The Baltic States are in the process of reorganization, moving from a centrally planned economy towards market liberalization. The closure of Unit 1 of the Ignalina Nuclear Power Plant in 2004 and the scheduled shutdown of Unit 2 in 2009 in accordance with the EU accession agreement raise crucial supply security questions not only for Lithuania but for the region as a whole. This study analyses the economic competitiveness and energy security aspects of a wide range of energy supply options including the construction of a new nuclear power plant.