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A Political Surge on Bulgaria’s Power Grid

10 11 2006  Bulgarian energy minister warns of crisis over Kozloduy nuclear shutdown, but critics see sufficient reserves to cover the loss.

By Ekaterina Petrova in Sofia (Balkan Insight, 10 Nov 06)

Panic is not usually a word for a government minister to use lightly when speaking about nuclear reactors, but last week a Bulgarian government minister thought otherwise, much to the distaste of the European Union.

Grudgingly, Bulgaria is approaching the EU-mandated shutdowns of two antiquated units at its Kozloduy nuclear power plant, on the Danube riverbank. The EU’s reason for requiring the shutdowns is that it deems the units not safe enough but too old to modernise at a reasonable price.

Rumen Ovcharov, the Bulgarian economy and energy minister, last week proposed that energy market “panic” would prove to be a more real danger and expense. He warned of “tragic” consequences across southeast Europe stemming from the shutdowns.

The minister’s timing nearly proved fortuitous. His comments came shortly before western Europe experienced dramatic blackouts, raising fresh worries about EU policies on energy security and power supply.

But on the subject of Kozloduy’s aged III and IV reactors, Andris Piebalgs, the European commissioner for energy, offered no wiggle room. Taking the comments from Sofia as a late plea to postpone the shutdowns, Piebalgs’ spokesman said the suggestion “absolutely cannot be discussed”.

The rebuff did not end there. Analysts in Bulgaria have added substantive criticism to the EU’s political rebuke, arguing that sufficient power reserves exist, anyway, to cover domestic demand in Bulgaria and broader demand across the Balkans, a free energy-trading zone. Sharper analysis questioned whether the Bulgarian government might seek to benefit somehow by fomenting market panic.

By midnight on December 31, Bulgaria is obliged to close units III and IV as part of its agreement with the EU. One second later, on January 1, Bulgaria becomes a member state.

The shutdowns, in fact, are nothing new. Nuclear safety experts deemed Kozloduy’s old Soviet-built units, I through IV, “non-upgradable at reasonable cost” already a decade ago. A deal on shutdowns became a condition for Bulgaria to start membership negotiations with the EU. Bulgaria grumbled for a while, then gave in, closing units I and II in 2002, despite domestic opposition.

The coming shutdowns are part of that same EU deal, and the domestic furore has yet to die down. Kozloduy remains a focus of debate between ruling parties and opposition, for example in the recent presidential election campaign. During the campaign, Georgi Purvanov, the Socialist candidate, called the EU deal a “hard compromise”. Volen Siderov, a far-right contender, vowed to force a referendum over the shutdowns.

To pacify opposition, government officials are promising to resume construction of an unfinished nuclear plant in Belene, downstream on the Danube - an ecologically-controversial project launched before the end of communist rule but abandoned shortly thereafter.

But given the political heat generated by Kozloduy, the EU is keen to ensure that the current government in Sofia follows through. Brussels recently sent a delegation to check that preparations for shutdown are underway.

During recent weeks, several Balkan importers of electricity from Bulgaria expressed concerns over the power supply. Ovcharov’s plea, registered in a letter to the European Commission sent last week in addition to his public statements, referenced these regional concerns. While requesting EU supply guarantees for the region, he also sought Piebalgs’ personal support for the Belene project.

Government experts and voices within the nuclear industry warn that Bulgaria will be unable to export power this winter after January. For example, Ivan Genov, executive director of Kozloduy, projects an overall annual loss in real capacity of some 6 billion kilowatt-hours, kWh. The plant’s two remaining units cannot make up for such a loss. He argues that shortages may appear in case of technical faults in either of the plant’s remaining 1000 megawatt-thermal, MWt, reactors.

But independent experts counter that the capacity loss upon shutdown of the two 440 megawatt-hour, MWh, units can easily be covered by available national reserves. They also say that “unfactual” claims add political momentum to efforts to build support for construction at Belene.

