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INTERVIEW: Bulgaria's Belene NPP project loss-making, to block new technology inflow

Author Mario Tanev
INTERVIEW: Bulgaria's Belene NPP project loss-making, to block new technology inflow Author: Bulgaria's Ministry of Energy / All rights reserved.

SOFIA (Bulgaria), May 25 (SeeNews) – The planned construction of a second nuclear power plant (NPP) in Bulgaria is economically unfeasible and will hinder the introduction of new technologies in the country’s energy sector, Traicho Traikov, former minister of economy and energy, told SeeNews in a recent interview.

Last week, Bulgaria's government asked parliament for a mandate to negotiate with potential strategic investors in a mothballed project to build an NPP in Belene, on the Danube, and submitted a report on the options for its revival drafted by the energy ministry.

The move brought several hundred people out in the streets in Sofia on Tuesday to protest against the revival of the project, claiming it will lead to heavy fiscal burdens for the country, while further deepening the country's energy dependence on Russia. At the same time, a counter-protest in support of the project raised claims that the construction of Belene NPP is crucial for meeting the country's energy needs and for the economic development of Bulgaria's economically lagging northern part.

Even if Bulgaria's only contribution to the capital of the company running the project consists of the already existing equipment, which the country has already paid, Bulgaria will still have to provide fresh cash during the construction period in order to cover interest payments on the loan needed for building the plant, Traikov told SeeNews over the phone on Wednesday.

In 2008 the then Socialist-led government broke ground for the plant in Belene after a long pause and hired Russia's Atomstroyexport to build two reactors for the plant. After the project made scant headway, Bulgaria finally abandoned it with a parliament decision in February 2013 citing huge construction costs and unclear prospects for the sale of electricity produced by the plant.

In December 2016, Bulgaria paid 601.6 million euro ($701.4 million) in compensation to Atomstroyexport, a subsidiary of Russia's Rosatom, for the equipment manufactured by the Russian company for the project following international arbitration. The equipment is now stored at the site designated for the plant. Initially, Atomstroyexport will be the only supplier of nuclear fuel for the plant if it commences operations.

"During the construction period, interest fees will amount to around 2 billion euro, if I'm not mistaken," Traikov explained.

In addition, even under the best-case scenario, the power plant will incur losses during the first years of its operation, which have to be covered by the shareholders in the company, according to Traikov.

The only option for Bulgaria to avoid those losses is to sell the equipment to the selected strategic investor and thus stay out of the company's shareholding structure. However, even then Bulgaria will still be obliged to connect the power plant to the existing electricity grid to comply with its energy legislation. The expenses for doing so amount to around 1.3 billion levs - for two 400 KV substations, several smaller ones, etc., Traikov explained.

In his view, a restart of the Belene project would be detrimental to the introduction of new technologies in Bulgaria's energy sector.

“These new 2,000 MW will literally block the energy system,” he said

So far this year, Bulgaria's total electricity output amounts to 17.3 million MWh, of which 13.9 million MWh came from Kozloduy NPP and the country's thermal power plants. Some 2.3 million MWh were generated by hydropower plants, while renewable energy plants accounted for 1.1 million MWh.

The possible construction of the Belene plant is also likely to lead to the closure of the coal-fired power plants in the Maritsa East complex, in southern Bulgaria, Traikov opined.

The Maritsa East complex consists of three thermal power plants – two of them owned by U.S. companies ContourGlobal and AES, and one state-owned.

Earlier this year, Bulgaria joined Poland in an appeal against a decision by the European Commission to impose stricter limits on toxic pollutants coal-fired plants emit. The Commission adopted the implementing decision, setting stricter criteria for emissions to both air and water from large combustion plants in July 2017.

“If those plants are considered competitors to Belene NPP, not only will no one lift a finger to defend them but they will actually be additionally sabotaged,” Traikov said. The same thing happened last time the Belene NPP project was unfrozen and Bulgaria had to close units 3 and 4 of Kozloduy NPP to address safety concerns of the EU before the country’s accession to the union in 2007, he added.

Kozloduy NPP currently has two operational units of 1,000 MW each.

Another cause of concern, according to Traikov, is the fact that a study by the Bulgarian Academy of Sciences in 1990 concluded that Belene is located in an area with an increased risk of seismic activity.

“I’m not an expert but I doubt that the geological structure of the region has changed for the past 28 years,” Traikov said.

($ = 0.8577 euro)