LATVIANS SEE IGNALINA LOSING MOMENTUM

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SIPDIS

SIPDIS

E.O. 12958: DECL: 02/28/2018
TAGS: ENRG ECON PREL LG
SUBJECT: LATVIANS SEE IGNALINA LOSING MOMENTUM

Classified By: Ambassador Charles W. Larson for Reason 1.4(d).


1. (C) Summary: The mood among Latvian officials on
prospects for building a new nuclear power facility in
Ignalina, Lithuania, has turned gloomy. In recent meetings
GOL officials and politicians say that the drive to replace
the plant has lost momentum and that the Lithuanians are not
showing decisive leadership. Representatives from the Greens
party questioned whether the facility would be built at
all--noting that they have stopped bothering to publicly
oppose the project, as they see it dying of its own accord.
We believe the GOL would still support the construction of a
new Ignalina. Nonetheless, the GOL is clearly rethinking its
energy strategy and developing contingency plans should
Ignalina founder. End Summary.


2. (U) Lithuania's Ignalina Nuclear Power plant plays a vital
part in meeting Latvia's overall energy needs. Latvia's
long-term energy strategy had been based on a replacement
plant for Ignalina coming online by 2015. Post surveyed key
officials on their current thinking regarding Ignalina.


3. (C) On February 21, PolEconOff met with Ugis Sarma,
Director of the Energy Department in the GOL's Ministry of
Economy, to gauge his sense of where things stand on
Ignalina. Sarma is the closest thing the GOL has to an
energy policy guru. His opinion and perspective holds a
significant amount of sway with policy makers throughout
government. After initial resistance to divulge his opinion,
Sarma told Emboff, "We don,t see it (Ignalina) being done
till 2025. The Lithuanians just started the Environmental
Impact Statement now. They estimate this will take one year,
but we think it will take longer . . . . There is still much
political bickering going on over how production shares will
be allocated to the various participating states. . . . We
still want this, but Ignalina is not really being used for
short-term planning purposes for energy needs at this point."
Just nine months ago, Sarma was much more optimistic in
conversations with emboff.


4. (C) On February 22, PolEconOff met with Latvian politician
Viesturs Silenieks, a member of the Greens party in Latvia.
As would be predicted from a Green, Silenieks opposes
Ignalina. However, Silenieks did not bother to make his
arguments on environmental grounds. Instead, he argued
against the project because, "Money and jobs will go to
Lithuania, not Latvia." He had concerns on terrorism grounds
in terms of how nuclear waste in particular is protected. He
articulated a clear alternative vision for the future of
Latvia's energy production, stating that he wants "over a
thousand cogeneration plants all over Latvia." The plants
would produce both electricity and heating and could be
powered by natural gas, oil, biomass, and other fuel sources.
Silenieks argued that such an approach would enhance
Latvia's energy security, promote its local economy, and
could be more environmental if the right technologies and
fuel sources were used. He stressed that this would do a
better job of fostering energy independence than
Ignalina--especially as Ignalina's fuel sourcing and disposal
of spent fuel might be handled by Russia.


5. (C) On February 26, PolEconOff also spoke with Ojars
Kehris, a former econ minister, former Chairman of the Board
of state energy monopoly Latvenergo, and--like
Sarma--something of an energy guru in Latvia. Kehris, if
anyone, has always come across as an ardent supporter of
nuclear energy in general and Ignalina in particular. Yet
Kehris, too, sounded a more hesitant note: "I don't think
anyone in Latvia can really break this loose and move it
forward. Generally it is better to go ahead with this
project if possible, but it depends on the Lithuanians. It
is important for the Lithuanians to fulfill their role as
leaders of this project. Leadership is in their hands."
Even eight months ago, Kehris was much more optimistic about
the speed with which Ignalina would be accomplished.


6. (C) On February 27, PolEconOff met with Martins Jirgens,
Parliamentary Secretary at the Minister of Environment (and
Greens party member),and Valdis Bisters, Director of Climate
Change Policy at the Ministry of Environment. Jirgens and
Bisters echoed Silenieks' thoughts on Ignalina, arguing that
a sounder approach to energy policy would be to promote many
decentralized cogeneration plants throughout Latvia. Jirgens
highlighted that Ignalina could cost Latvia about USD 1
billion or more, and that those funds could be better spent
building the energy infrastructure within Latvia. He noted
that such an approach and would also take pressure off of
Latvia's current account deficit as well. As a long-term
alternative to nuclear power, both Jirens and Bisters stated
that a better approach for Latvia would be to build
coal-fired plants that use clean coal technology and carbon
capture storage. Jirgens emphasized that Latvia has

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excellent topography for carbon capture--the GOL has already
identified 16 potential carbon capture storage sites. Unlike
natural gas which comes almost exclusively from Russia, coal
could be shipped in by rail from Ukraine, Kazakhstan, or
elsewhere.


7. (C) Comment: The level of skepticism emboff encountered
regarding Ignalina's prospects is new in Latvia. Not much
more than a year ago, the general sense was that Ignalina
would definitely be replaced and that it would be a key part
of the energy mix for Latvia. This new perspective likely
stems from the drawn-out political squabbles between Vilnius
and Riga that arose in early 2007 when the Lithuanians
announced that Poland would be brought into the project.
This quarreling, combined with a sense in Latvia that the
Lithuanians are not showing clear vision and leadership on
the project, has really dampened the Latvian sense that
Ignalina is moving ahead. Jirgens stated that the Latvian
Green party has stopped bothering to speak out against
Ignalina because it seems to be dying of its own accord (and
there are political downsides to publicly opposing it). We
believe the GOL would still support the construction of a new
Ignalina. Nonetheless, the GOL is clearly rethinking its
energy strategy and developing contingency plans should
Ignalina founder. End Comment.
LARSON