completionof nuclear powerplant blocks3 and 4 · pdf filecompletionof nuclear powerplant_...

Completion of Nuclear Power plant _ blocks 3 and 4

Authors of the presentation: Koloman Ivanička, Daniela Špirková and Tomáš

Urbanovský

Slovakian Megaprojects – The Case of Mochovce

Slovakia in Europe

Nuclear power plants in Slovakia

Map of power plant types operated by Slovenskéelektrárne in Slovak Republic Source: SE, a. s., 2012

Nuclear Power plant

220 kV line 400 kV line

Switchgear stationHeadquaterPhotovoltaic plant

Hydro Power plantThermal Power plant

220 kV line for 2 circuits

400 kV line for 2 circuits

Structure of energy generation in 2010

NPP 3 /4

Mochovce Nuclear Power Plant –Owner Slovenské elektrárne, a.s.

• Short video on‐ Virtual tour: http://www.youtube.com/watch?v=xAZ47IFwJek&feature=related

• English 7,5 min• http://www.youtube.com/watch?v=_QBKcVLQ5VE&feature=related• installation of pressure vessel 14 min• http://www.youtube.com/watch?v=IEW2TJ‐

04vo&NR=1&feature=endscreen

Ownership structure of Slovenskeelektrárne

Supervisory board of Slovenskeelektrarne

The Supervisory Board (15 Members)

11 Members appointed by Enel Produzione

2 Members appointed by The National

Property Fund of the Slovak Republic

2 Members appointed by employees

The Board of Directors

The Board of Directors (7 Members)

2 Members appointed by The National

Property Fund of the Slovak Republic

5 Members appointed by Enel Produzione

Enel• the largest power generating company in Italy; the second largest company in

Europe by its installed capacity

• It generates, distributes and sells electricity and gas in Europe, Northern and LatinAmerica Enel is present in 21 countries with almost 90,000MW of installedgenerating capacity, selling electricity to 49 million customers.

• The company employs 73,500 employees.

• Enel´s revenues in 2007 reached EUR 43.7bil, EBITDA reached 10bil., net profit EUR 3.98bil. The group delivered 196TWh of electricity and 5.5bil cubic meters ofnatural gas in 2007.

• The Italian Economy Ministry holds 21.1% of the company directly and another10.1% indirectly through state‐run lender Cassa Depositie Prestiti, leaving a free‐float of some 68.8%.

• Enel’s shareholders include leading international investment funds, insurancecompanies and pension funds,.

ENEL World production sites

Stakeholder Category

Case‐Study Comments (e.g. maturity, previous experiences of stakeholders, skills, influence on project)

Internal

Supply‐Side

Client Slovenské elektrárne, a.s. Largest producer of energy in Slovakia

Financiers Private financing: Enel, proceeds from equity from both shareholder of SE

The experience of large European power operator

Sponsors n/aClient’s Customers SEPS (Slovenská elektrizačná a prenosová sústava) – Slovak

power grid operatorClient’s Owners 34% National property fund of the Slovak republic

66% ENEL Produzione, SpAOther internal supply‐side categories ( please specify)

Category Case‐Study

MEGAPROJECT Stakeholder Identification (Internal)

SECTION 2 - PROJECT STAKEHOLDERS

Stakeholder Category

Case‐Study

Internal

Demand Side)

Principal Contractor

Enel, Ingegneria Innovazione

First Tier Contractors

Škoda Jadrové strojírenství (ŠJS), Atomstrojexport, Enseco (Evaluation of reliability and operational efficiency in the stages of commissioning, operation and decommissioning of sources of energy and heat. Design of electrical equipment), Inžinierske stavby Košice, ZIPPVUJE (research institute of the nuclear power plants), JAVYS (Nuclear and Decommissioning Company), SEPS (Slovak Electricity Transmission System)

Second Tier Consultants

Individual companies within Slovakia, Poland, Czech, HungaryIndividual worldwide companies

Professional Services Providers

Areva‐Siemens, NPPM (Nuclear power plant maintenance)

Other internal supply‐side categories

Category Case‐Study

MEGAPROJECT Stakeholder Identification (Internal)

Stakeholder Category Case‐Study Comments (e.g. maturity, previous experiences of stakeholders, skills, influence on project)

External

Public Regulatory Agencies Ústav jadrového dozoru (Office of nuclear regulation), URSO, MŽP (Ministry of Environment), MH (Ministry of Economy), International atomic energy authority (IAEA), Environment agency,International Atomic Energy Authority

