‘Talks on how the Baltic states, including Lithuania, could emancipate itself from being an energy island and build an energy bridge to the European continent – this will, I believe, be one of the most important issues for this visit,’ Azubalis said journalists on 24 August.

In his words, Lithuania hopes for “Germany’s cooperation and assistance” in the implementation of the Baltic plan of energy links.

The Minister also expressed his hope that during the Merkel’s visit ‘we will speak as neighbours, first of all, sharing the Baltic Sea and common interest of implementing the energy strategy’.

“Lithuanian people wanted change and now they see it on the move. Not as fast as we had wanted but still in these 365 days Lithuania took the courage to go for change towards a more transparent, fairer, safer and more civic-spirited state. This is an ambitious agenda. But if we continue working hand in hand towards a common goal, we will succeed in creating a better Lithuania,” the President says covering her first year in office.

For many people, according to the President, a better Lithuania is about lower consumer prices; therefore, the primary goal at the time of recession is to protect people against manipulation in prices, curb arbitrariness on the part of various interest groups and prevent price rise. Amendments to the Law on Pharmacy adopted in response to the President’s call had a downward effect on medicine prices. The President’s veto on amendments to the Law on Heat Sector prevented a rise in heat prices. With the dissolution of Lithuanian Electricity Organization, LEO LT, the adoption of a new methodology for calculating electricity prices and the creation of a functioning electricity market, electricity price regulation was introduced. New leadership of the Competition Council, the National Control Commission for Energy and Prices, and the National Audit Office enabled to monitor cartel agreements more closely, to contain water-supply and heat prices and to introduce a more rigorous supervision of the use of public funds and public property.

Protection of the poorest people is the primary task set by the President for social policy-makers. According to the President, a safe childhood and a secure old age are the centerpiece of a responsible social policy. The authorities responded to the President’s call to provide a mechanism for compensating pension cuts, start long-term social security reform, create a legal framework against violence, adopt legal amendments imposing higher penalties for crimes against children, make the reduction of unemployment a priority for the Government, introduce a tax-exempt cap for social payments and put into action the programme to combat social exclusion in the region of the Ignalina Nuclear Power Plant (NPP) in Visaginas.

The President says it is corruption that causes the largest damage to the state and people-to-people relations. “Corruption is like cancer metastasized in all spheres of life. We need a much more powerful cure than ever before,” the President says. The President successfully insisted on the extension of the period of limitation for crimes of corruption and tabled proposals to the Seimas to set ten times higher sanctions for smuggling, corruption and economic crimes and to legalize the seizure of illegally acquired property. The President vetoed the Law on Land Reform and proposed amendments to prevent corrupt transactions in public land in urban areas, while the presidential veto on the Law on Construction eliminated the possibility of unauthorized construction and triggered legal amendments to guarantee a transparent issue of construction permits.

To make people trust the state, their trust in justice should first be promoted, the President says. On the President’s initiative, a reform was started in law enforcement bodies with the aim to improve the transparency of the judiciary: a stricter procedure for assessing and selecting judges was introduced, the President meets with every candidate in person, and judicial supervisory authorities now impose harder sanctions for negligence on the part of judges, including dismissal from office. Also, legal amendments to tighten the control of courts were prepared, rotation of court presidents was introduced, the General Prosecutor’s Office leadership was changed, and further improvements in the procedure and control of pre-trial investigation are underway.

National security is seen as a measure of credibility of the state. The President initiated the first-ever list of national security threats and the setting of clear tasks for intelligence services. Also, a national intelligence concept was developed and approved by the Seimas. Restructuring in the State Security Department aimed at depolitization was started following the appointment of a new director, the Law on Operational Activities was amended to set out a clear procedure and responsibility for providing intelligence information, a decision was made to finalize the lustration process. At the President’s initiative, Baltic defense plans were included in the new NATO concept, which reinforced international security of the country. A new commander-in-chief of the armed forces was designated, and new Lithuanian national military defense plans are on the way.

