusbecauseof)thecountry’sdeepdependence
8 The protest against the nuclear power plant has for many years been an important partoftherhetoricoftheBelarusianoppositionandenvironmentalgroups.Thetopicreturnswith particular force during the annual commemoration of the Chernobyl disaster –rememberedinBelarusasanationaltragedy–on26April.TheChernobylMarchorgan-isedontheoccasionprovidesanopportunityforindependentorganisationstovoicetheiroppositiontotheproject,whichisbeingundertakenwithoutpublicconsultationandbearsenvironmentalrisks,http://naviny.by/new/20170131/14858
9 Theseismic risk is furthersubstantiatedbyarchivalsourceswhichcontain informationaboutalocalearthquakeintheareainearly20thcentury,whichreportedlyhadadanger-ouslyhighmagnitudeof6-7,http://naviny.by/article/20160906/1473174695-ostroveckuyu-ploshchadku-priznali-negodnoy-eshche-v-90-h73043-uchenyy-na-ploshchadke-belaes-nichego-bolee-otvetstvennogo-chem The physics professor Grigory Lepin has been themostactivepromoterofthescience-basedcriticismsoftheAstravyetsplantandhaslobbiedformanyyearsfortheprojecttobediscontinued.HisargumentsareechoedbytheRussianatomicphysicistandenvironmentalactivistAndreiOzharovsky.
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onRussiaintermsofeconomicrelations,energyresourcesupplies,thedefenceallianceandtheparticipationofBelarusinRussian-initiatedintegrationprojects.Intheyears2011–2012thepartiesconcludedanumberofagreementstogoverntheirco-operationontheBelarusianNuclearPowerPlantproject.TheMarch2011agreementestablishingEnergoconnect,ajointRussian-Belarusianundertak-ing,whichwasregisteredinMinskon17June2011,isofcrucialimportance.ItsshareholdersaretheBelarusiancompanyBelenergoandRussia’sInterRAO(eachholdinga50%stake).Thecompany’smissionistoorganiseandcontrolexportsofelectricityproducedattheplantandensuresuppliesofRussiannuclearfuelfortheplant.Moreover,theagreementlaysdownthetermsandconditionsunderwhichtheinvestmentwillbefinancedfromaUS$10billioncreditlineopenedbyRussia;thiswasparticularlyimportantfortheBelarusianside.
Belarus’s energy and economic dependence on russia
Since regaining independence in 1991, Belarus has depended on co-oper-ation with Russia – its sole provider of energy resources, its main market and main lender. Russia covers 100% of Belarus’s gas needs, and the Rus-sian gas company Gazprom has been the sole owner of the Belarusian gas pipeline network and the Yamal transit gas pipeline since 2011. As much as 90% of electricity in Belarus is produced from gas. While power genera-tion could use other energy resources, the Belarusian nitrate and potas-sium plants would not be able to cut their consumption of imported gas, which is necessary in their production processes. Similarly, 90% of the oil in Belarus comes from Russia. Belarus extracts around 1.6 million tonnes of oil annually from its own deposits, but all that output is exported, mostly to Germany. Thus, the country’s two refineries (in Navapolatsk and Ma-zyr) are completely dependent on oil imports from Russia (18 to 24 million tonnes of oil a year). Still in 2015, as much as a quarter of Belarus’s export revenues came from the sale of petroleum products. For this reason, Rus-sian supplies of energy resources are a crucial factor not only for the func-tioning of a large part of Belarusian industry, but also its profitability. The dependence on Russia is further deepened by the Belarusian economy’s heavy orientation towards the Russian market. According to Belarusian statistics, trade with Russia accounted for 40–50% of Belarusian exports and more than 50% of imports in the last dozen or so years. In the case of the agricultural and food sector, as much as 90% of its produce is sold in the Russian market. Belarus’s reliance on co-operation with Russia is further reinforced by the credit extended by Russia directly from the state budget and via the Moscow-controlled Eurasian Economic Union and its Eurasian
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Fund for Stabilisation and Development. In that situation, it was an abso-lute priority for Minsk to obtain preferential terms and conditions from Moscow; one of the results of this in practice was the negotiation of the lowest possible oil and gas prices. In this context, in the mid-1990s, after Alyaksandr Lukashenka came to power, Belarus decided to build a union state with Russia. It was the first re-integration project in the post-Soviet area. Since then Minsk has taken part in all Russian integration initiatives, including the Eurasian Economic Union launched in 2015. The two coun-tries also co-operate closely in the areas of defence and security. Minsk’s loyalty to Moscow is the price for it pays for at least some of the Russian subsidies, which totalled around US$ 100 billion between 2005 and 2015 ac-cording to the International Monetary Fund’s calculations (including of-ficial aid such as loans and hidden subsidies in the form of lower prices on imported resources). Despite frequent tension and periodic disagreements, close co-operation with Russia remains the most important priority of Be-larus’s foreign policy, guiding Minsk’s steps also in other spheres.
Thesignature,on18July2012inMinsk,ofanintergovernmentalgeneralcon-tractfortheconstructionoftwonuclearunitswithacapacityof1,200MWeachclosedtheopaqueprocessofnegotiationswithMoscowandtriggeredthestartofconstructionworks.10TheRussiancontractorofferedtocarryouttheprojectusingtheAES-2006newgenerationpowerplanttechnologybasedoninno-vativeWWER1200generation3+reactorsdevelopedbyRussia’sAtomener-goproekt,i.e.themostadvancedtechnologyavailableinRussia,whichmeetsinternationalsafetystandards.11Thereactors’projectedusefullifeis60years.Theywilloperateonlow-enricheduraniumU-235.Russiawasinitiallyexpectedtodeliverthefuelforthepowerplantinthe4thquarterof2017butcurrentlythedeliveryisscheduledtotakeplaceinNovember2018.ThefuelwillbedeliveredfromRussiabytheRosatom-controlledTVELcompanyunderacontractcon-cludedinDecember2017.12Waterforthecoolingsystemsisgoingtobesourced
10 The construction of auxiliary infrastructure for the plant (such as access roads, a hotel,warehouses)startedevenbeforetheRussian-Belarusiannegotiationswerecompleted.
11 InparalleltotheBelarusianproject,theLAES-2plantnearSt.PetersburgandtheNovo-voronezhplantintheVoronezhoblastarebeingbuiltaccordingtothesamedesigns.Formoretechnicaldetails,see:Характеристика Белорусской АЭС,Департаментпоядернойи радиационной безопасности Министерства по чрезвычайным ситуациямРеспубликиБеларусь, 13.07.2012,http://www.gosatomnadzor.gov.by/index.php/ru/bez-opasnost-belorusskoj-aes/obshchaya-informatsiya-o-stroitelstve-belorusskoj-aes
12 See:Беларусь заключила контракт на поставку ядерного топлива для БелАЭС с компанией Росатома,29.12.2017,https://news.tut.by/economics/575024.html
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fromtheriverNeris(atributaryoftheNemunasriver)thatflowsthroughLith-uania,includingVilnius.
TheprojectiseffectivelyfullyfinancedbytheRussianside.UnderthebilateraldealmadeinNovember2011,90%oftheproject’scostistobecoveredfromaRus-siancreditlineworthUS$10billion.TheRussianstate-ownedVnesheconom-bank(VEB)isinchargeofdisbursementoftheexportloan.TheloanwasmadeavailableinOctober2014anditstermsandconditionsarehighlyrestrictive.13Itisanexportloan,andnotacommodityloan,andusesaspecialreimburse-mentmechanismbasedontheso-calleddocumentaryletterofcredit.Aftertheexecutionofcertainworksordeliveryofconstructionmaterials,theprojectmanagementsignsthecorrespondingdocumentsandsendsthemtotheVEB.ThebankchecksthedocumentsandthentheRussianfinanceministrytrans-fersthefundsdirectlytoAtomstroyexport.ThismechanismshowshowcloselyRussia,whoseconfidenceinBelarusislimited,controlstheproject’sfinances.
Underthecontract,Belarusmayusethemoneyfromtheloanuntil2020,andloanrepaymentisexpectedtostartwithinsixmonthsoftheplant’scommis-sioning,butnotlaterthan1April2021.Theloanistoberepaidin30instal-ments,payableeverysixmonths,andtheUSdollaristhecurrencyofrepay-ment.14Thismeansthatfor15years(2021-2036)BelaruswillhavetorepayaroundUS$1billionayear.Thereisariskthat,shoulditbeunabletomeetitsrepaymentcommitments,itwillhavetohandoversomeofitssharesintheplant(includingacontrollingpackage)toRussia. IfRussiaweretotakeovertheAstravyetspowerplant,theoperationwouldleaveMoscowfacingeconomicchallenges.However,politicalconsiderationsusuallyprevailinRussia’senergypolicydecisions.
Belaruswasexpectedtocover10%ofthecostoftheproject,butinpracticeitdidnothavethemoneyandobtainedanadditionalloanfromMoscowtofinanceitscontribution.On17May2014inMinsk,theBelarusiangovernmentandRussia’sVEBbanksignedanagreementforaneight-yearloanworthUS$500million.15
13 РФ выделит Белоруссии $10 млрд на строительство АЭС, 3.10.2014, http://www.vestifi-nance.ru/articles/47777
14 Белорусская АЭС: чья это будет собственность?, 17.03.2014,http://nmnby.eu/news/ana-lytics/5441.html
15 Подписан договор об открытии кредитной линии до $500 млн на сооружение Белорусской АЭС,17.05.2014,https://www.seogan.ru/podpisan-dogovor-ob-otkritii-kreditnoiy-linii-do-$500-mln-na-sooruzhenie-belorusskoiy-aes.html
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Accordingtoascheduleadoptedattheonsetoftheproject’simplementation,thefirst1,200MWunitwasexpectedtobecommissionedinNovember2018,andthesecondone,withthesameparameters,inJuly2020.However,afterthe300-tonnereactorpressurevesselforthefirstunitwasunexpectedlydamagedduringatrialassemblyinJuly2016,thecontractor,inagreementwiththeBela-rusianleadership,postponedthescheduledlaunchofthefirstunituntilDecem-ber2019inanatmosphereofdeepconcern,mediaspeculationandcontroversy(stirredmostlybypressurefromLithuaniawhichpublicisedinformationabouttheincidentinternationally).Theplannedcommissioningdateforthesecondunitremainedunchanged.TheBelarusianauthoritiesadmittedinearly2018thatthesuccessivestagesofconstructionandassemblyworkshadbeendelayedinthelastthreeyears,butatthesametimetheysaidthatthenew,modifiedschedulewouldbekept.16Indeed,despitethedelays,assemblyworksonthefirstunitshavereachedthepeakphase–asshownbythereports,inearlyApril2017,thatthereactorhasbeeninstalledinkeepingwiththeconstructiondesign.17NuclearfuelforthefirstunitsistobedeliveredfromRussiatoAstravyetsbytheendof2018.Theinstallationofthereactor’sfuelunitisexpectedtotakeplaceinthesummerof2019.
