SEPTEMBER 1995 · VOLUME 16 · NUMBER 9
N U C L E A R P O W E R P U S H E R S
PRAGUE -- SCIENTISTS WARN THAT CATASTROPHE threatens the region surrounding the aging Soviet-designed Bohunice nuclear plant in Slovakia, a couple of hours drive from Vienna, Austria. The oldest two of four Bohunice reactors are housed in warehouse-like buildings with no containment structures to enclose the radiation that would escape if their metal-fatigued pipes gave way.
Slovak officials, however, are not in a hurry to shut down the plant. They say that the safety concerns are alarmist and have been trumped up by the West. The nuclear plant is a sufficiently safe source of cheap, clean energy to sate Slovakia's growing appetite for electricity, they say. Indeed, many Slovaks consider any alternative to be an improvement over the brown coal smog that now belches out of the country's smokestacks.
Slovak Premier Vladimir Meciar seems committed to keeping Bohunice's oldest reactors operating well into the next decade. In April 1995, he even rejected the option of obtaining Western funding to complete two reactors at Mochovce, another Russian-designed nuclear power plant site. The Slovak leader backed away from the deal because the supporters -- the European Bank for Reconstruction and Development (EBRD) and a Western consortium led by Electricité-de-France (EdF) -- were pressuring the government to step up its time table for phasing out the two oldest VVER-230 Bohunice reactors.
Bohunice's two slightly more advanced Soviet model VVER-213 pressurized water reactors are similar in design to the unfinished reactors at Mochovce as well as to the four reactors at Dukovany, the only operating nuclear plant in the Czech Republic. The Czech and Slovak governments expect to operate these relatively modern reactors for many years, although questions have been raised about whether even these reactors can attain the safety standards of Western nuclear plants.
Meciar has spent recent months trying to forge a so-called "Eastern option" in which Czech and Russian contractors would complete Mochovce with funding from Czech banks.
Meciar says that he is keeping the door open to other proposals, however, including EBRD participation. With nuclear business stagnant in the West, Western companies are aggressively seeking contracts in the former Soviet bloc, using reactor safety as a hot-button sales pitch.
"Clearly the government plays chess with everybody, but who finishes the project is not the point -- the basic question is whether to complete Mochovce or not," says Lubica Trubiniova, Greenpeace's nuclear campaigner in Slovakia.
Initially, the Slovak government was enthusiastic about the Western consortium's proposal, which was expected to cost around $1 billion. The EBRD was to provide a line of credit to cover one-fifth of the cost and to help arrange the rest of the funding. Slovakia was to repay most of the money through electricity exports to neighboring countries. EBRD has helped fund safety upgrades on a number of other Soviet-style reactors, including projects at the Kozloduy Nuclear Power Plant in Bulgaria and the Ignalia Nuclear Power Plant in Lithuania. However, the Mochovce project was to be the first in which the bank funded an uncompleted, Soviet-design reactor.
But the Western plan hit snags when EBRD and EdF attached requirements that the Meciar government eventually rejected. In addition to closing Bohunice's two antiquated VVER-230 reactors, Slovakia would have been required to raise energy prices 29 percent to encourage conservation.
"Bohunice is one of the most sensitive points in the relationship between Slovakia and the EBRD," says Karol Bodorik, an official of Slovenske elektrarne, the company that runs the country's energy program. Slovak energy officials, interviewed at Bohunice, located a few kilometers north of the medieval city of Trnava, insist that the power plant is safe. This, even though Czechoslovak nuclear safety officials found 89 major deficiencies there in 1989.
Josef Blazek, head of plant decommissioning, acknowledges some deficiencies. But he says, "We have made many improvements and we're doing all we can to keep these units in operation." Blazek suggests that Western critics should "see to problems with reactors in their own countries."
The Slovak government started having second thoughts about the EBRD-funded project after other players offered funding with fewer strings attached. In 1994, Russia proposed a loan of $450 million to complete Mochovce and promised to cooperate with Western companies. Russian leaders eventually pared this offer to $150 million and even this amount is far from assured. But Russia's offer has given it a place at the bargaining table. Denis Grishenko, an attaché at the Russian Embassy in Slovakia, says Russia intends to stay involved in Slovak nuclear power as a "normal competitor."