Georgi Ganev, an economist at the Centre for Liberal Strategies, a think tank, and Petko Kovachev, of the Information and Training Centre for Ecology, are among those who describe 880 MWh as a drop in the bucket of Bulgaria’s overall capacity. Together, the country’s power plants currently possess over 11000 MWh of capacity, they say. Of this, just 7500 MWh are used at peak moments, for both domestic consumption and exports.

But 11000 MWh may be a stretch. Not all the power plants can be used at their full capacity, according to Bulgaria’s Energy Efficiency Agency. “Currently the available capacity is a little above 9,000 MWh,” said Krasimir Naydenov, an agency expert. Still, this is 1500 MWh above the standing record for combined demand.

“The situation is similar to the one four years ago, when many people foretold problems, while after their closure Bulgaria in fact raised its production of electricity,” said Georgi Kaschiev, a former nuclear regulation chief.

Some experts also point out that since the December 31 shutdowns were planned years ago, measures could have been taken to avoid genuine difficulties in the coming winter. They also point to broader apparent failures to plan ahead in the country’s energy sector, not just involving nuclear power.

For example, Bulgaria suffered a coal-supply crisis earlier this year when Ukraine halted exports in response to a cut-off in Russian gas supplies. The dip in coal supply hit hard at Varna, Bulgaria’s 1260-Mwt coal-fired power station, in advance of its privatisation one month ago. Ovcharov, in his letter to the EC, cited the Varna case as evidence of Bulgaria’s energy insecurity. But critics of the government question why the coal supply problem was not solved more quickly.

“Varna power plant could become a much bigger problem than Kozloduy III and IV,” said Ganev. “I do not understand why nothing has been done yet to ensure Varna has coal in reserve, when the government has been aware of the problem for half a year.”

In fact, an alternative contract for coal supply from Vietnam has been signed, and press reports indicate that Ukrainian deliveries have resumed this week. Nonetheless, by Ovcharov’s admission Varna remains a point of worry.

Another point is energy inefficiency. Local experts place this at 1.8 times the average EU level. Eurostat’s measure is worse: 2.3 times. At this level, Bulgaria will join the EU as the least energy-efficient member state.

A state programme offers “energy savings loans”, but low electricity prices limit local incentive to borrow for this purpose. Only higher prices will force households and companies to save power, said Naydenov. “The government has no instrument to influence this anywhere, except over state property, but that is not much.”

The Energy Efficiency Agency figures that active measures to maximise local power efficiency cannot reduce electricity consumption, but it can only slow down its speed of growth. “We project that if GDP grows as predicted by five per cent per year, vigorous measures to lower energy consumption will reduce its growth to 2.5-3 per cent annually,” said Naydenov.

In this case, Bulgaria could soon gobble up whatever reserves it has left after the shutdowns of Kozloduy III and IV. The agency concludes that Belene, the stalled nuclear construction, is the only solution.

Belene is expected to proceed after a Russian firm, Atomstroyproject, owned by Gazprom, won a tender last week on the construction project. Yet the project has fierce critics. Ganev asserts that pessimistic projects of capacity are released in an effort to “shove the Belene project down people’s throats” and justify massive new state spending.

Kaschiev, the former nuclear regulator, calls Belene “irrelevant to the current situation” since the project may take seven or more years of preparation before it starts adding electricity to the grid. In the intervening period, other Balkan countries will launch new power plants. Romania is a key example; its Chernavoda nuclear power plant’s first reactor will launch operations in the first half of 2007.

Meanwhile, conspicuously absent in Bulgaria’s public debate over energy is a sober cost-benefit analysis of new domestic production versus future imports. If Kozloduy looks likely to retain the political focus through the end of 2006, the closure of its outmoded units can still offer an opportunity for fresh focus in the new year.

Ekaterina Petrova is project coordinator in BIRN Bulgaria. Balkan Insight is BIRN`s online publication.