Identifier
Created
Classification
Origin
08RIGA660
2008-10-29 06:45:00
CONFIDENTIAL
Embassy Riga
Cable title:
GOL DENIES THAT E.ON IS FAVORED TO BUILD LATVIAN
how-toVZCZCXRO7661 PP RUEHFL RUEHKW RUEHLA RUEHROV RUEHSR DE RUEHRA #0660 3030645 ZNY CCCCC ZZH P 290645Z OCT 08 FM AMEMBASSY RIGA TO RUEHC/SECSTATE WASHDC PRIORITY 5340 INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY RHMFISS/DEPT OF ENERGY WASHINGTON DC PRIORITY RUCPDOC/DEPT OF COMMERCE WASHDC PRIORITY
C O N F I D E N T I A L RIGA 000660
SIPDIS
E.O. 12958: DECL: 10/26/2018
TAGS: ENRG LG
SUBJECT: GOL DENIES THAT E.ON IS FAVORED TO BUILD LATVIAN
COAL POWER PLANT
Classified By: Ambassador Charles W. Larson for reasons 1.4 (b) and (d)
.
C O N F I D E N T I A L RIGA 000660
SIPDIS
E.O. 12958: DECL: 10/26/2018
TAGS: ENRG LG
SUBJECT: GOL DENIES THAT E.ON IS FAVORED TO BUILD LATVIAN
COAL POWER PLANT
Classified By: Ambassador Charles W. Larson for reasons 1.4 (b) and (d)
.
1. (C) SUMMARY: The Government of Latvia pledged that there
will be an open, tansparent bidding process for upcoming
construction of a 400MW solid-fuel power plant. Following an
interview in which a Ministry of Economy official had implied
that German company E.on Ruhrgas was likely to win the
tender, the Minister of Economy assured the Ambassador that
American companies would be welcome to compete in the tender
process. The proposed coal plant will help to somewhat
reduce dependence on Russian gas. GOL is not particularly
concerned about the impact of a coal plant on Latvia's CO2
emissions targets. End Summary.
2. (C) In a meeting with the Ambassador, Minister of Economy
Kaspars Gerhards claimed that there was no leading candidate
yet, and that the electricity regulation agency would have
significant say in the final selection. Gerhards conceded
that GOL had been in discussions with E.on, while noting
other interested companies and their weaknesses. He
acknowledged previous discussions with American firm AES and
noted that the GOL welcomed American bids on the project.
3. (U) The Director of the Ministry's Energy Division
assured Econoff that the newspaper's emphasis on E.on did not
reflect any government preference at this point. He noted,
however, that the GOL would be looking for an investor who
demonstrated a long-term strategic interest in the region.
4. (SBU) Rod Christie of General Electric (protect) says
that the GOL is most likely looking to build a pulverized
coal plant, which GE would not want to bid on. Christie
claimed that no American firm would be likely to bid on a
pulverized coal plant because European firms dominate that
technology, although contacts at AES have continued to
express interest to us.
5. (C) When asked how a new coal facility would comply with
EU emissions regulations, Sarma flatly stated that staying
within the emissions quotas is not a priority. He said that
GOL is prepared to pay for emissions over their cap and pass
costs on to consumers. He expressed a similar lack of concern
about meeting targets for percentage of energy from renewable
sources, confidently asserting that none of the 27 EU
countries would meet those targets, so there was no chance of
Latvia facing any sanctions for it.
6. (C) Comment: Post has pushed for Latvia to diversify
energy supplies from Russian gas, and steps toward a new coal
plant are a positive step. Because of their close ties with
Gazprom, E.on would not be the ideal investor for this
project. While the tender may not be written specifically
with E.on in mind, they still appear to have an advantage at
this point.
LARSON
SIPDIS
E.O. 12958: DECL: 10/26/2018
TAGS: ENRG LG
SUBJECT: GOL DENIES THAT E.ON IS FAVORED TO BUILD LATVIAN
COAL POWER PLANT
Classified By: Ambassador Charles W. Larson for reasons 1.4 (b) and (d)
.
1. (C) SUMMARY: The Government of Latvia pledged that there
will be an open, tansparent bidding process for upcoming
construction of a 400MW solid-fuel power plant. Following an
interview in which a Ministry of Economy official had implied
that German company E.on Ruhrgas was likely to win the
tender, the Minister of Economy assured the Ambassador that
American companies would be welcome to compete in the tender
process. The proposed coal plant will help to somewhat
reduce dependence on Russian gas. GOL is not particularly
concerned about the impact of a coal plant on Latvia's CO2
emissions targets. End Summary.
2. (C) In a meeting with the Ambassador, Minister of Economy
Kaspars Gerhards claimed that there was no leading candidate
yet, and that the electricity regulation agency would have
significant say in the final selection. Gerhards conceded
that GOL had been in discussions with E.on, while noting
other interested companies and their weaknesses. He
acknowledged previous discussions with American firm AES and
noted that the GOL welcomed American bids on the project.
3. (U) The Director of the Ministry's Energy Division
assured Econoff that the newspaper's emphasis on E.on did not
reflect any government preference at this point. He noted,
however, that the GOL would be looking for an investor who
demonstrated a long-term strategic interest in the region.
4. (SBU) Rod Christie of General Electric (protect) says
that the GOL is most likely looking to build a pulverized
coal plant, which GE would not want to bid on. Christie
claimed that no American firm would be likely to bid on a
pulverized coal plant because European firms dominate that
technology, although contacts at AES have continued to
express interest to us.
5. (C) When asked how a new coal facility would comply with
EU emissions regulations, Sarma flatly stated that staying
within the emissions quotas is not a priority. He said that
GOL is prepared to pay for emissions over their cap and pass
costs on to consumers. He expressed a similar lack of concern
about meeting targets for percentage of energy from renewable
sources, confidently asserting that none of the 27 EU
countries would meet those targets, so there was no chance of
Latvia facing any sanctions for it.
6. (C) Comment: Post has pushed for Latvia to diversify
energy supplies from Russian gas, and steps toward a new coal
plant are a positive step. Because of their close ties with
Gazprom, E.on would not be the ideal investor for this
project. While the tender may not be written specifically
with E.on in mind, they still appear to have an advantage at
this point.
LARSON