Foreign policy, according to the President, must serve the interests of the people. The economic downturn and the financial crisis called for immediate solutions to help attract new investment, enter new markets in the neighboring countries, and ensure economic and energy security. Reaching out for these goals, the President made 26 working visits abroad. In turn, Lithuania was visited, at the President’s invitation, by the leaders of NATO, the European Parliament and the European Commission, the new President of the European Council, the presidents of Finland, Slovenia, Poland, Estonia and Latvia, and 40 high-level foreign officials. By making a special focus on cooperation with the EU institutions and among the Baltic and Nordic countries, the President succeeded in having the elimination of Lithuania’s and other Baltic States’ energy isolation placed among the EU priorities: the EU allocated 175 million euros for the construction of a power bridge to Sweden. Lithuania also managed to secure support from the European Commission for its aspiration to receive financial assistance to build a gas line connecting Lithuania and Poland and to ensure that financial allocations for the supervision of the closure of the Ignalina NPP and for the construction of power and railway links with the rest of Europe were included in the EU’s new financial perspective. The President’s efforts also contributed to the setting-up of European and Euroatlantic agencies in Lithuania: the European Institute for Gender Equality recently opened in Vilnius and NATO Energy Security Centre to be opened in the future. Furthermore, the President received official assurances from Luxembourg’s leaders about future investments in renewable energy in Lithuania. The new stage of bilateral relations with the neighboring countries, Russia and Belarus, built on a constructive dialogue started bearing fruit: investigation of the January 13 case broke the deadlock, investment opportunities were opened up in Belarus, and business climate in Russia was improved.

The President sees the driving force of a faster recovery of the country in creative, educated and inventive people. Education and culture was recognized as the key areas in the development of the state: at the President’s initiative, policy guidelines for culture were developed for the first time in the twenty years of restored independence, to guarantee access to culture for all people – not only in major towns but also in regions. Other accomplishments include the correction of mistakes made in carrying out the education reform, success in guaranteeing lower interest rates on student loans, signs of recovery of applied science, accelerated establishment of science, studies and business valleys.

To promote public confidence in the government, the President worked towards enhanced democracy and transparency in the political system. At the President’s demand, the rules for financing political parties were changed and an opportunity for independent candidates to stand at municipal elections was created. The President also advocated the direct election of mayors. The President’s dynamic and open way of cooperating with the Seimas and the Government improved the quality of the legislative process: 502 laws were signed, 8 laws vetoed, 34 legal acts initiated, 28 of which were adopted.

Over the year, the President received 11,370 letters from private individuals. The issues raised in the letters were discussed both in house and during the President’s working visits to Lithuania’s regions. Over the time in question, the President visited 6 regions: Visaginas – to discuss problems encountered by the local community of the Ignalina NPP region, Alytus – to explore possibilities for reducing unemployment and promoting job creation, the south-western district of Suvalkija – to strengthen local communities, Kazokiškės – to look into waste management issues, Kaunas – to address problems in local self-government, and Biržai – to discuss the adaptation of heritage sites for tourism.

The President said she believed that the Baltic Development Forum Summit and the Baltic Sea States Summit held simultaneously in Vilnius for the first time would reinforce shared aspiration for making the Baltic Sea Region stronger, more prosperous, closely coordinated and competitive in the European Union and turning it to a place where everyone feels safe and secure and where many business initiatives come together. According to the President, the creation of a Baltic energy market will help Lithuania, Latvia and Estonia to break away from their energy isolation and will certainly be beneficial for the whole region.

The President noted that Lithuania and other states of the Region had already started the process and that the European Commission, too, was showing the initiative in this regard. The President underlined that the Baltic Sea was our pride and part of our identity, but at the same time the Sea was most vulnerable and sensitive and its fragile ecosystem was seriously threatened by very intensive economic activity. The President urged all the countries in the region to pool not only their political efforts, but also material resources together to preserve the Baltic Sea, starting with neutralizing the explosives and ammunition dumped in the war years and ending with protecting rare species of flora and fauna.

The Baltic Development Forum which is also called the Baltic Davos and which runs this year under the title “European Challenges – Regional Solutions: An Agenda for Jobs, Investments and Sustainable Growth” is attended by prime ministers of the Baltic countries, Norway and Finland, ministers of foreign affairs of Lithuania and Denmark, Minister of Economy and Energy of Sweden, President of the European Commission Jose Manuel Barroso, Deputy Director of the World Trade Organisation Rufus H. Yerxa, senior managers of large energy, consulting and other companies of the Baltic Sea countries, associated business structures, international financial institutions, analysts from research institutions, and many others.

Energy, the sea, innovation, and competitiveness – these are the key words that best describe the peculiarities and challenges of the Baltic Sea region and define directions for close cooperation. When I say “cooperation”, I mean joint work by governments, businesses and public-private partnerships.

