N U C L E A R  E N E R G Y

A nuclear renaissance

AS THE PAKS NUCLEAR POWER PLANT reaches middle age, Hungary's energy officials are considering more nuclear reactors. "These reactors will be built sooner or later,"says Dr. Zoltan Szatmary, director of the Institute of Nuclear Technology at the Technical University of Budapest.


The message that appeared on the computer screen came through loud and clear. ACTION ALERT: BULGARIAN NUCLEAR POWER PLANT BELENE. Environmentalists in Bulgaria urged readers to send faxes of protest to Bulgarian decisionmakers trying to push an energy strategy through Parliament that relies largely on nuclear reactors. This is not the only indication that Bulgarian energy officials are courting nuclear power as the answer to their country's worsening energy problems. In February, they signed a protocol for nuclear energy cooperation with Russia, a move that will help the energy committee fulfill its plan to modernize the six reactors at Kozloduy and complete the unfinished plant at Belene. They also recently re-opened reactor number one at the increasingly unsafe Kozloduy nuclear power station to meet very high peak demands during the cold winter months.

Despite safer and more affordable alternatives, nuclear power may be seeing a hot new renaissance in Central and Eastern Europe (CEE) over the coming years. Hungary is considering a proposal to line the Danube with more reactors, and Romania is close to putting the first of its five Canadian-designed Candu reactors on-line - more than twelve years after the problem-plagued project was started. The story is similar in Slovakia and the Czech Republic, where governments are trying desperately to finish Soviet-designed power plants with foreign assistance.

Some environmental experts aren't at all concerned. "This is a dying industry worldwide. No new projects are being started in Central and Eastern Europe, and plans to complete existing plantsÐthose are just pipe dreams. Temelin (in the Czech Republic) may be the best bet, but I don't even think that will be finished," says Christopher Flavin, senior researcher at the Worldwatch Institute in Washington, D.C.

WORKERS INSTALL COMPONENTS at reactor number five at Kozluduy, one of the world's most dangerous nuclear power plants.


While Worldwatch's figures back up Flavin's claimÐworldwide, there were 10 fewer nuclear plants in 1992 than there were in 1989Ðand despite a number of convincing arguments against nuclear powerÐranging from safety to waste disposal to economicsÐearly indicators suggest that some CEE governments are considering uranium as the fuel of the future.

"After Asia, Central and Eastern Europe is the region where nuclear power seems most likely to re-emerge," says David Kyd, spokesperson for the International Atomic Energy Association. "Because of the economic downturn, there was no need to expand energy production because demand was way down. But there will be an increase in demand over the next ten years and, alongside that, a need for new generating capacity. They've got five years to milk what they've got, and then they must decide on the future." The real question is whether there is really any need for boosting generating capacity at all. True, strengthening economies and increased consumer use have prompted experts to forecast energy shortages in CEE by the year 2000. But most countries could easily make up the shortfall by investing in increased efficiency, both by energy producers and end-users. Bulgaria wants to build more reactors, despite the fact that the country's installed generating capacity of 12,000 MW cannot meet winter's 7,000 MW peak consumption. Romania can barely meet its 8,000 MW consumption level even though it already has an electrical generating capacity of 18,000 MW. Rather than improve production efficiency, Romanian officials have chosen to build five nuclear reactors to remedy electricity shortfalls. This inefficiency characterizes most CEE countries, where energy intensities are two to four times higher than in the West.

Not surprisingly, a report on energy issues in the Danubian countries of Central and Eastern Europe, completed by Equipe Cousteau and International Consulting on Energy, under contract to the EBRD, states that overcapacity is a considerable burden because it is risky, polluting and expensive. To alleviate this hardship and "reduce consumption levels while raising service quality, use of electricity must become the number one priority of energy policy in these countries." Energy efficiency, in other words, could bring intensity levels down, vaporizing the need for new nuclear power plants.

