East Europe Nuclear Plants Struggle to Find Investors

Views on BG | January 27, 2011, Thursday // 17:57
Bulgaria: East Europe Nuclear Plants Struggle to Find Investors A file picture dated 03 September 2008 showing workers during the construction of the first 1,000 MW unit of the second nuclear plant of Belene, Bulgaria. Photo by EPA/BGNES

By EurActiv

Cash shortages and uncertainty over energy prices are delaying or cutting back nuclear power projects across Central and South-Eastern Europe, threatening energy supply and a push to abandon polluting coal.

Investors are retreating, worried that future energy prices might not give them a good return.

Many countries in the region have looked to increasing atomic power to provide a stable energy supply and to help meet tough new EU emissions targets.

But high capital costs, dwindling interest from power firms, uncertainty about future carbon emissions prices and tangled planning permission are all slowing plans.

Romania, Poland and the Czech Republic are some of the European Union's least energy-dependent states, but the delays put them at risk of boosting imports in a decade or so as ageing coal-fired plants are shut or become too expensive to run.

Last week power groups GDF Suez, RWE and Iberdrola quit plans in Romania to add two more units to its only nuclear power plant by 2017. Czech CEZ's left the project in 2010.

Romania is left with just two foreign partners and will be casting for new investors, a search that will likely delay the project.

Bulgaria, the Czech Republic and Poland have also hit delays in their plans to build or expand nuclear generation.

"Investment in new power generation needs to occur, it has to be built and it has to be built now," said Michael Labelle, an independent energy expert based in Budapest.

"There is a collection of issues inhibiting the building [...] funding is a problem, governments are less willing to put in money, the EU's plans of having competitive pricing takes away some of the security of knowing what prices will be in future."

Power needed

After a tender failed to attract investors for a new nuclear plant in Lithuania, its president said it needed to rethink its alternatives

In the Czech Republic, state-controlled power group CEZ, Central Europe's biggest utility, postponed a tender in 2010 to expand its Temelin nuclear plant. Slovenia was expected to approve a decision to build a second plant by 2020 last year, but the decision has yet to come.

Croatia will likely not decide before 2012 on whether to partner Slovenia or Hungary for a plant or build a second one on its own territory.

Poland, which generates most of its power from coal, wants to build a nuclear power plant but has struggled to find skilled workers and clear legislation needed to move the project along.

"The world has changed [...] everybody is a bit more careful about spending big money," said Stephan Werthschulte, head of the power generation business at consultants Accenture.

"These projects are more complex than in the past [...] the appetite for risk is lower so you have more partners."

Romania, where energy production is largely in state hands, estimates it will need to shut down and replace a third of its power plants by 2020. It sees demand rising by 2% on average each year until then. But with the exception of some small scale new hydro power units, it last built a new power unit in 2007, when its second 706 megawatt nuclear reactor went on stream.

The economy ministry is now waiting to see if remaining partners Enel and a local unit of ArcelorMittal would like more shares in the future two units.

"We will then launch a new tender for new investors," a ministry official has said. "There should be interest for it."

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Tags: Belene, power projects, nuclear, Romania, Poland, Czech Republic, Czech Republic
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