From Balkanleaks:

Belene NPP Report before Being Altered under Government Pressure

Definite and verifiable conclusion: The Belene NPP project is unprofitable
Екип на Биволъ

The Balkanleaks platform for anonymous sharing recently received the integral text (in Bulgarian – editor’s note) of an interim version of the report drafted by the Bulgarian Academy of Sciences (BAS) under a contract with the Bulgarian Energy Holding (BEH), titled: “Preparing a National Strategy in the Energy Sector (with a focus on electricity)”.

This version of the report was submitted to BEH and the Ministry of Energy at the end of September 2017. Some of the conclusions in this interim report were published in October in the Capital daily, which claims to have the text but did not publish it in its entirety.

The report contains an introduction, three parts and two annexes: Financial model for Construction and Operation of the Belene Nuclear Power Plant (NPP) and Forecast Prices of Electricity in the Region.

The Belene NPP is examined in detail in the second part of the report. The full name of the assignment on which the BAS has worked is: “Analysis of the Possibility to Implement the Belene NPP Project on a Market Principle and Exploring an Option for Separating the Assets and Liabilities of the NEK (the National Electric Company – editor’s note) Related to the Belene NPP Project into a Separate Company and Conducting a Follow-up Procedure under the Law on Privatization and Post-Privatization Control”.

There are three separate parts:

  • Technical-economic and legal analysis of the possibilities to use the already-acquired equipment for the construction of a nuclear power plant at the Belene site on a market principle;
  • Option to separate NEK’s assets and liabilities related to the Belene NPP project into a separate company;
  • Financial model of the Belene NPP project – in Excel.

However, there is an important clarification:

Interim reports are intended to be read and used in their entirety and not partially and separately. The separation and / or modification of any section or page of the reports renders them invalid with regard to the conclusions and the assessments. These findings are valid only with regard to the outlooks, the scope and the purposes of the reports at the date of the reporting.

The report also rejects the myth launched every so often by the government and nuclear lobbyists that the project could be implemented by a private investor without public funding.

The general conclusion is that the implementation of a project for the construction and the operation of an NPP without any state commitment, including a financial one, would not be in line with the current regulatory framework.

“After BEH and the minister of energy examined closely this version, they push the project team to introduce significant changes and for that reason, the project was extended by 2 months (sic),” the anonymous person who has sent the documents claims.

MS Word and MS Excel files reveal comments and changes by a “beh” user, as well as metadata for recent changes by a user named MEET – the previous abbreviation of the Ministry of Economy and Energy.

Definite and verifiable conclusion: The Belene NPP project is unprofitable

On the economic and financial feasibility of the Belene NPP, BAS scientists firmly conclude that there is none.

An interactive model is also included in an MS Excel file with 18 tables and an algorithm for automatic result update. This way, everyone can test variations of projected prices on domestic and regional markets and capacity options. This model was ready in June 2017, the metadata from the file reveal. The file was last changed by a user named “beh” on September 18, 2017.

BAS scientists, who have prepared the preliminary report, are categorical that the bill to be footed by the taxpayers does not add up in any of the combinations.

The elaborated financial analyzes cover a wide range of possible options, both for financing the construction of the NPP and for its exploitation throughout its life cycle. They use six options for participation in the project company’s capital to build the plant and finance the project, five variations of projected prices on the domestic and regional markets, where the plant can sell the electricity produced by it, and two variations of capacity utilization. When all these variables are played, they result in a total of 90 combinations.

For none of these 90 combinations, the project is financially viable. This also happens when the highest prices, full capacity and a different ratio between own and borrowed capital are combined. The net cash flows of the project are negative and its internal rate of return is below the discount rate.

Why did the government classify the final version?

The availability of this interim / “pre-final” (sic) version, which, as one can see, had been nearly conclusive, allows an exact verification of what was changed during the two-month extension to arrive to the final version, which provides more favorable conclusions about the feasibility of the construction of a second nuclear power plant.

The final version of the report was classified, although it is a strictly scientific work on the basis of open data, and not a report prepared by the services on intelligence-based information. The final report has already been requested under the Access to Public Information Act (APIA) by several political parties not represented in Parliament.

Bivol welcomes the efforts to declassify the final version of the reports under APIA, but also calls on those with access to the final report to send it to Balkanleaks, a platform that ensures complete anonymity and untraceability of the sender.

The comparison between the final and intermediate versions will provide an answer to the question of what has been changed in the report and whether the changes are compatible with an objective and impartial scientific assessment or a partisan fraud ordered by the government to justify a huge theft of public resource to the benefit of a foreign country and corruption groups.

Although, the final version of the report is classified, its publication in violation of current legislation is justified in terms of public interest to protect taxpayers’ money, the honor of Bulgarian scientists and the future of Bulgarian children.


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