So far, Russia and its Czech partners have managed to offer stiff competition to the Western companies. In April 1995, just days before EBRD's directors had been expected to approve funding for the Western consortium's Slovakia proposal, the Czech company Skoda Praha unveiled a plan to complete the power plant with Russian assistance for 30 percent less than the Western group. The company said three-to-five times lower labor costs explain its low bid. Funding was to be provided by large Czech banks. Stunning EBRD directors, Meciar abruptly withdrew his request for the bank's funding, criticizing the West's terms.
Meciar's many faces
Since his about-face in April, Meciar has avowed renewed interest in EBRD participation in Mochovce. Given his earlier behavior, these comments have been viewed with suspicion by some environmental groups, especially since the Slovak premier recently fired several key people involved in negotiating the EdF project. The government reportedly is working on a variation of the Eastern option that could include Skoda Praha, the Russians and the German engineering firm Siemens.
"I think Western European financing for the project is dead," says Philip Weller, an organizer with Global 2000, an Austrian-based environmental group. "There's no way EBRD will give money [to] and no way EdF will participate in a Skoda Praha-led project."
EdF pulled most of its staff off the project early this summer out of exasperation with the Slovaks, but the company still hopes to participate in Mochovce, says company spokesperson Claire Gerard. She insists that EdF's participation is conditional. "We want to control the management and we want Bohunice units one and two shut down," she says. EdF's "number-one motivation" is to prevent a nuclear catastrophe, says Gerard. "Any accident would have an impact on our activities."
Gerard doubts Skoda can chop costs as dramatically as it has indicated while maintaining safety standards. Seemingly small improvements that might be scrapped to save money can undermine safety, says Gerard. For example, she says, walls should be built between high-temperature steam pipes that were installed too close together. "If one fails, it could damage the others," she says.
Stanislav Vesely, head of international relations at Skoda Praha, denies that the company would compromise safety. He says that, where necessary, his firm will seek help from Western experts to achieve safety standards.
For the Slovak government, the Eastern option offers a number of advantages besides price. As a supplier of technology to the two operating plants in the former Czechoslovak federation, Skoda Praha has valuable knowledge of Mochovce's design. Also, a deal with Skoda Praha would help Slovakia work its way out of a debt of $100 million that the government owes the company for work already done on the project. Finally, the Czechs and Russians are not expected to put much pressure on the Slovaks to close Bohunice.
But the key question for the Eastern option continues to be: Can Skoda Praha get funding to complete Mochovce without EBRD's backing? Jan Matejcek, an attorney for White & Case, a Prague law firm that represents the Czech Energy Companies (CEZ), which owns and operates Czech nuclear plants, thinks the money can be arranged. Some large Czech banks that also run investment funds have large stakes in Skoda Praha, he says. "Also, a lot of European countries are interested in purchasing energy, and all the commercial banks have to worry about is their image and liability," he says. Peter Muska, the European Community (EC) adviser in Slovakia, agrees that the government can get a loan, but notes, "The problem will be paying it back."
Officials from several of the largest Czech banks say they do not expect to participate in the financing of Mochovce. But Petr Hlavacek, director of capital investments for Ceska sporitelna, the largest Czech savings bank, says, "We might be interested -- we're interested in all big projects." Komercni banka is also reported to be giving serious consideration to the deal.
West viewed as best
The Western multinationals have not folded their hand in the face of the Eastern challenge. Eager to cash in on the perception that they can offer superior nuclear safety technology, multinational nuclear engineering companies rushed into Czechoslovakia shortly after the fall of the Soviet empire, when frightening concerns about reactor designs and operations were fully aired for the first time.
The Western companies do not want to forfeit a chance to penetrate the former Eastern bloc market. Westinghouse, one of the first out of the starting blocks, quickly developed its proposal for completing and improving safety at Temelin, a VVER-1000 model Soviet-style plant in Southern Bohemia, in what is now the Czech Republic. In the second quarter of 1993, Westinghouse landed a $440 million order for fuel and control systems, just part of its Temelin contract. By the following year, the project had begun to give the corporation's lagging Energy Systems division a boost. August 1994 Westinghouse filings with the U.S. Securities and Exchange Commission reported that operating profits for the division were up $17 million in the first quarter of 1994 compared with the same period in 1993, mainly "due to revenues from Temelin control systems."