There is no question that long-term energy policy is an important economic and environmental issue, especially for those CEE governments that rely so heavily on nuclear reactors for electricity. Presently, six countries in Central and Eastern Europe, and many more in the former-Soviet Union, still rely heavily on aging, Soviet-designed reactors as important sources of energy. The Chernobyl-type nuclear power plant at Ignalina, in Lithuania, provides more than 70 percent of the country's electricity. The reactor the Bulgarians recently restarted is a 21-year old VVER-440; the one beside it is just a year younger. Despite their antiquity, the whole complex at Kozloduy provides over 40 percent of Bulgaria's electricity. Slovakia and Slovenia rely on uranium-inspired electricity to satisfy almost 40 percent of their needs. In Hungary, Paks supplies closer to 50 percent of the country's electricity. Now Romania, with its grand plans for a pentium of Candu reactors at Cernavoda, will bump the number of nuclear-powered CEE countries to seven.

Many post-transition governments in the region are convinced that nuclear power is the best way to satisfy their electricity needs, especially when many of these countries have already invested hundreds of millions of dollars in half-finished reactors that are sitting idle. The pro-nuclear lobby argues that nuclear power is cheaper, safer and less polluting than any other method of power generation. "I'm personally convinced nuclear power is the cheapest way for these countries to generate electricity," says Tibor Laczai Szabo, Hungarian representative for Ontario Hydro International.

ALTHOUGH PUBLIC OPINION is generally against nuclear power, some CEE governments are seriously considering nuclear as an energy option.


Others would disagree All but one of the reactors currently on-line are of Soviet design, and most of those are either first or second generation VVER-440s, designed in the seventies and built throughout the Eastern Bloc during the eighties. All have been branded "unsafe" and are becoming increasingly so as they get older. Report after report and expert after expert have condemned them as potentially dangerous, and have recommended that they be shut down as soon as possible. "They would be unlicensable in the West," says Kyd.

No matter what type of reactor is used, there is also the "little" matter of what to do with high-level nuclear waste, an issue that has always left pro-nuclear technocrats dumbfounded. And for good reason: no one has devised a "suitable" method for disposing of highly radioactive spent fuel. Bulgaria, Hungary, Lithuania and the Czech and Slovak republics all got around this issue by shuffling their spent fuel rods off to the Soviet Union.

Since 1990, these countries have had to renegotiate these deals, and Russia still grudgingly accepts the radioactive waste CEE's reactors produce. Although the agreements were meant to last for the plants' lifetimes, they are tenuous affairs that must be renegotiated on a load-by-load basis. "There is no guarantee,"says Laczai Szabo. "The Russians could just say no at any time."

In order to rid itself of its dependence on Russia, Hungary has started construction on a temporary storage facility for high-level waste at Paks. A more permanent burial site is being considered at Mecsek, near Pecs, not only to bury unwanted waste but to assist with the complex task of decommissioning Paks.

Originally conceived of as a cheap, pollution-free method of producing electricity, the nuclear industry has also taken a beating recently on the financial front. Massive cost overruns at Cernavoda in Romania and Temelin in the Czech Republic indicate that construction and upgrade costs often exceed too-conservative estimates, rendering least-cost labels inaccurate. A report issued by Battelle and the U.S. Department of Energy indicates that the least-cost analysis for the completion of Mochovce in Slovakia "is not a least cost plan" at all, and points to "demand side options as a lower-cost alternative to reduce the need for reactors."

Several recent studies have indicated that once environmental costs, and the costs of decommissioning plants and managing high-level waste for centuries, have been factored into the equation, nuclear power ceases to be the least-cost option. According to the Worldwatch Institute, new nuclear plants in the United States produce electricity for more than 12 cents/kilowatt-hour, while natural gas plants come in at around 6-8 cents, and efficiency improvements cost even less at 2-6 cents/kilowatt-hour saved.

MAKING COAL-FIRED POWER plants more efficient and less polluting would make NPPs unnecessary.


Because nuclear power plants require huge initial capital investments, financing new plants out-of-pocket is simply not a viable option for CEE countries. Most are already burdened with heavy debt loads. The large loan guarantees necessary to secure funding for nuclear power plant construction, like those necessary for completing Mochovce, mean less funding for projects in other sectors.

Although the Bulgarians are claiming they can complete the Belene plant for about USD 1,300/MW, experience indicates the actual costs of constructing new nuclear power plants range from USD 2,000/MW and up, about three times the cost of comparable thermal plants.

