Lithuania loses final nuclear plant bidder

KEPCO Withdrawal from Visaginas Tender disrupts Lithuania's nuclear power plant plans, affecting Baltic energy security, concession talks, and co-investment at a fixed price, as reliance on Russian gas and imports rises after the Ignalina shutdown.

Lithuania's nuclear future is in doubt following the withdrawal of the final bidder for the construction of the new Visaginas Korea Electric Power Corporation KEPCO has pulled out of the tender process, the Lithuanian government confirmed, leaving the project for a plant with a generating capacity of up to 3,400 megawatts MW back at square one after a year of tendering.

The Lithuanian Ministry of Energy claimed that the bid from KEPCO was the only one to meet the tender requirements, claiming that it was "an attractive binding proposal to co-invest in the project and to construct a nuclear power plant in the period to 2020 for an attractive fixed price."

One other undisclosed company submitted a proposal, but it did not meet the tender requirements. Unconfirmed reports say that other bidder was Electricite de France S.A., while AECL received Ottawa's backing during the process.

"Two weeks after submission of its proposal, KEPCO unexpectedly informed the Concession Tender Commission that it is revoking its proposal, even though just prior to the withdrawal, KEPCO had publicly confirmed in the media its participation in the tender," the Ministry stated.

The Visaginas plant, which is to be near the old Ignalina nuclear power plant and has received environmental approval already, is seen as vital to helping Lithuania and its neighbouring countries, Latvia and Estonia, reduce their energy dependence on Russia. Lithuania has alleged that the Russian government, during a recent visit to South Korea, influenced KEPCO's decision, because it wants the existing, lucrative gas supply contracts to stay in place.

The Ignalina plant supplied up to 70 of the country's electricity, but decommissioning has been under way since 2004. One of the key conditions for Lithuania's membership in the European Union was that the unsafe plant would be taken offline as scheduled, with regional energy implications. Unit 1 was shut down December 31, 2004, and Unit 2 closed on December 31 last year. As a result, Lithuania's electricity and gas imports from Russia have increased.

"It is regrettable that the South Korean KEPCO company, with a financially attractive proposal, decided to withdraw from the tender for reasons unknown to us," said Prime Minister Andrius Kubilius. "Under the Law on Concessions, such an end to the tender opens opportunities for direct negotiations with all possible investors, including potential reactor vendors now under review, under the same conditions."

The project is being overseen by Visaginas Atomic Energy, established in 2008 by the power companies of Lithuania, Estonia, Latvia and Poland, which is turning to nuclear to reduce coal dependence.

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