Since Lithuania gained its independence from the Soviet Union, it has relied increasingly on nuclear energy as the cost of imported fossil fuels has risen. At the time of the Soviet collapse, the Ignalina nuclear power plant alone provided about 60 percent of Lithuania's electricity. Thermal (coal, oil, gas) power plants generated about 39 percent, followed by hydroelectric plants at slightly more than 1 percent. Now, the Ignalina plant provides about 90 percent of the country's electricity.
The two 1,500-megawatt units at Ignalina produce about 2,600 megawatts (net) of electricity. As designed by the Soviets, the plant has the capacity to produce even more power, but safety concerns and public reaction to the Chernobyl accident prompted authorities to operate the plant below its full capacity.
Lithuania assumed ownership of the plant Aug. 27, 1991, and set up its own inspectorate, the Lithuanian Nuclear Power Safety Inspectorate--VATESI--to oversee the plant. Today, even though the plant's operators are ethnic Russians, they have agreed to stay and become Lithuanian citizens.
Historically, Lithuania's neighbors--Latvia, Belarus and the Kaliningrad region of Russia--depended heavily on its power, which exceeded the country's demands.
Since Lithuania gained its independence, the growing cost of imported fossil fuels, mainly from Russia, has made Ignalina almost 50 percent cheaper than other power sources. This accounts for Lithuania's growing dependence on nuclear energy. By 1993, Lithuania had set a world record for the proportion of nuclear-generated electricity produced in a single nation, with nuclear energy providing 88 percent of Lithuania's power, up from 60 percent in 1991. That figure slid to 76 percent in 1994, but rose again to an estimated 90 percent for 1995.
Since the breakup of the Soviet Union, Lithuania's economy has declined, as has the demand for power in general in the Baltic countries. Over the past three years, Lithuania's gross domestic product has fallen by 64 percent and its industrial production by more than 70 percent. Countries such as Belarus have had difficulty paying for Lithuanian power. In addition, Lithuania now must compete for certain sectors of its traditional export market with Russia's Smolensk plant. In 1989, Lithuania was exporting 40 percent of its electricity, but by 1994, exports had fallen to just 5 percent.
In February 1995, Lithuania's ambassador to Ukraine told a Ukrainian parliamentary leader that Lithuania was prepared to sell electricity from Ignalina to his country. The ambassador said that the electricity could be paid for in part with hard currency and in part with agricultural produce. During official Lithuanian-Belarussian talks that same month, Belarus reportedly expressed an interest in buying electricity from Lithuania because it was cheaper than the power available from other countries. Lithuania began exporting electricity to Belarus in the spring. Estimated sales to Belarus for 1995 totaled 2 billion kilowatt-hours.
In summer 1995, a Lithuanian delegation to Sweden headed by the energy minister discussed the construction of a high-voltage transmission line between Lithuania and Poland that could be used to export electricity generated at the country's hydroelectric plants. In mid-July, Lithuanian Prime Minister Slezevicius said he hoped that Sweden would provide assistance for the $150 million project. According to the Lithuanian energy ministry in January 1996, Electricité de France will study the feasibility of building such a transmission line. The energy minister said that although Lithuania gets most of its electricity from Ignalina, it wanted to develop its hydropower potential.
Long-Term Energy Plan. Lithuania released a long-term energy plan in early 1994, developed with the assistance of two Scandinavian firms, Sweden's Vattenfall AB and Finland's Imatran Voima Oy (IVO). The plan projected that:
Ignalina's units can operate safely until about 2005 or 2010, provided upgrade programs continue.
By completing Ignalina's safety upgrades, Lithuania's electricity supply will be stable for 10 to 15 years.
Ignalina's premature closure would result in an increase of $500 million in costs to the Lithuanian power supply system.
Lithuania cannot expect a new nuclear unit to be as cost-competitive as gas-fired plants.
The plan suggested that:
The establishment of an electricity supply system over the Baltic region would allow for the trading of power; such an arrangement would help balance the supply system better at peak periods
Firm long-range import/export agreements would help finance Ignalina's improvement program.
