Deputy Minister Nikolov: Three companies will be able to build the new nuclear units of the Kozloduy NPP

The government's goal is for the price of the two blocks to be around 12 billion euros

Energy / Analysis / Interview , Bulgaria
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Deputy Minister Nikolov: Three companies will be able to build the new nuclear units of the Kozloduy NPP

For the construction of the seventh and eighth units of the Kozloduy NPP, Bulgaria will aim to achieve a price of around 6 billion euros per unit. This is what Deputy Minister of Energy Nikolay Nikolov said in an interview with BTA regarding the decision of the Council of Ministers on the construction of the blocks, which was confirmed by the National Assembly. In the recently published draft of Bulgaria's energy strategy, it is planned that block 7 will be put into operation in 2032, but no later than 2033, and block 8 - no later than 2035, said the Deputy Minister Nikolov. 

The nuclear technology that will be used is Westinghouse's "Westinghouse" - (AP) 1000. Potential builders have been narrowed down to three - "Bechtel Corporation", "Fluor" and "Hyundai", explained Deputy Minister Nikolov. One of the three companies will be the main builder. There will be multiple subcontractors. The state is expected to be the only investor in the project, it is clear from the statement of the deputy minister.

After their commissioning, Bulgaria should start thinking about the choice of technology and the construction of new nuclear power plants - those that will replace units 5 and 6 of the nuclear power plant. "Belene" site has its role, but in a longer-term perspective. In 2035 the technology selection process should start to be able to walk the path so that around 2040 it starts construction so that by 2050 we already have new nuclear power there and can to replace the decommissioned units 5 and 6 of the Kozloduy NPP. The idea is to have about 4 gigawatts of permanently operating nuclear power, said the Deputy Minister of Energy.

Here is the full interview:

- How much will the construction of units 7 and 8 of the Kozloduy NPP cost?

- Commercial negotiations are coming up, which we start literally at the beginning of the new year. These negotiations concern terms, numbers, prices, construction, stages, so for obvious reasons it is not good practice to go into specifics. Naturally, we strive to protect the Bulgarian interest as much as possible, given the fact that the state will be the only investor in the project. We believe that the state should be the owner of the plant. In this sense, our wish is that the project be realized on time and at the lowest possible price. What is currently seen as potential opportunities is around €6 billion per block, we are aiming for a price of €6 billion per block.

- What are the exact terms for the construction of the two blocks?

- We have already published a draft of Bulgaria's energy strategy. It is envisaged that the seventh unit will be commissioned in 2032, but no later than 2033, and the eighth unit will be commissioned no later than 2035.

- So far, about BGN 3 billion are the state guarantees for Unit 7 of the Kozloduy NPP. Energy Minister Rumen Radev clarified that this money is not a capital expenditure. What are they intended for? Can this amount be increased and by how much?

- There is already a decision of the National Assembly increasing the capital of the Kozloduy NPP by BGN 1.5 billion, which is different from the state guarantees. In addition, we have state guarantees, which are an opportunity to raise financial resources under favorable conditions in the amount of 1.5 billion euros or about 3 billion BGN. This implies possibilities for much more flexible financing in terms of collateral, interest rate, because the state-guaranteed loan means actually lower costs. The commercial risk is guaranteed by the state.

- Who will finance the construction of the two blocks?

- Always with large infrastructure projects, especially nuclear power plants, the financing is mixed - equity and borrowed resources. They are always in some ratio that is acceptable to financial institutions. Obviously, we are talking about huge global financial institutions here. It is here that the state guarantee will be of help in raising this borrowed resource.

- Won't a foreign investor participate in the construction of the two blocks?

- We do not think it is a good idea, and it is completely realistic for the state to implement the project. I see no need to attract a foreign investor.

- The two blocks are type AP 1000 (AP 1000) of "Westinghouse". But who will build them?

- Nuclear technology belongs to "Westinghouse". This is predetermined by a decision of the National Assembly. It is quite correct, because the AP 1000 technology is a very modern reactor with great flexibility and gives great possibilities to the power system. On the other hand, in terms of construction - "Westinghouse" does not build, the company is a supplier of technology. We will conduct a competitive procedure for the selection of a builder. The potencial builders are reduced to three. These are companies that firstly know the technology, secondly, they have experience in building a nuclear power plant - "Bechtel Corporation". "Fluor" and "Hyundai". These are the three companies with which Westinghouse has worldwide experience in the construction of nuclear power plants, and they will be invited. It is a matter of agreed conditions which of them will build. One of the three companies will be the main builder. There will also be multiple subcontractors. Hundreds of companies, even thousands in some cases, are involved in such a large-scale project. Our ambition is to give the maximum opportunity for Bulgarian business to participate to the extent that this is possible. This is one of the requirements we set for all three companies - everything that can be delivered or built by the Bulgarian business should be used.

