Bulgaria to begin talks with Westinghouse on new Kozloduy nuclear reactor

Written by on December 11, 2013 in Business - No comments

Bulgaria’s Cabinet endorsed on December 11 the Economy Ministry’s recommendations to begin negotiations for the construction of a new nuclear unit at Kozloduy power plant, using Westinghouse’s AP1000 reactor design.

Formally, the talks would be carried out by Bulgarian Energy Holding (BEH), the umbrella holding company that groups Bulgaria’s state-owned assets in the energy sector, including Kozloduy nuclear power plant, and Toshiba Corporation, the parent company of Westinghouse Electric.

Economy Minister Dragomir Stoynev was mandated to “organise, co-ordinate and control the talks on the structuring and financing of the project,” the Cabinet’s media service said. The design of the new unit, licensing, construction and operations would all be carried out by a subsidiary of Kozloduy power plant, the statement said.

The Cabinet said that it decided to open talks with Toshiba because the company showed interest to invest and also based on the recommendation of Kozloduy’s management, which suggested using the AP1000 reactor design for safety reasons. The new unit will have an installed capacity of between 1000MW and 1200MW, the Government said.

After the Cabinet sitting, Stoynev told reporters that by opting for direct talks with Westinghouse instead of calling a public tender to pick the reactor type, Bulgaria would avoid having to sign a long-term contract that would require the state to buy all the electricity output from the new reactor. He said that the construction itself, however, would be carried out by a contractor picked following a public tender.

Stoynev did not say how much the new nuclear unit would cost. Under the terms of the Government’s mandate, Toshiba will be asked to foot 30 per cent of the final costs and help secure the remaining 70 per cent from foreign lenders, specifically the Japan Bank for International Cooperation and the Export-Import Bank of the United States. The deadline for signing the agreement is September 30 2014, Stoynev said.

Kozloduy currently has two 1000MW Soviet-made reactors and the proposed plant at Belene – frozen in 2012 by Government and Parliament decisions – was also to use Russian technology. The life cycles of Kozloduy’s two operational units expire later this decade, but Bulgaria hopes to extend them by another 10 years. Four smaller units, totalling a combined power of 1760MW, have been shut down in 2005 and 2006 as a pre-requisite for Bulgaria’s accession to the European Union in January 2007.

Westinghouse, picked in August 2012 to carry out the feasibility study of adding another unit at Kozloduy, had previously put forth its own AP1000 reactor design as a candidate.

After a trip to the US last month, Stoynev said that he discussed the issue of the new unit with Westinghouse executives and secured a tentative agreement. His announcement drew sharp criticism from the opposition parties, including GERB, the party whose government which shelved Belene and awarded Westinhouse the Kozldoduy feasibility study. GERB said that it planned to notify the European Commission of Bulgaria’s apparent plans to build the new reactor without public tender or the EC’s explicit approval.

UPDATE: On December 13, BEH and Westinghouse signed the agreement to begin exclusive negotiations on the construction of unit 7 at Kozloduy. The agreement was signed on the same day that Westinghouse president and CEO Danny Roderick met with Prime Minister Plamen Oresharski in Sofia.

(Bulgaria’s Kozloduy nuclear power station. Photo: Trygve W Nodeland)

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