What the opponents say – and how the Bank responds
The programme is basically a lifetime extension of nuclear reactors which instead should be shut down.
Nuclear safety is a consideration of the utmost priority at any time regardless of whether a unit has just been connected to the grid or has been producing electricity for decades. The upgrade programme includes measures to address well-known generic safety issues with reactors of this design irrespective of their age. The K2/R4-project illustrates this approach: The modernisation and upgrade were implemented even though the units had just been completed. This shows that safety always comes first for us. Furthermore, the K2/R4 loan covenanted that a nuclear safety upgrade should be required for all nuclear units operating in Ukraine. Energoatom has already started this programme and the EBRD and Euratom are joining now.
Unit 1 at South Ukraine NPP initially did not get a licence beyond 2012. Does the EBRD have confidence in the independence of Ukraine’s nuclear regulator?
Energoatom has made a case to the nuclear regulator (SNRIU) for a longer operation period of SU1 arguing that the design life of the plant had not yet elapsed. Energoatom provided documentation, including information by the design institute, to substantiate the claim. After review SNRIU granted the extension of the licence until the end of the current fuel campaign. Due process was followed and we have no indication that any pressure was put on the regulator to influence its decision.
SU1 will go into a long outage at the end of its current licence, Energoatom will perform (safety and other) upgrades and seek a new licence. We have confidence that such a request will be duly reviewed by SNRIU and Energoatom will get a new licence if it can demonstrate that SU1 meets all the requirements. This process, however, has nothing to do with our project.
The Bank did not use its leverage sufficiently to bring Ukraine to a commitment to a fixed date for the phasing out of nuclear power production
The Bank has no policy basis for forcing the closure of any source of energy. The EBRD’s energy policy is mainly geared towards bringing about greater energy efficiency. However, the Bank has been given a clear mandate by its shareholders that: “it may provide financing to an operating facility in relation to nuclear safety improvements” (EBRD Energy Operations Policy). Ukraine is currently reviewing its own energy strategy but has made it clear that it will continue to use nuclear power generation. Consequently, addressing the safety issues and raising of standards is the EBRD’s primary concern and its due role.
Energoatom illegally uses the water cooling reservoir at the South Ukraine NPP. How does the EBRD’s due diligence address such facts?
South Ukraine NPP does not require additional cooling water for its operation. It is cooled using aeration ponds and water from the Tashlyk reservoir, a small reservoir located on a little tributary of Pivdenny Bug. It does not directly use water from Pivdenny Bug for cooling needs. In parallel, Energoatom operates a pumped storage scheme for peak energy production with an upper mini-reservoir located against Tashlyk reservoir and a downstream reservoir located on Pivdenny Bug named Olexandrivsk. The EBRD’s environmental assessment did not identify any non-compliance in relation to South Ukraine NPP or Olexandrivske reservoir.
How confident is the EBRD that Ukraine can bring its nuclear programme in line with international safety standards?
The fact that the nuclear power plants in Ukraine do not yet fulfil all international standards and regulations only underlines the crucial importance of the upgrade programme. A detailed work schedule has been developed which is due for completion by the end of 2017. The tendering of contracts in accordance with the EBRD’s Procurement Policies and Rules will ensure a transparent, competitive and cost-efficient process.
It also has to be mentioned that Ukraine has come a long way in nuclear power generation. A joint report by the International Atomic Energy Agency, the European Commission and the government of Ukraine published in February 2010 confirms that in most areas Ukraine complies with international standards. Where this is not the case the required corrective measures will be implemented now by the upgrade programme. This programme has been reviewed by leading local and international independent experts whose additional recommendations have also been taken into account.
Lastly, it is also important to stress that Ukraine has made substantial progress with the institution of an independent nuclear regulator. The authority has won high recognition and respect and the new loan will lead to its further strengthening which is critical for trust in the nuclear power sector in the country.
The EBRD should rather invest in renewables and lessen Ukraine’s dependency on imports of gas and oil and nuclear power.
The Bank is taking a very active role in the promotion of “green” energy in Ukraine and in many cases serves as a forerunner. In 2012 alone the Bank invested over €200 million in energy projects based on renewables sources such as wind or water. At the same time, the Bank is a leading force in the drive to improve the country’s energy efficiency. Ukraine still has an energy intensity which is three times higher than the European average. The EBRD therefore strongly supports the present review of the country’s energy strategy and the commitment to reach an 11 per cent renewable energy target by 2020.