PVB Power Bulgaria CEO Plamen Dilkov: Bulgaria Needs Alternatives to Kozloduy NPP, Thermal Power Plants

Bulgaria-Italy Survey » BUSINESS | May 31, 2011, Tuesday // 13:06
Bulgaria: PVB Power Bulgaria CEO Plamen Dilkov: Bulgaria Needs Alternatives to Kozloduy NPP, Thermal Power Plants

Interview with Academician Dipl. Eng. Plamen DILKOV, CEO of PVB Power Bulgaria AD, a member of International Academy of Ecology and Life Protection Sciences - St. Petersburg, for the "Bulgaria-Italy Survey of (Sofia News Agency).


Which role does Italy play in the world of renewable energy?

Italy ranks seventh among the World's most industrialized nations, it is a densely populated country and is generally acknowledged as enjoying one of the highest standards of living anywhere. Italians have managed to transform the "joie de vivre" lifestyle into an economic philosophy, perhaps one of the best concepts we can export to those countries that welcome us. Italy is a country with an enormous cultural and artistic heritage, not to mention its history and traditions, which explains the tens of millions of tourists who visit this country every year from around the world.

But Italy also features a very fragile geomorphological balance and is essentially poor in conventional energy sources. It has no oil fields or coal deposits, and its gas and geothermal energy output are practically irrelevant.

But Italy, it should be remembered, is also a manufacturing country and, unlike the French and British economies, which have largely shifted from manufacturing to services, it features a vast number of manufacturing and processing concerns, often with unique, very much craft-related skills, which brings added value to the goods produced. Italy is one of the most complex and contradictory countries in the Western world, where the ancient and the modern, the cutting-edge and the traditional come together.

Above all Italy has reached a crossroads where it needs to conciliate its destiny with future challenges, especially the very difficult one of securing a sufficiently independent and economically competitive energy supply.

This long introduction was necessary to tackle Italy's outlook on renewable energy, because in the last five years – against the backdrop of an ongoing shortage of conventional energy sources – there has been a boom in the technological and, consequently, economic development of potentially exploitable renewable energy sectors, such as solar, wind and biomass.

By and large, the sector currently employs over twenty thousand workers and, at the end of 2010, the total installed power from renewable sources exceeded 30 GW. In particular, the production of photovoltaic (PV) energy has increased by 160%, while wind power is up by 20%.

The PV industry in our country has hit a new record high, exceeding the milestone of 1 GigaWatt of installed power. Italy now ranks second in Europe for PV energy production, preceded only by Germany.

The approximately 70,000 certified facilities in operation, with an annual output of 1,300 GWh, can supply electricity to almost 500,000 households (i.e. 1,200,000 people, almost equivalent to the population of a region like Friuli-Venezia Giulia), with an average annual consumption of 2,700 kWh per household.

Which Italian experiences can be repeated in Bulgaria?

First of all, I am convinced that each country has the right to choose its own energy strategy and decide how to implement it, in light of local geopolitical and development considerations. 

This having been said, I believe that the "experimental trials" carried out in Italy over the past five to ten years as a nuclear-free nation aiming at increasing its power production capacity from locally available energy sources can provide much food for thought, certainly for Bulgaria as well.

Italy, in fact, and especially the North of the country, which features some of the highest economic and social development levels in Europe, and has a per capita income among the highest in the world, has long ago understood that the first and best form of power generation is the one you don't need to produce. I am referring here to the enormous effort under way to achieve the energy efficiency of buildings, and indeed of the industrial system as a whole, by implementing approved and certified technologies and standards.

I can safely say that Bulgaria could gain enormous benefits from this experience. I am also convinced that certain local energy development models, whether hydroelectric, PV, wind or biomass, could be successfully repeated in Bulgaria by implementing partnerships between local authorities and private investors aimed at sharing resources and know how, for developing local communities, both economically and politically. In short, this would be a practical application of the principle of subsidiarity, not just as a slogan.