Because most of the works carried out in previous years were preparatoryinnatureandthecoreinvestmentworkswerescheduledintheyears2017–2018,only30%oftheallocatedUS$10billionhadbeenspentbythe3rdquarterof2017.18AccordingtoBelarusianfigures,5,000peoplehavebeenemployedfortheproject,including1,400Russianspecialists.MostworkisbeingcarriedoutbyBelarusiancompanies;however,thesearemainlyauxiliarytaskssinceBelarusisstillstrugglingtofindasufficientnumberofspecialistswithpracti-calexperienceinbuildingandoperatingnuclearpowerplants.Toaddressthisproblem,alreadyin2008,thecountrylaunchedastateprogrammetotrain
16 The Belarusian minister for energy Uladzimir Patupchyk revealed in a press conferenceon21February2018thatsince2015,onaverage20%ofworkscheduledinanygivenyearwasaffectedbydelays.Inhisviewthemainreasonforthatconcernedtheshortageofqualifiedspecialistsanddifficultiesindeliveringconstructionmaterialsandequipment,Министр Потупчик недоволен темпами строительства БелАЭС, 21.02.2018, http://naviny.by/new/20180221/1519216282-ministr-potupchik-nedovolen-tempami-stroitelstva-belaes
17 ThewebsiteoftheBelarusianNuclearPowerPlanthasbeenonlinesince2010,whichpre-sents the official narrativeabout theproject andreportsontheprogressofwork, safetymeasuresandenvironmentalimpactinamodernandaccessibleway(byBelarusianstateadministrationstandards),http://www.dsae.by/ru/
18 Information provided by Mikhail Filimonov, director general of the Astravyets nuclearpowerplant,duringapressconferenceinOctober2017,Строительство Белорусской АЭС обойдется в $11 миллиардов,https://realt.onliner.by/2017/10/12/aes-38
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nuclearenergyspecialists,wherebytheleadingBelarusiantechnologicaluni-versitiesopenedspecialisteducationprogrammes.PracticalandtheoreticalinternshipsatexistingRussianpowerplantshavealsobeenofferedtopeopleworkingintheBelarusianenergysystemwhowillbeinvolvedintheopera-tionoftheAstravyetsplant.19Moreover,PresidentLukashenkahaspersonallyinvitedLithuanianspecialiststocometoBelarus.20However,duetothefactthatthefinancialconditionsarenotveryattractive,theplanthasbeenstrugglingtorecruitpeoplenotonlyfromabroad,butalsodomestically.
2. safety issues
TheBelarusiangovernmenthasrepeatedlyandpubliclymadeassurancesthatthenuclearpowerplantwillbesafeandmeettheinternationalstandardsforthiskindofproject.Aspecialunitoftheinteriortroops(controlledbytheInte-riorMinistry)wascreatedtoprovidesecuritytotheplant; itnumbers300troopsandstarteditsdutyinthepowerplantareainearly2017.Belarusclaimsthatspecialsolutionshavebeenappliedwithregardtopeopleworkingonthesite,topreventterrorattacksandalsostopindependentjournalists,civilsocietyactivistsandotherunauthorisedpersonsfromenteringtheconstructionsitetoobtaininformation.Thoserestrictionswereconsiderablysteppedupintheautumnof2016,afterhighlycontroversialincidentsontheconstructionsite,includingthefallofthereactorpressurevesselmentionedabove.21IndependentBelarusianmediaandthemediainLithuaniahavepublishedmultiplereportsabouterrors,inadequatesupervisionandimplementationproblems,whichalsoimplythattheplant’ssecuritysystemmaybeimperfect.
19 Since last year, Belarusian specialists have been training at the Novovoronezh nuclearpowerplantbuiltaccordingtothesamedesign(AES-2006).Theplanistotrainmorethan200futureemployeesoftheAstravyetsplantattheNovovoronezhplant.
20 Lithuanianspecialistsinthefieldofnuclearpowerplantoperationareinvolvedinthepro-tracteddismantlingprocessoftheIgnalinaNuclearPowerPlantinLithuaniathatstoppedoperatingin2009;manyofthemwillsoonreachretirementage.
21 According to unofficial information gathered by Belarusian journalists, people work-ingontheconstructionarenotallowedtobringmobilephonestowork,facerestrictionsonmovementwithintheconstructionsite,andareunderstepped-upoperationalcontrolbytheKGB.ThejournalisticinvestigationalsorevealedthatmanyoftheBelarusianwork-ersaredissatisfiedwiththeirlowsalariesandarduousworkpatterns(suchastwelve-hourshiftsfor30days),especiallysincetheyseethattheRussianspecialisthavemuchbetterconditions. Many examples of very shoddy execution of construction works, which maycause damage or even collapse of parts of the plant’s structure, have also been revealed.http://naviny.by/article/20161015/1476523783-belorusskaya-aes-zona-sekretnosti-no-1;https://gazetaby.com/cont/art.php?sn_nid=131055
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Meanwhile,theBelarusiangovernmenthastakenanumberofinformationmeasurestoimprovetheatmospherearoundtheproject.Theyhaverepeatedlypledgedtoco-operatewiththeInternationalAtomicEnergyAgency(IAEA)whoseexpertshavevisitedtheconstructionsiteseveraltimesandmetwithBelarusianofficialsinchargeoftheproject’simplementationandsupervision.22Itshouldbenoted,though,thattheIAEA’sactivitiesweretakenlargelyunderpressurefromVilnius.ThevisitsfollowedascheduleproposedbytheBelarusianside.Minskhasbeenrepresentingitscontactswiththeagencyasevidencethattheprojectisbeingimplementedinfullcompliancewithinternationalstand-ards,andhasdismissedanyreservations,includingthoseexpressedbytheLithuaniangovernment,asbeingpoliticallymotivated.Respondingtocriti-cismsoftheprojectandthewayitisbeingimplemented,Belarusianofficialshavesaidthattheycandemonstrate,usingtechnicaldata,thattheplantwillbeable towithstandall impacts includinguptomagnitude8earthquakes,floods,hurricanes,explosionsandimpactfromalargeaircraft.23
However,itistheplant’senvironmentalimpactsthatraisethemostcontro-versy.ThelaconiccommuniquésoftheBelarusiangovernmentsuggestthatdesignworkonthenuclearwastestoragefacilityfortheplanthavenotyetbeencompleted.24Theplanistostorewastewithintheplantforthefirsttenyears,andonlyafterthatperiodwillitbecomenecessarytostoreitinanother,spe-ciallydesignatedplace.However,Belarusianenvironmentalgroupsarealreadywarningabouttherisksofinadequatelystoringdangerousnuclearsubstancesandbuildingtheprojecteddumpinaninadequatelocation(e.g.tooclosetopop-ulatedareas).25
22 TwoIAEAdelegationsvisitedtheprojectinrecentmonths.One(IRRS)examinedtheinfra-structure, while the other (SEED) looked at the project itself, with particular emphasisontheexternalimpact,Беларусь продолжит практику тесного взаимодействия сМАГАТЭ – МИД,7.03.2017,https://www.interfax.by/news/belarus/1221116
23 PressconferenceofNikolaiGrusha,directoroftheNuclearEnergyDepartmentattheBela-rusianMinistryofEnergy,Эксперт: белорусская АЭС способна будет выдержать падение самолета,http://www.tc.by/exhibitions/atomexpo2013/news/1628.html
24 ВБеларусиразрабатываетсяпроектпунктазахоронениярадиоактивныхотходовАЭС,10.07.2017,http://atom.belta.by/ru/news_ru/view/v-belarusi-razrabatyvaetsja-proekt-punkta-zaxoronenija-radioaktivnyx-otxodov-aes-9464/
25 Что будет с отходами БелАЭС, 11.07.2017, http://belsat.eu/ru/programs/chto-budet-s-othodami-belaes/
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III. the astravyets plaNt aNd russIa’s strategy IN the Nuclear aNd electrIcIty sectors
NuclearenergyisaveryimportantareaofRussia’seconomicactivityabroad.TheprincipalformofthatactivityconsistsinparticipatinginnuclearpowerplantprojectsoutsideRussia.Thestate-ownedRosatomcompanyimplementsRussia’spolicyinthisregard.Thecompanyiscurrentlyinvolvedinprojectsfortheconstructionofatotalof21nuclearunitsabroad(includinginBangladesh,China,Egypt,Finland,Iran,Jordan,NigeriaandTurkey).RussiaisalsoactiveinCentralandEasternEuropeandparticipatesinnuclearprojectsinEUmem-berstates,includingtheexpansionoftheTemelinplantintheCzechRepublicandnewunitsatthePaksplantinHungary.InCentralEurope,Russiahasbeenusingitscompetitiveadvantagebasedonhistoricallinks–asallthenuclearpowerplantsintheregionarebasedonSoviet/Russiantechnology.Moreover,mostofthemsourcetheirnuclearfuelfromRussia(seeTable2forthebasicparametersofforeignnuclearprojectsimplementedbyRosatom).
table 2. Nuclear projects currently pursued by Rosatom outside Russia
country project name
Number of units
russia’s financial involvement
source of finance
launch date
Bangladesh Ruppur 2 US$ 11.38 billion loan 2022–2023
Belarus Astravyets 2 US$ 10 billion loan 2018–2020
china Tianwan 2 2(block nos. 3 and 4)
- - 2018
egypt Al-Dabbah 4 US$ 25 billion loan2026–2029
finland Hanhikivi 1 EUR 2.4 billionNational Welfare Fund
2024
India Kudankulam 2(units 3 and 4)
US$ 3.5 billion loan 2020s
Iran Bushehr 22(units 2 and 3)
- -2024–2026
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country project name
Number of units
russia’s financial involvement
source of finance
launch date
turkey Akkuyu 4 US$ 4 billionstate budget
2022 and following years
hungary Paks 2 US$ 10 billion loan 2020s
Source:S.Kardaś,Rosyjsko-egipska współpraca w sferze energetyki jądrowej,OSWAnalyses,20.12.2017
ThemainobjectiveofRussia’sactivityinthenuclearsectoristouseenergypro-jectstostrengthenitseconomicinfluenceandkeeporincreasethetargetcoun-tries’energydependenceonRussiainordertogaintoolsofpoliticalinfluence.Moscow’sintentionisstill,irrespectiveofthechangingconditionsinEurope,tokeepandexpanditselectricityinterconnectorswithEUcountriestopreservetheabilitytoexpandintotheEuropeanelectricitymarket.
