Žygimantas Vaičiūnas, Minister of Energy, stated last week that not a single kilowatt hour of electricity produced in the Astravyets Nuclear Power Plant (NPP) may be sold for commercial purposes in Lithuania because the law prohibits it.
This is a welcome statement and maintaining this attitude will be crucial. The prohibition represents a truly effective means of preventing Belarus from receiving monetary revenues that were expected to reimburse the construction costs of the power plant. The national accord on the matter is of particular importance too since the closer the launch of the NPP is, the greater the pressure will be exerted by Minsk and Moscow or even some actors in Brussels to accept Belarusian electricity.
Having witnessed the adoption of the said law and seeing our resolute stance, Belarus has begun to slightly change its plans. A need to close a share of gas-fired CHP plants that generate district heating in winter is being widely discussed at the moment. Powerful electric boilers are to be installed there to use the surplus electricity produced in the Astravyets NPP. The estimated costs of the plan account for at least 700 million dollars and it will take months to implement it.
With a view to securing necessary power reserves in the Astravyets NPP, Belarus is negotiating with the Eurasian Development Bank on a 1-billion-euro loan for the construction of new gas power plants with the total power of 800 MW.
It will definitely not reduce the costs of the Astravyets NPP. Moreover, the hundreds of millions will still need to be brought in from somewhere and returned with interest. After the launch of the NPP, a loan of a similar amount granted by China to install the connection infrastructure of the plant will also be outstanding. Even if Belarus succeeds in persuading Russia to alleviate the terms of repayment of the 10-billion-dollar construction loan, electricity prices for households and industry will most likely have to be subsidized in some secret way. It is unclear how long the Belarusian authorities will have the patience to do so. It will evidently be a heavy financial millstone round their neck from the very first day of the operation of the NPP.
Under the pressure from the creditors, the Belarusian government will naturally be tasked with pushing through, in some devious ways, the electricity produced in Astravyets to EU markets. Much is expected from Latvia, whose authorities have not yet said "no" to the electricity produced in Astravyets and have been engaged in an active dialogue with Lukashenka's regime with an eye to directing Belarusian export goods to the Latvian ports. Having cleared its way to Latvia, though with small export volumes, and when political changes may occur sometime in future, Belarus could expect to win over Lithuania too and ensure far greater export flows.
Nevertheless, it is impossible to export electricity from Belarus to Latvia directly because they are not connected by power transmission lines of necessary capacity. And yet, Belarusian electricity can be transmitted to Latvia by the existing power connections through the distribution substation in Ignalina, Lithuania. Latvia also has a direct power connection with Russia. This enables manipulation of physical and commercial transmission capacities to help electricity produced in Belarus gain access to the Latvian electricity market.
Currently, the project on the reconstruction of the distribution substation in Ignalina is underway. However, it does not include the disabling of direct flows from Belarus to Latvia. The motives behind the project are unclear. As a result, it would be highly desirable if the company running this classified project and the Ministry of Energy could offer a wider explanation to the public about the objectives of this undertaking. Otherwise, the project does not seem to contribute in any way to the synchronisation with the European Continental Network but rather fully meet the interests of Belarus and Russia. Perhaps this is the exact reason why it is classified.
It would be best if direct connections between Belarus and Ignalina or Utena were completely disabled after the launch of the Astravyets nuclear power plant, as planned. It would reduce the chances of not only Belarusian electricity accessing the Latvian market but also exploiting electricity flows from Belarus to Lithuania that are necessary for ensuring reliability of the electricity system in order to satisfy the needs of the Astravyets NPP.