Nuclear hopes fade with the end of Bulgaria’s Belene

London, United Kingdom – Bulgaria has finally abandoned the building of a second 2GW nuclear power plant by the town of Belene on the banks of the River Danube. The building started more than 30 years ago and successive governments have spent hundreds of millions of taxpayer dollars on it.

This is not exactly the end of Bulgarian nuclear power. Kozloduy – Bulgaria’s first nuclear plant – is still operating, and the government announced that it will add one reactor to it (a share of which is already paid for as part of the abandoned plant).

In the town of Belene, local citizens organised a protest to declare their determination, a year after the Fukushima disaster, to have a nuclear plant – even in an earthquake zone. The Bulgarian Socialist Party announced the first thing it would do in power would be to revive the project.

Most civil society organisations however are jubilant. For them it has been a long battle which united the growing national environmental movement and right-wing economic think tanks, incompatible political parties and movements, artists, writers and businesspeople into a formidable opposition to the Belene project.

A blow to European nuclear power

It would, however, be an exaggeration to present the government decision simply as an achievement of the anti-nuclear campaign. Bulgaria is a nuclear country and people are generally supportive of keeping and developing nuclear power. There are also some simple economics to the Bulgarian government position.

The Institute for Market Economics, a Bulgarian think tank, estimated that the plant would cost €11.5bn ($15bn), double the price the government was suggesting. That would have led to a minimum price of electricity of €0.14 ($0.18) per KWh (the current retail price in Bulgaria is less than €0.10 per KWh). That assessment was made before the Fukushima disaster triggered additional safety concerns that would inevitably lead to higher costs. The government was trying hard to find a Western investor, but that proved impossible after RWE withdrew in 2009, and the only willing international participant in the project remained Russia. Bulgarian energy dependency on Russia, from where almost 100 per cent of its gas imports come, is already very high, so Russia dominating projects on such a scale was always going to be a politically tricky option.

The cancellation of the Belene project is another blow to European nuclear power, further denting confidence in its safety and cost effectiveness. Next door, Romania’s plans for expanding their Chernavoda nuclear plants are also in trouble after Germany’s RWE, Spain’s Iberdrola, France’s GDF SUEZ and the Czech CEZ withdrew from that project. Nuclear seems to be fading away – with Germany, Italy, Switzerland and other countries abandoning the technology. And Siemens, one of the leading nuclear developers, has dropped nuclear altogether.

In this context, the Bulgarian government has adopted a pragmatic strategy to nuclear power – “If you have it – keep it. If you don’t – don’t bother”. As concerns over nuclear safety and costs grow, investment in the technology is waning, and nuclear countries should just try to get as much out of existing facilities as possible. This might be a good lesson for countries such as Poland and Turkey that are trying to enter the nuclear age now. It might be just a bit too late.

A new energy strategy

The question is: What will the Belene decision mean for the energy future of Bulgaria and the wider south-east Europe region? Bulgaria, like most of its neighbours, has always entertained the fantasy of becoming the energy centre of the Balkans – Belene was to serve this dream by providing substantial export capacity. Bulgaria will have to rethink its energy strategy. Such a rethink, however, will first have to overcome several historical and political hurdles.

First, it would be difficult to split any political decision on energy from one of the main problems of Bulgarian politics since the 19th century – its division into Russophiles and Russophobes. The campaign against Belene was run mainly along the lines of arguing against the Russian affiliation with the project, not its safety or economic viability. Since Bulgaria joined the EU in 2007, pro-Russian feelings have been shrinking. In the severe winter of 2009, when, during its dispute with Ukraine, Russia stopped the gas supply to Bulgaria – and the national television showed women giving birth in three layers of skiing jackets, remaining pro-Russian sentimentality in Bulgaria froze along with the temperature.

Second, Bulgaria still cannot find its proper place in the EU’s confused energy strategy. Currently, the European Commission sees the whole Balkan region simply as an EU gas corridor. Successive Bulgarian governments have also failed to demonstrate the confidence to develop a modern energy vision that goes beyond the paradigm of “more of this and more of that”.

Third, the peculiar Balkan neighbourhood mindset is not helpful. All Balkan countries want to be energy independent. They aspire to be energy islands which generate enough electricity for domestic needs and have something left to sell abroad. This position works to some extent, but it means that there is no collective regional strategic thinking for the future of energy generation and supply.

Fourth, the future of the only fossil fuel resource in the region, lignite, is quite uncertain. Growing awareness of local and cross-border health damage from coal power, its high carbon intensity and the tightening international regulations are making coal – and especially lignite – less and less attractive.

Rethinking energy

There is, however, light at the end of the tunnel, despite Bulgaria being the most energy inefficient country in the European Union (closely followed by Romania). The country uses eight times more energy than the EU average to produce one euro of GDP. Rossen Plevneliev, the recently elected Bulgarian president, is, however, a great proponent of energy efficiency. He said that – just by renovating the Communist concrete blocks accommodating 700,000 families, Bulgaria could gain energy savings equivalent to the output a nuclear power plant. That seems to be the view of the Bulgarian minister of industry and energy and a growing number of other politicians, including the prime minister. Bulgaria’s abysmal energy efficiency might turn into one of its most valuable energy assets after all. Dumping nuclear and restricting coal power generation could trigger a strong national and regional drive for saving energy and improving both energy efficiency and economic productivity.

Renewable energy is also suddenly coming of age. Wind generation is expanding and is closing the competitive gap with traditional energy sources. Solar, for long thought to be a luxury for rich countries, is also reaching grid parity, the point at which it can survive without subsidy. To build 1W solar capacity today costs less than €2 in Germany, a figure that keeps falling, bringing the unsubsidised price of solar electricity to €0.20 per KWh, which is roughly what German consumers pay for electricity from the grid. Bulgaria is at least 20 per cent sunnier than Germany. That would mean that solar might already be as cheep as nuclear in Bulgaria, and one would not have to wait another ten or 20 years for its installation. It would not take long, certainly before a nuclear power plant could be built, before Bulgarian policies, licensing regimes, grid structure and pricing adjust to a renewable technology that might prove cheaper even than coal.

However, that might not be enough. New energy strategies can not be locked behind national borders. They require much closer and more complex regional cooperation than the predictable export and import pattern of energy generated by traditional sources. In order to balance the intermittency of the renewable generation, and to achieve high levels of energy efficiency, the Balkan region needs a new grid structure, smart technologies, a more open market and closer business and investment interaction. This might not be that easy in a region not known for long term strategic cooperation.

Another trouble with energy efficiency and renewable energy is that both tracks lack the machismo of nuclear and coal power that make small countries feel better about themselves. And they do not provide the political and financial concentration offered by energy mega-projects – and consequently there are fewer opportunities for corruption and the exercise of political influence.

The end of Belene will not change old fashioned energy nationalism, but it just might be a strong enough signal for Balkan countries to start discussing their energy future in a less Balkan way.

Julian Popov is a journalist, consultant, director of the UK charity organisation Friends of Bulgaria, and chairman of the Board of Directors at the Bulgarian School of Politics.

Follow him on Twitter: @julianpopov