TheconstructionoftheAstravyetsplantisparticularlyimportantinthecontextofRussia’sstrategicobjectives.Initially,Russia’skeyobjectiveinrelationtotheprojectwastousethenewinfrastructuretoexportelectricitytoEUmarkets(thesameobjectivewasbehindtheneverimplementedplanstobuildanuclearpowerplantintheKaliningradOblast(seebox).
the Baltic Nuclear power plant in the Kaliningrad oblast
The planned Baltic Nuclear Power Plant (BNPP) in the Kaliningrad Oblast (close to the city of Neman near the Lithuanian border) is an example of a project that was intended to enable Russia to export electricity to Euro-pean markets. The decision to build two units with a total capacity of 2,300 MW was taken in 2009. In view of the Kaliningrad Oblast’s very limited electricity needs, the real aim of the project was to export electricity to countries in the region (mainly Poland and Lithuania, but also Germany). The Russian side made the first proposals to build electricity interconnec-tors between the Kaliningrad Oblast and Poland back in May 2010. They concerned the construction of a double circuit 400 kV high-voltage power line. In the following years Russia proposed to build modified variants of the interconnectors: as a direct link between the Kaliningrad Oblast and Poland (Mamonovo – Olsztyn), a link using existing Russian-Lithuanian in-frastructure (Sovetsk – Bitėnai – Klaipeda), and finally a Polish-Lithuanian interconnection (using the LitPol Link). The Russian side also considered
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laying a submarine electricity cable from the Kaliningrad Oblast to Ger-many. As the potential electricity buyers showed no interest, and because Russia struggled to find interested external investors to fund the Baltic Nu-clear Power Plant, the project was suspended in June 2013.
Discussions about a nuclear power plant in the Kaliningrad Oblast recom-menced in 2017, but their outcome so far suggests that the debate mainly serves propaganda purposes. On the one hand, the Russian energy minis-ter Alexander Novak said during a visit to Kaliningrad in April 2017 that implementing the project is necessary in view of the projections of rising electricity consumption in Europe. At the same time, Rosatom representa-tives started to intensively promote the project during open seminars and industry conferences, emphasising that it would generate electricity for export (mainly to the Central European markets), while the media start-ed spreading reports that the reactor pressure vessel damaged during at-tempted assembly in Astravyets would be moved to Kaliningrad and used on the Baltic Nuclear Power Plant. However, no steps have been taken that would indicate that works on the project are genuinely recommencing. Moreover, in view of the energy strategies of EU member states and the projections of electricity generation and consumption, the EU will not need to import electricity. On top of that, as many Western European countries are abandoning nuclear energy (especially Germany), the prospect of them importing electricity generated at nuclear power plant in the Kaliningrad Oblast or Astravyets does not seem realistic.
Irrespective of the freezing of the BNPP project, Moscow has proceeded to expand the electricity and energy infrastructure in the Kaliningrad Oblast. On 2 March 2018, two large gas-fired power plants were officially commissioned (Mayakovskaya and Talakhovskaya, with a capacity of 156 MW each), and two more are under construction, including the gas-fired Pregolskaya (with a capacity of 440 MW, planned launch in late 2018 or ear-ly 2019) and the coal-fired Primorskaya (with a capacity of 195 MW, planned launch in the first half of 2020). The cost of building the four facilities is es-timated at RUB 100 billion. The total capacity of power plants currently op-erating in the Kaliningrad Oblast is 900 MW (2 units of the Kaliningrads-kaya–2 CHP plant). The future demand for power capacity in the oblast will range, according to Russian estimations, from 250 to 840 MW, and Moscow argues that the expansion of capacity by around 950 MW is justified by the projected increase in electricity consumption in the Kaliningrad Oblast by even up to 100% by 2020. It has also been argued that the new projects are
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intended to provide security in the event the existing power plants need to be renovated or go offline for other reasons.
RussiaalreadyexportssomeelectricitytotheEUmarket,andEUbuyersaccountfornearly50%ofthecountry’stotalelectricityexports.FinlandisthebiggestimporterofRussianelectricity(5.04TWhin2017,withtotalconsumptionat85.5TWh);andLithuaniaranksthirdamongRussia’stradingpartnersinthissphere(3.13TWhin2017,withtotalconsumptionat10.76TWh).AdetailedspecificationofthedirectionsofRussia’selectricityexportsispresentedinTable3.
table 3. Russian electricity exports by country (TWh)
2012 2013 2014 2015 2016 2017
finland 3.79 4.10 2.99 3.38 5.28 5.04
lithuania 4.78 3.56 3.21 2.99 3.01 3.13
china 2.63 3.49 3.37 3.29 3.32 3.32
georgia 0.51 0.46 0.62 0.51 0.40 0.50
Kazakhstan 2.28 1.66 1.64 1.54 1.16 1.29
Belarus 3.69 3.59 1.42 2.81 3.18 2.73
Mongolia 0.39 0.41 0.39 0.28 0.30 0.37
south ossetia 0.13 0.13 0.14 0.14 0.15 0.15
ukraine 0.08 0.03 0.17 2.46 0.12 0.09
azerbaijan 0.06 0.05 0.05 0.05 0.06 0.06
total 18.36 17.53 14.043 17.49 17.00 16.68
Source:http://www.interrao.ru/activity/
FromMoscow’spointofview,theexpansionofits–alreadydominant–eco-nomicandpoliticalinfluenceinBelarusisalsoanimportantobjective.Thepro-jectwouldnotbepossiblewithouttheRussianside’sfinancialandtechnologi-calinvolvement,whichimpliesthatitwillbeoperatedinawaythatwilltakeRussia’sinterestsintoaccount.Giventhechangingplansconcerningthecon-structionofnewnuclearunitsinRussia(Rosatomexpectsdelaysandmaygiveupsomeprojects),itisverylikelythattheprofileoftheAstravyetsplantwill
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besubordinatedtoRussia’snuclearstrategyintheinternalmarketinthecom-ingyears(seechapterVofthispaperformoredetails).
TheRussianplansconcerningthecreationofacommonenergymarketwithintheEurasianEconomicUnion(EEU)alsopointinthatdirection.Intheautumnof2017theRussianmediaannouncedthatthegovernmentoftheRussianFed-erationwouldextendaproposaltotheotherEEUmembers,i.e.Armenia,Bela-rus,KazakhstanandKyrgyzstan,askingthemtohandovertoMoscowtheircompetences regarding the trade in electricity within the common marketoftheEEU.ThosecompetenceswouldbevestedintheAdministratoroftheTradingSystemoftheWholesaleElectricityMarket,i.e.theinstitutioncur-rentlyinchargeoftheorganisationandoperationofthewholesaleelectricitymarketinRussia.TheRussiansidehasannouncedthattheagreementonacom-monelectricitymarketwithintheEurasianEconomicUnionwouldbesignedbytheendof2019.26Ifthoseplansmaterialiseonthetermsandconditionspro-posedbyMoscow,theKremlinwilltightenitspoliticalgripoftheEEUmem-berstates’energymarkets,gainmoreinfluenceontheirenergystrategiesand,consequently,expanditsabilitytousetheenergyinfrastructuresoftheEEUmemberstates.
26 Москва хочет быть энергостолицей,https://www.kommersant.ru/doc/3454638
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Iv. lIthuaNIa oN the BelarusIaN Nuclear power plaNt IN astravyets
1. lithuania’s arguments against the plant
BecauseAstravyetsisinthedirectvicinityoftheLithuanianborderandVil-nius, Lithuania has been particularly determined and persistent in tryingtoblocktheproject.Itspositionisbasedonthefollowingarguments:
• The selected location is not suitable for the project.LithuaniacitestheopinionofBelarusianscientistswhoevaluatedthe28proposedlocationsbackin199327andconcludedthatAstravyetswasnotsuitablebecauseofitsgeologicalconditionsandincreasedseismicrisk.Belarushasnotpresentedanyalternativestudyofthesite’sgeologicalandtectonicstructure.
• Belarus selected the location prior to conducting an environmental impact assessment,inviolationoftheEspooConvention.TheselectionofthesitewasnotagreedwithLithuania,inbreachofthe1994ViennaCon-ventiononNuclearSafety.Sincethe2013Fukushimanucleardisaster,therecommendation of the International Atomic Energy Agency (IAEA) hasbeen that no new plants should be located within 100 km of large cities.Meanwhile,Belarus iscarryingoutconstructionworkswithin50kmofVilnius,whichmeansthatintheeventofanaccident,theLithuaniancapi-talandonethirdofthecountry’spopulationwillbewithinthezoneofra-diologicalcontamination.
• Belarus has ignored civil society protests against the Astravyets plant,inviolationofthe1998AarhusConventiononpublicparticipationindecisionsconcerningthenaturalenvironment.In2015,LithuaniafiledacomplaintwiththeAarhusConventionComplianceCommittee,claimingthatLithuaniancitizens’righttoinformationhadbeenviolatedinconnec-tionwiththeAstravyetsproject.
• Because of the project’s location, the Lithuanian government has been forced to take measures to address the effects of a possible incident.Thecostofdevelopingcountermeasuresintheeventofradioactivecontam-inationwillbebornebytheLithuanianside.Lithuaniahasbeenforcedto
27 Г.Лепин,Величайшая диверсия или худшая из неблагоприятных,ОГП,http://ucpb.org/news/economics/velichajshaya-diversiya-ili-khudshaya-iz-neblagopriyatnykh
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developevacuationplansforthecapitalcity,tocreateadequateinfrastruc-tures to be able to carry out those plans, and to purchase the necessarymeanstoevacuateandrescueitspopulation.Theplansmustalsomakepro-visionsforthepossiblecontaminationoftheNerisriver;andLithuaniahasreportedtheissueofpossiblecontaminationtotheImplementationCom-mitteeoftheHelsinkiWaterConvention.TheriveristheprimarysourceofdrinkingwaterfortheLithuaniancapitaland,sinceitisatributaryoftheNemunas,itcanpotentiallycontaminatethewholecountry’swaterre-sources.ThetwocountrieshavenotconcludedanyagreementontheuseandprotectionofwaterintheNemantributaries,althoughLithuaniahasbeenpressingforthesignatureofabilateraltechnicalprotocolsince2009.