Which are the main Italian renewable energy projects in Bulgaria? 

According to the information we collected, the main projects are in the field of hydropower and wind power.

Hydropower in Bulgaria has a longstanding tradition, especially, albeit not exclusively, as regards pumped-storage facilities.

As PVB Power Bulgaria we have developed, jointly with the company we have established in partnership with the municipality of Svoge, the first flowing water plants in this part of the Balkans, and as far as I know they are the only ones to be fully operational for the moment.

We are currently building three more plants and expect to build a further 9 over the next four years, to reach an installed capacity of 50 MW and generate about 300 GWh per year.

With regard to wind power, there are the Enel and Leitwind projects, with farms generating about 40 and 30 MW of installed power, respectively. Unlike hydropower, wind features more complex problems as concerns the energy network and, generally speaking, the country's overall economic balance, as a result of which Bulgaria is faced with some important and probably dramatic decisions, as mentioned previously.

The current political world, the government, must necessarily involve the public opinion in a clear, balanced and thorough discussion on the country's energy development strategy, the outcome of which will be a clearer picture of what it makes sense to develop and, above all, of the rules and economic conditions that will regulate energy investments. 

Italy is a nuclear-free country, surrounded by nuclear facilities from which it buys energy. Bulgaria is a convincedly pro-nuclear country. What are your thoughts on the issue?

We have dramatic news breaking daily from Fukushima. My generation grew up with memories of Chernobyl, or rather, of what it has been told about that disaster. An economic model based on endless consumption of energy has revealed its tragic shortcomings, not to mention the abyss into which it has hurled entire countries and their economies.

The collapse of the financial models based solely on speculation for speculation's sake, of the mathematicians who populated Wall Street creating models for the deceptive multiplication of wealth, which, instead of relying on the production and sale of real goods have uncritically embraced the religion of probabilistic calculations and numerical algorithms, was inevitable, as always occurs in life when people lose touch with the real world. 

I would like to remind everyone that the downfall of the banks in the US, Iceland, Ireland, and many other countries besides, is the outcome of the financial products grounded merely on gambling on commodities, particularly oil and gas. In short, a massive speculation on the rising or falling prices of fuels which drive our world.

How could these contradictions not explode, and the ensuing bubble ultimately burst? I fear that the enormous "need" for nuclear development was also intimately connected to these milieus, which are so complex and contaminated as to be far removed from any ethical, national or financial sense of responsibility.

A merry-go-round put into motion and which no one really knew, and perhaps still does not know, exactly how to control, a merry-go-round that theoretically requires a continuous and growing demand for energy coming from an economy that is considered stagnant and recessionary when not consuming.

I very much appreciated the comment recently made by the Italian Treasury Minister, Mr. Giulio Tremonti, according to which the budgets each country presents in Brussels should also take into account the costs for managing the nuclear risk and its decommissioning. If this were the case, many present "slogans" on the cost-effectiveness of nuclear power would suddenly be revealed as a complete sham, to the benefit of other less problematic energy sources.

But I wonder what the capital markets, the large institutional investors, the speculators would think. Italy is a substantially ancient and therefore wise country. I believe that the choice made 25 years ago to end the nuclear experience and decommission the existing nuclear plants, was fundamentally correct and that the path of nuclear power is not the only one nor the most cost-effective we can tread.

Moreover: as it is true that beyond the Alps there are many nuclear facilities, Italy should cut itself out a role as an ambassador to all those countries that, sooner or later, will inevitably have to invest in upgrading or decommissioning their plants, and bring them the message that a less irresponsible model is possible both in terms of consumption and risk management. It would be sufficient to pool our resources, know-how and political will, to create a European brand, as opposed to the American or the Chinese one. 

What is your specific experience in Bulgaria?

