Westinghouse still optimistic on nuclear deal with Bulgaria despite delay

Westinghouse still optimistic on nuclear deal with Bulgaria despite delay


By Clive Leviev-Sawyer of the Sofia Globe

US energy firm Westinghouse remains optimistic about the prospects of signing the contract to build a nuclear reactor in Bulgaria, despite the decision by the outgoing administration of Plamen Oresharski to leave the issue at the discretion of the next government, which will be formed following the October 5 early elections.

Reports in Bulgarian media in recent weeks claimed that the shareholder agreement with Westinghouse for a new unit at the Kozloduy nuclear plant had been finalised. The issue was discussed at the cabinet meeting on July 23 – with no decision taken – just hours before Oresharski submitted his long-awaited resignation as prime minister.

Westinghouse Electric CEO Danny Roderick visited Bulgaria on July 29 to discuss the project with government officials and senior politicians to seek re-assurances about the project.

“We wanted to touch base with all the political and government leaders about the next place the project goes. What we realised today is that there is still a lot of support across all political factions and our ability to go forward now, with the next caretaker government, is much clearer now,” Roderick told Bulgarian National Television (BNT).

Roderick said that he met with senior politicians from all of Bulgaria’s major political parties to assess their support for the project, but also to provide information about the proposed new Kozloduy unit.

He emphasised that the project was very different from the aborted plans to build a second nuclear power plant at Belene, the controversial proposal that was officially shelved by Bulgaria in 2012, in that Westinghouse would show a higher degree of transparency.

Bulgaria picked Russia’s Atomstroyexport in 2008 to build two 1000MW reactors at Belene at a fixed cost of four billion euro, but with cost escalation clauses to be determined at a later date; at the point that Bulgaria decided to pull the plug on the project, the price tag had increased to 6.4 billion euro. Consultancy firm HSBC, which Bulgaria asked to carry out a feasibility study on the Belene project, estimated the final costs of construction at closer to 10.4 billion euro.

Belene was agreed as an intergovernmental deal, with no clarity on the final price, whereas the Westinghouse approach was to eliminate all risks at various stages and order equipment only when after reaching agreement on costs and financing details, Roderick said.

The latter aspect may prove key to moving the Westinghouse deal forward, offering reassurances to the public and politicians in Sofia, burned by the Belene deal – Bulgaria is currently involved in an international arbitrage lawsuit from Atomstroyexport, which claims damages of more than one billion euro for equipment ordered for the Belene project.

Roderick also confirmed the price tag for the project to build the new unit at Kozloduy – “just over $5 billion” – which he described as “one of the most competitive prices anywhere that Westinghouse has ever offered.”

The signing of the shareholder agreement is a necessary legal step that would allow Westinghouse to invest in Bulgaria and a pre-requisite to “create a de-risked project that would be presented to the Bulgarian Parliament,” Roderick said.

Bulgaria opened talks with Westinghouse to build a new unit at Kozloduy in November 2013. Before that, the company was contracted in August 2012 to carry out a feasibility study for the new unit.

Westinghouse offered to build a 1000MW reactor, using its AP1000 technology, with part of the funding to come from the Export-Import Bank of the United States and Japan’s Toshiba Corporation, the parent company of Westinghouse Electric. Toshiba withdrew as a strategic investor in June and was replaced by Westinghouse.

Kozloduy currently has two Soviet-built 1000MW reactors, whose life cycles expire later this decade, but Bulgaria hopes to extend them by another 10 years. Four smaller units, totalling a combined power of 1760MW, have been shut down in 2005 and 2006 as a pre-requisite for Bulgaria’s accession to the European Union in January 2007.


(Photo of Kozloduy nuclear power plant: uvioc/flickr.com)