Local Government Nitra Self ‐ Governnig Region, Levice district – Tlmače, Kalná nad Hronom, Starý Tekov, Veľký Ďur, Malé Kozmálovce, Nový Tekov

Positive economicimpact in region

National Government Slovakia, Italy, Austria, Czech Republic, Poland, Russia

Other internal supply‐side categories ( please specify)

Category Case‐study

Private Local residents Individual residents, Levice, Tlmače, Kalná nad Hronom, Starý Tekov, Veľký Ďur, Malé Kozmálovce, Nový Tekov

Possitive impact on the area, unemployment decrease

Local Landowners Individual landowners The value of property will increase

Environmentalists Greenpeace, Environment agency, VLK, Conservationists Greenpeace, State nature conservancy,Archaeologists The Monument office of SR, Local authorities, Greenfiield,

impropable to find somethink

MEGAPROJECT Stakeholder Identification (External)


SE(client)

FNM(owner)

Enel(owner)

SR Govermen

t(owner)

Retail investors

Institutional investors

Ministry of

EconomyEnvironment

Agencies

Office of nuclear

regulation

Provides nuclear site licenceAssists in providing nuclear site licence

SEPSNPPM

ŠJS

EnelInovazionne

Areva‐Siemens

JAVYS

First tier subcontra

ctor

First tier subcontractor

First tier subcontractor

MEGAPROJECT Stakeholder Relationship Maps

Owns 34% Owns 66%

Owns 100%

Owns 31,2%

Owns 37%

Owns 31,8%

Atomstrojexport

Owns 100%


External Stakeholder External Stakeholder’s Attitude to this Project

External Stakeholder’s Influence on project

Impact of Project on External Stakeholder

Greenpeace, VLK, Environment agencies, Austria goverment

Highly Unfavourable Ability to Lobby Government Organisations, civil disruption

Opposition to this type of project is their raison d’etre

Local residents and landowners

Concerned about risk but also welcoming new jobs and potential property boom

vote for local government and national government

Potentially ( and v. remotely) substantivelyharmful but in reality itmay make significant improvement to standards of living

Local Business Organisations Happy to see new business opportunities but want to have themavailable locally

General ability to lobby government (especially local )

if successful may increase growth substantially

Local goverment Very favourable and supportive

None identified Long term sustainability in region

MEGAPROJECT External Stakeholder Attitude Analysis

Rating• Fitch Ratings increased the rating of Slovenské elektrárne, a.s. from BB+ to BBB‐,awarding theCompany with an investment grade rating, or the highest rating in history of Slovenské elektrárne ,a.s.

Table 1 Construction schedule of the third and fourth unit of NPP Mochovceuntil 2007

1980 Start of construction

Site permit

1987 Building permit – start of construction

1992Halt of

construction works

Halt of construction works

1993 Start of preservation and protective works

2000 Approval of the Mochovce 3&4Strategic preservation maintenance and protection plan by the Nuclear Regulatory Authority (NRA)

2002 Takeover of the supplies in the property of Slovenské Elektrárne

2007 Feasibility study development

Table 1 Construction schedule of the third and fourth unit of NPP MochovceSource: worked according to SE, a. s., 2012

The completion scheduleFebruary 2, 2007 Continuation

and planned completion of the project

Slovenské elektrárne stakeholders announced the intention to complete the construction of units 3&4

July15, 2008 European Commission issues positive statement on units 3&4

August 14, 2008NRA approved Mochovce 3&4 design modifications and prolonged the building permit by Dec 31,2013

November 3, 2008

Inauguration of the re-start of construction works

2009 EIA process for Mochovce 3&4 operation (public participation)

June 11, 2009 Signing of contracts with the main suppliers

April 30, 2010 Ministry of Environment issues its Final Statement on the EIA Report

September 5, 2010

Installation of unit 3 reactor pressure vessel

2011 Realization of stress tests of EMO units(that were not planned) as the result of accident NPP Fukushima

March, 2012 Decision on delay of commissioning EMO units 3&4

2013-2014 Commissioning of units 3&4 (the original date 2012 -2013)

The major areas of design change improvements are:

• Severe Accident consequence mitigation;• Seismic reinforcement;• Enhancement of plant protection to area events (flooding, fire, etc);• Plant instrumentation and control and human machine interface;• Protection from high energy pipe breaks;• Minimization of radioactive wastes.• The management and verification of the design works are being performed by

Slovenske elektrarne through a dedicated Engineering Team which consists of specialists from Mochovce 3‐4, Mochovce 1‐2, Bohunice and from Enel SpA.