- The process of issuing a permit for the use of a new type of RWFA nuclear fuel in Unit 5 of the Kozloduy NPP, produced by Westinghouse, has been delayed. The company must supply fresh nuclear fuel to the plant from 2024. What was the problem? Where did the delay come from?

- I wouldn't say there is a problem. Westinghouse should make the first delivery of fresh nuclear fuel for unit 5 of the Kozloduy NPP in April 2024. We have every assurance that this will happen. There was no licensing problem, rather there was a delay in two documents that have long been submitted for analysis. We now have every assurance that the documents that were handed over by Westinghouse are in their entirety. They are currently being analyzed by the Nuclear Regulatory Agency (NRA), which licenses the fuel. We have not heard of any licensing issues at this time. This fuel has been working with similar units in Ukraine for a long time, it is not something new. Some of the documents are related to the exploitation of fuel in Ukraine. There are no problems with him. This is an important clarification, because safety comes first in nuclear energy.

- Recently, it seems that Bulgaria imports electricity. How much electricity has our country imported this year, from which countries and at what price?

- The electricity system of Bulgaria is part of the electricity system of Europe - the so-called ENTSO-E. We are one. In this sense, there is a constant movement of electricity from one system to another. As a net result, we are exporters, but constantly at different times there are imports and exports. It is difficult to say the country of origin of the electricity because, due to the interconnectedness of the systems, we can say where we imported it, but not where it originated. For example from Romania, but that doesn't mean it was made there, it could have been made in a country neighboring Romania. Regarding the price, it is marketable. For specific numbers, if we talk - for the eleven months of 2023, the entire commercial import in Bulgaria is 7.6 million megawatt hours, while the entire export is 11 million megawatt hours. That is, we are a net exporter. Most of the imported electricity comes from Romania.

- What is the vision of the Ministry of Energy, which is included in Bulgaria's energy strategy?

- We strive for low-emission electricity production. That is why, in the draft energy strategy, we have set the two new units of the Kozloduy NPP as the foundation. In addition, the state has an idea to invest in two new HPP capacities - pumped-storage hydroelectric power plants, along with the rehabilitation of the HPP Chaira. I.e. after all, by 2035 we should have about 3,000 megawatts of pumped-storage hydropower plants that also offer energy storage - they're a huge battery. In addition, another 4,000 megawatts of nuclear power - the two existing and the two new units of the Kozloduy NPP. Thus, these 7,000 megawatts will be the backbone of the electricity system. In addition, we predict that in the coming decades, energy storage systems will have developed a lot and will occupy a significant place.

- In 2038, the coal-fired power plants from the Marishki basin will stop working. What is predicted to happen next?

- The market is gradually pushing out coal production for purely economic reasons. It is logical that it should be replaced by something. To this backbone, as I described it, "musculature" can be added - these are precisely the RES capacities. This backbone will enable us to connect 18,000-20,000 megawatts of renewables to it.

- The issue is that in winter the RES capacities are almost not working because the weather does not allow it.

- Exactly. So we say we have to have that backbone that holds the system. At the moment when the sun does not shine, the wind does not blow or the year is drier and we do not have the opportunity to use much water, it is this backbone of the system that must work and provide the necessary electricity.

- When blocks 5 and b of the Kozloduy NPP stop working, what will happen, because possibly only the new blocks 7 and 8 will remain? However, the site in Kozloduy will be full. In that case, will an option be considered for starting the construction of a nuclear power plant at the site in Belene?

- On block 5, the resource expires in 2047, and on block 6 - in 2051. Yes, in the draft energy strategy it is laid down that after 2035, Bulgaria must start thinking about the choice of technology and the construction of new nuclear power plants - those that will replace units 5 and 6 of the Kozloduy NPP. In this sense, Belene playground has its role, but in a more distant period. In 2035, the technology selection process should begin, this will enable the selection of the most appropriate and modern solutions at that time. So that around 2040, construction should begin and by 2050, we should already have new nuclear units at the site in Belene and be able to replace the decommissioning units 5 and 6 at "Kozloduy". The idea is to have about 4 gigawatts of continuously operating nuclear power.

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