Bogomil Manchev: Parliament’s decision on the equipment for Belene NPP means termination of the Belene project, but not to close the site

It will take at least 8 years for Ukraine to build a new nuclear unit, and they need electricity today, recalls the chairman of the Bulgarian Atomic Forum BULATOM

28 Sep 2023

Mr. Manchev, has anyone from the government and the Ministry of Energy consulted with the nuclear experts in Bulgaria on the vision for the development of the electricity sector in Bulgaria?

As representatives of Bulatom, we met with the Minister of Energy and presented the vision of our organization. Bulatom has used only official data from the Electricity System Operator. We don’t use data that we invent. We have settled on 2053. The caretaker government submitted this vision to the Energy Committee of the 48th National Assembly, but it did not reach the plenary. Intentionally or not, you can ask the politicians. As you can see, they’re making up some kind of topic to kill their time. For the past three months, what major issue have they resolved? None.

The minister supported this vision. But it must be supported by the political class, by the representatives of the parliament and be “clothed” in a “vision for energy development”. It’s not just about nuclear energy. We put nuclear energy at the base of basic energy and build on it everything that needs to be done: electricity production from renewable energy sources (water, sun, wind, biomass) and last but not least – steam-gas plants to work with natural gas , mixed with hydrogen. This is a mandatory condition after 2050, in order to reduce harmful emissions to below 200 kg/co2 per MWh of energy. At least, because for the construction of one unit of a steam-gas power plant, At least, because for the construction of one unit of a steam-gas power plant, for example, it takes between 6 and 8 years – from permits, emission part to its start-up. This is what is required, but only if we want such a development.

What happens to the Belene project? The Energy Commission asked the government to negotiate the sale of Belene’s equipment?

The National Assembly cannot oblige, but to recommend to the government to hold, the energy minister to hold negotiations, but this cannot be achieved at any cost. It can recommend, as was the decision taken: the government to conduct negotiations and, if an adequate agreement is reached, with the one who wants to receive it, to reach a sale. This does not mean that there will be a sale or that there will not be a sale. That is, a function has been assigned, it is the duty of the government what to do.

How do you assess everything that happened?

The only thing the National Assembly has done is to show misunderstanding from trade negotiations. On the table is put equipment that costs about 700m euros. euro.
We were sentenced for 610 million euros, but we had paid 90 million in advance. I am not convinced that these 610 million euros included the advance. In my opinion, the sentencing procedure for this is for 610 million euros. Because if it wasn’t so, and the supplier had accounted for the advance, we would have had to pay 520 million euros. Right?

And we paid 610 million euros. Is it true? Did we pay 90 million euros in December 2008 (advance payment) according to Appendix 5 to the Agreement between Atomtroexport and NEK with the two annexes with the specification, what equipment should be started to be produced. That’s a fact. And every time I listen to some political figures and some energy experts from the college, who are incomprehensible. But didn’t we pay an advance of 90 million euros?

However, if this equipment is to be implemented as a project at the Kozloduy site, a new project must be made. It must be redone through the master designer.

Let’s clarify. Can we sell the equipment for Belene NPP?

We can sell the equipment because it’s ours. However, we are not responsible for the equipment when it is implemented on site, beyond what is specified in the project with a different EPC contractor. If the Ukrainians have decided to assemble something like “whatever happens”, this is a very interesting nuclear game. Right? We’ll build a plant if it’s going to work. We don’t know what’s going to happen here.

Should the manufacturer of the equipment be asked for consent?

No, you don’t have to ask. However, when a country buys it from us, we should not be required to carry a guarantee for the equipment in the appropriate sense of the Nuclear Damage Act, which is under the Vienna Convention. And then this nuclear damage is carried by their EPC contractor (EPC stands for Engineering Procurement Construction). The EPC contractor is called Atomstroyexport under the official agreement, which was also prepared under the EPC contract. Accordingly, this company, through internal channels, redistributes it to the chief designer, chief designer, scientific supervisor. This is the responsibility of the EPC contractor. We, having decided that we will not do this project with Russia and want to do it with France, then the French will be responsible for the requirement of a turbine, the fuel that will supply us, all the systems that will manage, but cannot be responsible for the equipment supplied. And that responsibility would fall on us. If you get a defect, a physical defect – a crack, a hollow, it will be at our expense. We won’t even be able to claim OKB Hydropress. OKB Hydropress is the main designer, but he has not made it. It was built by the Izhor Factory.