The three Baltic States are isolated in the field of energy. The creation of a Baltic energy market is crucial for ending this isolation. We have already started the process by opening our energy market to competition and investment. We have also received EU support for strategic infrastructure projects. Lithuania’s first power exchange was launched on 1 January 2010. We are preparing to build electricity bridges to Poland and Sweden, and we plan to construct a new nuclear power plant.

As there is no functioning natural gas market in Lithuania, gas prices exceed those in Germany by 38 percent. We are taking steps to change the situation. They include the EU 3rd Energy Package, new gas pipeline to connect Lithuania with Poland, and liquefied gas terminal in Klaipėda. In addition to resolute steps in conventional energy sectors, we must also accelerate the development of alternative energy sources.

The Baltic Sea is our pride and part of our identity. At the same time, it is a sea that is most vulnerable and sensitive. Its fragile ecosystem is seriously threatened by very intensive economic activity. I would urge all the countries in the region to pool not only their political efforts, but also material resources together to preserve the Baltic Sea, starting with neutralizing the explosives and ammunition dumped in the war years and ending with protecting rare species of flora and fauna. These issues were discussed at a special meeting in Helsinki this past February. I am convinced that by continuing this initiative, by exploiting the region’s full potential for research and development and by attracting businesses, we can and must become a center to spread useful information and experience across Europe and around the world on saving the seas.

The European Union has approved the Strategy for the Baltic Sea Region. It is a very important and necessary step which demonstrates the region’s huge potential. It is also a commitment to embark on a modern path of development, based on the newest technologies and innovations.

It is symbolic that for the first time the Baltic Development Forum Summit coincides with the Baltic Sea States Summit, both meeting in one city. I firmly believe that this will help us to understand each other even better and that it will reinforce our shared aspiration for making the Baltic Sea Region stronger as it emerges as the most prosperous, closely coordinated and competitive region in the European Union, where everyone feels safe and secure and where many business initiatives come together.

I wish you fruitful discussions and the best of success in your work!

Dalia Grybauskaitė, President of the Republic of Lithuania

Oettinger told Lithuanian Energy Minister Arvydas Sekmokas his opinion at a conference on European energy infrastructure in Madrid on Friday. The meeting was focused on the integration of the Baltic countries into Europe. Lithuania in particular has energy supply issues because it is connected to Russian networks only, which leave it vulnerable to political incidents.

The commissioner was very interested in the country’s new nuclear plant.

“Oettinger was interested in what support instruments are needed for the new nuclear power plant to ensure as rapid implementation of this important regional project as possible,” Sekmokas said in Madrid.

Sekmokas underlined that pipelines and undersea cables were helpful, but that the country needed to find new ways to generate energy.

Oettinger confirmed support for Lithuania, saying that although its energy projects are costly, it is a sound investment for the EU.

“The Lithuanian-Polish gas pipeline. It costs a lot. However, it is necessary for European solidarity, competition, the single market and the security of supply,” he said.

The annual report prepared by the Government of Prime Minister Andrius Kubilius points out that the previous Government was implementing the energy strategy that did not comply with the situation.

“LEO LT is an example of non-transparent cooperation between the Government and private sector. Lithuanian electric power system is integrated into the system of the former USSR, and local power generation sources are fitted to use the imported fuel (natural gas). There are no links with other EU countries. The framework of LEO LT and Lietuvos Energija does not conform to the requirements of the EU Third Energy Package. The laws on electric power provide legal conditions for undue increases in electricity rates for customers,” the situation in which the present Government came to work is presented in grim colours.

According to the report, upon the closure of the Ignalina Nuclear Power Plant, we became even more energy-dependent than 20 years ago, in 1990. Probably, a certain exception can be seen in the oil sector, where the possibilities of self-sufficiency in oil and its products have increased significantly.

One of the major reasons why the situation in the energy sector is still discouraging is the fact that strong companies, that have monopolized the market and that are dictating the conditions not only to the customers but also to the state, prevail,” says the document.

The Government announced that upon the establishment of Energy Ministry, the situation began improving substantially – the abstract desire for energy independence is turning to concrete projects, the implementation of which not only moved from the dead point, but also started bringing first results.

“In the energy sector in 2009, the focus was on strategic challenges – to ensure smooth functioning of energy sector upon the closure of Ignalina Nuclear Power Plant, to protect consumers from sudden increase in electricity prices, and pave the way for the integration of Lithuanian energy systems into the EU,” says the Government report.

