NUCLEAR NEW BUILD AT KOZLODUY

The Concept

The concept of building units 7 and 8 at the Kozloduy NPP site at the end of the operational lifetime of units 1 to 4 dates back to the beginning of the 1980s. During the construction of units 5 and 6, two locations were envisaged for the potential new units.

Kozloduy

This concept has been repeatedly studied since then, inter alia in the context of the EU accession-related premature closure of Units 1 to 4, about which three studies were conducted. The latest preliminary feasibility study on potential new build at Kozloduy was implemented, in 2009, by Iberdrola Generation S.A.U and Iberdrola y Construccion S.A.U. The study confirmed the viability of building one or two new units using the assets available at the Kozloduy site, such as electrical and technical infrastructure, an existing reliable system for radiation monitoring, the availability of facilities for the secondary processing of radioactive waste and spent fuel storage, the presence of skilled and experienced personnel, planned construction of a national radwaste storage facility for low and intermediate-level waste close to Kozloduy site, etc. The study concluded that the new generation capacity could partially compensate for the closure of units 1 to 4 (1760 MW) by ensuring a reliable electricity source. It would allow full and effective use of the infrastructure built by Kozloduy NPP plc (which after the shut down of Units 1 to 4 was only used up to 50%), thereby decreasing the initial investments and the terms of the return on investment.

The construction and commissioning of new nuclear capacity at Kozloduy will further contribute to the strategic long-term goals related to: increasing direct and indirect employment in the North-West region of Bulgaria, safeguarding the scientific and technical potential and the driving forces behind economic growth, ensuring a reliable and affordable energy supply in Bulgaria and the wider region, decreasing significantly environmentally-harmful emissions and, last but not least, the implementing of the Energy Strategy of Bulgaria to 2020, which projects the further development of the nuclear energy sector.

Based on the above, and respective of the legislation in force, Kozloduy NPP plc has stated its intent to invest. The Bulgarian Government was considering this independently of the plans for building Belene NPP.

Governmental Decisions and Legislative Requirements

On 29 March 2012, the Council of Ministers asked the Minister of Economy, Energy and Tourism to submit a proposal for the construction of new nuclear capacity at the Kozloduy NPP site (CM Decision №250 of 29.03.2012, p. B).

On 11 April 2012, the Council of Ministers gave their consent in principle under Article 45, paragraph 1 of the Safe Use of Nuclear Energy Act (SUNEA), for undertaking activities necessary for the construction of new nuclear capacities at Kozloduy. The Council of Ministers required the Minister of Economy, Energy and Tourism to present a report under SUNEA Article 45, paragraph 2, for adopting a decision on substance, as well as a report concerning the legal and organisational structure for the project’s implementation (Protocol № 14 of the CM Meeting on 11 April 2012, p. 28).

In accordance with Article 8 (4) of the Energy Law and SUNEA, Article 45, a nuclear power plant shall be built following a decision on substance from the Council of Ministers (CM), a proposal to build a nuclear power plant being submitted by the Minister of Economy, Energy and Tourism, accompanied by an assessment of nuclear safety and radiation protection, environmental impact and physical protection, the social and economic significance of the construction of a nuclear power plant for the nation or for particular regions, radioactive waste and spent nuclear fuel to be generated, as well as their management. Based on the above-mentioned assessments, the Council of Ministers will take a decision on substance, including the specific technology to be used the unit’s overall installed capacity and the commissioning schedule for the new plant.

The investment intent for the construction of new nuclear generating capacity based on Generation III or III+ light water reactor (LWR) technology shall be implemented in strict compliance with the nuclear safety-related legislation in force, the European Utility Requirements for LWR Nuclear Power Plants, as well as the latest IAEA requirements for nuclear new build. Market principles will be applied for the project financing, without state funds and/or guarantees and/or loans or the participation of strategic investors being sought.

Kozloduy NPP

Implementation of the Governmental Decision

Under the remit of the Minister of Economy, Energy and Tourism, an inter-institutional Expert Task Force was established to deal with new build issues. The Task Force includes representatives of the Ministry of Economy, Energy and Tourism, the Nuclear Regulatory Agency, the Ministry of Health, the Ministry of Environment and Water, Bulgarian Energy Holding, the National Electric Company and Kozloduy NPP plc. The Task Force objectives are to identify the proper legal and organisational forms for the new build implementation, as well as to develop an implementation programme and schedule.

