Cable Ties; Awkward Tussles Over Nuclear Power on Russia’s Borders

The Economist

COMMUNISM, Lenin said, was “Soviet power plus the electrification of the whole country”. His country is long gone, but rows over electricity still echo in its former territories. Lithuania is furious about two Russian-financed nuclear-power plants on its borders, one under construction in Kaliningrad, the other due to be approved soon in Belarus (see map).

The foremost worry, on the 25th anniversary of the Chernobyl disaster, is safety. The Lithuanians insist that the planned plants do not meet international standards and that consultation has been slipshod. “We didn’t get proper answers or a proper discussion,” complains the prime minister, Andrius Kubilius. The site of the plant in Belarus, 40km (25 miles) upriver from Vilnius, is a particular concern.

Russia pooh-poohs all this. It worries that Kaliningrad may be left an energy island as Lithuania and its Baltic neighbours integrate their power grids with the rest of Europe’s. It wants to make money from its nuclear know-how. The Belarus plan also gives Russia a bargaining tool with the cash-strapped regime in Minsk.

Competition from the two Russian-built plants undermines the case for a planned new nuclear-power plant at Visaginas. Lithuania had to shut its Soviet-era plant there as a condition of joining the European Union. The four-country replacement project has strong Latvian support, but Poland is lukewarm and Estonia is considering a small nuclear-power plant of its own if the joint one falls through.

Plagued by scandals and investors’ jitters, the Visaginas project is again moving ahead: since Japan’s nuclear accident, firms wanting to build nuclear-power plants have become less choosy about the conditions. Mr Kubilius says he hopes to find a strategic investor “within months”. But skeptics note that rich, single-minded Finland is over budget and behind schedule with its new nuclear-power plant. The idea that four poorer countries with scant record of co-operation, even on simple things, can finance and build something so costly and complex seems a stretch. “We are more motivated because our needs are more severe,” a Lithuanian official retorts.

Political power matters almost as much as the nuclear kind. Lithuania scents Russian interference whenever it tries to bolster its energy independence. It wants to build a liquefied natural gas terminal by 2014 to break its dependence on pricey Russian gas. The government is also fighting to liberalise the gas market, in line with EU rules that came into force on March 3rd, but against fierce opposition from Russia’s gas giant, Gazprom, and its local proxies.

At least Mr Kubilius has an ally in Brussels. He has asked the European Commission to investigate Gazprom for anti-competitive behavior. The commission’s president, José Manuel Barroso, clashed heatedly with Vladimir Putin over gas liberalisation during the Russian prime minister’s visit to Brussels in February. Lithuania is a “test case,” says Mr Kubilius. But if Russia is ready to finance new nuclear-power plants and sell cheap electricity, European consumers will be keen to buy, heedless of political worries.