Direct Speech, Energy, EU – Baltic States, Forum, Lithuania

Ladies and Gentlemen, 

I would like to welcome you to the forum dedicated to the issue of strategic importance to the state, the energy. This past decade, the agendas of all our governments have been marked by the priorities of energy security and a competitive supply of energy resources. Can these priorities be compatible with each other? Can we ensure energy security and guarantee lowest energy prices for consumers?

It must be stated that usually, when trying to answer these questions and making specific decisions, politicians held diametrically opposite views. This is particularly evident in the project of construction of the nuclear power plant that has been going on for more than five years.

After winning the election we undertook a difficult task to answer these questions. On behalf of the Seimas, the Government set up a working group to evaluate economic aspects of the Visaginas Nuclear Power Plant project, to analyse electricity development prospects and to submit proposals regarding cost-efficient and consumer-friendly supply of electricity and other energy resources. 

The working group’s proposals have been recently put before the Seimas. The most economically sound scenario, assuring the lowest electricity price for the consumer, would be based on a balanced supply of mixed energy sources, including the renewables, with a particular emphasis on local biofuels for heat and electricity generation; the diversified imports of energy and natural gas; as well as the safe nuclear power.

The Government has already taken actual steps in restructuring the heat sector towards a more extensive application of biofuels in heat and electricity generation over the next two to four years. A significant share of the EU support is intended to be allocated for this purpose in the new EU financial framework. It is important to encourage the widest possible use of biofuels across our country, especially in those municipalities where heat bills are the highest.

The situation in the gas and electricity market is taking a positive turn as regards gas supply and electricity import alternatives. The end of 2014 should see the completion of an important element in our energy system – a liquefied natural gas terminal in Klaipėda, which will enable the diversified supply of natural gas at competitive prices. In 2012 we joined the Norpdpool Spot electricity market. When power link with Sweden becomes operational in 2015, a real possibility of trading electricity with Northern Europe will be ensured for Lithuania. It is planned that approximately at the same time, around 2016, our electricity network will have a second link, with Poland, and in 2020 we are to become a fully-fledged part of the European power market and grid, and to operate synchronically in the Western European power system, which will ensure diversified electricity import, markedly enhance energy security, and guarantee lowest prices for consumers.

The issue of the new nuclear power plant remains unsettled. Following a thorough economic assessment of Visaginas nuclear power plant project and analysis of alternatives for power sector development, carried out by the Lithuanian Energy Institute scientists, it turns out that the cost price for electricity generated by the project would not be competitive on the market. This does not mean that we will shut the door for the nuclear power in Lithuania, but continuity of Visaginas nuclear power plant project is possible only once major commercial indicators of the project are radically improved and additional conditions are met: implementation costs, responsibility, and risks have to be shared with partners Latvia and Estonia. We have submitted our proposals to the partners and we are waiting for their response. 

Thank you for your attention and I wish participants of the forum fruitful work.