This is the main problem of this business – responsibility.

How should we understand the results of the tender for the assessment of equipment for the Belene NPP?

I don’t have any information about the auction. He was completely opaque. They didn’t even report the companies that participated.

Isn’t the assessment too fast? Was it done in two weeks?

Someone had to announce that there was an auction. For example, there had to be a procedure. We do not even know with what references this evaluator was selected. And that raises menu questions.

The initial information was about the use of the equipment for the Khmelnitsko NPP?

The Khmelnitsko NPP has a third unit erected as a structure, but I think it should be destroyed one hundred percent. Because from an elevation of minus 4.2 m to ground zero, the block has been underwater for 30 years. This is a decision of the Ukrainian nuclear operator, which owns nuclear power plants, and Ukrainian designers. They have to take responsibility. We told them that it was easier to destroy it because it would cost 30-40m euros. the construction of such a block is 5-6 billion. Euro budget price (final price). It can still be the second generation as all equipment can be produced in the Czech Republic.

So the claim that we will give the Ukrainians the equipment from Belene is a bit of a strange leitmotif.

Let’s assume that today we have given them all the equipment, that is, in 8 years maybe the Khmelnitsky Block will work. But we say that they today do not have electricity, and not in 8 years. That’s quite a while.

It is important to note that the third generation of reactors differs significantly from the second generation as a package. And it is not clear to me exactly how this equipment will enter the building of the block precisely because of its different composition.

Why Ukrainians can use Russian equipment without having a project to make a plant. Why can’t we?

Did Bulgaria try to sell the equipment to Iran?

I was at the negotiations at the time. The equipment was going one-to-one, but the supplier who sold the equipment to ensure quality wanted a hefty percentage of the amount. I have reported this to our government. The Iranians had no problem buying it. The equipment was one-to-one for their third and fourth units of the Bushehr nuclear power plant.

What happened before the pandemic tender for the construction of Belene NPP? Is it still valid?

After hiding behind the pandemic problem, the required “information room” was never created. As for the tender, at least I do not know that it is suspended, because again by decision of the National Assembly it was assigned to the government. It announced a procedure that hangs and is in place, including in a newspaper in Brussels announcing such large contracts. Because this is a large public procurement under the PPA. A desire to participate was announced by three companies – Chinese, Korean and Russian.

In my opinion, apart from Russia, the country that can build a headquarters in Belene is China. They have built 4 such blocks and are now making another 4 similar 1200 MW each. Their composition is just like the Belene company.

How would you comment on the words of Prime Minister Denkov that there are no investors for Belene NPP and therefore it will not be built, which is why we sell the equipment?

This is, as they say, to put it mildly, false. In order to see if there are investors, it should be said – “the procedure is alive, I invite you to submit proposals for the implementation of the Belene project.” This should be said to those three candidates who have already appeared. And since Rosatom has no ban, it may come with a proposal for investment.

Strange things are said. And who is the investor for Units 7 and 8 of Kozloduy NPP? What’s his name?

What is the procedure for a new block at the Kozloduy site?

There is a procedure for one block under the so-called “conceptual design” between the companies “New Builds” and “Westinghouse”. With the idea of becoming two blocks later.

The first option is for the 7th block, the second – for the 7th and 8th blocks. For this agreement to happen, it must be by interstate compact. In order to have such a contract, there must be a notification from Brussels. This agreement is presented to the two countries – the United States and Bulgaria. Each shall submit this notified agreement to its Parliament. In the United States, it must be approved by the Senate, in Bulgaria – by the National Assembly. Once approved, this agreement becomes an interstate compact. Thus, under this interstate contract, an investor was practically selected, and there is no need to make an auction. The contract is between two countries, in compliance with all conditions of Brussels – not to take money from Kozloduy NPP for the implementation of the project. This, for example, can be done through loans from BEH or other institutions. Because if the company that will build receives a loan from the NPP, state aid will be conducted. And this is forbidden under the rules of European aid. The procedure is similar to that for the Hungarian NPP Paks 2.