• Constantly monitoring the situation in Astravyets will pose a chal-lenge to the Lithuanian services.Minskhabituallyreportsincidents(fornow,relatedonlytoconstructionworks)solelyunderpressurefromthein-dependentmediainBelarusandfromLithuania.Vilniusisnotconcernedbythereactortechnologybutconsidersitselftobe under major risk due to an inadequate working culture, a disregard for safety standards and poor supervision of the plant’s construction. IntheopinionoftheLithuanian authorities, Belarus is not performing sufficient oversightof the plant’s safety because the project is controlled by Rosatom. Lithu-ania’ssafetyassessmentisbasedonananalysisofincidentsthatoccurredinthecourseoftheproject’simplementation.Itshowsthatin2016alone,thereweresixseriousincidentsrelatedtotheconstruction.TwooftheminvolveddamagetotwoRosatom-producedreactorbodies,whicharepartof the plant’s safety arrangement (the first reactor pressure vessel wasdropped to the ground on 10 July 2016, and the second one collided witharailwaypylonon26December2016and,despitethedamagesustained,wasapprovedforinstallationatthefirstunit).
• No stress tests have been carried out despite Lithuania’s demands.Lithuaniahasbeencallingforsuchteststobecarriedoutwiththepartici-pation of international experts and in keeping with international stand-ardsfortheassessmentofriskatnuclearfacilities.IthasthebackingoftheEuropeanParliament(resolutionsof16November2016and5April2017ontheneedtoensurethehighestsafetystandards).
• Belarus has been manipulating the SEED (Site and External Events Design) mission of the IAEA.Since2013,LithuaniahascalledonBelarustoacceptafullSEEDmissiontocarryoutstudiesoftheconstructionsite
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(includingstresstests)anddecidewhetheritissuitableforanuclearpowerplant.In2014,Lithuania’spositionwasbackedbytheBureauoftheEspooConventionandtheNuclearSafetyConvention.On16-20January2017,Be-larusdidacceptapartialSEEDmission(thecompositionofthemissionisdecidedbythehost,notbyIAEA).WithregardtothesubjectmatterthatBelarus allowed the mission to examine, no reservations concerning thelocationorthesafetymeasureswerereported.ForLithuania,thewaythemissionwascarriedoutprovesthatBelarus’sapproachtosafetystandardsisselectiveandthatMinskiscreatingafalselypositiveimageoftheAstra-vyetsprojecttomisleadinternationalpublicopinion.
• No adequate security measures at the plant.WhileBelarushascreatedaspecialmilitaryunittoprovidesecuritytotheplantandhasstartedcre-atinganairdefencebaseforthesamepurpose,directsecurityservicesfortheplantareprovidedbyprivatesecuritycontractors,andnotthemilitary.Moreover, Belarus has not studied the plant structure’s resilience in theevent of impact by a large aircraft. As per the 2013 recommendations oftheWesternEuropeanNuclear Regulators Association(WENRA),allnewlybuiltpowerplantsshouldbeabletowithstandsuchanincident.Belarushasrefusedtoconductsuchstudies.28
2. lithuania’s objections against rosatom’s influence in the region
Internationally,Lithuaniahasmainlybeenraisingargumentsthatconcernvio-lationsofinternationalconventionsinconnectionwiththeAstravyetsprojectandMinsk’sinsufficientsupervisionoftheproject.However,itsobjectionsaremotivatedbythebeliefthatAstravyetsisaRussianeconomic-politicalprojectandthatRosatomisimplementingtheKremlin’spolicyaimedatpreservingRussianpoliticalinfluencebywayofeconomicpressure.AccordingtotheLithu-anianleadership,theinternationalinstitutions’failuretostoptheprojectandotherinvestmentsinwhichRosatomisinvolvedinEuropeisasharmfulastheirfailuretostoptheNordStreamgaspipeline.29
28 Lithuania invokes the example of Finland which demonstrated that the structure of itsRosatom-designedplantontheHanhikivipeninsulacouldnotwithstandanaircraftimpact,andtheRussiancompanywasforcedtomodifythedesigns.
29 R.MasiulisJAV: “Rosatom” tampa geopolitinio spaudimo įrankiu,https://www.delfi.lt/verslas/energetika/rmasiulis-jav-rosatom-tampa-geopolitinio-spaudimo-irankiu.d?id=72436962
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LithuaniaoccupiesaprominentpositioninRosatom’sstrategytowardstheBal-ticregion.Theregion’sonlypumped-storagepowerplantislocatedinLithu-anianterritoryinthetownofKruonis.ItcouldprovidethenecessaryreservecapacityandhelpinbalancingtheBelarusiangridwhentheRosatomnuclearpowerplantgoesonline(whetherinAstravyetsorintheKaliningradOblast).In relation to Rosatom, the Lithuanian leadership is anxious not to repeatmistakesmadeinthepastintherelationswithGazprom,towhichLithuaniahandedovercontrolofitsstrategicgastransmissioninfrastructurein2004.30GazpromnotonlyfailedtoensurelowgaspricesbutalsocorruptedtheLithu-anianpoliticalelitewhiletryingtothwartinitiativesaimedatthediversifica-tionofgassuppliestotheBalticregion.IttooktheLithuanianleadershiptenyearstopurgethegassectorofGazprom’spoliticalandeconomicinfluence,whichalsoinvolvedeffortstoconvincetheEuropeanCommissiontolaunchthenowongoingantitrustproceedingsagainstGazprom.
In2012,LithuaniarejectedRussia’soffertoco-operateontheBalticNPPprojectintheKaliningradOblast,despiteattemptsmadebyRosatomandtheRussiansecretservicestobribetheLithuanianpoliticalelites.31Lithuania’sresistancecouldhavebeenanimportantfactorinRosatom’sdecisiontofreezetheKalinin-gradprojectandfocusontheconstructionofanuclearpowerplantinBelarus.MinskisanimportanteconomicpartnerforLithuaniabecauseoftheBelaru-siantransitviaLithuania’sBalticports.Formanyyears,theKlaipedaporthasbeenstrivingtopositionitselfasthemainBalticportforBelarusiantransit.LithuaniahasalsosoughttobeactiveintheEasternPartnershipprojectandformanyyearsmaintainedrelationswiththeBelarusianleadership,supporting
30 In2004,theLithuaniangovernmentagreedtosellGazproma34%stakeinthecountry’sgasmonopolyLietuvosdujos(dealingwithtransmission,distributionandtrade).TogetherwiththestakeheldbytheRussiancompanyIteraLietuva,Gazpromthusacquiredacon-trollingstakeinLietuvosdujos.TheRussianmonopolyfailedtodeliverontheconfidentialpartoftheprivatisationagreementanddidnotensurestableandcheapgassuppliestoLith-uania.TherisinggaspricespromptedVilniustocarryoutaradicalreformofthegassector(inlinewiththeguidelinesoftheEuropeanUnion’sThirdEnergyPackage),whichforcedGazpromtoresellitsgastransmissionandtradeassetstotheLithuanianstate,asaresultofwhichLithuaniawasabletolaunchtheLNGterminalinKlaipedainlate2014.
31 Declassified documents of the Lithuanian security service VSD (State Security Depart-ment)showthatin2012RosatomtriedtoincreaseitsswayinLithuaniabybuildingrela-tions with Lithuanian entrepreneurs, via whom the Russian side also tried to bribe pol-iticians of the then ruling Social Democratic Party. Former KGB operatives in Lithuaniawere involved in the execution of Rosatom’splans. One of the aims of the operation wastopersuadeVilniustojointheBalticNPPprojectortoallowRosatomtoacquirea25%stakeintheLithuaniannuclearpowerplantproject inVisaginas,http://www.lrt.lt/naujienos/lietuvoje/2/169550(accessedon17.11.2017).
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Minsk’srapprochementwiththeEU.TherapprochementbetweenLithuaniaandBelarusintheyears2008–2010–whichfollowedtheliftingoftheEUsanc-tionsagainstBelarusandoccurredduringMinsk’sgasdisputeswithRussia–wasaimedatintensifyingthetwocountries’co-operationintheareasoftran-sitandenergy–inkeepingwithVilnius’splansandagainstRussia’seconomicinterests.
ThedecisiontolocatetheBelarusianNuclearPowerPlantinAstravyets,i.e.like the BNPP, very close to the Lithuanian border, and Rosatom’s key roleinthatproject,putanendtotheperiodofco-operationbetweenVilniusandMinsk.Moreover,thedecisionhastriggeredthedeepestcrisisinBelarusian-Lithuanianrelations,whichcontinuestothepresent,adverselyaffectingthetwocountries’politicalandeconomicrelationsandtheirco-operationwithinEUprogrammes.
TheweakeningofLithuanian-Belarusiancontactscreatedanopportunityforcloserco-operationbetweenLatviaandBelarus.Latvia’sprimeministerMārisKučinskis,whohasbeendevelopingclosercontactswiththeBelarusiansidesincetheendof2017,hasdeclaredthathiscountryisinterestedmainlyintran-sitco-operationbetweenLatvia(portsandrailways),BelarusandChina(theChinese‘GreatStone’industrialparknearMinsk).UnlikethepreviouseffortsofLithuania,thisco-operationisnotdirectlyaimedatunderminingBelarusian-Russianrelations.32Moreover,Latvia’sinvolvementineconomicco-operationwithBelarushasalsobeennegativelyaffectingtherelationsbetweenRigaandVilnius.Mostimportantly,ithasunderminedLithuania’shopesthattheBalticstateswouldadoptajointpositiononAstravyetsandRosatom’spolicyintheEUandpromoteitinEuropeanforums.Inotherwords,itbenefitsRussia’spolicy.
