Brussels' wish for a relatively rapid decommissioning of the coal-fired power plants of European Union Member States has the potential to create huge imbalances in Bulgaria's electricity system, writes Borislav Boev, a PhD student at D A Tsenov Academy of Economics.Borislav Boev
"Over the last few years. the EU has made significant efforts to develop energy transformation strategies. The underlying principle of these policies is to reduce the carbon intensity of the economy. The updated European Green Deal strategy of 16 September 2020 aims to reduce carbon emissions by 55% in 2030 compared to 1990 levels. The achievement of such an ambitious goal in such a short time will require a significant transformation of entire sectors of the economy.
Electricity generation, as a primary activity in the energy sector, is the main source not only of carbon dioxide, but also of far more harmful and dangerous to human health gases and substances such as sulphur dioxide, nitrogen oxides, fine dust particles, etc. Therefore, it is very important that electricity producers tackle this issue which poses an immediate danger to human health.
As a Member State of the EU, Bulgaria must adhere to the general strategy for development of the energy sector. However, Brussels' intentions for a relatively rapid decommissioning of coal-fired power plants has the potential to create huge imbalances in Bulgaria’s electricity system as the country now depends heavily on this type of electricity generation. Coal-fired power plants account for 45% of the country's electricity production and can rightfully be defined as a key factor for national security. Together with the Kozloduy nuclear power plant, which produces 35% of the country's electricity, these plants constitute the backbone of Bulgaria’s energy sector.
The transition from coal to cleaner sources in countries like Bulgaria must first and foremost be smooth and carefully planned. To maintain the stability of the electricity generation system (EGS), coal must be substituted with sources that are as similar as possible in terms of their technical, technological and economic characteristics. Thus, nuclear energy generation will play a major role in the process of energy transformation.
There are several opportunities for development of Bulgaria’s nuclear power generation sector:
First of all, the Belene NPP
The project for construction of a second nuclear power plant was initiated 40 years ago. Since then, it has been discontinued twice due to various organisational, managerial and economic problems. Bulgaria currently owns brand new nuclear island equipment (VVER-1000 reactors under the AES-92 project), and in the last two years the Bulgarian government has been trying to restart the procedure for selection of a strategic investor with whom to negotiate the construction of the plant.
The potential challenges associated with this procedure stem from the need for a new notification to the European Commission in the event of a change in the structure of the investment project in accordance with the Euratom Treaty. Moreover, a number of expired licenses must be renewed in accordance with national regulations.
The signing of a Memorandum of Understanding between the main candidates in the procedure for a strategic investor - Rosatom, Areva and General Electric - a few months ago is considered a positive market signal. However, it should be pointed out that the project has a long way to go because along with opportunities it faces a number of challenges as well. The economic crisis caused by COVID-19 further complicates the procedure and is likely to delay some important activities.
Secondly, units 7 and 8 of Kozloduy NPP
The construction of new units at the existing NPP in Kozloduy is another option that should not be neglected because it has the technical infrastructure to support the new facilities. The construction of new reactors on an existing site has obvious advantages in all aspects - technical, technological, financial, economic, administrative, and personnel qualification.
The existing grid connections and transmission capacity would reduce the cost of connecting the units to both the country's electricity grid and ENTSO-E, and will have a direct effect on the overall investment cost. Moreover, Kozloduy NPP has qualified staff and an established system for training and education of its employees. The NPP has its own on-site training centre and has already established a well-functioning partnership with leading secondary schools and higher educational institutions. These factors provide a number of competitive advantages for the project to construct units 7 and 8 at Kozloduy.
Thirdly, small modular reactors
Small modular reactors (SMRs) are an option that is still not very well-known in Bulgaria. However, the need for compact, standardised and portable reactors will grow, especially in markets with slower rates of growth in demand for electricity. The forthcoming decommissioning of coal-fired power plants naturally raises issues related to the construction of alternative generation capacities. SMRs can bridge this gap and at the same time meet the requirements for low emissions. Moreover, their standardised design and compact size lower the investment costs, thus making them not only attractive but also a feasible option for extending the life of the former coal-fired facilities.
SMRs can be built not only on the sites of the decommissioned coal-fired plants in the Maritza Iztok Complex. Such reactors can also be installed on existing sites both in Kozloduy and Belene. The benefits of using SMRs must be taken into account because in the future the energy systems will require more versatile and portable generation facilities.
Bulgaria will undoubtedly need new nuclear capacity in view of the forthcoming closure of its large coal-fired facilities. In the short run, a priority for the country is to extend the operation of units 5 and 6 of Kozloduy NPP, which, after a successful moderniaation programme, are technically operational for the next 30 years. In the medium and long run, however, the country needs to consider building additional capacities. According to its current energy plans, 2000 megawatts of nuclear power will be added after 2030, but it is still not clear where these facilities will be installed.
The potential challenges to building new nuclear capacities can be grouped as follows:
European challenges The unclear role of nuclear energy in the EU’s strategic energy documents is still baffling to potential investors and the Member States that rely on nuclear energy. The EU has set ambitious targets to reduce drastically its carbon footprint from electricity generation, but nuclear generation is not included in its development plans as a clean and sustainable source that can help the energy transition. The lack of support for the development of the sector at the pan-European level, and the adoption of stricter regulations, will jeopardise the implementation of plans for the construction of new nuclear facilities and would send a bad market signal to potential investors. That is why the EU needs to reconsider its nuclear energy policy because it has a key role in the development of cleaner electricity generation. In this respect Bulgaria must seek alliances with the EU Member States that openly support the development of nuclear energy.
National challenges These problems are mostly organisational and managerial in character and are related to policymakers’ lack of strategic thinking. Lack of management capacity and excessive red tape can also slow down the implementation of projects and, under certain conditions, be the main cause of their failure. This problem can be tackled by developing a national energy doctrine, which will put the development of nuclear energy at the heart of the upcoming energy transition in the country and the planned activities to be implemented, no matter what government is in power.
Traditionally, nuclear projects have a relatively long implementation period, which usually exceeds the mandate of one government. That is why the government officials responsible for the energy sector must not think only in the short term. The development of nuclear energy generation largely depends on the strategic management of this sector.
The EU's plans to reduce energy sector emissions seem overly ambitious as they require the transformation of rigid systems, which is a difficult goal to achieve in the short and medium term. However, the electricity sector emissions can only be reduced by expanding nuclear energy generation as one of the lowest-emission energy sources. Presently, nuclear power plants produce 40-50% of low-emission electricity across the EU, which is proof of their contribution to cleaner energy production.
Bulgaria, as a full member of the EU, can increase its contribution to the energy transformation by expanding its nuclear energy sector. However, implementation of these plans requires an increase in its energy management capacity and alliances with other Member States who share the same vision for Europe's nuclear future."