Energy policy - of everything and more

By Kaloyan Staykov, IME

If until recently experts claimed that the government was pursuing a disoriented and unprincipled energy policy, then last week the government definitely outdid itself. Provided that it continues to swear in the bright future of the Marishki  basin and keeping the production of electricity from coal and insists that there is no way to abandon the Belene project, to all this is added the construction of the 7th unit in Kozloduy NPP. The situation increasingly resembles Alice in Wonderland, who asks a cat which way to go, and the cat answers her with a question - where she wants to go. It doesn't matter, she replies. Since it doesn't matter, it doesn't matter where you go, the cat tells her. The difference is that Alice ultimately chooses one of the paths, while with their current energy policy, the rulers are taking all possible paths.

The project for Unit 7 at Kozloduy NPP is proposed as an alternative to the terminated procedure for construction of Belene NPP in 2012. The same year a new company was established - Kozloduy NPP - New Capacities, begins the pre-project stage of the construction of a new block, and in 2014 a shareholder agreement was signed with the selected builder - the American "Westinghouse". A year later, the new government informally abandoned the project, but work on it was not terminated, and in 2019 a five-member panel of the Supreme Administrative Court finally confirmed the issued environmental impact assessment (EIA). Earlier this year, the Nuclear Regulatory Agency approved site 2 of the Kozloduy NPP for the construction of a new facility. At its regular meeting on October 14, the Council of Ministers instructed the Minister of Energy to take the necessary actions and allow Bulgarian Energy Holding EAD to enter into negotiations with companies from the United States developing new nuclear technologies for civilian purposes. , including small modular reactors, in order to study the possibilities for construction of a new nuclear power plant on site № 2 at Kozloduy NPP.

So far so good, said the one falling from the eighteenth floor, passing the tenth. The first obvious problem with the decision is that the negotiations will be with companies "developing new nuclear technologies for civilian purposes", such as EIA and site approval is for a specific technology - a pressurized water reactor with a nominal capacity of 1000 MW, such as reactors delivered to Belene (WWER-1000) or AP1000 of Westinghouse, as already installed in China. Anything other than the technology in question for the approval of the site and the prepared EIA, in practice, means starting a new project, and this may take another eight years of administrative work.

The next important question is whether Unit 7 at Kozloduy and Belene NPP will be built in parallel. If not, does this mean that one of the already delivered Belene reactors will be used, what does this mean for the licensing procedure and is the company with which negotiations will be held aware of this? If so, will a company be sought to supply a reactor with the specifications set out in this licensing procedure, or will all possible technologies be considered, which would mean launching an entirely new project, losing eight years and a bunch of funds under the current one?

The last issue is also important from the point of view of the overall energy policy and the plans of the governments, enshrined in the Integrated Energy and Climate Plan of the Republic of Bulgaria 2021 - 2030 and the Strategy for Sustainable Energy Development of the Republic of Bulgaria until 2030 with a horizon of 2050. Both documents envisage "including the production of nuclear energy from new nuclear power in the national energy mix after 2030" by building two units with a capacity of 1000 MW. This somewhat answers one of the above questions - the government seems to be considering installing one of the Belene reactors at Kozloduy, but this is in stark contrast to the mandate to build Belene, which provides for the use of available equipment. The whole argument for reviving Belene is based on the fact that two reactors have already been purchased, which have nothing to do, so it is best to build a whole plant for them, and now the story is changing.

Added to all this is the overall uncertainty about the future of coal-fired power plants after 2025, when stricter CO2 emission requirements come into force and emission allowance prices are expected to continue to rise, making power plants uncompetitive.  The government insists that coal production will be maintained, as it is key to the country's energy security, but the integrated plan envisions a gradual reduction in primary energy production from solid fuels from 46.4% in 2020 to 19.3% in 2035 and 2.5% in 2040. Replacement capacities should be nuclear as their production increases from 33.3% in 2020 to 53.8% in 2035 and 69.5% in 2040. The downside is that "flexible" capacities, which can change production quickly, are being replaced by base capacities whose maneuverability is relatively limited.

This is important both for the Energy System Operator, which needs suppliers of the so-called additional services for balancing the electricity network, as well as for the consumption in the country, which is characterized by large amplitudes - both during the day and during the year. For example, the highest maximum load of the network is in the winter and in 2019 it was 7111 MW, and the highest minimum load is 5145 MW. In other words, during a winter day, consumption varies by about 2,000 MW, and this change cannot be absorbed by the Belene reactors. The situation is even more complicated by adding seasonal changes - the lowest peak load is 3864 MW in the spring and the lowest minimum load is 2660 MW. In other words, whole units will have to be excluded between the seasons, as consumption is low, and to this is added the increased production of renewable energy plants.

All this is happening against the background of the construction of new nuclear power plants in Turkey, Hungary, the Czech Republic and Romania, which means that export opportunities in the next 20 years will be relatively modest, and this makes it pointless to build power plants that are deprived of the opportunity for flexible production. It is in this direction that the efforts of the government should be directed - building base capacities only as a replacement for those that go out of operation. Such are, for example, Units 5 and 6 of Kozloduy NPP, but their potential operating horizon is until about 2045. The flexible capacities are mainly HPPs, gas-fired power plants and to some extent RES, whose role may be strengthened in the next years, depending on the technological advance and the advent of electricity storage technology.

The new technologies also include NPPs - these are the small modular reactors that are able to change their production quickly and can meet the needs of Bulgarian consumption. However, this again depends on technological progress, political will and administrative time for licensing procedures. Until then, the government's focus should be on water supplies for electricity generation, dam repairs, water loss reduction and, in general, everything in the water sector that we have been reading about in the media for more than 12 months. Natural gas can be used as a transitional fuel, but for this purpose it is necessary to create at least an adequate business and investment environment, instead of constant political attacks on private companies in the sector, while the abuses of state ones go unnoticed.