Viewing cable 06VILNIUS549
Title: PRESSURE BUILDS TO CONSTRUCT NUCLEAR POWER PLANT

IdentifierCreatedReleasedClassificationOrigin
06VILNIUS5492006-06-13 13:22:00 2011-08-30 01:44:00 CONFIDENTIAL Embassy Vilnius
VZCZCXRO7306
PP RUEHDBU RUEHFL RUEHKW RUEHLA RUEHROV RUEHSR
DE RUEHVL #0549/01 1641322
ZNY CCCCC ZZH
P 131322Z JUN 06
FM AMEMBASSY VILNIUS
TO RUEHC/SECSTATE WASHDC PRIORITY 0272
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY
RHMFISS/DEPT OF ENERGY WASHINGTON DC PRIORITY
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC PRIORITY
RHEHNSC/NATIONAL SECURITY COUNCIL WASHINGTON DC PRIORITY
C O N F I D E N T I A L SECTION 01 OF 02 VILNIUS 000549 
 
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STATE FOR EUR/NB, EB/ESC 
 
E.O. 12958: DECL: 06/12/2016 
TAGS: ENRG PREL PGOV ECON LH FR
SUBJECT: PRESSURE BUILDS TO CONSTRUCT NUCLEAR POWER PLANT 
IN LITHUANIA 
 
 
Classified By: Economic Officer Scott Woodard for reasons 1.4 b and d 
 
¶1. (C) SUMMARY:  A well-placed source says that a two-year 
French plan to convince the GOL to build a French-designed 
nuclear power plant is succeeding.  According to this 
account, the French have persuaded many of Lithuania's 
political leaders of the need to build a nuclear power plant 
as soon as possible -- a plan that could benefit French 
companies at the expense of others, including Westinghouse 
and General Electric.  Other GOL sources insist that the 
competition remains wide open.  Our Mission continues to work 
with both firms.  We will stay engaged to ensure that the 
GOL's ultimate decision is transparent and fair.  END SUMMARY. 
 
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PARANOIA VERSUS SCIENCE 
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¶2. (C) Jurgis Vilemas, Chairman of the Lithuanian Energy 
Institute (LEI) and a long-time advisor to Prime Minister 
Brazauskas on energy matters, told us recently that he is 
increasingly concerned that anxiety about dependence on 
Russian energy supplies is driving the discussion on the 
construction of a new nuclear power plant.  He told us that 
he thinks that Lithuania's parliament may require the 
construction of a new nuclear plant by 2015. 
 
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A QUICK DECISION WOULD HURT U.S. INTERESTS 
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¶3. (C) Such a decision, Vilemas said, would have two major 
consequences.  First, it would not allow enough time for the 
GOL to issue a proper international tender and allow a 
competitive bidding process.  This, he argued, would force 
the GOL to rely on "experts" to select the most suitable 
model for Lithuania.  Vilemas said that the GOL's experts, 
influenced by a two-year French lobbying campaign, would 
likely select the French design as the winner.  The second 
consequence is that this accelerated timetable would 
effectively eliminate Westinghouse's IRIS reactor -- 
Vilemas's preferred design -- as a possibility, as it will 
not have regulatory approval in time to meet a 2015 
completion deadline.  Vilemas also mentioned that a different 
Westinghouse design, the AP 1000, already has U.S. regulatory 
approval and may be a possibility for Lithuania, even if the 
parliament requires a 2015 completion date.  Vilemas said 
that General Electric had also presented to the GOL a 
proposal for a GE-designed reactor. 
 
¶4. (C) Arturas Dainius, the Ministry of Economy's 
Undersecretary in charge of nuclear-power issues, gave us a 
slightly different perspective.  He said that "all of the 
major competitors," which included companies from Japan, 
France, Russia, the Czech Republic, and the United States, 
remain in the running.  Regarding Westinghouse, he said that 
the GOL probably would not consider "designs not yet 
approved" -- a reference to IRIS -- but said that 
Westinghouse's AP 1000 was an option.  He said that 2013 was 
the earliest conceivable completion date for a new nuclear 
power plant, adding that a date after 2015 was probably more 
realistic. 
 
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FEASIBILITY STUDY UNDERWAY 
-------------------------- 
 
¶5. (C) Vilemas said that the GOL has already launched a 
feasibility study to consider construction of a new nuclear 
plant in Lithuania.  He said that the committee commissioned 
to do the study -- of which he is a member -- had recently 
received pressure to complete the study by May, four months 
earlier than the original October deadline.  He told us, 
however, that he had successfully defended the original 
deadline and that the committee will not issue its 
conclusions before then. 
 
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WHO WILL PAY? 
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¶6. (C) Dainius was not able to clarify the source of funds 
for a new nuclear power plant.  He spoke vaguely of a mix of 
private funding and government borrowing and noted that the 
GOL had the possibility to borrow up to USD 500 million from 
the EU's Atomic Energy Agency (EURATOM).  Unfortunately, 
Dainius said, borrowing from EURATOM would require the 
 
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European Commission's permission, and he was unsure about how 
other EU members view the possibility of a new nuclear power 
plant in Lithuania.  Dr. Anicetas Ignotas, also an Under 
Secretary in the Ministry of Economy, told us in March that 
 
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the GOL would use funds from the sale of unused 
carbon-emissions quotas to help pay for the project. 
 
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U.S. COMPANIES' INTEREST 
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¶7. (C) General Electric (GE) told us on June 7 that it is in 
the process of negotiating a Proprietary Information 
Agreement with the GOL, which will enable more detailed 
discussions.  GE also told us that its Generation III 
Advanced Boiling Water Reactor design would be a perfect 
technical fit for Lithuania's needs.  GE hopes to learn more 
shortly about how the Lithuanians intend to set up the 
procurement process, which will help determine whether or not 
it will bid on the project. 
 
¶8. (C) Dr. Mario Carelli, Chief Scientist for Westinghouse 
Electric Company, told us on June 8 that "things look bleak" 
for a chance to build Westinghouse's IRIS reactor in 
Lithuania.  He said that if Lithuania wants to choose the 
300KW-IRIS, the GOL can help hasten its certification and 
licensing, but noted that, even under the most optimistic 
circumstances, they could not construct and bring an IRIS 
reactor online earlier than 2015-2017.  Carelli said that he 
believes that the French energy giant AREVA, working 
hand-in-glove with the French government, is lobbying hard to 
persuade Lithuanian officials to opt for AREVA's EPR design. 
Carelli also said that Westinghouse will undoubtedly be 
interested in building its larger reactor, the AP 1000 in 
Lithuania, but added that his company considers Chinese and 
American markets more appropriate for that design.  He said 
that the smaller IRIS is a much better fit for Lithuania's 
needs. 
 
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COMMENT 
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¶9. (C) A new nuclear power plant in Lithuania represents a 
multibillion-dollar opportunity, and it is not surprising 
that the French are lobbying hard for their design.  We are 
encouraging the GOL to take a deliberate, needs-based 
approach to this decision and are advocating for a 
transparent and competitive tender process that fairly 
considers all U.S. bids. 
MULL