But for us, Westinghouse is not an investor. Wesitnghaus has technology and is yet to choose an EPC contractor.

Therefore, a construction must be made: who will be an EWC contractor, will there be someone to be responsible for everything, for the whole process? If there is no one to be responsible for everything and there is a fuzzy concept of responsibility, it is extremely dangerous for the state both as money and as time. A contract can be completed in the agreed amount, but it can also be very expensive above the price if the structuring of the project is not agreed precisely.

So, with the same force, it should be asked Prime Minister Denkov, who will finance Unit 7 of Kozloduy NPP? If on one side the state is the owner of the project, why not the other project is the owner? The state may say that it reserves some percentage at which to control the process, or that it will look for a partner in some percentage of ownership interest.

Now who is a partner in the 7th block? There isn’t one.

Won’t the so-called evaluation of Belene’s equipment affect the price an investor would pay if found?

The investor comes and makes his own assessment. He says, for example: this plant, with what you have spent so far, plus what I will spend means that the budget price becomes such. The investor will appreciate what is given – the signed contract, the money spent on the architect engineer, the connection on the site, the conservation of equipment, etc. All this will be appreciated, with specifically the money for the architect-engineer being removed, because the owner has developed some kind of program, but has stopped and this money can not be in the budget. This is a cost of the company, but does not make the equipment more expensive. As long as the project has a price, because this investor has to keep it. None other than this project, which stands in the Nuclear Regulatory Agency for approval. Then this project is capitalized.

You need to use this equipment and capitalize on it. This site is used and you will – will not, you need to capitalize on it. All costs incurred in storing the equipment are added to the cost of this equipment and it is capitalized. Only the costs incurred for salaries and maintenance, for security of the site of Belene enterprise, this will not be recognized by the investor.

Is Belene in a stagnant stage?

Belene as a project is in the stage of completion. But the biggest plus is that we have a licensed nuclear site for 2000 MW. Tomorrow someone may want to build capacity for 2400 MW if he holds two units of 1200 MW, but will have to license it. Some changes may be made at the current site, but then a new EIA should be made and the Romanians should be asked and the new project notified in Brussels.

Has it come to a breakdown of relations with Framatom because of Belene?

Not. It’s just that the French may be more assertive about taking action to make a feasibility study on the usability of the site with their 1,200 MW reactors. They should make one option with the current equipment. Most likely, given the actions taken, however, they will wait to see what will happen.

And it had to be just the opposite – to conclude an agreement with EDF, to make the feasibility study and to deposit it with NEK due to a contract. Based on their analyses, whether the Belene project can be completed 100% with France, without the participation of Russia, and 100% to implement French blocs, the government should decide. It may decide not to carry out such a procedure, but another. For example, compete three countries for technology choices – South Korea, France and the United States. And this is permissible. This had to be done after the analysis of the site, which had and should be done and which has a term of 9 months. It was so long predicted that EDF would need to make the feasibility study for the equipment and two new units of 1200 MW.

However, in 1 month we managed to evaluate everything!

That is, if I can draw a conclusion: for 1 month, under the pressure of Parliament, a decision was made to close the Belene project?

To terminate the Belene project. Not to close the playground. These are two different things. And that should be clear.

That is, the Belene project in its current version?

Yes, in its current version. Although it is mostly French – both the control systems and the turbine of the project are French, even the fuel can be French.

Is it possible to have the 8th unit of Kozloduy NPP, because everyone says: “It is important for us to have two units of Kozloduy?” However, we heard the presentation of the head of Kozloduy New Builds NPP at the Bulatom forum, which alarmed that “Unit 8 is on the edge”. What does it mean?