LETA/ELTA

Swedish scientists have found that the average Lithuanian uses seven times less energy in a year than his Swedish counterpart.

Lithuanians tend to be more efficient with the energy they use, a point that is becoming particularly important after the shut down of the country’s nuclear power plant.

“Look at the statistics, we see that statistical Lithuanian consume less than two megawatt hours per year and this is among the least energy-consuming Europeans. This is a very positive indicator of a country which is actively integrating into the Western European market,” Andreas Skalegaard a scientist working at Scandinavia’s largest engineering company SWECO said.

Poor insulation in homes however is a problem that remains in Lithuania. Apartments with old windows and poor insulation lose significant amounts of heat into the environment, technologijos.lt reported.

This year, Lithuania will require around 9.1 terrawatt hours of electricity. The country now has the capacity to produce around 8 terrawatt hours of electricity and heat at thermal plants.

Lithuania and Sweden are building an electricity cable that will link the two countries under the Baltic sea. It will be complete in 2016.

The author starts with the closer of Ignalina nuclear power plant on January 1 of this year when the Baltic States still have not created any significant power network linkages with EU member states. Not even the fact that a Latvian served one term as the EU’s energy commissioner helped in this. The energy dependency of the Baltic States on Russia has increased, not decreased, since they joined the EU. There is only one interconnection – the Estlink cable which hooks up Tallinn and Helsinki. All of the rest remains on paper.

When concern about this situation is discussed at the EU level, there is sometimes not even a statement of condolences for those NATO and EU member states that have been forced to become energy-dependent on Russia. What has been the point of all of this? Why did Lithuania’s entrance treaty with the EU include the rule of closing down the Ignalina plant if, six years after joining the EU, that increased the dependency of the Baltic States on Russia? How can we explain such an odd understanding of European integration?

Business Interests
On the one hand,  the author says, the demand to close down the Ignalina nuclear power plant was pretty clearly based in part on French business interests. That is how, ten years ago, the cornerstone was laid for a situation, which would force the Baltic States to change their energy capacities by buying services from French companies. There were surely certain business interests in all of this. Ten years ago the EU and the rest of the world were still dominated by negative views about nuclear power. Everyone clearly remembered the terrors of Chernobyl, and greens got one European country after another to abandon plans for new plants. Companies which manufacture nuclear power plants had to look for markets for their services, and bans on the use of older plants in Eastern Europe created good growth for businesses which can offer a replacement of technologies.

Shifting Views on Nuclear Power
The author states that it is only over the last ten years that attitudes towards nuclear power have changed radically. The price of fossil fuels has skyrocketed, and a global decision was taken to reduce carbon emissions. Nuclear power plants do not have any carbon emissions. Now there are more orders for nuclear plants than the qualified manufacturers can absorb. They can now make a choice between humble orders from poor countries (one bloc of 600 MW), or an order from Great Britain or India to build 20 plants. Small countries, therefore, find it hard to get a good price. The bottom line is that Ignalina has been shut down, but alternatives are still only being drafted.

One consequence of this is clear. Latvia and the Baltic States are now far more dependent on Russia than they were before they joined the EU. Could it be that exactly that was the long-term goal?

Mr. Paiders asks what kind of Baltic States do other EU member states need? Is the EU interested in bringing in a periphery in the East that might become a regular treat against regional security? Does it want to bring in countries, which annoy and challenge their eastern neighbours?

No, it does not, and EU leaders say so both officially and unofficially. It is in the interests of the EU to admit countries, which have maximally good relations with their neighbours, and particularly with Russia.

US Interests
Meanwhile, according to the author, it was in the interests of other global political players (especially America during the Bush era) to ensure that countries that could torpedo and delay any rapprochement between the EU and Russia whenever that was needed joined the EU. It is specifically because of such interests that the EU must have countries, which have latent conflicts with neighbours to the East. As soon as there is a global need, an invisible hand will inflate the conflicts, and Russia’s rapprochement with the EU will be prevented. Lithuania and Poland, for instance, blocked the launch of negotiations with Russia for several months on end.

