OREANDA-NEWS. On 17 March 2009 was announced, that Latvenergo AS president K.Mikelsons, commenting the latest activities on energy sector, expresses its opinion on sector current events in Latvia and in the Baltics:

“Development of Latvian power industry keeps in step with the EU targets set for the industry, even ranking first regarding some criteria. The open electricity market is the essential factor for making us the leaders in the Baltics. It operates in compliance with the EU directives, while the market is fully closed in Lithuania and Estonia.”

Lately we read about Lithuania to be more prepared than Latvia for constructing the interconnection with Sweden, however, such a view is superficial and does not give an adequate picture of the situation. It is likely that this point of view is a result of wishful thinking to boost achieving the aims of one’s own country where target stands behind any means and not the solution of common problems for the benefit of the entire Baltic energy sector. The rhetoric used provokes indignation as the given view has been developed fully ignoring the basic principles of power industry, and as such is to be strictly opposed.

For example, on March 6, 2009, SEB bank in Lithuania spread information by an author who has not been able (or has not tried) to rise above the arguments he operates with, obviously, due to the specific features of the profession. He writes about three-pronged Lithuanian advantages of the project – technical readiness, development of the power system and financial aspect. It is clear demagogy as Lithuanians don’t have the slightest advantages either technically or financially, namely, neither their electrical networks nor finances rank them not a bit in any better situation.

It’s true that the Lithuanian power industry may boast of having the feasibility study of the interconnection construction. However, the feasibility study made by Lithuania and Sweden was possible only because the transmission systems operators of Latvia, Estonia and Lithuania mutually agreed on the first step of the Baltic-Sweden interconnection feasibility study to be the connection to Lithuania, and the second step – to Latvia. Regretfully, due to the rhetoric of Lithuanian politicians after the completion of the first step energy specialists were deprived of the possibility to continue professionally and with the second step by assessing an alternative connection to Latvia. Thus, professional discussions of energy specialists, not finishing the started common work, are channelled into a political sphere as a result of which it is likely that bank specialists and politicians take the technical decision about the most advantageous, advisable and well-grounded connection. Imagine, what will happen if energy specialists start solving the huge problems in economy and the banking sector!

An operating unified regional electricity market is much more vital for the Baltic energy perspective! If it takes place, then indeed there is not much difference which geographical points on the Baltic Sea shore are connected by a significant high-voltage cable, but, of course, only after assessing and deciding on the most well-grounded solution from the economic and energy supply security aspect for the whole Baltics, not for Lithuania, Latvia or Estonia separately. The leading position of Latvia is not to be contested in this respect as our market is open, implying completion of huge work – implementation of the EU directives in our legislation, drafting and approval of Regulations of the Cabinet and Public Utilities Commission. Moreover, it is done for the Latvian electricity market to be open also to … Lithuanians.

I am pleased to admit that the European Commission is taking an active part in solving the regional energy supply issues by launching the High Level Group that, among other things, evaluates the openness of the Baltic energy market and provides its analysis and conclusion on the justification of the Baltic States external interconnection projects. We also see a constructive approach of the Nordic States, especially Sweden’s, to solving these issues. Latvenergo AS is open to constructive professional dialogue and is ready to put forth proposals for the most advantageous solution for the entire Baltic energy supply system.

At times it seems that such utterances by representatives of the financial sector are a cover for Lithuanian domestic failures, as what other wording should be given to this statement pronounced at a time when in Lithuania itself the legitimacy of the new organization LEO LT for building the Visagina (Ignalina) NPP and the eventual Lithuania - Poland and the Baltics – Sweden interconnections is challenged? In fact, the development of the new NPP project faces a political deadlock as since 2006 when the Prime Ministers of the Baltic States agreed upon joint actions in a separate communiqué and on the basis of relevant agreement the Baltic power sector companies carried out the NPP feasibility study, nothing much has taken place with a view to involve the other Baltic States in the future development of the project.

Meanwhile, in Latvia the restructuring in Latvenergo AS has been finished, the market is open, in point of fact two new power plants have been built (reconstruction of TEC-1 and TEC-2), and right away the government is going to announce a new tender for the Kurzeme power plant.

Latvian energy specialists will not fixate, we will continue the work on developing new electricity generating facilities, as well as actively participate in international projects. All the efforts are aimed at for the benefit of energy sector and economy in the Baltic region.