|On 31 May 2011 Center for the Study of Democracy organized a round table with the participation of Professor Bulat Iskanderovich Nigmatulin, former Deputy Minister of Energy of Russia in charge of nuclear energy, and currently serving as First Deputy General Director of the Institute of Natural Monopolies, Moscow.
Professor Nigmatulin pointed out that from a global perspective there cannot be any talk about a renaissance of nuclear energy because new projects are only in their infancy in fast developing economies such as China, and because of the growing phobia towards this type of energy in developed countries such as Germany. In his opinion, the cost of nuclear energy is extremely high in the former Soviet bloc and, in addition, economic growth is fully assured via the energy savings resulting from the use of modern technologies. This results in a negligible increase in the projected demand for new energy generation capacities. As a result, the central challenge to nuclear energy development in Russia and Eastern Europe, and to some extent in Bulgaria, is whether there will be enough customers for this type of energy.
Professor Nigmatulin noted that the price per kilowatt/hour energy of nuclear power is unreasonably high in Russia, considering the relatively cheaper alternatives, such as gas-fired plants. He emphasized that taking into account the purchasing power parity between the Russian Federation and the US, as well as the fact that all energy sources in Russia are local, it can be established that Russian citizens pay higher prices for electricity than their American counterparts. for the situation is similar in Bulgaria. It can be expected that lower revenue from oil and gas exports will lead to a reconsideration of Russia’s energy policy, including withdrawal from the construction of new nuclear facilities, or a search for new technologies aimed at reducing the construction costs of Russian nuclear plants by at least half of their current levels. The latter will be driven by competition from China. It can be expected that China will manage to improve the characteristics of American reactors AP-1000 (which even today are 20% cheaper than similar Russian produce), commencing serial production in just a few years’ time.
According to Professor Nigmatulin, 4 GW of nuclear power capacity will likely turn out to be too much for the Bulgarian energy sector, making it difficult for the market for energy to reach equilibrium, especially outside peak demand periods. The construction of a new nuclear power plant poses significant risks and could negatively affect the prospects for the existing nuclear power plant, possibly forcing its premature closure. Professor Nigmatulin pointed out that the main problem arising from the construction of a new nuclear power plant would not be the price of generated energy but locating consumers in surrounding countries and building a network to reach them. Assuming that Turkey will also construct nuclear facilities and expand its gas supplies, then the remaining market for Bulgaria’s new nuclear plant would be confined to Greece and the Western Balkans. Reaching them would require additional investments in grid connections to these countries. Another significant risk for the future profitability of the new power plant is that Russia believes it has already made too many concessions in the Belene project, and that it has in fact subsidized it. It is very likely that in the future Russia will seek a revision of the current agreements utilizing its greater geopolitical and economic power.
Mr. IlianVassilev, Former Ambassador of Bulgaria to Moscow, welcomed the contribution of professor Nigmatulin and highlighted several problems of the Russian energy sector, taken from a letter written to the Russian Minister of Energy by professor Nigmatulin:
- The price of nuclear energy is too high compared to other local resources;
- Unprecedented levels of corruption in the nuclear energy sector in Russia;
- No link between fundamental research and experience in nuclear energy development;
- The construction of nuclear reactors is never completed within the agreed deadlines;
- Insufficient number of qualified construction workers;
- Lack of control mechanisms;
- Severed links between key sectors (science, funding, etc.) in Russia’s nuclear industry.
These among other issues relating to Russia’s domestic policy prevent the country from establishing nuclear energy production which is competitive on foreign markets. As a result Russian exports of nuclear technology require subsidies from the national budget.