EBRD Nuclear Safety Account Grant. In February 1994, Lithuanian authorities agreed to accept 33 million ECU ($42 million) from the European Bank for Reconstruction and Development's Nuclear Safety Account (NSA) to support an Ignalina safety improvement program that VATESI first approved in September 1993. The EBRD, however, placed conditions on the grant. Those conditions, which Lithuania must meet if it is to receive the full amount, could affect Lithuania's long-range energy plans.
The EBRD has stipulated that:
Lithuania must complete an in-depth safety assessment by the end of 1995. The assessment, funded in part by 7 million ECU ($9 million) from the Nuclear Safety Account, will help VATESI decide whether Ignalina's Unit 1 will operate beyond 1998.
The operation of Ignalina Unit 1 beyond 1998 must depend on the results of the nuclear safety assessment, the cost of continued safety upgrades and the energy situation in Lithuania. To operate beyond 1998, Unit 1 will have to be relicensed by VATESI.
Lithuania must close the two units when it is time to replace their pressure tubes. All RBMKs require such replacement after they have operated for about 15 years. The EBRD estimates that the deadline for Unit 1 will fall between 1998 and 2004, and the deadline for Unit 2 is 2010.
The objective of the safety improvement program is to keep Ignalina operating safely until its permanent closure. When the plant originally developed the program in 1993, it called for a full range of near-term upgrades, including new equipment such as a refueling machine, non-destructive testing equipment, TV monitors and other equipment to inspect the plant while it is operating. The plan also recognized the need for better fire-protection systems, procedures to properly document plant equipment and an improved reactor protection system.
Lithuania's original intent was to direct about $5 million of its own money toward plant improvements. Authorities expected that other bilateral agreements would help finance about $7 million in hardware and software improvements, with Sweden as the leading benefactor.
As part of the overall improvement program, the EBRD funds are to support 18 projects in three areas: operational safety, technical improvements, and services. Operational safety improvements include non-destructive examinations, seals for pressure tubes, routine maintenance equipment, radiation monitors and a simulator. Near-term technical improvements include seismic, fire and explosion prevention. Services include project management and design and engineering work. By the end of 1994, about half of the contracts for the improvement projects had been awarded. Short-term improvements will include: an emergency scram system, a neutron flux monitoring system, data processing upgrades, better fire protection and emergency core cooling system backfits.
Two British companies, National Nuclear Corporation Ltd. and Scottish Nuclear, won a contract in April 1994 to organize a project management unit that would oversee the implementation of the improvement program. Funds from the 33 million ECU ($42 million) grant had been earmarked for the 1.9 million ECU ($2.4 million) contract. The British team is working alongside Ignalina staff with the goal of turning all management responsibilities over to Lithuanian management when the project is complete.
The safety assessment, carried out by Sweden's Vattenfall, Canada's AECL, several Russian institutes and the Lithuanian energy ministry--Ignalina's operator--is expected to be completed and reviewed by mid-1996, when it will be presented to VATESI, the Lithuanian nuclear safety inspectorate.
The EBRD earmarked 100,000 ECU ($126,000) for consultancy services to prepare and carry out a public information program. The purpose of the program is to tell the population about the safety improvement effort, the EBRD's involvement in Lithuania's power sector, and the future of the Ignalina plant.
Power Sector Development Program. In light of the NSA grant, Lithuania's Ministry of Energy--together with the Lithuanian State Power System and the Lithuanian Energy Institute--is preparing a detailed least-cost program for the development of the country's energy sector. The first draft was submitted to the Lithuanian government and international lending institutions in November 1995. The draft will be refined after the safety assessment of Ignalina is completed.
The program will cover:
In February 1995, Lithuania's parliament ruled that the Ignalina plant should be not privatized before 2000. In June, an official of the Lithuanian State Power System (LSPS)--the country's utility--said that 15 percent of LSPS would be privatized.
Lithuania's nuclear inspectorate, VATESI, faces three major tasks:
Decide on a set of rules and standards to use for current regulation.
Develop its own rules and standards, based on a survey and analysis of regulations from various countries, which will be codified in national legislation.
Exercise regulatory control over Ignalina's operational safety.
To aid VATESI in these activities, the Lithuanian government issued a decree in May 1993 establishing the Nuclear and Radiation Safety Advisory Committee. The committee, which met for the first time in October 1993, is composed of safety advisors and environmental specialists from the United Kingdom, Germany, Sweden, Finland, Ukraine, Russia and Lithuania.