• For the technical activities, Slovenske elektrarne is assisted by an international engineering consultant.

• In order to ensure that the revision of basic design is performed by implementing the best applicable safety practices, SE has also set up a Safety Board, composed by 6 leading national and international experts in nuclear safety, which is aimed at providing guidelines as well advice on all subjects concerning safety.

Events and activities relating to

project stakeholders


project management


project performance

Events and activities relating to project environment

MEGAPROJECT Project Key Events and Activities TimelineTIME

SECTION 6 - PROJECT TIMELINE

Early site

permit

Buildingpermit – start of

construction

Halt of construction works

Start of preservation works

Re‐start of

completion works

Stresstestsafter

Fukushima

Final decision

on completio

n

Takeover of

supplies to SE

property

1980 1987 1993 2002 2007 2008 2011‐121992

1989

Revolution

1989

Revolution

1989

Revolution

2006

66% of SE owned by

Enel

1993

Dissolution of ČSFR

2004

Privatizationtender

1993

Dissolution of ČSFR

2004

Slovakia in EU

1998

Elections

2014Commissioning of the Unit 3&4

Funding of NPP• The NPP Mochovce was financed by State budget till the

end of 1991. Till the end of this year the governmentinvested 19 billion of Czechoslovak crowns.In the early Nineties lack of resources greatly influencedthe construction of NPP in Mochovce. The search forforeign funding started.

• In September 1995, the government approved a model to complete the financing of Units 1 and 2. It was agreed thatthe completion will be carried out within the scope of theoriginal design. Contracts with suppliers and creditinstitutions were signed in 1996. The government agreed to take over loan guarantees for the completion of Units 1 and 2

Funding of NPP• According to the original design Mochovce NPP consisted of

4 units, the construction of units 3 and 4 should followimmediately after the completion of Units 1 and 2 It alsohad to use existing support systems, which are common to all 4 blocks.Planned costs of construction of Units 3 and 4 attained EUR 1.3 billion.In 1992, however, construction work on the completion ofUnits 3 and 4 stopped. One reason was the lack of funds. Completion construction works of Units 3 and 4 resumedin 2007, which raised the cost to EUR 3.4 billion. Expectedcompletion cost of Mochovce NPP ‐ units 3 and 4 are EUR 2.7 billion, but even this costs will be surpassed.

Containement – walls 1,5 meters thickAll blocks in Jaslovske Bohunice havecontainment. Containment enables to protect against radation in case ofaccident.The installed containment reduces thepressure in nuclear powe block.wherethe large volume of water conse thevor releasd from primary circuit in caseof the damage of potrubie This enableto attain in cointainment the pressurethat is lower than atmosperic pressure.This enables the highest levelofprotection against external risk, including the collision with theaircarft

barriersagainst the release of radioactive substances into the environment:1d barrier ‐ the fuel matrix2nd barrier ‐ cover fuel rods3rd barrier ‐ wall components of the primary circuit4th barrier ‐ containment (protective reinforced concrete shield of the primary circuit)

The measures after Fukushimaaccidents

Nuclear regulatory authority of Slovak Republic asked Slovenské elektrárne in 31. 3. 2011 to prepare the program to evaluate the responses related to the accident at Fukushima NPP in the following areas:

• Initiating events beyond the project status of nuclear power plants(earthquake, flooding, other extreme externalities).Induced loss of safety functions (complete loss of all sources of power, the ultimate heat sink).

• Type of emergency management (melting of the reactor core, hydrogen management, degradation of cooling in the pool storage of spent fuel).

Reaction: implementation of plan of actions: "Lessons learned from the Fukushima accident.„

• Realization of the costly stress tests

The problems of completion of the blocks 3 and 4

• The project of completion of the third and fourth block of Mochovce (EMO) formally started on November 2008. Theproject should have been finished in 2012 and 2013. Yet thereality at present is different The completion of the projectdelays for another 1,5 year. . The delay are partly explainedby realizing the stress tests after the Fukushima accident, other reasons were not published yet.

• The consequence of the delay: The costs of the completionwill be raised by € 200 millions. The stockholders will notreceive dividends from the operation of the Blocks 3 and 4. For the Slovak government (the owner of 34 % of thestocks), this means additional stress for the state budgetand the necessity to

•

MEGAPROJECT Project Environment

SECTION 5 - PROJECT ENVIRONMENT

Specific political events impacting on the project

The construction of the nuclear power stationMochovce started in 1981. It was expected thatEMO will start to work at the end of Eighties. Theproblem was that the proposed control andregulation system of technological processes wasoutdated, which led to delay of the completion ofthe project. After the political changes in 1989the state budget funding on the reasonable levelwas not longer available.

