Plans aplenty, but little certainty for nuclear power in Eastern Europe

Written by on October 19, 2012 in Business, Europe, News, Perspectives - No comments

The proposed nuclear power plant at Belene has dominated public discourse in Bulgaria in recent weeks and with good reason, but Sofia is far from the only Eastern European capital where the issue of building new nuclear energy facilities has been causing political headaches.

Recent developments across the region show that the issue remains very firmly on the agenda, despite the lingering memories of the Fukushima disaster last year, but lack of public or investor support (as well as lack of clarity on funding) means most of the planned Eastern European nuclear reactors remain, for now, mainly on the drawing board.

Another common thread is the nearly-ubiquitous presence of Russian state nuclear power corporation Rosatom and its foreign works subsidiary Atomstroyexport in any discussion concerning nuclear power in the region – given how dependent these countries are on Russian gas, it would have been surprising if Moscow made no attempt to maintain or strengthen its grasp on the energy sector of countries it still sees as in its sphere of influence. (The sole exception is Romania, for reasons that will be addressed below.)

Compared to the other countries in Eastern Europe, Bulgaria appears to be the one where the issue is the most politically charged, but Bulgarians will not be the first to head to voting booths to weigh in on the future of nuclear energy in their country in a plebiscite.

Limp in Lithuania
More than 62 per cent of the voters in the October 14 referendum voted against the proposed nuclear facility at Visaginas, near the site of the Ignalina nuclear power plant. Lithuania shut down Ignalina in 2009 in line with commitments made prior to joining the European Union – the plant, similar in design to the one that failed catastrophically at Chernobyl in 1986, was deemed unsafe.

The new plant is meant to replace Ignalina and was to supply electricity not just to Lithuania, but to Latvia and Estonia as well, and energy firms from the two countries were slated to pick up part of the financing costs. Polish state-owned energy firm PGE was also invited to join the consortium, but broke off talks in December 2011. In May, PGE said it was considering the issue again and could be back on board if certain changes were made to the project.

The referendum result is not binding, but participating companies and governments have said that the vote has muddled the future of the plant. The two parties that have won the most votes in the parliamentary elections held alongside the referendum have said that they did not support the project as it stands, but were not opposed to reconsidering the issue.

“We are not anti-nuclear power. We are against this project which was given to parliament for discussion very late before the election,” Reuters quoted Social Democrat leader Algirdas Butkevicius as saying.

One of the issues on which opponents want more clarity is financing. The project’s costs have been estimated at 6.8 billion euro, according to Reuters, with 2.8 billion euro coming from participating firms and the rest to be borrowed.

Prior to the referendum, the plans were to start construction in 2015 and have the plant operational by 2021. Its maximum installed power would have been 3400MW.

The outcome is also a blow to Japan’s Hitachi, the chosen contractor – after Fukushima, domestic demand in Japan for nuclear reactors disappeared and Visaginas was its most advanced project abroad, Japan Times reported on October 17.

Temelin nuclear power plant in the Czech Republic. Photo: Japo/Wikimedia Commons

Czech controversy
In the Czech Republic, the planned expansion of Temelin nuclear power plant is at an even earlier stage, with the tender to pick a contractor still under way, but already stirring the spirits.

Earlier this month, the country’s state-owned electricity company CEZ rejected one of the bidders, France’s Areva, on the grounds that it did not “meet statutory requirements” and failed other bid criteria.

Areva was considered the favourite to win the tender and has said that it plans to appeal the decision, The Prague Post reported on October 10. “Areva firmly believes it has met all the tender criteria, and we look forward to addressing the issues raised by CEZ. We are confident our offer to CEZ is the most competitive one, and our commitment to the Temelín completion project remains absolute,” Areva said.

Quoting industry sources, The Prague Post said that Areva’s odds to win a favourable appeal decision were slim.

The other two bidders are Toshiba’s US nuclear subsidiary Westinghouse and Russia’s Atomstroyexport; opponents of the latter claim that it is the favourite because of the backing of pro-Moscow president Vaclav Klaus, The Prague Post reported.

CEZ is expected to pick a contractor by the end of 2013, with work on two new reactors to be completed by 2025. The choice will also determine the price of the project, with CEZ so far avoiding to put an exact price tag on the Temelin expansion, which is expected to add about 2400MW in installed power.

Further complicating issues is that Austria, a non-nuclear country since 1978 and a long-time opponent of Temelin, plans to ban all imports of electricity produced by nuclear plants starting 2015, removing one of the key potential markets for electricity produced at Temelin.

Polish priorities
Poland’s nuclear plans are the most nebulous – the country wants nuclear facilities to diminish reliance on gas imports and coal, but is yet to even pick a location for a nuclear power plant. State-owned utility PGE has invited 13 potential contractors for talks and hopes to pick one by 2015, The Warsaw Voice reported on October 12.

