May 12, 2012
Lithuania’s government has approved the draft concession agreement for the planned Visaginas nuclear power plant as part of major legislation on strategic energy projects, while Czech power company CEZ confirms it is looking for a strategic partner for Temelin.
Lithuania’s energy ministry signed the Visaginas concession agreement with strategic investor Hitachi in March. Now that it has received government approval, the 120-page agreement setting out the contractual framework for the project to build a 1350 MWe advanced boiling water reactor (ABWR) has been made public.
Although the plant will be built on Lithuanian soil, Visaginas is a joint project supported by the governments of Estonia, Latvia and Lithuania. According to the concession agreement, initial shareholdings in the plant will see Lithuanian investor Visagino Atominė Elektrinė (VAE) take a 38% stake, with strategic investor Hitachi taking 20%, Latvian utility Latvenergo 20% and Eesti Energia of Estonia the remaining 22%.
In the government’s announcement of the legislation, Lithuanian economy minister Rimantas Žylius described the Visaginas nuclear power plant as the “biggest ever investment in Lithuania”, amounting to some LTL17.3 billion ($6.5 billion), including LTL10-14 billion ($3.8-5.3 billion) in foreign direct investment.
At the same time as approving the concession agreement, the Lithuanian cabinet also approved draft laws on a new liquefied natural gas terminal and on synchronisation with the continental European power grid. Together, the three projects represent important steps towards energy independence for Lithuania, according to prime minister Andrius Kublius. “These projects are economically beneficial for Lithuania and its people, and they also guarantee energy security and greater integration into Europe,” he said.
Czech utility CEZ has announced that it is considering completing the Temelin nuclear power plant through a strategic partnership, and intends to select a partner through a “transparent tender”. Any partnership is likely to be formed after contracts have been signed with a selected supplier for the plant, which is expected to take place in 2013.
CEZ chairman and CEO Daniel Beneš said the company was prepared to fund the project using its own resources but a strategic partner might provide other “interesting” investment opportunities. The possibility to split the potential risks and returns for the project was also “motivating, he said, adding that most European nuclear projects are implemented on a partnership basis. Initial market analyses had identified more than ten energy companies, mostly Europe-based, which had either already shown an interest or may become interested in partnership negotiations, according to CEZ.
CEZ has formally invited three approved candidates – Areva, a Russian-Czech consortium of Škoda JS/Atomstroyexport/OKB Gidropress, and Westinghouse – to submit their bids for the project to build two new units at the Temelin site. The would-be builders have until July to submit their tenders, with the winner to be announced in 2013.
All three candidates have signed agreements with local engineering and construction companies over recent months. The Russian-Czech consortium has now welcomed two more Czech companies as partners for its bid with the signature of supplier contracts with I&C Energo and PSG International, Rusatom Overseas has announced. Should the consortium – now dubbed MIR.1200 by the Russian state atomic energy corporation subsidiary – win the tender, I&C Energo will supply electrical systems for the nuclear facilities while PSG International will construct parts for the turbine island. Both Czech companies can boast previous experience with construction activities at existing Czech nuclear plants.
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