EconomicEnvironment

In times of economic recession, this investment is a huge stimulus to the nationaleconomy. More than 1.6 billion EUR of the total investment is being spent inSlovakia. The construction directly involves about 3,000 people for three years andalready created additional 300 permanent jobs for operation in new blocks. It alsoindirectly involves several thousand people who provide infrastructure for the project,most of them from Nitra region. Nuclear type power plants belong to low carbon technologies (and in fact, greenhousegas emissions are running at close to zero), so the construction of two new nuclearunits will significantly contributes the fulfillment of the commitment of Slovakia toreduce CO2 emissions by 2020. Each reactor VVER 440 will save about 3.7 million tonsof CO2 each year. Otherwise this greenhouse gas will flow to air from coal‐fired powerplants.Based on the document ESS SR, the final consumption of electricity represents about20.7% share of total energy consumption and until 2030 is expected to rise to 22.8%.This increase is consistent with the expected growth of the economy, while reducingthe energy consumption. In connection with this fact it is quite a significant factor inthe expected increase in energy prices. Production costs of nuclear energy incomparison with coal and gas resources are less sensitive to price changes. This ismainly so because in the world there is a sufficient number of uranium deposits and itis possible to diversify the vendors.


Specific Economic Events impacting on the project

The new production capacity in Mochovce willbecome the next great stabilizing element in ourenergy system and it guarantees stable andsecure supply of electricity. Placing third and fourth block of Mochovce intooperation in 2013 will replace fossil fuel burningin the Central region of Slovakia. It is expectedthat this would reduce the volatility of electricityprices for households and industry on the Slovakmarket.


Feasibility studyStudy presented by Deloitte&Touche in 2002 analyzed the completion as aproject for independent power producer (hereinafter IPP) i.e. like the mostconservative variant in terms of their financial evaluation.Based on the financial estimates and forecasts, which used wide range oftools and techniques of project financing, Deloitte&Touche preparedfinancial model and financial forecast with below mentioned conclusions:

Company SE MO34 as IPP can be successfully designed and financed assole projectCompany SE MO34 as IPP has sufficient cash flow, to fulfill their liabilitiesand cover operational costsCash flow of the company as IPP provides adequate assurance in respectto the debt service obligations incurred from the financing agreementsIn general, the company SE MO34 as IPP seems like a profit makingcompany, whereby the return of equity seems to be significantly higherthan the average level in comparable projects within EuropeThe internal rate of return (IRR) of the project is calculated around 18,61%for the whole life cycle of the project / 40 years.


Feasibility study Positive aspects of completion:

Valid building permissionUtilization of constructed objects and sideaccommodationsCompensation for the decommissioning ofenergy capacity till 2010Boost for whole economy in SlovakiaUtilization of experienced staffEvaluation of financial expensesHigher economic efficiency in long‐term period comparedto comparable resourcesEmployment and regional developmentHigh level of usability of supplied components andequipmentHigh level of safety after the revision of former projectOptimization of completion costs, approximately EUR 1mil./MW installed


SECTION 7 – SUSTAINABILITY

Sustainability

Comments on the relationship of the project to issues of sustainability

Completion of third and fourth block of the nuclear power plant will be the largestprivate investment in the history of Slovakia.Slovenské elektrárne invests EUR 2.775 billion by 2013 in the construction ofMochovce NPP units 3 and 4.Further investments were concluded with the modernisation and power up‐rateof existing units in Bohunice NPP ( EUR 0.5 billion) and Mochovce NPP power up‐rate.The Strategic Plan involves also hydro full automation and modernisation of theexisting hydro units, introduction of biomass in the fleet of thermal power plants(Vojany and Nováky) and development of renewables ‐ mainly photovoltaic andsmall hydro power plants.

This completion is one of three nuclear power plant currently being built in EU

Third block will be put into operation in 2012 and fourth block in 2013.

