The right balance?

Monday, April 02, 2007

Rumen Ovcharov, Bulgarian Economy and Energy Minister, investigates the potential of nuclear energy versus renewable sources.

Back in March 2006, the Bulgarian Prime Minister Sergei Stanishev in a meeting with the European Commissioner Olli Rehn said that he believes a balance should be struck between the three strategic goals of common EU energy policy, namely: security of energy deliveries, competitiveness, sustainable developments of the energy sector and environment. The Prime Minister said that Bulgaria contributes a lot to the energy security in the Western Balkans and drew particular attention to the Government's priority policy regarding energy-efficiency.

The Prime Minister also put special emphasis on the potential of nuclear energy, indeed, he believes that alternative renewable resources have significant potential which, however, is not limitless. He stressed that it is imperative for Member States and acceding countries that have opted for nuclear energy to channel their efforts into the drafting of a long-term clear common vision for its development and proper investments. Sergei Stanishev underlined that the key to a successful common energy policy is the diversification of the energy and delivery sources. Bulgarian Minister of Economy and Energy Rumen Ovcharov, gives Public Service Review all the details about nuclear energy.

What is the potential of nuclear energy and the use of renewable energy sources?

We think that nuclear energy development is a major factor for both guaranteeing security of power supplies and moderating climate changes resulting from greenhouse gas emissions. It has no true alternative in these two respects since the reserves of fossil fuel are decreasing rapidly, and besides, they pollute the environment and are often dependent on import, while the renewable energy sources do not have the potential to satisfy the rapidly growing energy needs in the world.

Bulgaria believes that the objectives for utilisation of energy from renewable sources till 2020 should be indicative rather than obligatory. We support an approach to define the national goals that would take into consideration the economic potential for the utilisation of renewable energy sources and the specific conditions in the different Member States. The approach suggested by the European Commission is expedient in terms of defining the goals for the individual sectors (energy, heating and cooling, biofuels) and not for the individual types of renewable energy sources and technologies for their utilisation since the benefit from all of them is the same – avoiding the use of conventional energy sources that pollute the environment. This would make possible securing the necessary flexibility to reach a maximum level of utilisation of renewable energy sources with a minimum total cost for the society.

Why are technological development and the creation of new nuclear power capacity so important for the parameters of the common European policy?

Bulgaria supports the adoption of a European Strategic Energy Technology Plan aimed at the development of competitive and economically efficient clean energy technologies. We support the goal for development and leadership of the European Union in the field of nuclear technologies, as well as the goal for the development of fourth generation atomic reactors and of a new technology based on nuclear synthesis. The suggested ambitious goal to reduce greenhouse gas emissions by 20%, compared to 1990 levels for the countries of the European Union, will depend exclusively on the creation of efficient incentives for changing energy production and consumption patterns, including by means of the European Union Greenhouse Gas Emission Trading Scheme. In this sense, we support the European Commission in reconsidering the Scheme and the elaboration of a timely and clear strategic long-term investment framework for promoting high efficiency technologies in the energy and industrial sectors, and the reduction of the harmful effects on the environment and the climate.

What should be done to secure nuclear power production over the next 20-30 years?