3. steps taken by vilnius with regard to the Belarusian Nuclear power plant
LithuaniahastakentwokindsofmeasuresinconnectionwiththeAstravyetsissue.Firstly,ithasstriventoblockthepossibilityofBelarussellingtheelectric-itygeneratedatAstravyetsinthecombinedmarketsoftheBalticstates,which
32 OntheoccasionoftheLatvianPMMārisKučinskis’svisittoMinskinearlyFebruary2018,PresidentLukashenkamadeadeclarationofloyaltytoRussia,sayingthathiscountrywouldneverbefriendswithanyoneagainstRussia;VSD medžiaga: “Rosatom” per M. Bastį bandė Lietuvą įtraukti į bendro verslo voratinklį,LRT,12.04.2017,https://www.delfi.lt/news/daily/world/lukasenka-baltarusija-niekada-su-niekuo-nedraugaus-pries-rusija.d?id=77122225
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areintegratedwiththeEuropeanmarket.Secondly,inaneffortthatimpactstheAstravyetsproject,ithassoughtanasfastaspossibledesynchronisationoftheBalticstates’gridswiththegridsofBelarusandRussia(theirsynchronisedsystemoperatesundertheBRELLcontractbetweentheBelarusian,Russian,Estonian,LatvianandLithuanianoperatorswhichstillremainsinforce).
the Baltic grids – towards synchronisation with continental europe
When the Baltic states joined the EU, their energy systems were isolated from the European energy system. In 2004 the development of intercon-nectors started, and currently the Baltic region can exchange energy with the EU system via four asynchronous interconnections linking Estonia and Finland (Estlink 1, Estlink 2), Lithuania and Sweden (NordBalt), and Lithu-ania and Poland (LitPol Link). The links to Finland and Sweden connect the Baltic grids with the Nordel grid (comprised of the Nordic states), while the link to Poland connects the Baltic grids to the UCTE grid (spanning continental Europe). Grid operators in the UCTE and Nordel systems work together under the ENTSO-E agreement which brings together European transmission system operators who together make up the EU energy mar-ket. Despite the development of interconnections, the Baltic grids are still part of the post-Soviet IPS/UPS synchronous system (under the BRELL agreement on co-operation between the operators in Belarus, Russia, Es-tonia, Latvia and Lithuania). Currently the three Baltic states intend to de-synchronise from the IPS/UPS and synchronise with the continental Eu-rope grid using the Polish-Lithuania interconnection LitPol Link.
ThesynchronisationoftheBalticgrids,supportedbytheEuropeanCommissionwhichprovidesfinancingfromtheCEF,isscheduledtobecompletedin2025.ThecommissionagreedwiththecasemadebytheBalticstatesthatwhiledesyn-chronisationandsynchronisationarecostlyprocesses,inthecurrentIPS/UPSsystemtheBalticstatesdonothavefullcontroloverthegridsystemparam-etersbecausesupervisionisexercisedbythesystemheadquartersinMoscow.ThegridcreatedundertheBRELLagreementspansalargeterritory,andtheRussianandBelarusianinfrastructuresareobsoleteandoftenmalfunction.TheBalticstatesdonothaveaccesseithertoinformationonthesystem’scurrentcondition,nortoplansregardingitsmodernisationanddevelopment.AnotherargumentforsynchronisationreferstotheambitionstobuildanintegratedEuropeanelectricitymarketinwhichEUactorstradinginelectricitywouldcompete for customers on a level playing field. Harmonising the technicalparametersthroughsynchronisationisoneofthewaystoensuresuchalevel
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playingfield.Finally, theBalticstateshavealsoarguedthatRussiahasnotsignedtheEnergyCharter,whichmayrenderitmoredifficultforstatessyn-chronisedwithitsenergysystemtofunctionintheEuropeanenergymarket.
where is lithuania’s electricity produced?
Since the Ignalina NPP was phased out on 31 December 2009, the Elektrėnai power plant (with a reserve capacity unit and a new combined cycle unit operating on gas/mazut), the pumped-storage plant in Kruonis and the Al-girdas Brazauskas hydro power plant in Kaunas have been the country’s main power generators. All three are owned by the state-owned company Lietuvos Energijos Gamyba which generates and trades in electricity, sell-ing it in the Nord Pool Spot exchange and providing balancing services to energy suppliers. There are also other, smaller power plants that use local and renewable sources (mainly CHP plants running on biomass and wind farms). The Lithuanian power plants are able to fully cover the country’s electricity demand, but they use only around 22% of their installed capac-ity because the price of electricity generated in Lithuania is not competitive due to the need to import fuels (gas and mazut). Because of that, Lithuania imports energy, mainly from Estonia, Latvia, the Nordic states, Poland, Russia and Belarus. Before 2016, around 50% of imported electricity on av-erage came from Estonia and the Nordic states, and another 50% from Rus-sia (with around 2% coming from Belarus). When the NordBalt and LitPol Link interconnections were launched in early 2016, the structure of energy imports changed. The interconnections allowed Lithuania to better diver-sify its imports and reduced its dependence on providers outside the EU, es-pecially Russia. In 2016, imports from Latvia, Estonia, Sweden and Poland accounted for 70% of Lithuania’s total electricity imports. The remaining 30% came from Russia and Belarus.
3.1. Efforts to block trade in Belarusian electricity
TheLithuaniangovernmentisdeterminedtopreventBelarusandRussiafrombecomingthemainexportersofelectricitytotheLithuanianmarketandcashingintherelatedprofits,estimatedatEUR700millionayear.Shouldthathappen,Lithuania’seconomywouldbecomemorecloselytiedtotheBelarusianNuclearPowerPlantinAstravyets.ThatiswhyVilniusdecidedtotakemeasureswhicharecontroversialfromamarketeconomypointofview,toblockthepossibilityofBelarussellingtheAstravyets-generatedelectricityintheBalticregion.On20April2017,theLithuanianparliamentadoptedabill‘Onthenecessarysafeguards
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againstthreatsfromunsafethird-countrynuclearpowerplants’.33ThebillstatesthatelectricityfromnuclearpowerplantsdeemedbytheLithuanianparliamenttobeunsafe(andsofar,onlytheAstravyetsNPPhasbeendeclaredunsafe)34cannotbetradedintheLithuanianmarket.TheprohibitionwillenterintoforcethemomenttheBelarusianpowerplantislaunchedandwillapplytocommer-cialflows,withoutaffectingtechnicalflows,i.e.theenergyneededtopreservethestabilityoftheenergygridsofLithuaniaandBelarus.On13September2017,theLithuaniangovernmentapprovedanactionplantoblocktradeinelectricitycomingfromAstravyets.ItalsoprohibitedtheKruonisfacilityfromprovidingbalancingservicestoBelarus.Bythe2ndquarterof2018,agreementsarealsotobesignedwithLatviaandEstoniaontheimpositionoftariffsonenergytrans-missionfromthirdcountries,subjecttotheEuropeanCommission’sapproval.CurrentlyBelarusianandRussiancompaniessellingelectricitytoLithuaniapaynosuchtariffs,eventhoughLithuanianexportersdo.
TheobjectivebehindtheadoptionoftheLithuanianactionplanisnotonlytoblocktheexportofenergygeneratedatAstravyets,butalsotostepuptheeffortsaimedatgettingtheothercountriesintheregiontoalignwithLithu-ania’spositionontheAstravyetsplant.Moreover,Lithuania’sstrategyalsoseekstostimulatecloserEuropeanandregionalenergyco-operation.Sofar,Lithuania’s position on the Belarusian Nuclear Power Plant has been sup-portedmainlybyPoland.35Poland’sdeclarationswereparticularlyimportantforLithuaniainthecontextofitsrelationswithLatviaandEstonia.WhilethegovernmentsofthetwocountriesdoshareLithuania’sviewthattheAstravyetsplantshouldmeetallEuropeanandinternationalsafetystandards,theyhavemadenoclearstatementsastowhethertheywouldtakeanymeasurestoblockBelarusianenergyexports.Atthisstage,whentheBelarusianauthoritiesarealreadyannouncingthefirstreactor’slaunchdate,theLithuaniangovernment
33 Thetextofthebillcanbeconsultedat:https://www.e-tar.lt/portal/lt/legalAct/baeac2202f-3c11e78397ae072f58c508
34 Thebillprovidesthat‘unsafeplants’arethosewhosedesign,constructionoroperationfailstomeetsafetystandardsrelatedtoenvironmentalprotectionandprotectionagainstradi-ation or which breach international agreements and conventions, and those which poseathreattothesafety,thenaturalenvironmentandhumanhealthintheRepublicofLithu-aniabecauseoftheirgeographiclocationortechnologyused.TheLithuanianparliamentwilldeclarethird-countrynuclearpowerplantsasunsafeonacasebycasebasisthroughseparatelegalbills.
35 On 17 March 2017, Piotr Naimski, the Polish minister and governmental plenipotentiaryforstrategicenergyinfrastructure,announcedthatPolandwouldnotbuyelectricityfromAstravyets and would dismantle the no-longer functioning Ros–Białystok link, http://www.energetyka24.com/563903,minister-naimski-nie-dla-energii-z-bialorusi
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viewsblockingenergyexportsasmoreeffectivethanattemptsatdemonstrat-ingthattheprojectviolatesinternationalsafetystandards.TheLithuaniatacticmaysucceedindelayingthelaunchofthesecondreactorinAstravyetsorevenpreventingitscommissioningaltogether.
AccordingtoLitgrid,theLithuaniantransmissionsystemoperator,LithuaniaisabletosinglehandedlyblockcommercialenergyflowsfromBelarus.Tothisend,VilniusintendstousetheNordPoolpowermarket,36andthusavoidhav-ingtoinvestinnewfacilitiessuchasphaseshiftersandhavingtobeartheadditionalcostsofthemeasurestoblockAstravyets’senergyexports.TradeinenergywithBelarusortheothercountrieswithwhichLithuaniahasinter-connectionsispossibleonlyviathepowermarket.ThismeansthattheLithu-anianinstitutionswillbeabletocontrolcommercialcontractsmadethereandblockcontractstobeexecutedviaanyofthefiveexistinginterconnectionsbetweenLithuaniaandBelarus.37Whilethephysicaltransmissionofenergywillnotbeblocked,tradewillnolongerbepossible.ThisnotonlymeansthattheAstravyetspowerplantwillnotbeabletoofferitselectricityintheLithu-anianmarket,butalsothatotherBelarusianentitieswhichcurrentlytradeviaNordPoolwillbeunabletosellit.Suchwillbetheconsequencesofthedecisiontoblockcommercialflows,becauseitisnotpossibletodetermineiftheenergyofferedcomesfromanuclearpowerplantoranothersource.Thosemeasuresmay be seen as a way for Lithuania to exert additional economic pressureonBelarus.
Litgrid, the Lithuanian operator, is positive that technical flows that servetobalancetheBelarusianandLithuaniangridswillbepreserveduntiltheBalticgridsbecomesynchronisedwiththecontinentalEuropeangrids,irrespectiveofthetypeofpowerplantinwhichsuchenergyisgenerated.Withthecurrentlyexistingtransmissioninfrastructureintheregion,BelarushaspracticallynotechnicalpossibilitytoexportitselectricitytotheBalticstatesotherthanviaLithuania,i.e.itcannotdothisviaLatviaorFinland.Itwouldhavetodevelop
36 https://www.delfi.lt/verslas/energetika/ar-i-lietuva-pateks-astravo-elektra.d?id=76537663(accessedon4.12.2017).
