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Identifier
Created
Classification
Origin
07TALLINN227
2007-04-04 06:17:00
CONFIDENTIAL
Embassy Tallinn
Cable title:  

ESTONIA'S VIEW ON POLISH PARTICIPATION IN IGNALINA

Tags:   ENRG  ECON  LG  LH  PL  EN 
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VZCZCXRO3837
RR RUEHAG RUEHROV
DE RUEHTL #0227/01 0940617
ZNY CCCCC ZZH
R 040617Z APR 07
FM AMEMBASSY TALLINN
TO RUEHC/SECSTATE WASHDC 9702
INFO RUCNMEM/EU MEMBER STATES COLLECTIVE
RUEHMO/AMEMBASSY MOSCOW 2481
RUEHBS/USEU BRUSSELS
						C O N F I D E N T I A L SECTION 01 OF 02 TALLINN 000227 

SIPDIS

SIPDIS

INR FOR STOLTENBERG

E.O. 12958: DECL: 03/30/2017
TAGS: ENRG ECON LG LH PL EN
SUBJECT: ESTONIA'S VIEW ON POLISH PARTICIPATION IN IGNALINA

REF: (A) 06 TALLINN 197QQ(B) 06 TALLINN 1090

Classified By: ADCM Eric A. Johnson for reasons 1.4 (b) and (d)



1. (C) Based on our recent discussions with key officials in
Estonia's energy sector, it is clear that Estonia is open to
the
idea of Polish participation in the Ignalina nuclear power
project. However, GOE and Eesti Energia officials have
expressed
concern to us about the Lithuanian approach to the project
and
emphasized the need for consensus decision-making among the
three
original project participants (Lithuania, Latvia and Estonia).



2. (C) Both Sandor Liive, Chairman of Eesti Energia, and
Einari
Kisel, Director of the Energy Office at the Ministry of
Economy,
told us recently they believe Polish participation in
Ignalina
makes sense, and emphasized that it does not present a
problem
for Estonia. However, our GOE counterparts bristled at the
'unilateral way' Lithuania announced in the fall of 2006 that
it
wanted to bring Poland on board. GOE officials note that the
basis for Baltic cooperation on Ignalina is contained in the
Trakai Communique, which was signed by the three countries'
Prime
Ministers February 27, 2006 (reftel A). According to this
agreement, invitations to additional participants should be
made
on the 'principle of consensus' among the three Baltic
countries.



--------------------------


Matters of substance...


--------------------------





3. (C) For the GOE, the biggest complication posed by Polish
participation is the division of project shares. At Trakai,
the
three countries agreed that the Baltic energy companies would
be
invited to participate in the project "on equal terms."
Since
the invitation to Poland to join the project, however,
Lithuania
has proposed that it get one-third of the project, leaving
each
of the three other parties with approximately 22 percent.
This
is not a deal-breaker for the Estonians, as they understand
Lithuania's sensitivity to the fact that the new plant will
be
located on Lithuanian territory. However, Kisel told us that
the
GOE is concerned about Poland and Lithuania together wielding
majority control, and has suggested Estonia would prefer
Poland
having a smaller share, perhaps 15 percent. According to
Kyllike
Sillaste-Elling, the Prime Minister's Foreign Policy Advisor,
the
GOE opposes the idea of Lithuania codifying ownership
percentages
into its domestic legislation, as it would set unnecessary
limitations on the shape of the project.



--------------------------


And matters of style...


--------------------------





4. (C) Another issue which complicates Baltic cooperation on

Ignalina is the Lithuanian preference for dealing with the
project at the political level. Even in the early planning
stages, Lithuania has sought strong involvement from its
Prime
Minister and President. Both Sillaste-Elling and Kisel
emphasized that the GOE's preference is to keep the
discussions
at a commercial level, with engagement from the Prime
Minister as
necessary from time to time. This issue was particularly
problematic during the last few months when the Lithuanians
pressed for several meetings at the prime ministerial level.
Sillaste-Elling commented that in the run-up to Estonia's

TALLINN 00000227 002 OF 002


Parliamentary elections, it was not appropriate for PM Ansip
to
attend.



5. (C) Our Estonian interlocutors also expressed some
concerns
about the Lithuanian track record on Baltic cooperation.
Eesti
Energia's Liive told us that Estonia has had "a couple of
unpleasant experiences in the energy field" with Lithuania in
the
past. Kisel said he believes the two countries take
different
approaches to signed agreements. The Lithuanians have a
tendency
to use signed agreements such as Trakai as more of a starting
point for discussion while the GOE takes a much more "Nordic"
approach - treating declarations and MOUs in a more
contractual
sense, not up for reinterpretation later in the process.



--------------------------


Ignalina in the big picture


--------------------------





6. (C) All of our contacts highlighted their belief that
Ignalina
is a higher priority for Lithuania and Latvia than for
Estonia.
In contrast to its Baltic neighbors, Estonia is already self-
sufficient in electricity production. Participation in
Ignalina
is only one of several avenues the GOE is pursuing to
diversify
electricity supply and reduce its use of fossil fuels. Other
recent initiatives include linking the Baltic and Nordic
electricity grids via the Estlink cable to Finland (reftel
B),
modernizing the oil-shale fired power plants in northeastern
Estonia, and modestly expanding the use of renewable energy
sources. Regardless, the GOE still sees great benefit in the
Ignalina project, which would serve to link the Baltic
electricity grid with Western Europe's UCTE grid. The GOE is
interested in the possibility that their share in Ignalina
will
provide Estonia with additional electricity for export to
Finland
and other neighbors. (Note, Estonia currently exports about
20%
of the electricity it generates domestically. End Note.)
GOLDSTEIN