By Anna Mudeva
SOFIA, Feb 20 (Reuters) - East European countries have
jumped on the global nuclear renaissance bandwagon, but numerous
hurdles facing atomic power mean projects could be delayed and
some even abandoned, analysts say.
Slovakia, Romania and Hungary plan to build new reactors or
extend the life of existing ones, driven by growing energy needs
at home and European Union (EU) targets to reduce greenhouse gas
emissions.
For others like Bulgaria, nuclear power is seen as a way to
become major electricity exporters again after being forced to
shut down communist era reactors as a condition to join the EU.
Lithuania on the other hand, hopes that a new plant which it
plans together with Poland, Latvia and Estonia, will reduce
energy dependence on Russia.
Unlike in western European countries, nuclear power provokes
little public opposition in eastern Europe. But projects still
face construction problems common to the industry worldwide and
added uncertainty over political change at home.
"We can expect some nuclear reactors to be built but not the
numbers that are predicted," Frank Barnaby, consultant at the
Oxford Research Group, said.
High capital costs, difficulties in convincing banks to loan
the money needed to build them, and uncertainty about future
political support are just some of the hurdles that could
scupper nuclear projects.
Meanwhile, the few nuclear engineering firms in the world
able to build the plants are already stretched with over 30
reactors under construction globally and about 90 more planned.
"Some companies in Germany have cancelled coal plant
plans...they knew engineering companies couldn't deliver. It
will be the same with nuclear," said Stephan Werthschulte,
managing partner with consultants Accenture.
FINANCIAL WOES
Most of the projects in eastern Europe seek private
partners, big western utilities in particular, to share costs
and responsibility. But raising funds is still not easy.
Sources in the capital Sofia said Bulgaria received little
interest in a tender to pick a lead manager to secure financing
for its 2,000 megawatt plant of Belene, which the government
says would cost 4 billion euros ($5.89 billion) but some
officials put it at over 6 billion.
"Banks are hesitant. They want to see a partner who could
safely run the reactors at high capacity to ensure that the huge
costs could be covered," said one source familiar with Belene.
"If a country like Finland finds it difficult to push ahead
with a new plant, what about Bulgaria," he said.
Finland's fifth nuclear power reactor, seen as a test for
Europe's nuclear future, is two years behind schedule and 50
percent over budget.
Sofia has extended its deadline for picking a strategic
investor for 49 percent of the plant until mid-200 due to
political wrangling about how to run Belene, which coupled with
funding woes could push the start date well beyond the planned
2013.
Lithuania's plan to build a new $9 billion 3,200-3,400 MW
plant to replace an existing one that is to be shut next year
have also been delayed over power purchase disputes with Poland.
When Bulgaria first decided to build Belene in 2005, the
bill was estimated at 2.5 billion euros.
Consultants Wood Mackenzie say capital costs for a new 1,000
MW reactor have risen to between $2.5 billion and $3.5 billion
(1.7-2.4 billion euros). Analysts say increasing construction,
uranium and steel costs have all added to the bigger bills.
"Our view is that there is only likely to be upward pressure
on this number going forward," said Stan Reid, product manager
European Gas and Power Services at Wood Mackenzie.
Uncertainty about future carbon emissions prices, political
support and planning permission problems make nuclear projects
difficult to sell to financiers, analysts say.
Emerging European markets are still going through a lot of
political and economic change, adding to uncertainty, they said.
"What matters...is having a stable regulatory and political
framework which guarantees they (investors) are not going to
have risks during the very long period of construction and
operation," said Luis Echavarri, director general of the OECD's
Nuclear Energy Agency.
High carbon prices make nuclear energy more competitive than
greenhouse gas polluting coal and gas fired power plants as
atomic power emits almost no CO2.
The world atomic watchdog, the IAEA, forecasts that nuclear
energy's share in eastern Europe, including Russia and its
former Soviet republics, could rise to about 21 percent by 2020
and 23 percent by 2030, from 17.8 percent in 2006.
(For factbox on projects double-click on [])
(Editing by Daniel Fineren and James Jukwey)
