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Lithuania braces for nuclear shutdown

by Staff Writers
Visaginas, Lithuania (AFP) Dec 20, 2009
Rising from the flat plain of eastern Lithuania, the two tall red and white chimneys of a nuclear power plant are the symbol of a once-proud Soviet industrial era whose end is looming.

One hour before midnight on December 31, under a pledge to the European Union, the last reactor will finally go offline at the 26-year-old plant, long a crucial power source for this Baltic state.

The nation of 3.3 million people is bracing for a surge in electricity prices as a result, a new blow amid one of the world's deepest economic crises.

The plant at Visaginas is similar in type to the one that exploded at Chernobyl in Ukraine in 1986 in the world's worst-ever nuclear power accident.

Lithuania, which won independence from the Soviet bloc in 1991, agreed to close it by the end of this year under the terms of its admission to the EU in May 2004. One of the two reactors was shut down in December 2004.

"We're sad about the closure of the second reactor and of the power plant, especially because it means saying farewell to employees who have worked for us for some two decades," said director Viktor Sevaldin, 60, who came from Russia to work as an expert on the eve of its opening in 1983 and has stayed ever since.

"But on the other hand, we've been preparing for the closure for years, so it's hardly a shock," Sevaldin, who was appointed director in 1991, told AFP.

Around a thousand employees will lose their jobs on New Year's Eve but they are to receive redundancy packages.

Sevaldin is a staunch defender of his baby, which generates the bulk of the country's electricity and which he said could have kept running for 15 more years.

"For years, nuclear power here was something normal and invisible. In the coming months, we're going to realise what we've lost," the normally-jovial Sevaldin said sadly.

Over the past 15 years, 800 million litas (231 million euros, 333 million dollars) have been ploughed into ensuring the plant's safety.

Lithuania tried to convince Brussels to allow a stay of execution, extending the plant's life until a planned alternative is up and running by 2018-2020.

In October 2008, the issue was even put to the people, 92 percent of whom voted in a referendum to keep it open. The non-binding plebiscite, meant to strengthen Lithuania's hand, nonetheless fell short of its target because overall turnout was just below the required 50 percent.

Supporters of the plant used the issue to harry the centre-right government -- which consistently said extension was not an option -- tabling unsuccessful bills on the issue in parliament.

As it scrambles to get ready for the shutdown, Lithuania has been forced to turn to mothballed gas and oil-fired power stations, which it hopes will pick up some of the slack. They will also have to rely on fuel supplies from Russia, whose relations with Lithuania are rocky.

Experts warn that power prices are set to jump.

"Individual customers and companies alike are going to feel the aftershock in their pockets," said Violeta Klyviene, an analyst at Danske Bank in Lithuania.

"From January, electricity prices are going to rise by around 30 percent for individual customers," she told AFP.

Companies are awaiting the shutdown nervously.

"Of course we're going to feel the impact of rising electricity prices. They represent between three and five percent of the final cost of our goods, and the per-kilowatt price for firms is going to go up by 20 percent," said Arvydas Stulpinas, head of a leading plastic-bottle firm.

Lithuania enjoyed a reputation as "tiger" after it joined the EU in 2004, with rising wages and easy credit fuelling an economic boom.

But the country was hit hard as the global crisis battered key export markets elsewhere in the EU, plus Russia.

The economy is expected to contract by up to 19.3 percent this year in one of the world's sharpest recessions. Output is expected to shrink by 4.3 percent in 2010.

To try to cope, Lithuania plans to link to the Polish and Swedish electricity grids, which would also enable it to import power from elsewhere in Europe. It has also signed a supply deal with Estonia.

This month, it launched the tender for a new nuclear plant at Visaginas, a project which involves neighbouring Poland, Latvia and Estonia and has been in the pipeline for several years. Construction costs are expected to be at least three to five billion euros (4.5 to 7.4 billion dollars).

According to Sevaldin, decommissioning the existing plant is set to take 25 years and cost around one billion euros.

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