Poland in talks with Kaliningrad on electricity interconnector
The government of Kaliningrad has revealed to ICIS that it is in discussions with Poland over the possibility of constructing an interconnector between the two countries.
"Now both sides are in negotiations [over an interconnector]," said a spokesperson for the Kaliningrad government. "The main activities for the construction of the network will have to be completed by 2016, ie, to the date of commissioning of the first unit of the Baltic nuclear power plant."
An interconnector would mean that Poland would gain access to the capacity generated from Rosatom's new 2.3GW nuclear power plant at Kaliningrad (see EDEM 3 January 2012). Due to come online in 2016, the plant is an attractive prospect for Poland's security of supply.
The Polish transmission system operator (TSO) also confirmed that talks are taking place. "The possibility of building a new connection with the Kaliningrad Oblast is the subject of analysis [by] PSE Operator," a spokesperson for the TSO told ICIS. "However, it is still too early to talk about details of any connection."
However, analysts have told ICIS that there are still several economic and regulatory hurdles to overcome, as well as fluctuating public opinion towards Poland fastening links to Russia.
"In general, this interconnector would be a good idea. Cheap electricity with no need for capex," said one Polish analyst. "However, this would be politically challenging. There is a fear of being controlled by Russia. The media and certain politicians would always bring it up."
The analyst thought that the risk of overdependence on Russian energy sources would be minimal, since the Polish grid would not allow itself to be reliant on Russia, adding that this is instead an opportunity to buy cheap electricity.
However, interconnectors themselves do not come cheap. Another analyst shared his doubts over the project's financial backing.
"I would like to hear who would be financing this. I've heard lots of ideas, but they all fall short on funding," he said. "Politically it is interesting. Logically, it is wise. But I believe that public opinion would be that people would prefer to be linked with the EU. Maybe if a Russian-Polish interconnector was built after more connectors to the EU, it would be acceptable."
There would also be regulatory and practical barriers to overcome. "Linking with Russia would provoke problems, since Russia and Europe doesn't work together in a synchronous mode," one CEE analyst pointed out.
Polish nuclear in doubt
The negotiations may also indicate that Poland's enthusiasm for building its own nuclear power plant is waning.
Market participants are increasingly doubtful over whether the project will break ground, given fears over return on investment in the current climate of weak power prices and the need for large government subsidies, as well as increasing enthusiasm for shale gas (see EDEM 1 November 2012).
"This is not necessarily a signal that Poland would abandon its own nuclear programme," said one analyst. "Several power plants will be decommissioned in Poland over the coming years. The country needs to build its own new plants to compensate for this. If anybody said that Poland is becoming dependent on Russia for power - it would be a political nightmare." KM
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