In fulfillment of the Council of Minsters’ decision in principle, and in compliance with the Environment Protection Law, Kozloduy NPP plc informed the impacted population and municipalities, as well as the Minister of Environment and Water, of its investment intent for building Generation III or III+ nuclear capacity at Kozloduy NPP. Consistent with SUNEA Article 45 (3), the investment intent was also notified to the competent authorities in Romania, through the Minister of Foreign Affairs.

On 3 May 2012, Kozloduy NPP’s Board of Directors took a decision to establish a new subsidiary company to organise the implementation of the investment intent. On May 5, 2012, the Bulgarian Energy Holding gave the necessary permission. On May 9 2012, the project company Kozloduy NPP New Build plc was established, with Kozloduy NPP plc as a sole owner of the capital. The company’s goal is to implement new build at Kozloduy NPPand to organize the process of conducting a feasibility (technical & economical) study, site selection and an environmental impact assessment (EIA).

Feasibility Study Status

In June 2012, Kozloduy NPP – New Build plc issued a call for proposals for conducting a feasibility study for two options: (1) a VVER unit using the nuclear island equipment already procured for the Belene NPP project, with new instrumentation and control systems and a turbine island supplied by different manufacturers; (2) the construction and operation of a 1000-1200 MWe PWR licensed in the country of manufacturing. The study will evaluate the site suitability, radioactive waste and spent fuel management, use of existing infrastructure and facilities, licensing, local economic aspects, as well as safety level, technical features and the economics of the PWR options currently available on the market. The study will also suggest and analyze assumptions for developing the project financing model.

The call for proposals elicited responses from Areva, Areva/Mitsubishi, Risk Engineering, Westinghouse Electric Spain and Worley Parsons. In August 2012, as a result of the competitive procedure the project company KNPP-New Build plc awarded a contract to Westinghouse Electric Spain.

The feasibility study is expected to be completed by March 2013.

Site Selection & Licensing Status

A competitive procedure for conducting a site selection study was launched in June 2012 and completed by the beginning of September 2012. The contract was awarded to the Bulgarian company Risk Engineering Ltd. According to the Study Terms of Reference, four possible locations for the new unit (units) on the Kozlduy site are to be assessed:

A 55-hectare spot located North-East of KNPP Units 1 and 2
A 55-hectare spot located to the East of KNPP Units 1 and 2
A 53-hectare spot located to the North of KNPP Units 5 and 6
A 21-hectare spot located to the west of KNPP Units 3 and 4.

The study should assess the available spots taking into account the safety-related and environmental legislation in force, as well as the latest IAEA standards and requirements for site selection and assessment. Based on the results, the study should assess the degree of Kozloduy site protection against external hazards induced by meteorological, hydrological and geological phenomena. The study should classify the four above-mentioned spots according to a developed assessment methodology and result in a proposal for the optimal location for the new build. The final study results were expected to be delivered in April 2012.

EIA Report Status

In September 2012, with regards to the investment intent for nuclear new build at Kozloduy, Kozloduy NPP – New Build plc invited all interested parties to declare their interest and present proposals for conducting an Environmental Impact Assessment (EIA) and developing an EIA Report in accordance with the environmental and biological diversity legislation in force. The EIA Report should evaluate the environmental impact of new nuclear build at the Kozloduy site, taking into account the cumulative effect of the joint operation of all the facilities located there. The EIA Report should evaluate also the trans-border impact and present the relevant results in a separate chapter. The effect of the investment project on the protected areas in the site neighborhood shall also be included. When finished, the EIA Report shall be evaluated by the Ministry of Environment and Water and shall be subject to a public debate.

During the final stage of the EIA process, a decision from the Ministry of Environment and Water shall be sought as to the admissibility of the investment intent implementation, based on the EIA Report and its attachments, documents and positions received during the EIA procedure and the results of the public debate.

Next steps

The licensing process for this new nuclear build will be initiated shortly by submitting a request for a Site Selection Permit, issued by the Chairman of the Nuclear Regulatory Authority, under SUNEA Article 33, paragraph 2 and paragraph 3. The request documentation required by law is currently under preparation.

Once the studies and assessments required by legislation are completed their results shall be provided, by May 2013, to the Council of Ministers and will serve as a necessary factual basis for the governmental decision on the substance of the nuclear new build investment intent, including the choice of specific technology to be used, number of units and their overall installed capacity, construction and the commissioning schedule of the new plant.

In case of a positive governmental decision, after the site licensing a third-party strategic investor will be sought for the 49% of Kozloduy NPP – New Build plc’s capital.

The Bulgarian Nuclear Society, Kozloduy, October 2012