1. Lithuanian Electricity Supply Assignment #3 to be announced February 17, due March 8 MS&E 290

2. Reading for Feb 17 Class National Energy Strategy, prepared by the Lithuanian Energy Institute, 2003. Available on class website. Page references on following slides refer to this document.

3. Agreements on the Ignalina Nuclear Power Plant (NPP) and Oil Reserves These two units generated 76-86% of electricity for Lithuania in last 5 years (p. 20) Unit 1 being taken out of service now. Unit 2 to be taken out of service “by the end of 2009” (page 5) Build up a 90 day stock of petroleum products by 2009 (page 5).

4. Alternatives to Ignalina NPP Oil (mostly imported, p. 36) Natural gas (pipeline from Russia; “most promising fossil fuel,” page 32 ) Coal (very little used now) Hydro – note there is controversy, as with nuclear (p.4). Lith. Has some hydro, pumped storage. Consideration of “modern” nuclear starting 2010 (see page 19, Fig 4.11; page 23) Renewables (from 9 up to 12% by 2010? p. 12,38) Buy electricity from neighbors (see 8, p. 12, 25-26) Increased energy efficiency/reduced intensity (p. 39)

5. Some of the Issues to be Considered Economic costs: capital, fuel, operation and maintenance, efficiency/“heat rate” Financing, including contribution of capital from outside Lithuania (EU, G7) for replacement of nuclear generation and decommissioning of Ignalina NPP and management of nuclear waste. (see p. 8. See also p. 28-privatization) Security of supply, for fuel or imported power. 90% of primary energy now from one supplier (page 10) Environmental: Air pollution, water pollution, and waste disposal (Meet requirements or exceed requirements? Flue gas cleaning on new plants, old plants?) Safety: the RBMK reactor until it is taken out of service, other nuclear? Fossil fuel alternatives – gas, LNG? System stability; transmission and distribution issues, district heating (old system needs to be rebuilt; new cogeneration (CHP) plants may be needed in cities). Transition to market economy.

6. Issues (continued) Lithuania’s energy strategy should take “into account global energy development trends, as well as trends and basic provisions in energy sector development in European Union countries” (page 8; see other provisions as well) “As the result of dependence on imports of primary energy resources, the economy of Lithuania is highly dependent on the general situation in global energy resource markets.” (p. 9)