Ross Hendin, CFP Contributor and Principal of Hendin Consultants, analyzes a new development which may curb the energy-dependence predicament that the Baltics currently find themselves in:

Today, an important step toward preventing the Baltics from continuing to be an “energy island”. Both the Guardian and Sweden’s The Local are confirming that an agreement has been reached on the development of the Sweden-Lithuanian power link. The link would be a 350-kilometer long, 700 – 1,000 megawatt cable running across the Baltic Sea floor.

The argument preventing the project from moving forward was between Lithuania and Latvia, who have now agreed that the power will come into the area through Lithuania, but be shared on an open market. The Estlink-2 project, which is an 800 MW link between Estonia and Finland, will come on-line by 2013.

The Guardian article also clearly says that the area will keep its plans for the Nuclear power plant to remain in place, and that proposals will still be accepted next year.

This, from an optical perspective, is a reaction from the Baltic’s and the EU to recent announcements that Rosatom will build a nuclear plant in Belarus, very close to the Baltic markets. Between this nuclear project, and the advancement of the Nord Stream and South Stream pipelines, fears and rumors escalated that the Baltic energy island issue would be getting worse, and not better.

With this announcement comes a whole new political dynamic to the Ignalina replacement, and Baltic energy issue – the first country to actually establish financing and infrastructure for getting power to the area wins. The second group either won’t get their project off the ground, or will saturate the energy market to the point where everyone suffers from the low prices.

As the political risk escalates and the chips are being put on the table, let’s see who will be the first to fold!

Ross Hendin is Principal of Hendin Consultants, and is a Senior Advisor to the Canadian office of a leading multi-national PR firm. With strategic communication experience in more than 20 countries around the world, Ross specializes in complex and high-stakes communication and marketing strategies in a number of industries, including energy. Hendin Consultants is in Toronto and London, UK, and is on the web at www.hendinconsultants.com. Email Ross at ross@hendinconsultants.com.