Sergey Kondratyev, senior expert of the Institute of Energy and Finance

– Construction of Baltic NPP will enhance the competitiveness of the region

In the last years Kaliningrad region has shown one of the highest economic growths in Russia. In 2001–2008 its gross product grew by 2.2 times, industrial production by 4.3 times. Energy consumption is also growing. And even though 2009 will see serious economic decline (the gross product will drop by 10%), in the following years the economy of Kaliningrad region is expected to grow by an average of 7.2% a year due to the opening of special economic zone, construction of new manufacturing enterprises and enlargement of cooperation with the EU.

The growth in production and housing construction has boosted energy consumption. In 2000–2008 the energy demand in the region grew by 1.3 times. Before the commissioning of Kaliningrad Thermal Power Plant-2 the region imported electricity from Lithuania and Russia (via Belarus and Lithuania). The high dependence on the import of energy is a serious problem for this strategically significant region (Kaliningrad hosts a number of strategic enterprises and a base of Russia’s Baltic Fleet). Presently, the region is building the 2nd unit of Kaliningrad TPP-2 (450MW). The unit will be launched in Dec 2010. However, the further construction of TPPs will require serious investments in the gas transportation infrastructure. Besides, the region may have difficulties with selling the heat to be generated by the plants. The price of gas in Kaliningrad region is one of the highest in Russia (because of transportation costs). The liberalization of the gas market may push the price even higher.

The construction of Baltic NPP will help the region to ensure its energy security and will enhance the competitiveness of the local economy. The plant will not just give energy it will enhance Russia’s presence on the markets of the Baltic states, north-eastern Poland and, in the longer run, Scandinavian countries.

Baltic NPP will become the biggest enterprise of the region. The construction will create as many as 8,000 jobs (almost 2% of all employed people in the region), which is especially important in the face of crisis. The project is supposed to receive as much as 170bln-200bln RUR – this is almost 3 times the money all the local companies received in 2008.

Baltic NPP will become the biggest tax-payer of the region. According to preliminary estimates, it will pay as much as 2bln RURN in taxes and will help the local authorities to more actively finance the social sector. One of the key benefits of this project will be the creation of 1,100 jobs. The employees of the plant will get wages that will be much higher than the average salary in Russia.

Public hearings on the preliminary assessment of the environmental impact of the construction and operation of the 1st and 2nd units of Baltic Nuclear Power Plant took place in Neman, Kaliningrad region July 24 2009. The keynote speaker was the chief engineer of the Baltic NPP project of St.Petersburg Atomenergoproekt Ivan Grabelnikov.

Representatives of Rosatom State Nuclear Energy Corporation, Energoatom Concern OJSC, St.Petersburg Atomenergoproekt, the executive and legislative authorities of Kaliningrad region, public organizations and mass media as well as residents of Neman district and neighboring Chernyakhovsk and Krasnoznamensk districts and Sovetsky municipal district took part in the hearings.

To remind, Apr 16 2008 the Government of Kaliningrad region and Rosatom State Nuclear Energy Corporation signed an agreement for the construction of Baltic Nuclear Power Plant in the territory of the region.

Baltic NPP will have two 1,170MW reactors. The estimated cost of the project is 194bln RUR in the prices of the first quarter of 2009.

The plant is supposed to employ 1,100 people. At the peak of construction the project will involve 8,000 people. Rosatom State Nuclear Energy Corporation is planning to recruit as many local specialists as possible. The railway in Neman district will be restored to ensure access to the construction site. Construction materials will be produced in the territorial of the region. The plant is expected to become the biggest tax-payer in the region.