Viewing cable 06VILNIUS637
Title: LITHUANIA SEEKS TO LINK UP WITH POLISH AND SWEDISH

IdentifierCreatedReleasedClassificationOrigin
06VILNIUS6372006-07-07 11:39:00 2011-08-30 01:44:00 CONFIDENTIAL Embassy Vilnius
VZCZCXRO2006
RR RUEHDBU RUEHFL RUEHKW RUEHLA RUEHROV RUEHSR
DE RUEHVL #0637/01 1881139
ZNY CCCCC ZZH
R 071139Z JUL 06
FM AMEMBASSY VILNIUS
TO RUEHC/SECSTATE WASHDC 0364
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RHMFISS/DEPT OF ENERGY WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RHEHNSC/NATIONAL SECURITY COUNCIL WASHINGTON DC
C O N F I D E N T I A L SECTION 01 OF 02 VILNIUS 000637 
 
SIPDIS 
 
SIPDIS 
 
STATE FOR EUR/NB, EB/CBA, AND EB/ESC 
 
E.O. 12958: DECL: 07/06/2016 
TAGS: ENRG ECON PREL PGOV LH PL SW
SUBJECT: LITHUANIA SEEKS TO LINK UP WITH POLISH AND SWEDISH 
POWER GRIDS 
 
REF: VILNIUS 549 
 
Classified By: Economic Officer Scott Woodard for reasons 1.4 b and d 
 
¶1. (C) SUMMARY:  Plans to link Lithuania to the electricity 
grids of Poland and Sweden are moving forward, according to 
several well-placed sources.  These links would complement 
the nearly complete Estonia-Finland power bridge and hook the 
Baltics into Western Europe's electricity grid for the first 
time.  These high-voltage links are an integral part of the 
GOL's wish to build a new nuclear reactor after it closes its 
current Soviet-designed reactor in 2009.  Ultimately, 
however, whether the two projects ever make it off the 
drawing board will depend on sufficient financing, which in 
both cases has yet to materialize.  END SUMMARY. 
 
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THE BALTICS AS AN ENERGY ISLAND, FOR NOW 
---------------------------------------- 
 
¶2. (SBU) The Baltics currently have no connection to the 
electricity grids of countries that were not part of the 
former USSR.  This will change later this year with the 
completion of the Estonia-Finland 350 MW power cable 
("Estlink").  Estlink will allow the Baltics, for the first 
time, to sell electricity beyond the borders of the former 
USSR.  Dr. Jonas Kazlauskas, Deputy Director of the Ministry 
of Economy's Energy Agency, told us June 21 that Estlink's 
impending completion highlights the absence of a similar line 
connecting Lithuania with a non-former-USSR country, like 
Poland or Sweden.  Such a connection, he said, would complete 
the "Baltic Ring," the interconnection of the Baltic 
electricity grid with Scandinavia and Western Europe. 
 
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LITHUANIA-SWEDEN UNDERSEA CABLE 
------------------------------- 
 
¶3. (SBU) Kazlauskas said that Lithuania's plan to build a 
high-capacity (1000 MW) underwater link with Sweden 
(SWINDLIT) is proceeding.  He told us that Lithuania has 
spent the past 18 months discussing this plan with Sweden. 
if all goes well, the project could be complete by 2012.  Dr. 
Anzelmas Bacauskas, Chief of Lietuvos Energija's (LE) 
Strategy Division, told us on June 22 that LE and Svenska 
Kraftnat (SvK) are finalizing the terms of a feasibility 
study for SWINDLIT and will announce a public tender to 
conduct this study soon. (LE is 96 percent state-owned and 
operates the eastern half of Lithuania's electricity grid. 
SvK is the state-owned operator of Sweden's grid.) 
 
¶4. (SBU) Bacauskas said that the project would cost 
approximately EUR 400 million (USD 501 million).  Without 
specifying who would pay for the project, he emphasized that 
it was commercially viable because the Scandinavian countries 
were not increasing their generation capacity even though 
their consumers required increasing amounts of electricity. 
He said that in dry years, especially, Scandinavian producers 
were already having difficulty meeting demand, and hinted 
that some large Scandinavian industrial concerns may be 
willing to finance the Lithuania-Sweden undersea link. 
 
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LITHUANIA-POLAND POWER BRIDGE 
----------------------------- 
 
¶5. (SBU) Kazlauskas was cautiously optimistic on the outlook 
for a 1000 MW power bridge with Poland, emphasizing that the 
two countries had discussed this project off and on for more 
than a decade.  He said, however, that media reports of 
renewed interest in this project were accurate and that he 
expected new discussions with the Poles as early as July. 
 
¶6. (C) The DCM of the Polish Embassy in Vilnius shared 
Kazlauskas's cautious optimism and told us on June 22 that 
President Adamkus and President Kaczynski could make an 
official announcement on the power bridge in September, if 
this summer's negotiations go well. 
 
¶7. (SBU) Kazlauskas said that the Lithuania-Poland power 
bridge would cost about EUR 300 million (USD 376 million) and 
take up to eight years to complete.  The engineering and 
construction, he said, will not take long, but the power 
bridge will pass through an environmentally sensitive area 
and through pieces of land owned by many different owners, 
which will complicate the legal process of acquiring the 
necessary land.  Bacauskas estimated that the power bridge 
 
VILNIUS 00000637  002 OF 002 
 
 
could cost up to EUR 434 million, some of which could be paid 
for by the EU's allotment of EUR 143 million (USD 179 
million) for the decommissioning of the Ignalina Nuclear 
Power Plant (INPP). 
 
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COMMENT 
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¶8. (SBU) The plans for these high-voltage connections 
complement the GOL's desire to build a new nuclear power 
plant once Lithuania's Soviet-designed reactor in Ignalina 
shuts down in 2009 (reftel).  Not only do the Lithuanians see 
a new reactor as a way to reduce energy dependence on Russia, 
but also as a commercial opportunity to sell electricity to 
power-hungry Scandinavian and Western European markets that 
find it difficult to increase their own power-generation 
capabilities.  The devil will lie in the financial details, 
however. The hundreds of millions of dollars necessary to 
construct these projects has not materialized, and will not 
simply appear because the GOL so wishes.  If these projects 
prove financially feasible, however, they may provide 
commercial opportunities for U.S. companies. We will work 
with the GOL to ensure transparent and competitive bidding 
processes that fairly consider all U.S. bids. 
KELLY