37 On10AprilLitgridsignedacontractwiththeLithuaniancompanyKaunoTiltaiandSwe-den’sABBforthereconstructionoftwotransformerstationsinIgnalinaandUtenaandthedismantling,bythespring2021,ofthefirst750kVultrahighvoltagepowerlinebetweentheIgnalinastationandBelarus.TheremainingpowerlinesbetweenBelarusandLithu-aniawillalsobedismantledasthesynchronisationprocessprogresses,Minister Naimski: „Nie” dla energii z Białorusi,Energetyka24,17.03.2017,https://www.etaplius.lt/lietuva-ruo-siasi-astravo-ae-isigyti-elektros-is-baltarusijos-bus-neimanoma
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newinterconnections,e.g.viaLatvia,butnosuchplanshavebeenmentionedtodate.ThismeansthatsincetheLithuanianparliamentdecidedtoblocktradeinBelarusianenergy,Lithuaniadoesnotneedbackingintheformofsimilardecisions by Latvia, Estonia or Finland to prevent Belarusian energy fromenteringitsmarketviathegridsofothercountriesintheregion.
However,thedecisiontoblocktradeiscontroversialinviewofEUmarketregu-lations.TakingsuchmeasuresinrelationtoBelaruswillhavetobeapprovedbytheEuropeaninstitutions,whichmayendupinadisputebetweenLithuaniaandtheEuropeanCommission.ToargueitscasetotheEuropeaninstitutions,Vilniushasrepresented Astravyets as a purely political project inspired by Russia, which Belarus has limited control of, forcing Lithuania to more broadly consider various safety aspects of the project. Lithuania demon-strates that while the HVVER-1200 reactor technology is not controver-sial, Rosatom has not complied with safety standards while implementing the investment, similar to other projects which it has carried out in Russia and abroad. LithuaniawillthereforehavetoconvincetheEUdecisionmak-ersthatthesituationconcerningtheconstructionandfutureoperationoftheAstravyetsplant isextraordinaryandthattheLithuaniangovernmenthastotakemeasurestorespondtoawiderangeofthreats,includingnaturaldis-asters,humanerrorcausedbynegligentapproachtosafetystandards,incom-petentoversightorhostileaction,inparticularbyRussia,suchasdeliberatelycausingpanicorsabotageusinghybridwarfaremeans.
3.2. Synchronising the Baltic energy grids with continental Europe
IntheaftermathofLithuania’sdecisiontoblockthesaleofenergyfromtheAstravyetsplant,VilniussteppedupeffortsregardingthesynchronisationoftheBalticgrids.TheLithuaniangovernmentmanagedtopersuadeLatviaandEstoniatoacceptthevariant(whichispromotedbyLithuaniaandregardedasmostfavourablebytheEuropeanCommission)tosynchroniseusingthePol-ish-LithuanianLitPolLinkinterconnection.38AccordingtothemanagementofLitgrid,theLithuaniangridoperator,39Russia(alongwithBelarus)hasbeenpreparing for desynchronisation already since 2014. Information obtained
38 On 22 March 2018, the prime ministers of Poland, Latvia and Estonia and the presidentofLithuaniareachedagreement, inthepresenceofEuropeanCommissionPresident Jean-ClaudeJuncker,onsynchronisingtheirelectricitygridswithcontinentalEuropeviaPoland.
39 A.Jockus, Lietuva pajėgi viena blokuoti Astravo AE,3.10.2017,https://www.lzinios.lt/lzinios/ekonomika/lietuva-pajegi-viena-blokuoti-astravo-ae/251391
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byLitgridshowsthatRussiahasalsobeenexpandingitsowntransmissionsysteminrecentyears,withnewlinesbeingbuiltalongthebordersofLatvia,EstoniaandBelaruswhichformaninnerringalternativetoBRELL.AccordingtoLitgridmanagement,theblueprintforgridexpansionrelatedtotheconnec-tionoftheAstravyetsplantalsoresemblesthecreationofanotherringalongtheborderwithLithuania,tobypassthoseelementsofthecurrentBRELLringthatarewithinLithuanianterritory–thisclearlypointstodesynchronisation.
TheLithuanianoperatorhasalsomonitoredthesituationintheKaliningradOblastwheretheprogramtoexpand(coalandgas)capacityforthepurposesofriskmanagementisunderway.Litgridinterpretsthosemeasuresasprepara-tionoftheKaliningradgridtooperateinisolation(possiblyasearlyas2020),asthecapacityreservewillallowtheoblasttoremainstablewithoutBRELL.LithuaniaandtheotherBalticstateswillalsohavetotrialoperationinisolation,assuchtestsarerequiredbeforetheEUoperatorscandecidetosynchronisetheBalticstates.ThetestsareplannedtobecarriedoutinJune2019.Meanwhile,therearemanyindicationssuggestingthatRussia’sactivitiesshouldbeinter-pretedaspreparationsforaso-calledpre-emptivedesynchronisation,whichmayberiskyfortheBalticstates.However,whetherthathappenswilldependonMoscow’spoliticaldecision.RussiamighttreatsuchameasureasakindofsanctionforLithuania’sunfriendlypoliticalcourse.AccordingtoLitgridrep-resentatives,RussiawillbeabletotakestepsthatwouldnegativelyaffecttheBalticstates’grids.Incertainconditions,disconnectingmightleadtoablackout,intheeventofwhichtheLithuanianoperatorsaysitwouldneed3to5daystorestoresystemstability,andthatwouldsurelyrenderthesynchronisationwithcontinentalEuropemoredifficult.AccordingtotheLithuaniansecurityservices,RussiahasbeeninvolvedinactivitiesaimedatdelayingtheBalticstates’synchronisation.40IthasbeenlobbyingvariousEUinstitutionsonthetopic,includingtheEuropeanCommission.
3.3. The impact of the Belarusian Nuclear Power Plant on energy policy discussions within Lithuania
TheLithuanianGreens,whichhavebeenpartofthelargestgroupingintheparliamentsincethe2016electionswonbytheLithuanianFarmersandGreensUnion(LVŽS),havebecomeactivelyinvolvedintheexpertandpoliticaldebatearoundtheAstravyetsproject.TheLVŽSandtheirleaderRamūnasKarbauskis
40 Lietuvosžvalgyba:Rusijasiekiapaveiktielektrostinklųsinchronizavimoprojektą,Delfi,26.03.2018,https://www.delfi.lt/spausdinti/?id=77526609
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havebeenarguingthatthepreviousgovernmentswereineffectiveinstoppingtheAstravyetsprojectbecausetheLithuanianpoliticalelitesavoidedcriticis-ingtheveryideaofusingnucleartechnologyforpowergenerationasthatcouldhaveharmedtheLithuaniannuclearprojectinVisaginas,41thecornerstoneofLithuania’sNationalEnergyStrategythatremainsinforce.42
ThecurrentgovernmenthasbeenpushingforanamendmentofthestrategywithaviewtoradicallyrebuildingthedevelopmentconceptofLithuania’spowergenerationsectortowardslocalandrenewableenergysources.43TheamendeddraftdoesnotmentionVisaginasornuclearenergy.AjointpositionoftheLithu-anianparliamentarypartiesontheBelarusianNuclearPowerPlantmaypro-videabasisforthecurrentgovernmenttofinallyclosethequestionofreturningtonuclearenergyinLithuania.IfLithuaniabecomesanadvocateofanuclearphaseoutintheEU,itwillalsowithdrawfromothernuclearprojectsintheEuropeanUnion,includinginPoland.
41 In2009,LithuaniasignedanagreementwithJapan’sHitachi,underwhichthelatterwoulddeliveraJapanese-madereactorfortheplannednuclearpowerplantinVisaginasandco-financetheprojectwithLithuania,LatviaandEstonia.TheLithuaniangovernmenttreatedthe announcements regarding the Russian and Belarusian nuclear projects as attemptsatpressuringinvestorsinordertounderminetheVisaginasprojectbyimplyingitwouldface too much competition in the regional electricity generation market. The pressureof two competing projects increased the investment risk of the Visaginas project. Lithu-aniawasnotabletoproduceconvincingevidencetoitspartnersthattheVisaginasplantwouldbecompetitive,asaresultofwhichthegovernmentsofLatviaandEstonialostmuchoftheirinitialinterestintheprojectanditfailedtogetofftheground.
42 Thetextofthestrategycanbeconsultedat:https://e-seimas.lrs.lt/portal/legalAct/lt/TAD/TAIS.291371
43 Duringthelastdecade,Lithuania’srenewablesectordevelopeddynamicallythankstopri-vate investments and public subsidies. Investors benefited from the 2010 closure of theoldnuclearpowerplantinIgnalina(nearVisaginas)andmaybeconcernedthatareturntonuclearenergyinLithuaniawouldunderminetheprofitabilityofrenewableprojects,includingonshorewindand,inthefuture,alsooffshorewind.TheLithuaniangovernmenthasbeenpostponingtheauthorisationofBalticoffshorewindfarms,eventhoughtherearecompaniesinterestedinparticipatingintenders.
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v. the proBleM of utIlIsINg the power geNerated at astravyets
ThefacttheplantwaslocatedneartheLithuanianborder,aswellasthepro-visionsof thecurrentEnergySecurityConceptof theRepublicofBelarusclearlysuggestthatoneofthemainoriginalobjectivesbehindtheconstruc-tionoftheBelarusianNuclearPowerPlantwastoexportenergy.However,Lithuania’sobjectionsandPoland’srefusaltobuyenergyfromBelarushavecutBelarusofffromitsmainpotentialexportmarkets.44Intheory,thecrea-tionofacommonelectricitymarketoftheEurasianEconomicUnion(EEU),scheduledtotakeplaceon1July2019,willopensomeexportpossibilitiesforBelarus.However,accordingtocalculationsbytheEurasianDevelopmentBankexperts,theEEUmemberstatesarereportingdecliningenergydemandandmostofthem(withtheexceptionofKyrgyzstan)areexperiencingcapac-itysurpluses,notdeficits.Moreover,theeffectivefunctioningofthecommonelectricitymarketwillbehinderedbytheSovietlegacysystemsolutionsstillinexistence,suchastheabsenceofdecouplingbetweenpowertransmissionandpowergeneration.Inviewofthis,itisunlikelythatBelaruswillbeabletoselllargervolumesofelectricitytotheEEUinthenearfuture,evenafterthecommonmarketisformallyestablished.45
Inthissituation,theBelarusianleadershipwillhavetochangetheAstravyetsplant’sexportprofile,atleasttemporarily,andchannelallpowergeneratedthereintothedomesticmarket.46AsaresultBelarus,whichcurrentlyproducesaround33-34TWhayearandconsumesbetween37and38TWhayear,willbeabletostopimportingelectricityfromRussia(3TWhinrecentyears)aftertheAstravyetsplantbecomesoperational.TheBelarusiansideoftenpresents
44 Forseveralyears,theBelarusiansidelobbiedforthemodernisationandexpansionofthePoland-Belarusgridinterconnection(theRos-Narewpowerline)withaviewtoexpandingitscapacity(inbothdirections)to1,000MW/8TWhayear.Thepowerline,whichhasnotbeenusedsince2004,wasconsideredbytheBelarusiansideasoneoftheimportantchan-nelsforthefutureexportofelectricityfromtheAstravyetsnuclearpowerplant.In2017,theline’sowner,PSE,decidedtodismantleit.
