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From Bulgaria

26.07.2013 17:47

Belene Nuclear Power Station Construction Restart Announced as Government Priority

Unclear financial parameters, claims from Rosatom and record-low consumption in Bulgaria remain hinders before the construction of a second nuclear power station

AUTHOR: Lyudmila Zlateva

© Belene npp

Bulgaria’s government, led by socialist party BSP, intends to rekindle the shelved project for a second nuclear power plant in Bulgaria. The Belen project was closed on March 28, 2012, by the previous government of center-right party GERB.

The renewal of the project however should be done when a clear financial feasibility study of Belene NPP is conducted, PM Plamen Oresharski stated during a meeting of BSP. Oresharski briefly presented the government’s strategy, after which the rest of the meeting was held at closed-doors, with journalists left out of the strategy debates, Darik reported.

Lawsuit from Rosatom

Oresharski stated that there have been talks with Russia’s Rosatom over lengthy legal and financial issues of the project. Bulgaria is facing penalty claims amounting to BGN 2.4 billion (about 1.2 billion euro) for cancelling the project from Russian company Rosatom which has already prepared the equipment for the nuclear island ready to be shipped. The estimated price of the power plant, if constructed, varies between BGN 6.5 and 10 billion, the former being sustained by the currently ruling socialist party and the latter by the opposition of ex-PM Boiko Borisov.

A few weeks after his inauguration in May Oresharski argued “that finishing the construction of Belene nuclear station would be more affordable for Bulgaria” than paying penalties to Rosatom.

Meanwhile the state energy giant Bulgarian Energy Holding sought a new loan in order to meet due date of a loan by BNP Paribas in May, lent to the National Electricity Company (part of BEH) for the now shelved Belene nuclear station project.

A new base-load unit against decreasing consumption

If a decision for restarting the project is taken, it is unclear if indebted state energy company NEK would be able to finance the construction while maintaining a majority stake of 51%. One of the options considered is building the power station as an entirely private project with the option for the state to buy up a certain portion of the project.

This however would require establishing long-term contracts for electricity trading, which given the current excess of power generation in the country, the decreasing internal consumption and exports and the tension arising from restricting the operation of coal power plants and local mines, could lead to even greater complications. During annual atomic forum Bulatom, held in June 2013 in Varna, along talks of reviving Belene, Mitiu Hristozov, chief of the Electricity System Operator, revealed alarming data about the effects of surplus energy production in Bulgaria. Since May 2013 the system operator was urged to limit production at Kozloduy nuclear station and a number of coal-fired power plants and renewable units in times when national consumption slumped under 3000MW.

Effect of Belene on energy prices

Amids protests against the previous government over unbearable utility bills, in February 2013, a link between soaring electricity prices and Belene project was uncovered by an inspection of the Bulgarian Public Finance Inspection Agency (PFIA). While the role of state-owned companies in the calculation of electricity prices has somewhat kept a low profile, people aimed their protest against the electricity suppliers – regional monopolies, managed by privately held foreign companies. According to PFIA, the BGN 200 million (EUR 100 m) deal signed between the National Electricity Company (NEK) and Russia’s Atomstroyexport for the construction of Belene NPP was set up without a tender procedure. The project was subsequently shelved in May 2012 in favor of a cheaper new unit at Bulgaria’s only nuclear station Kozloduy. There is also a programme for extending the lifecycle of the only two operating 1000-megawatt units at Kozloduy, which would require further budgetary spending and could be set back, if Belene nuclear station becomes a priority in the governmental energy agenda. Perhaps the biggest advantage of Belene over Kozloduy, should a new nuclear unit be constructed in Bulgaria and a choice between the two is necessary, is the fact that Belene has a ready and licensed construction site, which would spare years of construction and permit licensing and the related expenses.