The European Commission presented a common energy strategy for the European Union to follow in the coming years. A large part of the strategy is devoted to nuclear energy. The EU Member States have the right to decide for themselves whether or not to rely on nuclear power to generate electricity. The increase of nuclear power capacities could also be considered as a possibility for reduction of harmful CO2 emissions into the atmosphere, thus responding to the challenges connected to climate change. It is a favourable development that the EU energy policy in its evolution becomes ever closer to the Bulgarian national energy policy. The major pillars of our policy are energy-efficiency, the use of renewable energy resources and local coal, and the development of nuclear energy, for which we now receive the recognition of the European Commission. On various international forums, Bulgaria, as mentioned above, has repeatedly emphasised that nuclear energy is the major factor both for guaranteeing the security of energy supply and for moderation of climate change. It has no true alternative in these two respects and fossil fuels pollute the environment and are often dependent on import, while renewable energy sources do not have the potential to satisfy the rapidly growing energy needs in the world. Even so, Bulgaria made a significant compromise concerning its energy industry in the negotiations for EU Accession. Early decommissioning of Units 1 and 2 in 2002 and, particularly, decommissioning of Units 3 and 4 of Kozlodui NPP at the end of 2006, has significantly affected the Bulgarian energy industry, which is among the best functioning sectors in the Bulgarian economy. It should also be borne in mind that the sharp decline in Bulgaria's capacity to export electric power will have a significant negative impact on the security of the energy supply to the Southeast European region and, in particular, to some of the Balkan countries, as well as Greece. There is practically no other physical possibility for the import of energy in the countries from the SEE region, apart from Bulgaria, since there are no well developed inter-connections with the EU countries, and there is no alternative supplier of energy in the region at present. The construction of Belene NPP is also a choice of energy independence from imported supplies of fossil fuels. Bulgaria lacks quality coal, oil and natural gas. By the end of 2006, we had imported from Russia about BGN3bn worth of oil, while the imported nuclear fuel is for about BGN8m. Moreover, there are enough suppliers of nuclear fuel in the world and it should be provided by other nuclear fuel producing countries. Bulgaria has enough supplies of the raw materials for nuclear fuel to operate our nuclear facilities for over 20 more years. There is also the positive effect of the poor dependency of energy prices from nuclear power plants on the fluctuations in the price of nuclear fuel, since its share in the cost of energy is under 20%.

Why are the efforts outlined in the long-term vision of the European nuclear development important?

We welcome the inclusion and recognition of the role of nuclear energy for the reduction of greenhouse gases, as well as for the stable and economically cheapest production of energy. We support the suggestions for the development of nuclear energy and the establishment of a high level group for EU nuclear security that would be authorised to develop community standards and regulations for nuclear security. This will also give the relevant guarantee for nuclear security to the countries that have decided not to use nuclear energy. If such a guarantee exists, the countries that have decided not to use nuclear energy should not hinder the development of the nuclear energy sector in the Member States that have opted for nuclear energy.

Why does Bulgaria support the transparent implementation of the legislation for the introduction of effective liberalisation and competitiveness till the complete opening of the international energy market?

Bulgaria takes into account the suggestions of the European Commission for further restructuring, with the aim to raise the level of competitiveness, increase investment, and offer a greater choice to energy consumers. Bulgaria sees the need for a maximum consensus among the Member States when discussing the possible changes in the current legislation.

Compatibility in the activities of the national energy regulators, which is the guarantee of the effective regulation of the market in every Member State through co-ordination of rights and the independence of the regulators, is a key condition for the formation of a competitive internal energy market of the EU. The ERGEG+ model for a network of European energy regulators, suggested by the European Commission, has the greatest potential so far to establish an efficiently functioning internal energy market and to overcome the technical difficulties before the cross-border trade. In this case, we still prefer the option for the decisions of this institution to serve as recommendations rather than having a binding nature.

The need for growth in the cross-border energy trading requires building up a community mechanism and a structure at EU level of the Transmission Systems Operators, with the aim to adapt energy transmission to the conditions of a liberalised internal energy market, and the formation of minimal standards for the network security. At the same time, a mechanism is needed for the introduction of co-ordinated regulations and standards to the markets, which are to be integrated into the internal energy market of the EU, such as that of the Energy Community.

The adoption of the Energy Charter for the rights of the consumers is a proper step towards raising the social dimension in the process of liberalisation of energy markets and the decline in unjustified pricing practices. With the low access rate for new market participants to the community energy markets, there remains the requirement for considerable improvement of the quantity and quality of information on the operation of the market. The initiative of the European Commission for minimum common regulations for enhancement of transparency should be implemented.