Банкеръ Weekly



Ala Alizadeh, Regional Vice-President Business Development UK and Europe in the Canadian AECL company, to the BANKER weeklyMr. Alizadeh, in the recently announced report on the future effect that the Belene nuclear power plant will have on the environment, the Candu reactor produced by your company is not among the recommended modifications. How will you comment on that?- A few parts of that research have not been completed yet, in both technical and economic aspect. The official results have not been announced either. That's why we are not going to comment right now. I only want to underline that the Candu reactor type, which has been operating in Romania since 1986, passed all inspections of the European Union (EU) without any objections or recommendations. And the same cannot be said about the competing types of reactors. Besides, Candu has been licensed in five other countries and has proved to meet the world safety and ecology standards. I want to declare that our intentions to make an offer to the Bulgarian Government and the Ministry of Energy are extremely serious. And it will be a very good offer.How much will the construction and launching of a 700-megawatt Candu block cost and what will the price of the energy that it produces be?- We are now holding initial talks. Indeed, we presented our plans to both the energy and the finance ministries. We also gave an orientation price but as the process is going on, I think we should not mention concrete figures. Moreover, in order to make a complete offer we have to clearly know all requirements and conditions of the one who makes the order - in this case it's the National Electricity Company (NEC). No such definitions have been given yet. It is neither clear yet how the State will support the project .You mean that you are going to insist on receiving state guarantees and a long-term electricity purchase agreement?- Let's not comment on details now. I can only tell you that a large-scale project such as the construction of a nuclear power plant cannot be implemented without the State's support. As far as the long-term electricity purchase agreement is concerned, this is really one of the models. I am convinced, however, that our offer will be balanced and favourable and that the price of the electricity produced will be competitive.Won't you tell us the price at least?- Electricity producing capacities in Eastern Europe have been exploited for many years and the money put in their construction has already returned. That is why the end-price of the electricity produced does not include an investment component. On the other hand, the price of the current maintenance and operations of these plants is low. The situation will be quite different in the case of a new project. The funds invested in its implementation, including the bank loans, should be paid by the sold electricity. Moreover, for a reasonable period of time. Although the projects for new nuclear capacities are among the most expensive in the field of electricity, it can be said that plants with Candu reactors have quite competitive prices. In projects that we have implemented the value per kWh varies from USD0.04 to USD0.045, and according to the international practice these are acceptable levels.As to the Belene project, the lack of accurate requirements does not allow for citing concrete figures. I will repeat once again that before we define them we should know what type of project will be implemented, how many stages the plant construction will have, whether and what kind of assistance the State will provide. Only then we'll be able to make the final calculations of the price per kWh. Now I can just say that it will be about USD0.04 which is within the standard for Western Europe.But you are going to construct on a green field, i.e. you will start from zero. At the same time, the proposed Russian reactors will use the existing ground as well as part of the equipment delivered and paid. That will make their project cheaper.- No, their price will not be lower anyway. First of all it should be known that the completion of the WWER generator in Belene imposes the biggest possible project risk on Bulgaria. Moreover, the unit cannot be finished in the planned form. It needs very serious changes in the design and modification of the reactor. A great part of the equipment will most probably have to be replaced, too. We are not sure whether both the equipment and the ground already build in Belene can be used. We also realized that some of the delivered appliances have been divided in parts and that some of them have been used for the modernisation of the Kozlodoui N-plant. Besides, a great part of the equipment has been acquired 15 to 20 years ago. Since then standards have changed several times and the appliances need a very long revision that will establish which ones of them meet the new requirements. That's why we think that the risks, the value and the schedule for construction of the WWER generator in Belene cannot be estimated at this stage. Anyway, the price will not at all be low.What are the risks for the project if the Candu reactor is used?- I would not say that there are risks, but I will tell you the advantages. First of all, the modification that we propose for Bulgaria uses natural uranium as fuel. There are uranium reserves in your country and they are quite sufficient. Besides, the uranium does not need to be enriched and that procedure is both expensive and not quite safe. Therefore, Bulgaria (and its new nuclear plant) will be producing nuclear fuel at a much lower price. The publicly available information will convince everybody that the fuel for Candu reactors is three times cheaper than the fuel used for water-water reactors, while the uranium used is three times less. That lowers the value of the electricity produced considerably. However, the main advantage is that the own production of nuclear fuel increases Bulgaria's energy independence and that is important for any country around the world. Another advantage of the Candu reactors is also the fact that they were the first to use computer supervision technologies.If your offer is to be preferred, what period of time will you need to build the reactor?- In our offer we said 60 months in the course of which we have to finish the design, implement the orders and deliveries, the constructions, the launching of the powers and the training of the personnel. And since we know exactly how much time each of these phases take due to our most recent project in China, we are sure to be able to optimise this term.According to some analyses, there will be considerable electricity deficit in Southeastern Europe after 2007 - mainly in Greece, Italy, and Turkey. Can we suggest that your consortium which includes one of Italy's biggest energy companies intends to export electricity produced in Belene to third countries?- I think that the idea for exporting electricity is a very good one. It's certain that it will be included in our offer. Currently, Italy imports 17% of the electricity it needs and expects its needs to go up. The case with Enel is indicative - the Italians have serious plans for Bulgaria.When we consider direct investments as part of the financial project, companies such as Enel will obviously show interest in it. In fact, we have not yet started official talks with them, but when the project develops they will be among our potential partners.Finally, how will you overcome the attacks of ecological experts who worry about the danger of pollution?- Your ecological experts do not say anything generally different from the things said about any nuclear plant. In every country that has nuclear technology there are opponents against the nuclear energy. Therefore, I would not say that there is concrete opposition against Candu. Moreover, in the five countries where our reactors are operating we have no problems with the ecological experts.

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