Lithuanian energy bills to soar as EU closes power plant
Tuesday December 29 2009
Lithuanians are braced for a devastating increase in energy prices when the Baltic nation shuts down its main nuclear power station on New Year's Eve to comply with European Union demands.
Ignalina power station generates 70pc of Lithuania's power output and its closure will force the country to fall back on its old master Russia to meet its domestic demand. Engineers will start shutting down the plant at 11pm on December 31.
Brussels regards the facility as a Chernobyl-sized threat and made its decommissioning a condition of the country joining the EU in 2004.
But as a result domestic fuel bills are projected to jump by 30pc in 2010, a severe blow after the economy contracted by almost one-fifth in the last 12 months.
Raimondas Kuodis, the chief economist at Lithuanian's central bank, said soaring fuel bills would slash gross domestic product by one percentage point and will increase inflation by almost one percentage point.
For many Lithuanians already battling rising unemployment and public spending cuts that have eaten into pensions and benefits, higher fuel bills could prove intolerable.
Ignalina's closure has also increased concern in Lithuania about domination by Moscow. The nuclear plant was once a symbol of independence for a nation that was part of the Soviet Union for 60 years.
Andrius Kubilius, the country's prime minister, expressed his concern over "dependency on Russian supplies", given Lithuania's vulnerable position and Moscow's reputation for using energy supplies to exert pressure on its neighbours.
Lithuania plans to regain its domestic energy sufficiency by constructing a new nuclear plant but currently cannot afford the €11bn cost. (©Daily Telegraph, London)
- Matthew Day in Warsaw
Irish Independent
