Bulgaria Belene N-Plant Said to Halve Electricity Price

Business | March 9, 2008, Sunday // 00:00| Views: | Comments: 5
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Bulgaria: Bulgaria Belene N-Plant Said to Halve Electricity Price Russia's state-owned Atomstroyexport will design and build Belene nuclear plant two twin 1000 M reactors under a controversial EUR 4 B deal. Photo by Yuliana Nikolova (Sofia Photo Agency)

Bulgaria's Former Minister of Economy and Energy Rumen Ovcharov has been drumming support for the construction of a new nuclear power plant, the country's second, near the northern town of Belene, across the Danube from Romania.

"Electricity prices will be reduced twice if Bulgaria completes Belene projects despite the numerous opponents," Rumen Ovcharov, currently MP from the Socialist Party, said on Sunday during his visit to the town of Nova Zagora.

The long-awaited and controversial EUR 4 B deal that will see Russia's state-owned Atomstroyexport design and build two twin 1000 M reactors was sealed at the end of January during the visit of Russian President Vladimir Putin to Sofia, more than a year after Bulgaria picked the firm.

The total costs of the project are expected to run much higher, to the tune of EUR 6-7 B, and Russia is interested in developing the lucrative project further.

Construction on the twin units is expected to begin in the second half of the year, with 2014 and 2015 as the tentative deadlines for the two reactors to go online.

Critics say the project is economically flawed, open to corruption and mismanagement, and cements Russian dominance of Bulgaria's energy sector while the government says global energy pressures make the project necessary.

Rumen Ovcharov has also been one of the most ardent proponents of Bulgaria's efforts to reopen units 3 and 4 of Kozloduy Nuclear Power Plant.

The two Soviet-made 440 MW reactors were closed down on January 1, 2007, as part of Bulgaria's EU accession agreements on grounds that they are outdated and dangerous. There have been heated debates about the actual motives behind this move.
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» To the forumComments (5)
CJB - 10 Mar 2008 // 01:32:13

The local electricity companies have all been privatised. Much of the generating capacity has too, with Martitsa Iztok thermal plant, Kozluduy, and the hydro plants belong to NEK, plus the electricity distribution network. NEK controls most of the electricity export trade. NEK is 100% owned by the state.

The market in electricity from a consumer standpoint is only open to competition for larger usage customers, generally businesses. Household customers have no choice of supplier, though this was supposed to happen on 1 January 2007. There's no evidence of ordinary people being able to switch supplier as they can in many other EU countries.

So how exactly will the price of electricity come down? BG already produces twice as much electricity as it consumes, if the figures on the NEK web site are to be believed. Adding an extra 2GW of capacity with Belene will increase generation by 11%, and the costs will take decades to pay off.

Why do this? To replace Kozluduy? Perhaps, but that's not the reason that has been given. Even if that is the thinking, BG does not even need Kozloduy as it has plenty of spare electricity.

No, as usual, it's all about trade and the money earned from it. NEK can make a lot of money selling electricity to Greece, etc. But NEK is so burdened with debt it will not see profits for a long time. All that debt is paying for Belene, for renovating hydro schemes, for new thermal capacity. So who makes the money? Not the state. Rather all the contractors building Belene and the other schemes. Who are the owners and shareholders of these companies, and how much are they paying in bribes for the contracts? The answers to these questions give you the reasons why BG is building new nuclear power stations.

kingsland - 10 Mar 2008 // 00:48:11

I live in the stara zagora area and pay my lecy bill to EVN, who supply my home and are responsible for maintenance, no idea where they get their wiggly amps from?

CJB - 9 Mar 2008 // 19:09:05

Come back when you have some facts to back up your comment, not just you "heard" something! I can't be bothered discussing your non-argument...

resipsaloquitur - 9 Mar 2008 // 18:32:08

When i was in Varna last year i heard that the city is supplied by E-ON,a German company.

CJB - 9 Mar 2008 // 16:29:53

Frankly, this is total bullshit.

Don't be fooled by these claims: where are the figures to back them up? The only prices which may become cheaper are electricity EXPORT charges, as here the NEK faces competition from Romania for example. There is no competition for electricity supply to the consumer market in BG, NEK controls this.

Nuclear electricity is only cheap after the capital costs have been paid off. So the surviving units of Kozluduy provide cheap electric because the initial costs were settled a long time ago, leaving just fuel, running and maintenance costs. How long will it take to pay off 7 billion euros?

Why should Bulgarians pay for a potentially unsafe nuke on their territory just to provide cheaper electricity for Greece and Macedonia? Ah, I forgot. It's in the business interests of Russian and Bulgarian companies who have "friendly relations" with Bulgarian officials. That's why. Now it all makes sense! Take out that multi-billion euro loan and keep the cash rolling for the insiders...

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