beyondbrics

Bulgaria’s search for a European strategic partner to help build a new nuclear complex on the Danube river looks tougher than ever following the disaster at Japan’s Fukushima plant.

With the project’s future under threat, Bulgaria will struggle to expand electricity exports to its neighbours as planned. And that will add to pressure on costs for a region already mired in recession.

Guenther Oettinger, European Union energy commissioner, warned this week that licences granted in 2007 for the 2,000-megawatt project at Belene would have to be re-examined before it could go ahead.

Deadlines are looming as Rosatom, Russia’s state-owned nuclear group, says it will be ready to start installing the first 1,000MW reactor in September this year.

Belene has been stalled since 2009 when Germany’s RWE group pulled out of a deal to take a 49 per cent equity stake and raise €2bn of financing for the project.

Yet boosting nuclear capacity is still seen as key to the right-of-centre government’s strategy of maintaining Bulgaria’s position as the biggest electricity exporter in southeast Europe.

Bulgaria managed to double electricity exports last year to its Balkan neighbours – among them Greece, Serbia, Albania and Kosovo – although the region was still in recession. NEK, the state power utility, plans to start exporting to Turkey this year.

NEK has held inconclusive talks with Areva of France as a replacement for RWE in the nuclear project. And it has been trying, so far in vain, to knock at least €1bn off the €6.3bn price tag for Belene, set by Rosatom in negotiations last year.

In spite of Japan’s crisis and the EU’s warning, the Sofia government’s enthusiasm for nuclear power  seems undimmed.

Traicho Traykov, energy minister, came up with a compromise this week – to install the new reactor destined for Belene at Kozloduy, Bulgaria’s existing nuclear plant, and cancel the purchase of the second one.

Kozloduy’s two Soviet-era reactors still supply more than 30 per cent of Bulgaria’s electricity output. Four other reactors were shut down as a condition of Bulgaria’s European Union accession in 2007.

Bulgaria has already poured €600m into Belene. Another unit at Kozloduy would cost at least €1bn, according to Sofia-based analysts. In the current climate, though, Mr Traykov may have to put Bulgaria’s plans for nuclear expansion on hold.

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