The unnecessary “nuclear toy”
Last developments indicate that the government has firmly decided to launch a second nuclear plant project – “Belene”. However all questions concerning economic feasibility remain unanswered as the only backing used insofar are based either on populist grounds (Bulgaria to become center of energy on the Balkans) or on unproved expectations for electricity shortages around 2010-2011. IME team insisted for more than two years that a full regulation impact assessment is absolutely relevant although the government did not presented such analysis to the larger public.
Mr. Georgi Kaschiev (former president of the Committee to Use Nuclear Power for Peaceful Purposes) supported our argumentation in his report arguing that the net present value of this project seems to be negative and that this project may significantly hamper planned energy market liberalization. He states that the very need of additional power has not been proved yet backing his argumentation with international comparisons and calculations.
Herein we present to your attention a brief list of main argumentation against the second nuclear plant project:
1/ The need for additional plant has not been proved. Energy consumption in Bulgaria (consumed energy per one unit of GDP) is several times higher compared to EU average or Eastern Europe countries’ average. Therefore potential savings are a serious alternative to building new power facilities.
2/ It has not been proven if there is a need of any additional electricity production at all that it should be nuclear. Rehabilitation of existing thermal and building additional hydro plants appear to represent a serious alternative to nuclear projects. Up to now there is no cost and benefit analysis of different alternatives.
3/ Electricity transportation losses in Bulgaria are from two to three times higher compared to Germany or Italy. Thus it is not cleat why efforts are not focused on transportation saving technologies instead of building additional powers.
4/ There is no cost and benefit analysis of the “Belene” project and there is no indication that the government is even considering such. For instance the costs for the secondary infrastructure may turn to be considerable higher than all existing expectations. The same issue exists with waste disposal.
5/ Market liberalization will both change structures of supply and demand, which additionally complicates all forecasts.
6/ Electricity imports may turn to be more cost efficient than local production. With this respect the biggest problem appears to be stereotypes from the past as imports are considered lost per se. This way of thinking is wrong especially if we realize that Bulgaria is importing around 80%-85% of all energy resources.
7/ Bulgaria’s participation at the European energy system allows to maintain lower reserves, which should be also taken into account when forecasting the energy balance.
8/ Price per kwh will most probably turn to be much higher than existing expectations. If comparing with similar plants in other countries it would be more reasonable to expect prices around 5-6 eurocents per kwh.
9/ Market solution of “Belene” case would be if the existing infrastructure is sold at an open tender and is used according to decision of new owner. If there is private interest to build additional nuclear facilities without any government support than all related risks are taken by investors.
10/ The proclaimed idea to merger ‘Kozlodui” power plant to “Belene” plant is an example of non transparent privatization. It would complicate or would rather make impossible all economic calculations and would hide the actual results from “Belene” project. If this idea takes place we would probably never know the real price of kwh since all data will be mixed.