The seventh block is also on the edge because part of the land is on private individuals and they have filed objections. Earth is a problem, but it is very important to build two blocks, not one.

Is there a need for a new infrastructure?

The new two blocks will require brand new infrastructure. That some explain that there is no need for such is nonsense. The infrastructure of Kozloduy NPP began to be built in 1969. It’s 64 years later. When another 15 years are added, during which the blocks will be built, it becomes 80 years. The life of the new blocks for another 60 years should also be considered. How can you rely on outdated infrastructure? A new one has to be built.

Do you expect the moods of the political class towards Belene to change to some extent so as to boost the project?

Yes, I expect there to be some change for Belene, but I am only talking about the playground, because here and there appears someone who “instills” that we do not make a program for 3 days but for 30 years. It is obvious that in order to solve the issue of the Green Deal, transport, electric cars, hydrogen production, we need to be ready with an answer for the future.

Notice, we for 30 years ahead do not strive to increase production for consumption compared to what it is today, but to increase its efficiency. Otherwise, we go back. The aim is to double production. Because a lot of it will go to hydrogen production. We must produce hydrogen, which is largely mixed with natural gas otherwise we have no right to burn it, to use it as a raw material. Plus to have electricity to charge electric cars. Currently, we export about 10 million euros from our energy system. MWh. Probably $10 million. MWh won’t be enough for electric cars by 2053. We accept that we consume so much and we will export so much. So we’re gonna need more electricity. Otherwise, after 2025, where will electricity for electric cars come from?

Another issue is that for Bulgaria the only big plus, but of course, a minus of the state is that the people are very poor. They can’t get electric cars as quickly as they did in Norway and Sweden. People are able to do it and they are related to the environment. They bought electric cars, but the electricity systems “squatted”. Accordingly, their sale was limited because the systems cannot provide energy for cars. Energy systems cannot evolve at the rate at which electric cars are bought.

But where will we ensure the production of electricity in Bulgaria when we will have to limit the TPPs?

Nothing will be limited. You will buy very expensive electricity. There is no place to import electricity. Coal will be burned, but huge prices will be paid for emissions if we do not start building new nuclear power plants to replace basic coal plants. And to increase at least twice the capacity of the electricity grid.

Yes, but again the Prime Minister said that electricity prices for people will not increase. Of course, EWRC came up with the exact opposite forecast – a sharp jump?

And how many times have I explained that the current should be increased 3 times. I don’t remember anyone but me saying that in the last 10 years. This should be done in a long time, not for a year.

Look at the regulated market so far, 4m euros have been charged. MWh per year from Kozloduy NPP, to be sold at BGN 59 / MWh to the public provider NEK. And he sells it at a regulated price to the electricity distribution companies. With the liberalization of the market, there will no longer be a Public Provider and Kozloduy NPP will no longer supply electricity to the market at this price.

It goes to the market price – 100, 200, 80 euros / MWh…. What should a network operator like Electrohold or Energo Pro do? How do I deliver electricity at another price?

The fact is that the issue of several hundred thousand families who are energy poor must be resolved once a definition of this has been defined. And to decide at the government level how they will be helped.

What should happen in the Bulgarian energy sector, and in particular in the nuclear energy, so that things happen and get back on track?

We need an energy vision. A plan to be prepared with the participation of all stakeholders – industry, renewables, nuclear energy, TPP, ESO, major hydropower producers, etc. The one that has already been made and submitted to the National Assembly can be an extremely good basis to develop further, because it has a good balance of the way of production that corresponds to the path we have taken to implement the Green Deal. It is precisely such a vision that needs to be developed and said: Here, this is the way. And on this path it is decided what will replace 20 million. MWh of of coal coal plants. Otherwise, the question is: in 2038 we will close them, but what will we do in 2039? For energy, this is not too long. They say that we will build steam-gas plants, but natural gas is highly susceptible to fluctuations in the market, and it is not a sure supplier of energy to people. RES also – they are highly dependent on nature. You should also not confuse price and security of delivery.

Source: 3E news