Kozloduy NPP Tiptoes around Bulgaria-Russia Belene Project Talks

Energy | April 22, 2011, Friday // 14:50|  views

Bulgaria hopes to extend the life of Units 5 and 6 of the Kozloduy NPP by 20 years but that will ultimately depend on Russia. File photo

The management of Bulgaria's only operational Kozloduy NPP has denied being involved in any way in the ongoing Bulgarian-Russian talks for the construction a second nuclear plant in Belene.

What is more, senior Bulgarian officials made it clear Friday that Bulgaria must be very careful in the talks with Russia on the Belene project because if Bulgaria backs out of it, then Russia can block the extension of the life of Kozloduy's two operational reactors.

On Thursday, the Vice President of Rosatom's subsidiary "Atomstroyexport," Genadiy Tepkiyan proposed to include Bulgaria's nuclear power plant "Kozloduy" as investor in the project to build a second such plant in the Danube town of Belene.

Tepkyan said that if Bulgaria's National Electric Company NEK - Kozloduy's parent company and the subsidiary of the Bulgarian  Energy Holding (BEH) in charge of the Belene NPP talks with the Russians, does not have enough money, the Kozloduy plant itself should be sought out as an investor but had not clarified how exactly and under what conditions this deal would materialize. In 2010, the profit of the Kozloduy NPP was BGN 60 M.

"The Kozloduy NPP has not received any offers to participate in the construction of the second Bulgarian nuclear plant in Belene," Kozloduy CEO Kostadin Dimitrov has reacted cited by the Dnevnik daily.

"We have never been involved in any such talks. Of course, if our parent entities - the Bulgarian Energy Holding, the Ministry of Economy, Energy, and Tourism decide in favor of that, we will participate in the negotiations,"Dimitrov said. NEK itself has refused any comments on the Atomstroyexport suggestion.

The talks between the working groups of NEK and Rosatom's Atomstroyexport on the Belene project are continuing even though it is unclear whether NEK's chief accountant Mihail Andonov, who is the company's acting CEO after Krasimir Parvanov was recently sacked over a blunder in the talks with the Russians, is taking part in the negotiations himself.

Atomstroyexport VP Tepkiyan, who is also the Russian Director for the Belene project, had voiced his company's firm intentions to build the Belene NPP for a fixed price of EUR 6.298 B - stipulated in the Bulgarian-Russian memorandum of understanding signed in November 2010 - or for a base price of EUR 3.997 B plus escalation or inflation costs - stipulated in the intergovernmental agreement signed in January 2008.

According to the "Atomstroyexport" Vice President, the price is the only hurdle for the project, blaming Bulgaria's National Electric Company (NEK) of dragging on in announcing what exactly it is ready to pay.

In March, the Borisov Cabinet put the fate of the troubled Belene project in the hands of the UK-based bank HSBC, which was selected as a consultant to made a final pronouncement on whether the project will be economically feasible for Bulgaria or not. HSBC, however, is supposed to come up with such an appraisal in a very short time - by June 1, 2011, under the latest Bulgarian-Russian document; what is more, critics say the contract with bank is framed in a way enticing it to declare the project feasible in order to get a large commission.

On Wednesday, the Russian newspaper Komersant reported that Bulgaria faces being taken to arbitration by the Russian contractor Rosatom over the nuclear plant project in Belene as it is likely to miss the July 1 deadline for signing a final agreement for its construction.

Also Wednesday, Prime Minister, Boyko Borisov, announced after the cabinet's meeting that the final decision on Belene will be made by the Parliament.

Borisov said when all expert assessments are finished, including that by HSBC, he would make a decision on the future of the NPP, and then will ask to Parliament to vote yes or no on the project.

However, if HSBC finds the Belene project not beneficial for Bulgaria, and the Borisov Cabinet renounces it, this might have highly negative ramifications on the situation of the Kozloduy NPP as the Bulgarian authorities still need Russia's approval to extend the life ot Kozloduy's only two operational reactors.

"If HSBC says the Belene plant won't be economically feasible, we need to terminate our deal with the Russians in such a way so as not to threaten the fate of the Kozloduy NPP," ruling party GERB MP Valentin Nikolov, who is head of the Economy Committee in Parliament, commented on Friday.

"It is of vital importance for Bulgaria to extend the life of units 5 and 6 of Kozloduy. That is why we have started a survey. In the most recent modernization, we replace many of the plants systems with technology of Westinghouse, Areva, and Siemens so it is likely to extend the life of the two reactors by 20 years," said Kozloduy NPP CEO Kostandin Dimitrov.

In the fall of 2010, Bulgaria's Economy Minister Traicho Traikov explained that the license of Unit 5 of the Kozloduy plant expires in 2017, and of Unit 6 - in 2019, but that the government will take measures to extend their life.

In March 2011, the Economy Ministry initiated a formal plan to extend the life of the only two operational nuclear reactors in the country located in the Kozloduy NPP. However, this largely depends on the Russians who provide the servicing and fuel for the Bulgarian NPP built in the 1970s and 1980s by the Soviet Union.

Only the two VVER-type 1000-MW reactors at Kozloduy are in operation after Bulgaria agreed to shut down the "small" 440-MW reactors 1-4 in 2002 and 2006 as part of its EU accession negotiations.

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Tags: Boyko Borisov, Prime Minister, nuclear, Atomstroyexport, Rosatom, Kozloduy, Nuclear Power Plant, NPP, Belene, Bulgaria, Nuclear Power Plant, NEK, National Electric Company, Russia, Russian, HSBC, Kostadin Dimitrov, Krasimir Parvanov, Genadiy Tepkyan, Traicho Traikov, Unit 5, Unit 6


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