27 Oct 2011

In Bulgaria, the European Union (EU)’s poorest member, faces a seemingly impossible task to finish the 2,000 Megawatt (twin reactor), Russian-designed Nuclear Power Plant (NPP), in Belene, Bulgaria.  The lessons of the Fukushima Dai No.1 triple meltdown on 12 Mar 2011, have caused Bulgarians to reassess the 30 year-old Russian NPP design planned there.  Russia’s Rosatom wants an extra $2.1 billion Euros now, for a total of 6.1 Billion Euros, that they say would be needed for improved safety measures, and insurance.

BULGARIAN STUDY CENTERS  Such as “Balkans and Black Sea Studies Center”- A Sofia Research Group agree the project is practically on “life support”… Separately another Bulgarian, Ilian Vassilev, former Chairman of a Consulting firm from Deloitte, Bulgaria, said: “With additional billions of Euros in debt, it (the NPP) will never take off”.  All seem to agree that no one would lend Bulgaria enough money to complete the project, except for the main contractor, Russian state-run Rosatom Corp. The findings by Bulgarian study centers may give the Bulgarian government the arguments it needs to “bite the bullet”, and cancel the Belene NPP without upsetting Russia, its chief supplier of oil and natural gas. Mark Hibbs, an analyst at the Carnegie Endowment for International Peace in Berlin, said on 22 Oct 2011: “Some observers in the nuclear financing and nuclear project management field believe that the present Bulgarian government would prefer to walk away from this project.” – IF ONLY THEY COULD DO SO GRACEFULLY.

SEVERAL EUROPEAN NATIONS HAVE ABANDONED NUCLEAR AMBITIONS.  Germany canceled license extensions, shut down some of its oldest reactors, and ordered the rest closed by 2022. Swiss lawmakers approved phasing out five (5) plants by 2034. Italy permanently banned atomic power, and there are many worldwide movements against any further NPP involvement, notably in India, and soon in Great Britain.

EARTHQUAKE PRONE AREAS WILL BE RECONSIDERED. The Fukushima tragedy has triggered safety probes across Europe, and the world;  jeopardizing potential returns on investment (ROI), and scaring potential investors away from the Belene NPP project. European nations plan to publish conclusions of stress tests for their existing NPPs by the end of 2011.  Their findings, and new seismological science findings, will likely accentuate the consideration of added safeguards against earthquake damage, specially in areas known to be near geological fault areas.  Such findings should be used to preclude any new NPP in such quake-prone areas.  Prudence dictates so.

A FEW BULGARIANS STILL WANT THE BELENE NPP BUILT.  Sergei Stanishev, a former Prime Minister, and leader of the opposition Bulgarian Socialist Party, told reporters last week in Sofia: “Bulgaria needs new nuclear capacity, and a project like Belene will guarantee the country’s energy security…the longer the government puts off the decision, the higher will be the cost.”  Meanwhile, Bulgarian Prime Minister Boiko Borissov’s 27 month-old government (that  inherited the project from a Socialist-led Administration), is reviewing whether it can successfully complete Belene NPP, and salvage its investment, or cancel it, and gain more independence from Russia, Bulgaria’s traditional economic partner.  SUCH ARE THE HORNS OF THE DILEMMA AREN’T THEY?

MOST BULGARIANS OPPOSE THE BELENE NPP PROJECT.  Prominent Mr. Minchev opposes the project because the government chose the Russian supplier in 2005 without any regard for fair competition. The reactor design is obsolete, the costs are running out of control, and the project is making Bulgaria even more dependent on Russia for energy supplies  HE IS A MAN WHO “ TELLS IT LIKE IT IS” Minchev adds: “This project was developed without any consideration for our national interest, or the broader political and strategic interests of our European allies…The nuclear reactors proposed were developed 20 years ago (old technology). Why are we buying them?”.  GOOD QUESTION!  ANSWER: JUST BECAUSE!  The proposed pressurized-water reactors already licensed by Russia, would be installed 14 kilometers (9 miles) from a village where more than 100 people died in a 7.2-level earthquake in 1977; whose epicenter was in Romania. Even so, the site was declared safe by the Bulgarian nuclear regulator and approved by the European Union in 2008.  Bulgaria owns 51 % of the Belene NPP Project (Just a hole in the ground), and has spent about $2 billion so far, including  site preparation, safety studies, greasing palms for governmental approvals, and all in the expectation of buying obsolete reactors that no longer suit the times, or the need.  2 BILLION EUROS, THAT IS ABOUT PAR FOR “UPFRONT MONEY” REQUIRED BY NPP MAKERS SUCH AS JAPAN RUSSIA, AND FRANCE. THEIR “LIFETIME SERVICES” CONTRACTS ARE ALSO ALIKE.  