Last month, Polish news agency PAP said that Rosatom was interested in participating in any tender called by Poland, but also quoted the head of the company’s engineering projects, Sergey Boyarkin, saying that could find it cheaper to buy electricity from the Kaliningrad nuclear power plant.

The Kaliningrad power plant is already under construction and its first reactor is set to become operational in 2017, while the second would be brought online a year later. The project is meant to provide cheap electricity for Russia’s Kaliningrad enclave, but it is also a geopolitical tool and was envisioned as a rival project to Lithuania’s Visaginas plant.

Half of the electricity produced at the Kaliningrad facility will be slated for export – the Baltic States and Poland, or so Rosatom hopes. Given Poland’s complicated, to put it mildly, relationship with Russia and the country’s high dependence on Russian gas, it should come as no surprise that PGE has said that it would not be buying electricity from the Kaliningrad plant.

However, in a key policy speech on October 12, Polish prime minister Donald Tusk said that his government planned to spend 60 billion zloty (about 19 billion euro) in the energy sector, but not once did he mention nuclear power, which local analysts interpreted as a sign that shale gas development would be given top priority, The Warsaw Voice said.

Given this potential shift, the size of the new nuclear facility remains uncertain, but in 2009 PGE said that it wanted to build two power plants with an installed power of 3000MW each.

Cernavoda nuclear power plant in Romania. Photo: CameliaTWU/flickr.com

Romanian regression
Romania is the odd country out in Eastern Europe when it comes to nuclear power, since its two reactors at the Cernavoda plant on the Danube River were built using Canadian technology, rather than employing Soviet designs – even though the selection process and the start of construction happened during the communist era. The two units were completed already after the fall of communism, in 1996 and 2007, respectively.

The Cernavoda site can safely house two more reactors with an installed power of 1400MW and, in 2008, the state-owned nuclear power company Nuclearelectrica set up a project company together with several private investors as shareholders – CEZ, Belgium’s Electrabel, Italy’s Enel, Spain’s Iberdrola, Germany’s RWE and the local subsidiary of steel-maker ArcelorMittal.

Since then, there has been little progress and most private investors exited the project company in 2010 and 2011 – only Enel and ArcelorMittal remain.

Now, Romania’s government hopes to bring the companies back into the project, deputy economy minister Rodin Traicu said on October 17. Speaking at an energy sector seminar in Bucharest, Traicu said that the ministry expected to receive answers from the four companies by the end of the year, while Enel and ArcelorMittal remain committed to the project for at least another year.

Meanwhile, last year the project company tasked with building the new reactors postponed the deadline for completing construction work from 2016 to 2019, giving itself some additional leeway. It also commissioned a new feasibility study to replace the outdated previous one – Ernst&Young has already completed it, but its results were being kept confidential, Traicu said, as quoted by local daily Curierul National.

Until the updated cost estimates are announced, the most recent available figure dates back to 2008, before the onset of the global financial crisis. At that time, the final bill was set at four billion euro, but is certain to be higher in the current financial environment.

Silently forging ahead in Slovakia
Slovakia is the only Eastern European country to be currently building nuclear facilities – two reactors at the Mochovce power plant, slated to become operational in late-2013 and mid-2014, about a year behind schedule.

Beyond that, the country plans to build two more units at the Jaslovske Bohunice plants, replacing the two reactors shut down prior to EU accession – the decommissioning of Soviet-built nuclear reactors was a recurring demand made in Brussels during the EU’s eastward expansion, as can be seen from the shutdown of the Ignalina plant in Lithuania and four reactors at Kozloduy power plant in Bulgaria.

Slovakia remains committed to the project, economy minister Tomas Malatinsky told an international energy conference in Bratislava in late September, as reported by The Slovak Spectator.

A feasibility study has been drafted and is currently undergoing further evaluation and analysis, he said. The study which envisions the two new units going online in 2025, roughly at the same time when the other two reactors now in operation at Jaslovske Bohunice are expected to be closed down.

Initial plans called for construction on the two new units with an installed power ranging between 1200MW and 1750MW to start in 2014 and be completed by 2020, at a cost of between four billion euro and six billion euro. By comparison, the two new reactors at the Mochovce power plant, with a total installed power of about 900MW, cost 2.8 billion euro to build.

Hungarian hints
Hungary has four Soviet-built reactors at the Paks power plant, which it plans to expand further, according to development ministry state secretary Pal Kovacs. Speaking at a nuclear energy seminar in Prague on October 10, Kovacs said that a tender for one or two new units would probably be issued this year or early in 2013, but gave no further details, The Budapest Times reported.

Depending on the choice of technology, the new reactor, or reactors, would likely have an installed power of between 1250MW and 1700MW.

(Top photo of decommissioned Ignalina nuclear power plant in Lithuania by Radio Nederland Wereldomroep/flickr.com)

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About the Author

Alex Bivol is the news editor of The Sofia Globe.