Similarly, EdF approached the Czechoslovakian government more than three years ago, offering to upgrade safety at Mochovce and to complete the plant. Mochovce's Unit One is 90 percent finished and Unit Two is 60 percent complete, but work had almost stopped completely because the state-run utility lacked funds to continue. The EdF plan included contracts for Germany's Bayernwerk and Siemens, France's Framaton and the Czech Skoda Praha.
The nuclear engineering companies in Slovakia and the Czech Republic hope that their performance in these retrofit projects will be a springboard for other contracts in the former Soviet bloc. As Vesely of Skoda Praha puts it, "Mochovce is a pilot project for the whole of Eastern Europe."
Assuming Western financing is available, the potential for work in the former communist countries is enormous. Besides Mochovce and Temelin, there are 10 other unfinished Soviet-style reactors in the former Soviet bloc. There are also a large number of substandard reactors in operation and many of these are retrofit candidates. Completed reactors that could be modernized include:
* 10 VVER 440/230 pressurized water reactors, including two units at
* 14 VVER 440/213s, including the two other Bohunice units and the four units at Dukovany, the Czech Republic's only operating nuclear plant; and
* 19 VVER 1000 models that are similar to the one being completed at Temelin.
Critics say no amount of retrofitting can make these Soviet-designed reactors safe. "Bohunice is a reactor type that belongs on a black-list of the most hazardous reactors in the world," says Helmut Hirsch, a founder of Intac, a Hanover, Germany nuclear consulting firm. Hirsch says he also has safety concerns about the more modern Mochovce plant. "It doesn't have Western-style containment and the basic design can't be changed," he says.
EdF spokesperson Claire Gerard agrees with Hirsch's prognosis on the two VVER/230 reactors at Bohunice. "The vessels are old and embrittlement is a problem," she says. "The risks are increasing with time." But Gerard says Mochovce and other VVER/213 reactors can be brought up to Western standards. EdF would not support the project if the company did not think it could be made safe, she says.
Since Western safety standards are the measuring stick by which many people judge the Soviet-designed reactors, environmentalists realize that the projects will be easier to defeat if Western firms do not win the contracts. "The Eastern option won't play particularly well in Slovakia, because of the perceived lowering in safety standards," says Philip Weller of Global 2000.
Austria, a nuclear-free country and next-door neighbor of Slovakia and the Czech Republic, is one of the most vociferous opponents of the operation of the Soviet-designed reactors. During an EBRD comment period on Mochovce last winter, some 1.2 million Austrians and Slovaks signed a petition calling on Slovakia to abandon Mochovce. The signature drive was led by environmental groups, such as Global 2000, working in cooperation with Austria's Environment Ministry.
Austrian Chancellor Franz Vranitzky offered to loan Slovakia and the Czech Republic $50 million each if they would convert their partially completed nuclear projects to gas-powered plants. The Austrian government realized that this offer was minimal compared with what a plant conversion would cost, says Hans-Peter Glanzer, second secretary of the Austrian Embassy in Prague. But if Czech or Slovak leaders had shown any interest, Austria would have helped their governments arrange financing, says Glanzer. Czech Prime Minister Vaclav Klaus ignored the chancellor's offer, made during a visit to Prague in May 1995, as did his Slovak counterpart.
In July, however, Meciar surprised his Austrian neighbors by agreeing to a feasibility study on the costs of converting Mochovce nuclear reactors to gas power. "It is the first sign that Austria's efforts have fallen on fertile soil," Austrian Environment Minister Martin Bartenstein said in a statement responding to this overture.
Eager to acquire cheap electricity from Slovakia, leaders in the German state of Bavaria have been trying to steer Slovakia in the other direction, lobbying for Mochovce's completion. Bavarian Premier Edmund Stoiber has promised to try to bring Munich-based Bayernwerk, a member of the EdF consortium, back into the project. Exasperated by the fickle Slovak government, the utility company had pulled out in early July 1995, pronouncing the project "dead."
The fact that Mochovce is so close to completion makes its operation all but inevitable, according to some observers. "It would not be friendly policy to put pressure on Slovakia to turn back now," says Peter Muska, adviser to the ambassador from the European Union in Slovakia. "It's like having a discussion about a pregnant woman in her eighth month -- whether or not she should have an abortion."