ROSATOM (MinAtom) IS A RUSSIAN STATE-OWNED CORPORATION established on January 29, 1992 as a successor of the Ministry of Nuclear Engineering and Industry of the USSR. It was reorganized as the “Russian Federal Agency on Atomic Energy” on 09 Mar 2004, and  transformed to a State corporation;  Passed into the law, by the Russian Parliament on Nov 2007;  and signed by President Putin in early Dec, 2007.  Rosatom, currently sells nuclear fuel for Bulgaria’s only existing atomic plant at Kozloduy.  SEE THERE, RUSSIANS DON’T JUST BUILD NPPs, THEY WANT A CONTRACT TO SUPPLY THEM FOR LIFE. 

ROSATOM HAS TRIED HARD, but there are currently no investors to keep the “Belene NPP” project alive. The Russian Nuclear Services Company offered to finance the entire project, if the contract can be renegotiated by Mar. 2012.  Rosatom spokesman Sergei Novikov said: “The only chance for the Belene NPP to happen, is with Russian government-backed credit as a politically motivated investment”.  And besides…Bulgarians can’t afford high energy prices. Premier Borissov has said he’d welcome an opportunity to sell part of the Bulgarian government’s stake to a “strategic European investor”;  However, there are no potential serious buyers in the horizon.  In London, Stephen Tarlton, an analyst at the trade group “World Nuclear Association” said: “Given the high degree of political risk, it would be a highly risky project to be involved in”.  Tarlton wouldn’t speculate on whether the Belene NPP gets built.  HMM! – NOBODY LIKES THE PROPOSITION – SO, LET IT DIE!

RUSSIA’S ROSATOM PEEVED WITH BULGARIAN FOOT DRAGGING. Rosatom has inflated the initial price tag of 4 billion Euros to 6.3 billion Euros, blaming delays caused by the Bulgarian side. Bulgarians said they weren’t willing to pay more than 5 billion Euros.  Sergei Kiriyenko, CEO of Rosatom (the Russian contractor), said: We understand that the new government wants a fresh start, another analysis, another feasibility study…But the longer we wait without making any decision the less profitable it gets…If the two companies find a solution good…If not, the matter will go to court. Today we see Belene as a profitable project, and we are ready to invest in it…Our investment offer has its limits.” 

BULGARIAN NUCLEAR REGULATOR SAYS: Regulator’s chairman Sergey Tzotchev said in an interview. “There are NO operating reactors with this exact design…We need more time to see everything, to discuss everything.”… HMM!, SURE SOUNDS LIKE the USA-NRC.  Perhaps it is just a case of “greased – palmitis” in such commissions, do you think?   WE DO KNOW FOOT-DRAGGING MEANS: LATER, ALIGATOR! ; SO ROSATOM MUST KNOW IT TOO. 

BULGARIA TO DECIDE BY MAR 2012 Even though costs to complete the Belene NPP project have not been published, nor the terms of the contract between Bulgarian utility NEK and  Rosatom.  Rosatom, on July 2011 turned to the International Court of Arbitration in Paris, claiming 58 million Euros for “delayed construction payments”. Bulgaria, in turn filed a 61 million-euro counter-claim for unpaid purchases of old equipment to the Court of Arbitration in Geneva.  ITS “NO-GO” The NEK and the prime minister’s office referred calls to Bulgarian Energy Minister Traicho Traikov, who has said the government will make a final decision after running EU-compliant stress tests and having the project’s viability assessed. The government won´t move until the March 2012 deadline for negotiations with Rosatom; he said: “I don’t really believe that this project will go forward under the conditions which the previous government agreed-to with its Russian partners”

Thanks to Bloomberg 26 Oct 2011, for quotations.



It is clear to see Bulgaria also “has seen the light” about NPPs, and about dealing with Russia’s state-owned Rosatom.  THEY JUST WANT OUT OF THE DEAL! – just like the people of India.  Their concern appears to be how to say: Sorry, but we just don’t want these NPPs anymore; without upsetting their political relations with their longtime ally, Russia; To that end, Bulgaria appears ready to “bite the bullet” and write-off  2.1 Billion Euros to experience.  Let us remember that in southern India,  the Kudankulam NPP  located in Tirunelveli, will probably cost India $20 Billion to quash, even before they hatch – We’ll see.


October 27, 2011 at 9:53 AM Comments (0)