Former Energy Minister Arvydas Sekmokas, speaking about the current energy dilemma in Lithuania, says that there are many problems. Still, the biggest ones are the dependence on the control room in Moscow and the lack of electricity generation. The energy expert said these are problems that need to be solved urgently, without sparing any money. In an interview with tv3.lt, Sekmokas said that it is urgent to disconnect from the BRELL electricity supply ring while Russia is bogged down in Ukraine. This, he said, could be our only chance, Jūratė Važgauskaitė writing in tv3.lt news portal.
And we need to look for new ways to get more electricity quickly because electricity will not go up, demand will not go down, and there is no plan on what we will do.
He also added that all those who are now talking about the failed construction of the Visaginas Nuclear Power Plant are simply preying on the public’s attention, which, according to the former Energy Minister, had no chance of being built.
What are the most significant energy problems you see at the moment? How could these be addressed?
There are two problems, and they are quite obvious. The first problem is that we are still part of the Russian energy system. This is a security problem. And the other fundamental problem is the lack of electricity generation. So these are two fundamental issues, and they have not moved forward since 2014.
To what extent are we still part of the Russian energy system? And what have we done to make sure that we are not?
There has been a lot of resistance to change something. It was out of inertia, saying this is the way it is. Energy prices became painful later when gas became more expensive because Gazprom was allowed to privatise Lietuvos dujos. That is when the consequences of dependency on the price of gas were felt. Then the electricity interconnection projects with Sweden and Poland got underway. However, these interconnections have been talked about before. And the second thing we did was set up a liquefied gas terminal.
At the end of 2010, the second unit of the Ignalina Nuclear Power Plant (NPP) was shut down. We were obliged to do so in the Treaty of Accession to the European Union. The EU, for its part, pledged to finance the closure to a large extent.
The closure of Unit 2 immediately shifted Lithuania from the position of an electricity exporter to that of an importer of electricity. Immediately after the closure, it was obvious that Lithuania was short of electricity generation and that this was a major security problem.
It is not secure if a country does not generate at least 80-90% of its own electricity consumption. The only project that was implemented at that time was the gas-fired generation from Elektrėnai Unit 9.
Today, of course, the gas-fired generation is very expensive, but it is currently a lifesaver when there is simply no other generation. There was. Also, I would say a demonstration development of renewable resources. This was more for political and ideological reasons, but it was not linked to energy security, that Lithuania must produce enough electricity itself.
When Ignalina NPP was shut down, it immediately became clear that national security was at risk. What was done? Was the real threat understood?
There were a number of reasons (to take the situation in stride and do nothing). One of them, although not the main one, was the completion of the construction of Elektrėnai Unit 9 at the end of 2012, which was an effort to restore some electricity generation.
Since then, there has been a change of governments, and the focus has not been on the fact that we do not have enough electricity generation and we have a potential security problem but on the debate on the construction of the Visaginas NPP. So this issue has simply pushed all the others into the background.
The second thing that was also felt was energy fatigue. It was visible both in the political and the public arena. A lot of effort was put into the energy projects that were being finalised: the electricity interconnections with Poland and Sweden, the liquefied natural gas terminal, the debate on the construction of a new NPP, as well as the underground storage of natural gas in Svideriai, the construction of the Bitėnai switchyard, and other important projects.
There have been a lot of energy projects going on at the same time, and certain fatigue has set in, with comments in the public sphere that the energy sector has been over-invested and will never pay for itself. Competing political parties had also started to accuse former politicians of not being transparent when they came to power, saying that the projects were not transparent. This made the desire to finish certain projects even less.
And now, without completing such a fundamental issue as withdrawal from the Russian energy system and without resolving the issue of electricity generation, there is already talk of a major new project, I mean replacing the Russian railway track with a European track. It is a huge project, and yes, it is useful in security terms, but at the same time, other security projects are being neglected.
A control room in Moscow controls Lithuania’s electricity system. This is an eye-popping security challenge that somehow slips through the cracks. Yet, today, there is not even any talk of the political steps that need to be taken to change the situation.
What should we do at this point? Withdraw from BRELL (the ring, electricity transmission system)?
First, to take over the management of the electricity system to maximise the security of electricity transmission. This is impossible if everything is managed from Moscow for the time being. We need to withdraw from BRELL because you cannot be in BRELL and in Europe. It is possible to do this drastically, to terminate the contract abruptly on the basis of security challenges. But there is another, more considered way. Simply refer to the BRELL contract itself and withdraw from the BRELL electricity supply ring.
The legal arrangements need to be sorted out first, and then we can talk about the physical flows. Of course, one can always consider how Russia will react. However, Russia will always react, and now that Russia is bogged down in the war in Ukraine, this may be the most opportune moment for such an exit.
Because if some kind of agreement is reached with Russia on the war in Ukraine, it will be much more difficult to destabilise the situation by pulling out of the BRELL and cutting the Belarus line, at least to put it that way.
It is possible that our allies would also take a negative view of that step, but without that, real synchronisation is not possible. Moreover, these decisions need to be taken now, not in 2024, as politicians are now saying. There will be elections in that year, and the political will to take those steps will not be there.
Technically, another matter is how much Litgrid would take over everything. I think it would take over, although I am now talking about hypothetical things that would have to be done. Of course, there would also have to be changed in the legislation. But this is not about conquering the moon but about technical and legal things that simply need to be done.