The only nuclear option is to use Western financing to build more reactors than are actually needed, and to export the excess energy to Western Europe for the plants' lifetimes, an option that most nuclear-powered countries in CEE have either adopted or are seriously considering. This makes CEE countries into nuclear proxies, leaving them to deal with the excessive costs - and risks - of operating nuclear power plants, while countries that have chosen not to use nuclear power for safety and financial reasons, like Austria, benefit from inexpensive energy imports.

Untenable economics should be the final nail in the nuclear coffin, but it may well be the very thing that is keeping older plants open. The average lifetime of a nuclear power plant is 25 years, and most plants operating in CEE are 10 to 20 years old. At this late stage in their lives, after building costs have been recovered and loans paid off, nuclear power plants are finally generating affordable electricity: "They are now producing cheap electricity because they have been amortized so long. Governments are reluctant to shut them down," says Kyd. "Nobody will decommission a nuclear power plant after 25 years," says Ontario Hydro's Laczai Szabo. But as the years mount, so do concerns about safety. And the question remains: At what cost?

The costs and risks associated with nuclear power are especially unattractive when one considers the alternatives. Ironically, the best least-cost option has nothing to do with supply, but with curbing demand. Energy efficiency, both by energy producers and end-users, has been identified as the cheapest method of meeting energy needs, especially in CEE where heavy, energy-intensive industries and cheap energy prices have removed any incentive to conserve energy. Some estimates suggest that potential energy savings are in the neighborhood of 30 percent, rendering increased generating capacity - and more nuclear power plants - unnecessary.

Retrofitting coal-fired plants with high-tech desulfurization and denitrification technologies, for example, or switching them over to cleaner burning fuels like natural gas, would reduce environmental impact and increase combustion efficiency. One report suggests that simply burning higher-quality coal, rather then the sulfur-rich lignite found locally, would increase Poland's production capacity by 1500 MW, an amount equal to or greater than the capacity of a nuclear reactor or coal-fired plant.

Reduced consumption is also badly needed. Installing more efficient lighting systems, industrial drive motors and regulating devices, improving building standards for insulation, using energy-saving windows, even something as simple and inexpensive as applying weather stripping to doors and windows, would significantly decrease energy use.

Eventually, additional generating capacity may be required, but there are several options that are cheaper and more appropriate for Central and Eastern Europe's small electricity grids. Although natural gas is not common in CEE and must be imported, gas-fired combined-cycle and cogeneration systems allow investors to make profits by providing cheap electricity with near zero emissions. "If we're lucky, we'll get gas cogeneration stations. These are well understood by the investment community, and in many cases, because they are replacing systems which only created heat (or electricity), they are reducing greenhouse gases," says Paxus Adelova-Calta, international nuclear campaigner for both Friends of the Earth Czech Republic and Global 2000.

"Ultimately, we don't like anything. But if you consider the example of California, where legislation made renewable resources economically competitive, then it becomes apparent that alternative sources of energy are viable," says Janos Zlinszky, government and public affairs manager at the Regional Environmental Center. "But the introduction of such an idea is a process, and there are many interests that would be against it."

Herein lies the dilemma. The industries that have cropped up around traditional sources of energy - nuclear and fossil fuels - will not embrace energy efficiency and alternatives as realistic options because they stand to lose billions of dollars worldwide. Likewise, utility companies in CEE make their profits from consumption, not efficiency, and so are loath to promote, let alone invest, in efficiency.

CEE governments have taken the first big step to reduce the wasteful use of energy by reducing government subsidies on heat and electricity, but until they legislate demand-side management and integrated resource planning into their energy policies, energy efficiency will continue to be no more than ineffectual policy-speak.

"Demand side management is one area where they have done poorly. In the U.S., utility companies can make money by selling less energy. Nothing like that exists here - if a utility helps customers reduce consumption, they lose money," says Edward Corcoran, and energy consultant with the Center for Energy Efficiency in Budapest. "Incentives have not been built into legal systems to reduce end-user demand. This would be easy, and would result in small investments with good paybacks."

If introducing energy efficiency is so easy, why isn't it being done?

THE BULLETIN * WINTER 1995