45 https://www.belrynok.by/ru/page/economics/485046 RepresentativesoftheBelarusiangovernment(includingUladzimirSemashko,thedeputy
primeministerinchargeofenergy,inaninterviewfortheBelarusianTVon4March2018)still claim that power will be exported, but they are not able to name a specific market,https://news.tut.by/economics/583699.html
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thisphasingoutofimportsasthefirsttangiblebenefitoftheAstravyetspro-ject.47Inlate2017,theBelarusiangovernmentdecidedtofullyswitchtodomes-ticcapacityalreadyin2018,i.e.evenbeforetheAstravyetsplantislaunched,becauseofthegrowingpricesofRussianenergy.Thus,forthefirsttimeinitshistory,Belarusstoppedimportingelectricity.48However,ifthemaximumout-putoftheAstravyetsnuclearpowerplantis18TWhayear,thatwillstillleaveasurplusof14to15TWhthatneedstobeutilised.
TheBelarusiangovernmenthasaddressedtheproblemofthelackofaccesstoexternalmarketsandalreadyinSeptember2015establishedaspecialinter-departmentalworkinggroupfortheintegrationofthenuclearpowerplantwiththecountry’senergysystem.Thegroupdevelopedacomprehensiveplanforthedevelopmentoftheelectricitysectorto2025inviewofthelaunchoftheBelarusianNuclearPowerPlant;itwasapprovedinMarch2016.Themeasuresenvisagedintheplanincludetasksdirectlyrelatedtopreparingthedomesticinfrastructuretoutiliseenergynotgeneratedfromgas.Thelarge-scaleinstal-lationofelectricboilersatCHPplantsofthestate-ownedoperatorBelenergowithatotalcapacityof535MW,individualboilerswithatotalcapacityof450MWandotherfacilitieswithatotalcapacityof200MW.TheaimistoutilisesomeofthepowergeneratedatAstravyets.Theplanalsoenvisagesthecreationofreserve(peak)capacityof800MW,including400MWto2018.49However,accordingtothenewestreports,theBelarusianauthoritiesdecidednottobuildanewseparateplanttoensurereservecapacity.Instead,existingplantswillbeexpanded,includingtheCHPplantNo5intheMinskOblast.50Moreover,inordertooptimisethesystem,outsidetheheatingseasontheAstravyetsplantwilluseonly80%ofitscapacity.51Thegovernmenthasalsoannouncedthat
47 It should be remembered that Belarus already has sufficient capacity to meet its electricityneeds.Itimportsenergybecauseitisnoteconomicallyjustifiedtosupplyelectricitytotheeast-ernpartofthecountryfromthepowerplantslocatedinthewesternoblasts.ThelaunchoftheAstravyetsplantwillsolvetheproblembymakingimportsnolongereconomicallyviable.
48 Беларусь впервые отказалась от закупки электроэнергии, 21.02.2018, http://naviny.by/new/20180221/1519235858-belarus-vpervye-otkazalas-ot-zakupki-elektroenergii
49 Thismeanscapacitythatensuresadequategenerationlevelsattimesofpeakenergycon-sumption. In some cases, separate power plants are built to back up the nuclear powerplant.
50 ItisthenewestCHPplantinBelaruswhoseconstructionwascompletedin2012,Пиково-резервный источник планируется ввести на ТЭЦ-5 в Пуховичском районе, 25.04.2017,http://atom.belta.by/ru/news_ru/view/pik-rezervnogo-istochnika-planiruetsja-vvesti-na-tets-5-v-puxovichskom-rajone-9262
51 See: Министерство энергетики Республики Беларусь, http://minenergo.gov.by/wp-content/uploads/Комлпексный-План.pdf
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itwouldcreateincentivesforbuyerstoincreaseenergyconsumptionatnight,wherethebiggestsurplusesoccur.SomeBelarusianCHPplantsareinstallingelectrodeboilersthatcanusethenight-timeenergysurplustocreateheatthatcanbedeliveredtocustomersattimesofpeakdemand.Alltheaboveinvest-mentsaretobecarriedoutby2020and,accordingtoestimatesbytheMin-istryofEnergy,willcostUS$500-700millionbut,notably,thegovernmentalplandoesnotspecifythesourcesoffinancingforthisexpensiveupgrade.52Itseemsthatthehighcostisduetothefactthatthegovernmenthasselectedhigh-quality,expensiveboilersmanufacturedbyrenownedWesterncompaniessuchasGermany’sBBSGmbHorSweden’sZander&IngeströmAB.InAugust2016,boilersmanufacturedbythelattercompanywereinstalledattheCHPplantinGomelaspartofoneofahandfulofupgradeprojectthathaveactuallybeencarriedout.53
However,despitetheofficialstatementsandthemeasurestakenbythegovern-ment,itisstillfarfromclearthatsmoothfunctioningofthenuclearpowerplantwillbeensuredandtheriskofmalfunctioneliminated.Otherwaystosimu-latedomesticelectricitydemandhavealsobeenconsidered.Forexample,thequestionofdevelopinginfrastructureforelectricbusesandcars(whicharealmostentirelyunseeninBelarus).Thecompleteelectrificationofresidentialbuildings,includingheatingsystems,hasalsobeendiscussed.54Finally,theideatoutilisetheenergyfromAstravyetstopowertheenergy-intensivedevicesperformingcrypto-currencyoperations(bitcoinmining)hasalsobeenfloatedandisbeingofficiallystudiedbytheBelarusianAcademyofSciences.55How-ever,allthoseconceptsarestillveryvague,makingitdifficulttoestimatehowmuchenergytheycouldutilise.
As regards reserve capacity, in September 2016 the Belarusian side signedanagreementwithGermany’sSiemens.Fromthepointofviewoftheenergy
52 See:Концепции, программы и комплексные планы, МинистерствоэнергетикиРеспубликиБеларусь,http://minenergo.gov.by/zakonodatelstvo/koncepcii_i_proframmi
53 http://www.belmarket.by/ekonomicheskoe-napryazhenie-aes; О ходе реконструкции Гомельской ТЭЦ-2 с установкой электрических котлов, Министерство энергетикиРеспубликиБеларусь,11.08.2016,http://minenergo.gov.by/o-hode-rekonstruktsii-gomel-skoj-te-ts-2-s-ustanovkoj-e-lektricheskih-kotlov
54 А.Шрайбман,Куда мы денем энергию с АЭС? Мифы и реальность,4.09.2017,https://news.tut.by/economics/558443.html
55 Cryptocurrencyoperations(includingmining)werelegalisedinBelarusunderthepresi-dential decree “On the development of the digital economy” which entered into forceon 28 March 2018. See: БелАЭС предложили использовать для майнинга криптовалют,29.12.2017,https://42.tut.by/575038
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system’ssecurityandefficiency,thedecisionseemsjustified.However,asBela-rushasstillnotensuredfinancingfortheproject,choosingsuchanexpen-siveproviderwillfurtherincreasetheriskofdelays,whichmeansthatitwillnotbetechnicallypossibletodistributethepowergeneratedattheAstravy-etsplant.Astheprojectismiredincontroversy,BelarusisunlikelytoobtainfinancingfromtheEUorfrominternationalfinancialinstitutions.ThatleavestheChinesebanks,whicharealreadyinvolvedintheimplementationofinfra-structuralprojectsinBelarus,includingtheconstructionandmodernisationoftransmissiongrids,astheonlypotentiallenders.
Theblueprintfortheexpansionoftransmissioninfrastructureforthepur-posesoftheAstravyetsnuclearpowerplantenvisagestheconstructionofmorethan1,000kmofhigh-voltagepowerlines(330kV)andupgradesofmorethan600kmof110-330kVpowerlines.Aspartofthoseworks,inMarch2018themodernisationoftheLida-Hrodnalinewascompleted,whichwillconsiderablyfacilitatethetransmissionofenergyfromtheAstravyetsplanttotheHrodnaOblast.Moreover,atransformerstationisgoingtobebuiltinPastavy(north-westernBelarus)andthreeexistingfacilities,inRos,SmarhonandStowbtsy,willbeupgraded.Intotal,thoseinvestmentswillcostUS$340million,ofwhich95%willbefinancedwithaloangrantedbyChinaEximBankin2013.Inaccord-ancewiththeinvestmentmodelappliedbyChina,theChineseNCPEcorpora-tionwillcarryoutsomeoftheworks,forwhichpurposeitwillhireorisalreadyhiringseveralhundredworkersfromChina.56In2016,reportsbyindependentBelarusianmediaaboutviolationsofenvironmentalstandardsandthepoorqualityofworkcarriedoutbytheChineseinvestors,leadingtoinfrastructuredamageanddelays,createdamajorcontroversyinBelarus.57
ItisnotablethatmanyofthelinestobebuiltorupgradedclearlyleadtowardstheLithuanianborder,whichisindicativeoftheoriginalexportorientationoftheAstravyetsplant.However,inviewofLithuania’sfirmobjections,theBelarusiangovernmenthastooptforanalternativevariantand,alreadyin2015,aBelenergorepresentativeannouncedthattheBelarusiangridswereintendedtosolelyservedomesticneedsandthat–evenifexporttoLithuaniaisimpos-sible–nolinewouldbecloseddown.58However,irrespectiveofthestepsdis-
56 http://www.belrynok.by/ru/page/economics/276657 Белорусская земля «не принимает» ЛЭП Островецкой АЭС,14.06.2016,http://ex-press.by/
article.php?id=11824658 Т. Новикова, Китайская ЛЭП для Белорусской АЭС: незакрученные гайки, 27.10.2015,
https://news.tut.by/society/470297.html
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cussedabove,BelaruscanhardlyberegardedtobeimplementingacoherentandcomprehensivestrategyfortheoperationoftheAstravyetsplant.Rather,ithastakenaseriesofpoorlyconsideredanduncoordinatedmeasurestomini-misethecostoflaunchingandoperatingtheplant.Inhisannualaddresstothenationdeliveredon24April2018,PresidentLukashenkaopenlyadmittedthathisministershavenotbeenabletopresentaconvincingconceptfortheutilisa-tionoftheplantanditsintegrationwiththeBelarusianeconomy.Inthiscon-text,theBelarusianpresidentunequivocallycriticisedthequalityoftheworkdonesofarbythepeopleresponsiblefortheimplementationoftheinvestment.59
RussiahopesthatacapacitydeficitexpectedtohitCentralEurope(andespe-ciallyPoland)inthecomingyearswillforcedecisionmakerstochangetackandenableimportsofenergyfromtheAstravyetsplant.However,sincethatscenariodoesnotseemverylikelyinviewofthecurrentenergystrategiespur-suedbythecountriesintheregion(includingcategoricalrefusalstoimportelectricityfromBelarusorRussiavoicedbyPolandandLithuania),itseemsmoreprobablethatthesurpluswillbedirectedtotheRussianmarket.Thefactthat Rosatom has postponed several nuclear projects in Russia might pointinthatdirection,becausethenewunitslaunchedinrecentyearshavetriggeredaspikeincapacitypricesand,asaresult,higherpricesforindividualconsumers(otherthanhouseholds).60Atthesametime,powerplantswithatotalcapacityofaround50GWareexpectedtobedecommissionedinRussiabetween2020–2025.Todate,theRussiangovernmenthasusedtheso-calledcapacitysupplycontracts(inRussian–договорыопредоставлениимощности)asthemainmodelforinvestmentsintheelectricitysector.Thesystem,whichhasbeeninplacesince2011,consistsinprivateelectricitycompaniesconcludingagree-mentsunderwhichtheycommittobuildplantswithaspecifiedcapacitywithinasetperiod,whilethestatecommitstoreimbursethecostoftheinvestment.Thepeakofsuchpaymentsisexpectedtotakeplacein2021–2022,andin2026themechanismistobephasedout.Itisunclearifasimilarmechanismwillbeintroducedforthesuccessiveyears,whichcallsintoquestiontheprospectsofnewgenerationcapacitybeingbuiltinRussia.