Each block with performance 440MWe

Non nuclear part contractor: ENEL Ingegneria e Innovazione

Contractor of control and management system: Areva‐Siemens

Up to 2/3 of work was carried by Slovak (local) companies

Communication strategy of the completion is based on transparency and

therefore more than 2/3 of Slovak population and more than 87% of the

population in the 10km zone around the plant supports the completion


Acceptability of NPE by publics

Communication channels: Civil Information CommissionMochovce ‐ consists of 16 well‐known personalities of theregion. They meet regularly with management Mochovce, ensuring their constant awareness.Interest regional association Mochovce ‐ brings together citiesand municipalities in the 20 km zone Mochovce and theAssociation of Municipalities in the 5 km zone of NPE plant.Instructions are available to all visitors in power atom.skmonthly, distributed free of charge in the region

Support for Mochovce NPP

Communication• Company representatives take regular part in meeting the administrative

boards and general assemblies of the association of cities andmunicipalities of the Mochovce and Bohunice region.

• The company organizes annual study trips for mayors and representativesof the cities to nuclear installations abroad

• In order to promote the exchange of information and to increasetransparency of business, the Civic Information Committee (CIC) wasestablished in 2005 in the location of Mochovce.

• The Committee consists of 13 representatives of local selfgovernment and academic sphere meeting minimally twice a year with the power plantmanagement for the exchange of information regarding the latest eventsin the nuclear power plant.

• Civic Information Committee was founded for location of Jaslovské Bohunice in 2007 based on initiative of the Association of municipalities, the Bohunice NPP region and the companies JAVYS, a.s. (nuclear and decommissioning company) and Slovenské elektrárne, a.s.

Political environment• As a condition of accession into the European Union (2004) Slovakia

was forced to deactivate two reactors at the V‐1 plant in JaslovskéBohunice. The first reactor was shut down at the end of 2006, the second on the last day of 2008.

• The Russia‐Ukraine gas dispute in January 2009 disrupted natural gas supplies and electricity generation. The Russia‐Ukraine dispute had strengthen the political position of the advocate of completion of third and fourth block of Mochovce nuclear power plant ‐ the largest private investment in the Slovak Republic since its establishment.

• Document Energy Security Strategy of Slovak Republic (ESS SR) THE document refers to the fact that the EU is unable to guarantee the energy security of its members. Therefore in the competence of the Member States remain setting energy policy and particularly the determination of the energy mix.

Relations with Austria

• Austria ‐ the nuclear power euphoria was typical for Sixties. Construction ofnuclear power plant Zwenterdorf, which was expected to be completed in 1976. But during 1975 the protest movement was developed and half of the population was against the operation of nuclear power plants

• The referendum in 1977 has forbidden commissioning Zwenterdorf plant. • The disaster at Three Miles Island in 1979 and Tchernobyl catastrophe further

strengthened anti‐nuclear power plant opposition in Austria. Moreover the nuclear power plant agenda enabled to join political forces that were against the former premier minister Bruno Kreiski.

• Anti‐nuclear stance is also typical for public is as well as for Austrian parliament and government, while Parliament is in their views more radical, more approaching to public attitude.

• Austria expressed concern over the "nuclear renaissance". Austria will by all means protest against the presentation of nuclear energy as a safe and sustainable form of energy and will strongly advocate for the proliferation ‐ and the form of a multilateral system of controlling access to nuclear fuel. Austrian politicians and media promote a strict anti‐nuclear policy, not only on its territory, but also in relation to other countries, especially neighbors and try to promote anti‐nuclear the concept at European Union level.

Relations with Austria• Against the completion of Mochovce Austria stood out as very active at international level – she for

instance managed to block the allocation of credit for completion of the European Bank for Reconstruction and Development (EBRD) in Nineties in 20th century.

• The Austrian anti‐nuclear power activists from Greenpeace and Global 2000 occupied the Slovak Embassy in Vienna in May 1998 and demanded all the technical documentation for NPP Mochovce.

• The pressure from the activists was also focused on banks providing the credit for completion of third and forth unit of EMO Mochovce, and I some cases they succeeded in way that the banks refused to provide the credits for completion.

• The 2011 crash of Fukushima plant has caused renewed growth anti‐nuclear tendencies. Austria at the end of March 2012 decided to undertake the action against Czech and Slovak Republic in front of the European Court of Justice (ECJ). It was part of new action plan adopted by Austrian government in the document "International rethinking of nuclear power to renewable energy and energy efficiency", which was approved on March 3, 2011.The program aims to promote the closure of nuclear power plants across the European Union, through extensive campaigns and cooperation with other anti‐nuclear oriented countries.

• However European Union has never shared the extreme opinions of Austrian politician to the development of the nuclear power stations. So when Vienna provincial government sued Slovakia for the completion of third and fourth EMO units in 2011, it did not succeed

• The Slovak‐Austrian controversies regarding the operation of Nuclear power plant in Mochovce are likely to continue in future, even though the safety standards were significantly augmented.

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