The author noticed that,  there are certain limits to the rhetoric, which Baltic politicians allow themselves to engage in when it comes to annoying Russia. The Baltic States are linked in a single energy system with Russia. Politicians in the Baltic States can annoy their eastern neighbour only until the patients of the people is exhausted. Russia can shut down gas deliveries, as it has done with Ukraine. It can build alternatives to become independent from links to Poland and the Baltic States. That is why Primorsk, Ustylug and Nordstream were created. Each time there is an unmotivated escapade in Latvian foreign policy, there can be economic costs, which would be felt first and foremost by local residents. It was specifically the energy dependency that put the brakes on the policies of the Baltic States in terms of serving the interests of their global partners.

It is precisely energy dependency on Russia, Mr Paiders concludes, that limits Latvia’s foreign policy rhetoric, and that is a lever, which forces Latvia to maintain at least more or less normal relations with Russia. The European Union wants Baltic States that are European. They want Baltic States that are a part of Europe’s common foreign policy, not ones that represent the American “fifth column” within the EU. That is why it is possible that the EU was specifically interested in not increasing the level of energy independence in the Baltic States, thus creating conditions in which the Baltic political elite learns not only to live with Russia, but also to use their geographic location to serve their own interests and those of the EU.

“We cleared up the stage from the old legacy for a new nuclear power plant to a strategic investor and its constructors. Now everything is clear, the stage for a new nuclear power plant construction is ready “, – The Minister of Energy said to the press a day before.  The Minister referred to the ‘peace treaty’ between the private investor and the state, which allows liquidating the LEO LT company and, and clears that way of building a new nuclear plant in Ignalina.

On 5 December Mr Sekmokas agreed on the terms and conditions of a tender on a concession for the construction, management, development and design of a new Lithuanian nuclear power plant in Ignalina. The concession tender commission passed a decision to announce a call for investments into this project.

The Minister stated “We have made a very important step today. It means that Lithuania is inviting a strategic investor to implement the new nuclear plant project together. The project is particularly important for Lithuania and the whole region since the new nuclear power plant will contribute to the implementation of the key provisions of our energy policy – it will guarantee energy security, reduce our dependence on the sole gas supplier and will contribute to the implementation of our commitments to reduce the carbon dioxide emissions by 20 percent by 2020. Moreover, it should be noted that the new nuclear power plant will be the largest Greenfield investment in Lithuania’s history, a huge impetus for Lithuania’s economy,” Sekmokas said.

The call will be published in the official magazine Valstybes Zinios and the Official Journal of the European Union.

Earlier this week, Mr Sarunas Vasiliauskas, a Nuclear Plant Project manager said to Baltic News Service that Lithuania would like to a strategic investor with enough funds and experience in nuclear energy.  He said, ‘Usually such projects are not implemented by reactor producers, however, it may happen that bids are submitted by a consortium of [such] companies.’  He continued saying that talks with the Baltic States and Poland and the strategic investors should be finalised ad the deals should be inked in 2010.

Design works would take about two years and the construction of nuclear reactors – about six years.

The new nuclear facility is expected to launch electricity generation in 2018-2020.  The New Nuclear Plant should cost between three and five billion Euro.

The Swedish Environment Minister Anders Carlgren said”We have thus concluded that a yes is the only available decision. The government is satisfied that the planned route is in accordance with Swedish responsibilities to protect and preserve the marine environment”.

In the Governmental press release the Minister stated, “The government has set high demands to ensure that the sensitive environment in the Baltic Sea is not threatened. The company has been required to provide a series of supplementary examinations and has satisfied each stage of the deliberation process.”

The Finnish Helsingin Sanomat informed that the Finnish Government is very likely to follow the Swedish move.  A final decision on Finnish approval for the pipeline project is to come by early next year from the Western Finland Environmental Permit Authority.

Denmark approved the Nord Stream at the end of October.

The Lithuanian President Grybauskaite, meanwhile in the Summit in Brussels on 30 October stated “The “Nord Stream” project is very sensitive, and it is sensitive not only environmentally, but politically also. And the phenomena when such kind of strategic projects are practically negotiated on a bilateral basis beyond the framework of the EU, of course, is a phenomena which, politically, for some member states is not easy to accept,” BNS informed.

The Lithuanian Prime Minister Kubilius stated at the beginning of Autumn to BNs “We’re certainly concerned and we’re against it, both for environmental issues that could ensue and for certain political consequences, and Russia’s openly-declared bid to dominate in the Baltic Sea and use its military force for alleged protection of the pipeline, and because of how this could change Gazprom’s attitude to supplying gas to countries outside the reach of the pipeline, including the Baltic States.”