December 31, 2009 / 2:51 PM / 9 years ago

Lithuania to shut Soviet-era nuclear plant

VILNIUS, Dec 31 (Reuters) - Lithuania prepared to shut down on Thursday its Soviet-era nuclear power plant, raising fears of increased energy dependency on Russia and of a further blow to an already recession-hit economy.

The Baltic state is to shut down the last reactor at the Ignalina plant at 11 p.m. (2100 GMT).

It agreed to shut the plant, which has the same kind of reactors as at Chernobyl, the site of the worst nuclear accident in 1986, under its agreement to enter the European Union.

Some analysts have forecast rising power prices, dealing a further blow to the economy, and more dependence on power supplies from Russia.

But Prime Minister Andrius Kubilius was calm.

“There will be no catastrophe after the closure. We are ready to supply as much electricity as needed,” he told Reuters.

“As decent Europeans, we are ready to meet our obligations to close the Ignalina power plant on time, which is by the end of this day,” he added.

Lithuania is the second country in the world after France by the nuclear share in energy generation, which is more than 70 percent.

Energy Minister Arvydas Sekmokas said the bulk of the power needed after the immediate shutdown of Ignalina would be generated at the Elektrenai fossil fuel power plant and imported from neighboring Baltic states Estonia and Latvia.

Electricity imports from Ukraine, Belarus and Russia were also planned. Lithuania will also have to import more gas from Russia to generate electricity.

Russia has been a reliable supplier of gas to all three Baltic states, but Moscow’s rows with Ukraine over gas supplies have raised nerves about security in Lithuania too.

“Lithuania’s increasing import dependence on natural gas after the closure of Ignalina...is clearly raising import related risks,” leading bank Swedbank said in a report.

Ignalina has the only Chernobyl-style reactors operating outside Russia. It closed one of its reactors at the end of 2004.

Lithuania plans to build another nuclear power plant, though not until 2018-2020.

The government has said electricity bills for households will rise by one third from 2010. Analysts have said the shutdown could cut gross domestic product growth by 1 to 1.5 percentage points, and add to inflation one percentage point.

This will come at a time when GDP was expected to contract 15.2 percent this year and 4 percent in 2010.

“As local energy supply will diminish and prices rise, the recovery of economic growth will be more difficult, and for some industries and enterprises this could be the final bell,” the Swedbank report added. (Reporting by Nerijus Adomaitis, editing by William Hardy)

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