So far, the experience of PVB Power in Bulgaria has been a "success story". In practice, in years in which real estate speculation prevailed, outweighing all other sectors, roughly from 2004 onwards, we came to this country to offer a business model based on long-term commitments and daily interaction with the local communities and their institutions.

How often have we heard inappropriate comments by the banks with respect to long investment return times and implementation difficulties! But we are stubborn people, who know only one way to do business, through the hard work and serious commitment of the people involved in the projects.

We have built not just concrete dams, but above all a wealth of relationships and approaches with an administrative world that had no aptitude for and was unaccustomed to dialogue. Hundreds of meetings have been held in the past and, indeed, still are held today, in an attempt to get our ideas across, with no end of difficulties and misunderstandings due to a lack of clear strategic indications from the powers that be.

The renewable energy sector in Bulgaria has been classified, perhaps not quite innocently, as a sort of "luxury", a price that needs to be paid to continue having a place at the table in Brussels.

Obsessively, when the political world tackles the issue of renewable energy sources it reports the percentage or share achieved as concerns implementation of the commitments undertaken for 2020; in short, the arithmetic of punishment, rather than the perception of a new means for economic development. 

We were not viewed as exceptions. We had to become experts in everything and take part in each and every regulatory process linked to the actual implementation of our project. Thus, over the years, we have become one of the internal players of the system, stakeholders and no longer foreign bodies.

With our 35 GWh per year, which will rise to about 80 in a year's time, we cannot certainly be classed among the largest energy producers, but surely we have effectively motivated and driven local businesses, experts and skills in Bulgaria.

We are looking with interest and attention at the process this Government has decided to start through the law that was recently approved, and the full weight of which can only be assessed once the implementation plans have been disclosed; as regards our flowing water plants, despite the fact that the "feed-in" tariff does not yet fully satisfy our institutional lenders, we do not expect any major changes, because these are facilities that produce so-called basic energy, which is easily predictable and therefore "useful" to balance the network.

It would be nice if the combined and overall effect of facilities such as ours, their real impact on the balance of waters and the morphology of rivers, could be fully understood.

One thing that struck me particularly, in Bulgaria, is the limited capability of recognizing the prestige and merits of the academic world. So we tried to find a point of communication and exchange that would give the University world the credit due to it and be functional and useful for our project. The hydrology and productivity, the static features and environmental impact of our power plants were shared with professionals who have been contributing for many decades to the development of the Bulgarian hydro engineering expertise.

It's a shame they are not taken equally seriously by the political world, which could, possibly with a touch more of modesty, learn some important, and maybe unexpected, truths and news with respect to Bulgaria's potential. 

What is it about?

If it is true that in the future we may need an amount of energy we are unable to produce today, then why not explore the untapped potential? Admittedly, wind and solar energy create a great deal of network-related problems, and not just because they are forms of power that need to be balanced with the so-called "cold reserves", which are often powered by conventional fuels, but also because they are still not very efficient.

However, the Bulgarians need to create an alternative to their Kozloduy reactors, as well as to some thermoelectric plants that might reveal themselves as being no longer cost-effective or environmentally sustainable, precisely the reasons that have led to the design of a new nuclear power plant.

And if we were to look for an equivalent energy supply there, where it now flows unharnessed? The Bulgarian academia, an entire generation of professionals and scholars, has put together a huge amount of scientific research, the aim of which is to exploit the hydroelectric power locked up in the Danube.

Some of them have shared with me the results of decades of investigations and calculations, and it unexpectedly appears that we could install, with hardly any problems, about 2,000 MW of power in two different plants, with an output of 10,000 GWh per year.

In short, a risk-free nuclear power plant, connecting Bulgaria and Romania in two further points by means of road and rail infrastructure, and above all the possibility of making the Danube fully navigable, a real gateway to the East. There are enough reasons, it seems to me, to talk about and share this project with anyone in this country who wishes to achieve some goals in the only reliable and safe way, through commitment, hard work and intelligence.

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