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Note, though, that this is not the price for consumers, but merely production costs that include electricity generation, credit repayment, and interest. Their extent is as yet unknown, but what is clear is that banks usually lend for nuclear power plant projects at a considerably higher interest rate than for other projects.
Let's not forget that a 17 to 25-cent cost is what we can envisage from today's perspective. Only God knows what it will be in 2021. Kubilius claims that the nuclear power plant construction should cost 17 billion litas, while Lithuania will have to contribute 5 billion. Does that include credit interest or not? The Prime Minister was vague about that. Be that as it may, we should not have illusions that the rest of the sum will just be given to Lithuania as a gift.
The concessionist (should the three neighbours pull out of the project) will suck the remaining billions and even more from us. By charging for electricity we'll be buying. It was not that long ago that we furiously resented Lithuanian company Maxima, that owned but thirty-percent share in the failed LEO LT project, making profit from a nuclear power plant, and now we are OK with the Japanese taking all the profit? But concession is just business. Hitachi is making the investment in order to make money. The money will come from our pockets.
Has this been calculated into the Visaginas Nuclear Power Plant electricity cost? Probably not. So, after all, how much will ordinary consumers have to pay for electricity? That's a question that will remain unanswered until we get our first electricity bill after turning on the power plant.
By the time we finish the power plant, Lithuania will have lost an equivalent of the population in Kaunas, our second largest city. The construction cost will have to be covered by a smaller number of electricity consumers.
Are we buying a cat in a bag? Yes and no. It is virtually impossible to pre-calculate everything in such projects. The cost of building the power plant can be 17 billion, it can be lower, but then again, it can top 20 billion.
It will be one way, if the global economy contracts or stagnates. Oil products will be cheaper, construction materials and workforce will be more affordable. But if the economy grows – and that is something we all hope for – oil prices will soar and so will building materials, machinery, and probably even bank credits, while hiring a construction team will cost as much as it did before the downturn and, besides, workers will be so scarce that we will have to bring them in from abroad. That will inflate construction costs and, in turn, raise both electricity cost and electricity price.
Finally, besides all the arguments one could give “for” or “against” rising construction cost, the law of construction clearly states that it usually gets more expensive with time. Can anyone come up with a single example of anything being built in this country for less than planned? Even if it was a private house – figure in the final invoice is always bigger than the initial estimate.
We should therefore come to terms with the fact that 17 billion litas is but an estimate. In reality, the sum will be bigger. However, while construction cost is an important factor, it is not the most important one.
Even paying due attention to our national security – and that's something that should not be considered in terms of euros and dollars – it would be careless to ignore the country's demography. Consciously or not, but the current Government has completely neglected to inform us about this crucial aspect of the Visaginas Nuclear Power Plant project.
Why is demography so important for the plant? Why should the Parliament, before it votes on weather or not to sign the concession agreement with Hitachi at the end of the month, carefully consider Lithuania's demographic situation?
Because the money that Lithuania will borrow – and that will be borrowed by the Japanese to be retrieved through electricity bills – will have to be returned, with interest, by a significantly smaller population that the current one.
When Lithuania regained independence (1990), the country had a population of 3,71 million. In 2001, there were 3,4 million inhabitants while last year's census has shown that the country now has only 3 million people left. Negative natural growth alone – newborns minus the departed – has slashed 102 thousand over the last decade.
If the current birth and emigration rates persist, in 2021, the year that we should be getting nuclear electricity, the country might have under 2,6 million people left. To put it more vividly, by the time we finish the power plant, Lithuania will have lost an equivalent of the population in Kaunas, our second largest city. The construction cost will have to be covered by a smaller number of electricity consumers. But that is not all.
Lithuania is aging. Over the first decade of the century, the number of over-80s has grown by 85 percent; of those between 75 and 79 – by over 20 percent. In ten years, we will have another 30-percent increase in the over-80 age group. There will be 33 percent more people in retirement or about to retire.
Today, we have about 15 percent less children between the age of 10 and 15 – i.e., those who will be replacing the retiring in ten years – than we did a decade ago. A similar decline has been observed among 5 to 9-year-olds. What does that tell us?
In Šilutė, the district that ranks number three in terms of emigration, water consumption due to population change dropped by 8 percent last year. That means that the unchanged cost of maintaining a water supply system has to be covered by fewer people. Water bills rise.
How much will water cost in Šilutė, if in a decade or so, the only remaining population there will be several thousand grannies in their eighties (men die significantly earlier than women)? The same applies to electricity. But do we know how much electricity will go to private households and industry in a decade? One can venture a prediction that households will consume less electricity, since they will contain 0.4 million fewer people. Industry should also use up less, as new technologies are more energy-efficient. Ergo, considering demographical changes and technological development, burden of the new nuclear power plant costs for each of us – still living non-emigrants – can be significantly bigger than the government tries to convince us now.
Can one afford to ignore demography while putting together a pricey decades-long project? Moreover, our public debt that was under 13 billion litas a decade ago is now approaching 50-billion mark. And it is not the only ambitious energy project the government will be pursuing, on credit (LNG terminal, electric grid links to the West).
No government has ever increased its support by lashing out at the undecided and the doubting.
The example of Šilutė clearly shows that many smaller towns can hardly support the cost of upgrading their waterworks. Will we support the burden of a nuclear ambition?
Due to EU policies, we do not even have enough money to close down the old nuclear power plant. We will have to borrow to pay for the new one and repay the debt with dwindling tax revenues. Can it be that, in ten years, we will be independent from Russian electricity, but hopelessly debt-laden and at the mercy of world banks? Just like Greece right now.
Last week, 15min.lt has polled its readers and the results, even though they cannot claim to be statistically representative, are more than suggestive. Over 21 thousand people took part in the poll, of which only 17 percent were in favour of the new power plant at any cost, while 43 percent said the country did not need it, since it would push Lithuania into massive debt.
It would be one thing, if the power plant project was joined by Poles, Estonians, and Latvians. Another thing, if – and that seems very likely – Lithuania is left alone. If we are on our own, the nuclear power plant must at least have sincere popular support with the majority of Lithuanians saying they are ready to give up everything for it.
At the moment, the government does not enjoy anything near such support. Secrecy and the Energy Minister's nonsense about 10-cent electricity have not added to the plant's popularity. Instead of open discussion and reasonable argument, all we hear is chanting about cheap energy. In addition to simplistic curses that everyone who dares to point out both advantages and disadvantages of the plant is a veritable Russian spy.
No government has ever increased its support by lashing out at the undecided and the doubting.
