Bogomil Manchev: Belene NPP will cost BGN 10 billion, the state will recoup its investment in less than 10 years
The cost of electricity from the Second Nuclear Power Plant will be 23 euros per megawatt hour, says the chairman of "Bulatom"
Source: 3eNews, archive
Despite the changes in prices, the construction of the Belene NPP will cost about BGN 10 billion, because the main equipment for the plant has been purchased. This was said in an interview with BTA by the chairman of "Bulatom" Bogomil Manchev. He said if the equipment had been bought now, the nuclear power plant would have cost twice as much. He noted that copper is still more expensive at the moment. In every power plant that produces electricity, about 25 percent are cables and rotating mechanisms, and there is a lot of copper. Therefore, it is possible to increase the price a little more than these 10 billion levs, but not much.
Regarding the cost of the construction of Units 7 and 8 of Kozloduy NPP, nothing concrete can be said, because the process has not yet begun. The site of Unit 7 is completely new to the European community. Everything has to start all over again. The Belene NPP project cannot be adapted for Unit 7. It can't happen because it's another site. Manchev pointed out that the infrastructure there is completely different from that of Belene.
According to the chairman of Bulatom, it is right to start building the Belene NPP immediately. The project must be financed through a state guarantee - export-oriented. It is given to the Belene NPP trade company, which in turn gives the money to the respective creditor.
It is expected that the price of the so-called basic energy will increase very sharply. If four months ago it was about 60 euros, now it is about 80-90 euros, said Manchev. The protective price for the return of the money from Belene NPP at BGN 10 billion budget for the plant was 12 years. That is why they wanted a 25-year loan, an 8-year grace period and the plant to work for the state for 35 years after it was repaid. Now this payback period will be reduced to less than 10 years. "This is a unique job. It will work for the profit of the state for almost 50 years. The two nuclear units of the Belene NPP will produce 1 billion megawatt-hours of electricity in their 60 years of life," Manchev added.
The chairman of Bulatom believes that the problem with the construction of the Belene NPP is political. Some say there will be a lot of influence from Russia. However, the turbine is owned by General Electric, although it is French. In addition, Franatom will build electronics at the plant. An agreement will be signed with Westinghouse that after the fifth year of commercial operation, the American company will compete to supply fuel. "What exactly is Russian that I don't understand," Manchev asked. He explained that the future prime minister must explain this in the parliament, which in turn will not only support the current government, but MPs will support three or four governments ahead.
In the same way, the 7th and 8th units of Kozloduy NPP can and should be built. For this project, the new facilities must be allocated to a new company, because otherwise it is prohibited. The company must be independent. The Bulgarian Energy Holding / BEH / as a parent company supports it so that it can find a loan. 30 percent is required to be equity. Tenders will have to be made to choose the technology. Manchev said that is why BEH was created - so that there is no direct state aid. Kozloduy NPP itself cannot build Units 7 and 8. The reason is that the money of Kozloduy NPP belongs to the state. If this money is spent directly on the construction of the two blocks, it is state aid. Kozloduy NPP is a 100 percent state-owned company and all the money earned is a state dividend. However, the state can give a guarantee. The same needs to be done for the construction of Belene NPP.
Bogomil Manchev believes that the state has the money to build the Belene NPP. State guarantee - export-oriented, will be given in favor of the company. Subsequently, it will return the money, not the state through the budget. In addition, the electricity that will be produced by the Belene NPP will not be expensive. The protective price, which is a commercial sale price of 60 euros, includes those 37 euros "above", which will be used as cash flow to repay loans to banks. However, once the plant is put into commercial operation, tax payments on these 37 euros will be reduced due to the depreciation that is charged. Therefore, for the first 10 years the company will not pay loans to the state, but will pay the loan it will service. There will also be money left. This will happen provided that 30% is equity and 70% is attracted. Usually the equity is always with the length of the loan that is taken.
Bulatom's proposal is for the equity to be for 30 years. During the time the plant will be open, he will return three and a half times. Separately, the plant will make a huge profit. Manchev gave the example that 1 billion megawatt-hours in 60 years, even if 100 euros per megawatt-hour is considered, are 100 billion euros. With everything that is happening now, the weighted average price for 60 years cannot be less than 100 euros per megawatt-hour. In addition, the cost of electricity to be produced by the Belene NPP will be 23 euros per megawatt-hour, Manchev said. To date, almost nothing has changed, only the revenue side is increasing, said the chairman of "Bulatom".