But that is not what is being talked about. That is what is being tried to be kept quiet. But will we not lose sight of the withdrawal from the BRELL system, of the disconnection of the lines with Belarus, just as, say, Germany lost sight of the issue of supplies from Russia?
There should be no technical problems with the disconnection because the head of Litgrid has said that they are ready to take over if Russia cuts off the electricity. We are ready to connect to the European networks. We just have to assume that there is no political will to do so.
Maybe I am unaware of something, and there may be communication between the major capitals on this issue. However, one thing must be understood: this is a question of our security, not someone else’s.
Let us talk about the Visaginas NPP. Is it good or bad that we did not build it? Why is it now appearing as a ghost in the speeches of politicians?
The current debate on the construction of the Visaginas NPP is completely empty, nothing more than an attempt by politicians to attract public attention. And the answer is very simple, Lithuania simply could not build it because a project of this magnitude was too complicated.
As a regional project, it failed because there were too many issues and the project itself was fundamentally too complex. Today, synchronisation is still dragging on because Estonia is still not in favour of it. It was also not a shared vision, a shared interest in building an NPP in Lithuania. When there is a bilateral project, those projects have not moved forward easily, not smoothly, but they have moved forward.
Meanwhile, there are not many such regional projects, and in the Balkans, there is only one example of a regional nuclear power plant in Slovenia, but that was due to the break-up of Yugoslavia.
The Visaginas NPP project was large and expensive, required a lot of investment, and commercial banks did not finance such loans. More precisely, they did not give loans for more than ten years. The project was unviable for several reasons. First of all, as a regional project, national interests proved to be more important. It was also because of its size, and it needed regional approval, which Hitachi (the potential builders of the NPP) saw was not there. They did not want to enter into a bilateral agreement. Lithuania could not financially carry out the project alone.
It is not directly related to Astravas being built next door, but… The closure of the Ignalina NPP opens up a huge electricity market in the region. The generation gap had to be filled, not only energetically but also politically. The site for Astravas was strategically chosen, the infrastructure that had been created at Ignalina was used, and the issue of the Kaliningrad-Baltic NPP was raised.
This created a counterweight to the Visaginas NPP project. The Belarusians have taken over the market, but we do not buy that electricity. The Baltic countries no longer buy electricity from Russia either, but they are still technically dependent on the control room in Moscow.
What was the Leo LT project about, and why did it die like the Visaginas NPP idea?
In my view, the Leo Lt project failed for several reasons. One of them is their interests, and they are different. The interests of the state and the interests of national security were to own and control its own electricity generation. It should have been a largely state-owned project. And the private investor’s interest was to make a profit. This is what made it impossible to implement the project.
The second thing is that they had no expertise in the electricity market in plant construction. At best, they could have helped in the search for contractors. And Leo LT and NDX could not have pulled off an investment of billions. That project was a fantasy that private businesses could do anything. Not everything. Projects of this magnitude are public projects. And the involvement of private capital, well… there was already Hitachi. Why did they need some other participants? Why did Hitachi have to bring in another private investor whose value was zero? Of course, if an investor came in and invested billions, that would be another matter, but in the case of Leo LT, that was not realistic.
And besides, we saw immediately that NDX came in with a minority and immediately tried to dictate the conditions on the electricity market as soon as Lietuvos energija was privatised. The only thing is that we managed to get that Leo LT project on track, but it was not viable anyway.
And when NDX came to talk to the Government, they did not even have any plans. I do not know why, whether it was a case of being too stupid or not having a purpose. They must have realised that they could not carry out such a project.
How do you assess the current situation in the electricity market, and what solutions do you see?
The first sobering statement by the Prime Minister was that synchronisation must be implemented. We need electricity generation and compensation for consumers. These are quick decisions that need to be made. Yes, they are painful things, but they must be done because a long-term solution to increasing generation is not enough.
It is all very well building solar power plants and helping people to buy them, but it is a drop in the ocean. Building a wind farm in the Baltic Sea is good, but it is not a quick project. And will it not be the same fiasco as the Visaginas NPP? We do not know.
The direction identified by Minister Dainius Kreivys is good. But the direction is not a strategy. How many generations will we build? At least during this term of office? At what cost? What is the construction schedule? Who will implement it?
The physical barrier on the border with Belarus, for example, was started when Lithuania was flooded with illegal migrants. Now we have a similar situation with the lack of electricity generation. And there is no plan as to what we will do. Just as Epso G built the barrier, Ignitis should ensure that electricity generation is increased. Most of the energy is in the hands of Ignitis, and they are a state-owned company. Their main shareholder is the state. So it can be obliged to build so and so generation to ensure energy security.
It is a company that has to do it, with its own funds or with borrowed funds, without having to look for investors, without having to wait until 2028. Of course, I am not saying that everything can be put in place quickly, but a plan is needed. Because prices are not going to go down, and our electricity generation is not going up.
We are now burning gas from what we have now. It is expensive, but we cannot give up gas completely because of the infrastructure, the pipelines, and the industry. That infrastructure will have to be exploited, so we need a strategy, and we need to know what we are going to do with that infrastructure. Are we going to destroy those gas networks or not?
Because now we are talking about green hydrogen. But with electricity prices at this level, that is utopian. So these are strategic issues, we have a climate change plan, but we do not have an energy strategy.
At least we should have a plan before the next parliamentary elections, what this Government has decided and what will be done in the next couple of years because this will be a year of high prices. We need to grow our generating capacity so that, at least, later on, those prices can be reduced.