More efficient alternatives
Anti-nuclear opponents argue that simple conservation measures and the use of readily available alternative energy sources could eliminate the need for nuclear power in both Slovakia and the Czech Republic.
A 1994 report by Radko Pavlovec, of Global 2000, found energy consumption in Slovakia to be "markedly above the EU [European Union] average." At the same time, the country's Gross Domestic Product was eight to 11 times lower than in EU countries, suggesting a need for greater energy efficiency. The report called for construction of two new gas-steam units, with an output equal to the anticipated domestic supply of energy from the two blocks at Mochovce. This alternative "would permit the shutdown of the Bohunice power plant at an early date."
A 1994 study by Energieverwertungsagentur, a Vienna-based firm that does research on energy alternatives, said Slovakia has the potential to cut energy consumption by 30 percent or more by the year 2005. The report, prepared for the environmental ministries of Austria and Slovakia, said two-thirds of home heating costs in Slovakia could be eliminated by insulating homes. According to the study, Slovakia also has vast, and largely untapped, alternative energy sources, including bio-fuels, solar power and hydro power.
Similarly, the Czech Republic was described as "one of the most energy-intensive countries in the region," in a recent study by Power Engineering Limited, a consulting company working for the EU's PHARE program, which helps fund public projects in Central and Eastern Europe. The report said energy savings are possible in every sector of the economy.
In a December 1994 draft report called "The EBRD's Environmental Promise:A Bounced Check?," the Washington, D.C.-based Center for International Environmental Law (CIEL) says that Slovakia's ZSNP aluminum smelter consumes "approximately 10 percent of the total energy produced in Slovakia. "By financing ZSNP, the [EBRD] made it more difficult to close Bohunice, and more likely that Mochovce would be completed," write CIEL's Donald M. Goldberg and David B. Hunter. "Had the Bank weighed the environmental and social impacts of the two projects prior to approval of the ZSNP loan, it may well have concluded that the combined environmental and social costs outweighed the benefits."
Paxus Calta, international energy campaigner for the Czech environmental group, Hnuti DUHA, urges Czech government leaders to explore the potential of small hydroelectric power stations. The country had 14,000 such plants before World War II, providing 400 megawatts of power, he says. The communist government, favoring centralized heating, never maintained or replaced the plants. Only about 200 remain, says Calta, but he estimates that with modern technology the hydro plants could provide 800 megawatts, enough to eliminate one Temelin reactor. Energy conservation could do away with the need for the second unit, he adds.
Some energy-saving possibilities are obvious. In the Czech Republic's panelaks -- the standard-issue high-rise buildings that house a large proportion of the public -- it is not unusual to see most windows open in mid-winter, Calta says. "Nobody has the ability to control the heat in the rooms," suggesting a low-tech alternative to nuclear power. "Put in thermostats," he recommends.
Westinghouse's Czech Nuke: Overdue and Over Budget
|The Slovak government has yet to receive the full bill for its nuclear
energy program. But the Czechs, who are starting to pay for theirs, are
discovering that their unfinished Temelin plant is considerably more costly
Like Slovak Premier Vladimir Meciar, Czech Prime Minister Vaclav Klaus is an advocate of nuclear power. The government fully supports the Czech Energy Companies (CEZ) plans for the completion of Temelin, a VVER-1000 model Soviet-style plant in southern Bohemia. The design is the most advanced of the nuclear power plants operating or under construction in the former Czechoslovakia.
Temelin, which is being retrofitted and completed by Westinghouse with funding from the U.S. Export-Import Bank, is now projected to come in at least 10 percent over its initial $2.4 billion budget.
The project is already plagued with delays. The first reactor at Temelin had been expected to start up in September 1996. The government recently acknowledged that the plant will not be operational until well into 1997.
Gabe Toth, a Westinghouse representative in the Czech Republic, blames the problem on subcontractors. "We're required to work with the Czech companies, and it's a situation that has been difficult for us," he says. The Czech firms, which were formerly state-owned, have had to learn to deal with "a new culture," he explains.
A confidential report circulated within the government by the Czech Ministry of Industry last year also attributed part of the delays to subcontractors. Subcontractors halted production until new contracts could be drawn up to replace those signed in the communist era, the report says.
The ministry report also says some cost increases are the fault of project managers who yield to "the technocratic temptation to deck out this plant with avant-garde technical solutions above the European standard."