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EUROPE: Big Plans, But Little Money to go Nuclear

Zoltán Dujisin

BUDAPEST, Jun 8 2009 (IPS) - Eastern Europe is promoting nuclear energy as the only way to tackle climate change and reduce dependence on Russian gas, in spite of costs of going nuclear that it cannot meet.

Amid the last Ukrainian-Russian gas spat early this year, officials from several Central and Eastern European countries were quick to point to the need for nuclear energy to reduce problematic imports of Russian gas.

Unlike many countries in the West, public opinion in Central and Eastern Europe overwhelmingly supports nuclear energy, with opinion polls showing 80 percent support in Slovakia and 70 percent in Hungary.

“They see it as a way to export electricity, and they believe the simple solution is to have big facilities,” Olexi Pasyuk, energy specialist in Kiev with Bankwatch, an independent group monitoring European Bank investments told IPS. “But you have to invest a lot, and maybe you get money back in 30 years, if you’re lucky.”

The countries of Central and Eastern Europe will face stiff competition as they are all betting on electricity exports that will require either cheap prices or massive state support. But problems don’t end here.

“The nuclear industry is missing qualified staff and facilities to build all the necessary equipment; at best the world’s industry can build four reactors a year,” says Pasyuk.

Bulgaria, the Czech Republic, Slovakia, Ukraine, Hungary, Lithuania and Poland all have plans to further develop their nuclear capabilities. “In Europe we have a number of units under construction, and they are very good examples of how costly and complicated these projects are,” says Pasyuk.

Olkiluoto in Finland is one. A showcase project for the nuclear industry, there are already delays that could extend to three years, a budget overrun of 1.5 billion euros, and an incapacity of the French company Areva to live up to Finnish technical and safety requirements.

A similar case is developing in Eastern Europe, where Bulgaria is determined to complete construction of the Belene nuclear plant. The cost of the reactor was to be 3 billion euros; it has gone up to 6 billion euros, and commercial banks are refusing to get involved.

Ukraine has developed a national strategy calling for the creation of 22 new nuclear reactors, but projects are not taking off, and much needed Russian cooperation is not coming.

In Hungary several politicians and industry representatives want new blocs that will double the capacity of the Paks nuclear plant, which ensures 37.2 percent of Hungarian power production.

But many are starting to ask where the money will be found, as each unit is estimated to cost 5 billion euros. Permit procedures can take up to six years, and another six are needed to build a unit and form the necessary workforce.

Slovakia and the Czech Republic seem more determined; the historical ties between their energy sectors are among the closest in Europe, and their governments are traditionally close to the nuclear lobbies.

“Almost everywhere you have dedicated energy companies doing only nuclear, so it’s difficult for them to stop working, and they try to persuade everyone that they are the future while demanding state support,” says Pasyuk.

Czech and Slovak energy groups agreed last week to construct a new nuclear energy source at the site of a nuclear plant whose second Soviet built block from the 1970s was recently decommissioned in line with the country’s European Union accession agreement.

Slovakia, repeatedly noting its energy deficit condition, has also obtained EU approval for building another plant.

Besides the huge costs, nuclear energy also does not offer a solution for those wanting to avoid dependency, because Russians always manage to produce cheaper technology and fuel, and countries in the region rely on it for radioactive waste treatment.

The Ukrainian government, one of the world’s biggest state subsidisers of the energy sector, tried giving one-fifth of the fuel market to the U.S. company Westinghouse over a period of five years. But it soon concluded that the fuel produced by the U.S. government-financed company is almost twice as expensive as Russian fuel, and less suited for nuclear reactors built mostly with Russian or Soviet technology.

Rather than spending billions on new plants, several Eastern European governments are now considering extending the service life of existing plants.

This option too is not without its hurdles. “Experience with lifetime extension in the world is limited; all reactors, even those of the same type, can be different and are special, meaning these programmes need to be designed for each reactor, requiring considerable research and hundreds of millions of euros for every reactor,” says Pasyuk.

“Moreover, it doesn’t resolve the issue that if not now, you need to close the reactors in 15 years, and you’ll still need money for decommissioning.”

Many analysts insist governments should invest in incentives for energy efficiency rather than create additional production capacity.

“Gas is a quite convenient and competitive fuel right now in terms of immediate solutions, and more environmentally friendly than oil or coal,” Pasyuk told IPS.