The committee has proposed rules for the employment of Western companies at Ignalina and helped the government resolve the nuclear issue. The committee's expenses are covered by committee members and Lithuania's Ministry of Energy. The committee's agenda: to seek out regulatory information from the European community, to draw on Ukraine's expertise and to establish an independent safety group that will examine individual problems. The committee is working with Ignalina, VATESI and the Lithuanian Ministry of Energy to advise them on an integrated approach to safety upgrading and the development of a strong regulatory and technical infrastructure.
The committee has made recommendations to the Lithuanian government on prices for Ignalina electricity, and it appointed an independent group in October 1993 to review three key safety-related issues: 1) whether Ignalina Unit 2 should have operated through 1992 despite leaks, 2) the replacement of certain valves and 3) the possibility that a fuel assembly could have been missing in February 1993. Specialists with the review group found that Ignalina would benefit from a special safety committee that has the authority to examine management decisions.
In an April 1994 letter to the Lithuanian prime minister, the Nuclear and Radiation Safety Advisory Committee asked that the price of electricity from Ignalina be doubled--to about 10 Lithuanian cents per kilowatt-hour--to ensure the safe, long-term operation of the plant. The price increase was to take into account a new budget that includes upgrades, repairs, waste management and decommissioning.
The Lithuanian government officially authorized a price increase for electricity July 1, 1994, raising it to an average of 8 to 12 Lithuanian cents per kilowatt-hour. In October 1994, the price rose further to an average of 12 to 16 Lithuanian cents per kilowatt-hour.
In September 1995, the Ignalina plant sued the Lithuanian State Power System (LSPS), the national utility, for failing to pay for the electricity supplied by the plant. According to Ignalina's director, LSPS owed the plant between 230 million and 240 million litas ($9.2-9.6 million). The plant took LSPS to court in an attempt to recover 189 million litas ($7.56 million). The same month, the government granted Ignalina a credit of $5.6 million. In December 1995, the two sides settled their dispute, with LSPS agreeing to repay the debt in installments up to the end of 1996. According to the plant's director, payment of salaries to Ignalina personnel has been delayed, but the delayed payments have not affected plant operations.
In November, the Lithuanian government ordered the establishment of a decommissioning fund for Ignalina. Decommissioning costs will be included in the plant's production costs, and will eventually be reflected in consumers' electricity bills. The government asked VATESI to draw up a detailed decommissioning plan by 2000. VATESI is using a grant from the European Union's TACIS (technical assistance to the Commonwealth of Independent States) program to develop decommissioning options.
In January 1994, Lithuania became the first country of the former Soviet Union to ratify the Vienna Convention, which ensures that the responsibility for damage caused by a nuclear accident is channeled to the plant operator. Lithuania is also a party to the 1988 Joint Protocol on Civil Law Liability and Compensation for Cross-Boundary Damage from Nuclear Accident, which resolves potential conflicts between the Paris Convention--which covers 14 countries--and the Vienna Convention--which has worldwide coverage.
Lithuania passed a nuclear law in 1993 consisting essentially of the Vienna Convention's liability provisions. It has now developed nuclear legislation that includes a more comprehensive set of regulations. The draft law has been reviewed by Finnish, Swedish and German legal advisers, and will now be sent to the Lithuanian government. If approved, it will be sent to parliament and then to Lithuania's president for final approval.
Because of Lithuania's small size, Swedish vendors want Lithuania's neighbors--Estonia, Latvia and Belarus--to adopt nuclear liability provisions. Estonia and Latvia have done so, but Belarus--afraid it would be held retroactively liable for the Chernobyl accident--has not yet acted.
Supply of Fuel. After investigating other sources of fuel for Ignalina, Lithuanian authorities reported they intend to keep purchasing it from Russia, which has a limited market for RBMK fuel. The Russian government, however, has demanded hard currency for the RBMK fuel.
In September 1995, Russia agreed to supply nuclear fuel in exchange for electricity from Ignalina. The fuel-for-electricity swap, which involves the export of up to 4 billion kilowatt-hours of power to Russia, began in November and will extend to May 1, 1996.
