EU to allow Latvia to subsidize construction of new power plant

Thu, 28 Jan 2010

Brussels - Latvia is free to subsidize the construction of a new power plant aimed at reducing the country's dependence on gas imported from Russia, the European Commission said on Thursday. The EU executive decided to waive normal policy against state aid given the isolation of Latvia's energy market from the rest of Europe, which means it has to rely on supplies from Russian energy giant Gazprom.

It also took into consideration the closure of the Ignalina nuclear power plant in Lithuania, which supplied electricity to Latvia until the end of 2009. The EU demanded the Soviet-era plant be shut for safety reasons.

"The EU has repeatedly recognized the exceptional circumstances of the electricity market in Latvia. I am satisfied that the new thermal power plant will contribute to the security of electricity supply in the Baltic region without unduly distorting competition," competition commissioner Neelie Kroes said in a statement.

The 400 megawatt plant will be built between 2015-2025 and will be powered either by liquefied natural gas or from solid fuel such as coal, with a 10 per cent quota of eco-friendly biomass.

The Latvian government will give a grant for its construction after holding an open tender between rival bidders, the EU executive stressed...

Source: Earth Times.
Link: http://www.earthtimes.org/articles/show/306367,eu-to-allow-latvia-to-subsidize-construction-of-new-power-plant.html.