59 Лукашенко: большие начальники запили настолько, что на работу не ходили,24.04.2018, https://naviny.by/new/20180424/1524560400-lukashenko-o-stroitelstve-aes-bolshie-nachalniki-zapili-nastolko-chto-na
60 Theplanstopostponethecompletionofnewnuclearunitsconcernthesecondreactorunitof the Leningradskaya Nuclear Power Plant in particular (initially the 1.2 GW unit wasexpected to become operational in January 2019). Мирный атом откладывают в долгий ящик,https://www.kommersant.ru/doc/3448572
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AlsoimportanthereisthesystematicincreaseinenergyconsumptioninRus-sia–by1.7%in2016and0.5%in2017,61withprojectionsof1-1.2%annualgrowthinthesuccessiveyear.Thistrendmayproduce,around2026,adeficitofgen-erationcapacityinRussia,withelectricityimportsfromthirdcountriespartlycoveringthedeficitofelectricityproduction.However,itisextremelyunlikelythatthepriceofelectricitygeneratedattheAstravyetsplancanbecompetitiveintheRussianmarket.
lithuanian estimates concerning the price of energy generated at the Belarusian Npp
Arvydas Galinis, the head of the Complex Energy Studies lab at the Lithu-anian Energy Institute in Kaunas, has compares the projected price of elec-tricity from Astravyets with prices in the Nordic-Baltic region. In his view, in order for the construction of a nuclear power plant to be economically justified, the price of energy needs to be sufficient in view of the cost borne by the investors. Currently the average global market price of 1 kWh is 8.5 eurocents. In the Lithuanian trading zone at the Nord Pool Spot exchange the price is lower, at around 3.5–4 eurocents per 1 kWh. The average price for the Nordic states at the Nord Pool Spot exchange in 2017 was around 3.2 eurocents per 1 kWh. The price of electricity generated in Belarus from gas is currently 4-5 eurocents per 1 kWh. According to the Belarusian energy minister Uladzimir Patupchyk, the launch of the Astravyets plant will en-able Belarus to reduce that price by 15%. The installed capacity of Astra-vyets can produce 16.4 TWh a year. Even if all of that power was sold at current prices in Belarus, the annual revenues of the plant would reach around EUR 660 million, which means that the Russian loan would not be repaid within 15 years from the plant’s revenues alone. Optimistic and pes-simistic simulations were conducted by Galinis while taking into account various parameters; they show that the cost of producing electricity ranges between 3.8 eurocents per 1 kWh (in the optimist variant) to 9.3 eurocents per 1 kWh (in the pessimistic model).62
61 ПотреблениеэлектроэнергиивЕЭСРоссиив2017годуувеличилосьна1,3%,10.01.2018,https://www.eprussia.ru/news/base/2018/5600395.htm
62 E.Naprys,Viskas, ką žinome apie Astrave kylantį monstrą: ekonominio pagrįstumo nėra – tik politinė ambicija, 21.10.2017, https://www.15min.lt/verslas/naujiena/energetika/viskas-ka-zinome-apie-astrave-kylanti-monstra-ekonominio-pagristumo-nera-tik-politine-ambicija-664-868428?all#print
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vI. coNclusIoN
TherehasbeenalotofcontroversyandalackofclarityaroundtheconstructionofthenuclearpowerplantinAstravyetsinrecentyears,triggeringtensionsinBelarus’sinternationalenvironment.Sincethestartoftheproject,thelackoftransparencyandclarityabouttheintentionsoftheactorsinvolvedhasbeencomplicatingthesituation.Thecrucialquestionthatremainsconcernstheeco-nomicviabilityoftheproject,especiallyinthecontextoftheRussianloanandtheabsenceofrealisticopportunitiestoexportelectricityfromtheAstravyetsplanttothemarketsofEUmemberstatesneighbouringBelarus,i.e.toachieveoneoftheproject’soriginalkey,albeitundeclaredobjectives.
ThecurrenteffortsbytheBelarusiangovernmenttointegratethepowerplantwiththeinternalenergymarketcanhardlyguaranteeasuccessfulcomple-tionoftheinvestment,especiallysincethereseemstobeinsufficientmoneyto finance them. Statements by Belarusian officials, including AlyaksandrLukashenka himself, indirectly suggest that many important issues (suchasreservecapacityorwaystoutilisetheenergyduringthenight-timedeclineinconsumption)arestilltoberesolvedandarebeingbrushedoverwithgen-eraldeclarations.Inthissituation,theassumptionmadebyMinskthattheconstructionofthepowerplantwouldberepaidwithin15yearsseemsunreal-isticandintendedmainlyforpropagandapurposes.Itmayalsoturnoutthat,becauseofthecapacitysurplus,thepowerplantwillnotoperateatitsfullcapac-ity,e.g.itwilluseonlyoneofthetwoplannedunits.Inanextremescenarioitmayevenneverbeactivated,despitethefactthatconstructionworksarealreadyveryadvanced.
Becauseofthelackoftransparency,itisnotpossibletofullyassesstheenvi-ronmentalsafetyoftheplantduringconstructionandsubsequentoperation.However,itshouldbenotedthattheonlyaspectsaboutwhichthereisfullclar-ityareevidentlyunfavourableforMinsk.ThelaunchoftheBelarusianNuclearPowerPlantwillentrenchBelarus’senergydependenceonRussiaandtheloanagreedtofinancetheprojectwillbeamajorburdenontheBelarusianpublicfinancesformanyyearsandwillprovidetheKremlinwithyetanotherinstru-mentofpressure.
AnotherimportantaspectoftheAstravyetsplantconcernsitsimplicationsforBelarus’spoliticalrelationswithLithuania.Iftheprojectcontinues,andespe-ciallywhentheplantstartsoperations,theinvestmentwillcontinuetogeneratetensionsbetweenMinskandVilnius.Asaresult,theBelarusiansidewillnot
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beabletocountonLithuania’ssupportininternationalforums,includingtheEUwhereLithuaniawasuntilrecentlyoneofthemainadvocatesforBelarus.LithuaniahasbeenmakingeffortstokeepitspositionasaleaderoftheEasternPartnershiptobeabletoinfluencethedivisionoffundingundertheEU’sfinan-cialinstrumentsforBelarusintheyears2018–2020.Itisalsopossiblethatothercountriesmaystarttoactivelyopposetheplant,especiallyifsuddenincidentsoccurthatmayunderminethesafetyofthepeopleintheregion.BecauseofallthosefactorsitisalreadysafetosaythatthenuclearpowerplantinAstravyetswillcreatemoretroublethanaddedvalueforBelarusanditsneighbours.
JoANNA HyNDLE-HuSSEIN, SzymoN KARDAś, KAmIL KłySIńSKI, WoJCIECH KoNońCzuK (EDItoR)
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110 kV
100 km
50 km
30 km
Stockholm
Helsinki
Tallinn
Riga
Vilnius
Minsk
Moscow
Warsaw
Narva
Kaunas
Ignalina NPP
Belarusian NPP
Smolensk NPP
Chernobyl NPP
Baltic NPP
NordBalt
SwePol link
LitPo
l
link
Estlink 1
Estlink 2Loviisa NPP Leningrad NPP
Olkiluoto NPP
Forsmark NPP
OskarshamnNPP
KruonisKaliningrad
Nuclear power plants
Electrical substations
Thermal power plants
Hydroelectric power plants
Pumped-storage power plants
110–750 kV transmission lines
planned existing
under construction decommissioning
Source:EESTIENERGIAhttps://www.energia.ee,ENTSOEhttps://www.entsoe.eu,PSEhttps://www.pse.pl
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110 kV
100 km
50 km
30 km
Stockholm
Helsinki
Tallinn
Riga
Vilnius
Minsk
Moscow
Warsaw
Narva
Kaunas
Ignalina NPP
Belarusian NPP
Smolensk NPP
Chernobyl NPP
Baltic NPP
NordBalt
SwePol link
LitPo
l
link
Estlink 1
Estlink 2
Loviisa NPP Leningrad NPP
Olkiluoto NPP
Forsmark NPP
OskarshamnNPP
KruonisKaliningrad
Nuclear power plants
Electrical substations
Thermal power plants
Hydroelectric power plants
Pumped-storage power plants
110–750 kV transmission lines
planned existing
under construction decommissioning