Spent Fuel Storage and Disposal. Because reprocessing of RBMK spent fuel is too costly and storage space is limited, Lithuania has entered new agreements with Sweden and Germany to deal with its waste management problem. Among key efforts:
a long-term waste management program with the Swedish firm Svensk Kärnbränslehantering AB (SKB). The company is assisting with management programs for spent fuel and low- and intermediate-level waste. In October 1992, SKB was awarded a contract by Lithuania's Ministry of Energy to help evaluate and select a suitable solution for interim spent fuel storage at Ignalina. Given the short time before the plant would run out of storage space (early 1995 for Unit 1), SKB considered dry storage in casks or vaults to be the only feasible option.
a contract was signed in December 1993 with the German company Gesellschaft für Nuklear Behälter (GNB) for 60 CASTOR casks to be used for dry storage. After the first delivery of casks, scheduled for October 1996, GNB expects to deliver four casks each month. Lithuania is considering launching a search for a permanent site for spent fuel disposal.
Barselina Project. Swedish and Russian experts completed the final phase of the Barselina project in 1994 (see the International Assistance section). The three phases of the project involved a safety comparison between the Ignalina plant and the Barsebäck plant in Sweden.
RBMK Safety Review Consortium. In 1993, the European Union (formerly the European Communities) launched an RBMK safety review aimed at developing a better understanding of the RBMK design and operation. The review used Ignalina 2 and Russia's Smolensk 3 as reference plants. For details, see the International Assistance section.
Scandinavian Aid. The Swedish government increased its contribution to the Ignalina safety project by $2.1 million in early 1994 and doubled its share in the EBRD account. Sweden's EBRD contribution now totals $6 million. In addition, Sweden spent about $10 million in 1991-92, $6 million for Ignalina and $4 million for VATESI. It planned to spend $7.5 million in 1993-94. In June 1993, Sweden's Vattenfall and ABB Atom AB decided to delay safety improvements for Ignalina scheduled for the summer because the Lithuanian government had enacted no liability laws. When Vattenfall began supplying fire protection and emergency equipment, it accepted government indemnity in the absence of an official law. ABB Atom is now satisfied with the guarantees against liability, and plans to proceed with the supply of equipment to the plant. For details of assistance, see the separate summary of the Ignalina plant.
During Lithuanian-Swedish talks in April 1995, Lithuanian Prime Minister Slezevicius said the two sides had discussed possible studies of Ignalina by Swedish nuclear experts, including decommissioning studies.
Canadian Agreement. In November 1994, Canada and Lithuania signed an agreement to cooperate in the peaceful use of nuclear energy. Under the agreement, Canada will help improve safety at the Ignalina plant by providing equipment and expertise.
U.S. Assistance. Under an assistance program funded by the U.S. government, a peer review of the Barselina project and expert assistance on the RBMK's positive void coefficient are being provided. Other program activities include the provision of a full set of computer codes for safety, transient, severe accident and operation analysis; the development of an RBMK-1500 plant analyzer; the establishment of a dedicated voice and data communication link between Ignalina and important remote sites; the development and implementation of a management system to maintain and update key design, maintenance and safety information; and the provision of non-destructive examination equipment and training support.
In August 1994, the U.S. Agency for Trade and Development awarded Lithuania a $175,000 grant to prepare a technical specification and a plan for modernizing the country's electrical grid.
Russian Technical Support. In October 1994, Ignalina management requested assistance from Russia's RBMK institute, RDIPE, to review safety improvements planned under the EBRD's NSA grant program. The objective of the review, according to Lithuanian authorities, is to examine whether safety improvements planned under the EBRD-sponsored program will have any negative effect on parts of the reactor that were not the direct focus of the program. About 21,000 ECU ($26,460) from the NSA grant will be used to support RDIPE's work in preparing technical specifications. In addition, 1 million ECU ($1.26 million) from the grant will be used for accident analyses in the safety assessment.
The Russian fuel manufacturer, Mashinostroitelniy Zavod Elektrostal, has modified the fuel for RBMK reactors to reduce the void coefficient and thus improve safe operation. A pilot batch of the new fuel was loaded in Ignalina's reactors in July 1995. The results of the test will be analyzed in 1997.
January 1996
