IMPORTANT QUESTIONS AND ANSWERS ABOUT THE SLOVAK NUCLEAR POWER PLANT MOCHOVCE A BRIEFING PAPER Prepared by Environmental Non-Governmental Organizations for the Board of Directors of the European Bank for Reconstruction and Development November 1994 1. Is the Mochovce Nuclear Power Plant Needed? 2. Will Slovakia Export Electricity from Mochovce? 3. Is Mochovce the Least Cost Option for Electricity in Slovakia? 4. Will Mochovce be Safe? 5. Will Bohunice V-1 be Shut Down Because of Completion of Mochovce? 6. Will Russioa Complete Mochovce if the EBRD Does Not Finance Western Involvement in the Project? 7. How Does Mochovce Affect Nuclear Safety in Central and Eastern Europe? NOTE - This briefing paper has been compiled with information and assistance supplied by numerous individuals and organizations from throughout Europe and North America. The text was written and compiled by Philip Weller (GLOBAL 2000) with written contributions from Antony Froggatt, Lubica Trubinova and Heinz Hvgelsberger (Greenpeace), Radko Pavlovec (GLOBAL 2000) and David Schwarzbach (Natural Resources Defence Council). Production by Erich Braun (GLOBAL 2000). For additional copies of this paper please contact: For Mother Earth, P.O.Box 93, Bratislava, Slovakia Tel/fax: -42-7 713 506, Email: zamatku.zem@seps.ke.sanet.sk GLOBAL 2000, Flurschutzstrasse 13, 1120 Vienna, Austria. Tel: 43/1/812 57 30-0 Fax: 43/1/812 57 28 ------------------------------------------------------------------ 1) IS THE MOCHOVCE NUCLEAR POWER PLANT NEEDED? The need for electricity in Slovakia is declining. In 1993 the consumption of electricity in Slovakia was 20.42 TWh - this amount is 18.5% less than was used in 1990[1]. The decline in electricity consumption between 1992 and 1993 was 6.2%. It can be expected that electricity consumption will increase when economic growth begins again. Reaching a state of economic growth, however, appears to be more difficult than Slovak officials had predicted. According to official Slovak figures (calculated on the basis of European System of Integrated Economic Accounts) the real value of GDP in 1993 declined a further 4 %[2]. Before GDP begins to increase, further declines in electricity consumption are to be expected. Conservative estimates of future electrical energy need in Slovakia predict that the electrical energy demand that existed in 1991 will not be reached until the year 2005 at the earliest[3]. The existing prognoses greatly overestimate future electrical energy needs. Despite the decline of electrical consumption, and a less optimistic economic situation in Slovakia than expected, official estimates of future electrical energy needs in Slovakia continue to be based on gross exaggerations of the likely future need. The Slovak government, for example, estimated the electrical energy consumption up to the year 2005 and included an estimate for 1992 consumption of 25.8 TWh[4]. The actual electrical consumption for 1992 was 21.76 - over 15% below the official estimate. A briefing paper presented by staff to the Board of Directors of the EBRD in July 1993 also identified grossly exaggerated electricity consumption - the electricity demand for 1992 was estimated at 27.0 TWh[5]. This amount is almost 25% above the actual demand. The existing capacity for electricity production in Slovakia is more than 65% greater than the 1993 demand. The installed capacity for electricity production in Slovakia (1994) is 6918 MW[6]. In 1992 the calculated maximum peak load need for electricity was 3770 MW[7]. The currently installed capacity is therefore at least 75% greater than the peak load demand. It is usual for capacity to be greater than peak load demand - but not by more than 35%. At present many of the existing generation facilities are in operation only a very limited amount. With the 75% capacity above peak load it is possible to produce at least 65% more electricity than was needed in 1993. Completion of Mochovce will therefore add additional capacity for electricity production to an electricity system with an already existing overcapacity. ----------------------------------------------------------------------- 2) WILL SLOVAKIA EXPORT ELECTRICITY FROM MOCHOVCE? Slovakia needs to use electricity export to pay for the Mochovce project. Because the power from Mochovce is not needed in Slovakia, one of the major points of confusion surrounding the completion of plant is whether or not electricity will be exported to western markets. According to the information presented by the staff to the Board of the EBRD in July 1993, SEP and the western partners "have proposed an export of electricity contract over 10-15 years, which would generate enough foreign exchange to cover debt service after costs are taken into account."8 The reason for the electricity export is that "The Slovak Government have limited borrowing capacity at present, and wish to minimize the application of sovereign/government guarantees." Recent statements from SEP and EBRD officials have added to the confusion about this issue by claiming electricity will not be exported from Mochovce. A Slovakian Ministry of Economy official, however, confirmed in an October 1994 interview with the BBC, that "we intend to export half" of the electricity from Mochovce. When asked why, he replied, "to earn foreign currency to help repay the loan."9 This position was reinforced in an October 17, 1994 German Government document. The document explains that, because of the known difficulty east European countries have with financing the necessary safety improvements, western partners have said "that they will accept electricity from Mochovce as payment" for participation in the project.[10] Western firms will receive cheap power for their involvement in completing Mochovce. The Czech News Agency, CTK, reports,"The Slovaks will pay for Siemens` technology with electricity supply." According to CTK, to pay for the German machinery, Slovakia will have to supply Germany with 1.4 billion KWh of electricity. The electricity from Mochovce is expected to go to Bayernwerke, whose chief, Eberhard Wild, described the arrangements with Slovakia as "Good cooperation".[11] The German magazine, Der Spiegel, has revealed that the price arranged for electricity from Mochovce will be about half the cost of electricity produced in western Europe (about 2.5 cents per KWh).[12] By receiving low cost electricity it is expected that the participation of western firms in completing Mochovce will be generously rewarded. An export connection from Mochovce to western markets is currently under development. Although Slovakia is not currently connected to the UCPTE-Network, the west European electricity grid, the IEA has recommended that Slovakia develop this connection to take advantage of export chances.[13] Efforts are currently underway to build a 380 kV connection to the western grid in Austria at Stupava to enable Slovakia to export power. The connection will enable Slovakia to ship electricity to western markets.[14] The west doesn't need electricity from Mochovce. Electricity from Mochovce, however, is not needed in Western Europe. At present and for the forseeable future, there is considerable overcapacity of electricity supply in Western Europe. 1992 figures indicate that the the load factor for the existing generating capacity in western Europe was under 50%.[15] This means that the existing power production facilities produce only half the power they are capable of. Although no energy system can run at 100% capacity, a 50% excess of capacity to need is substantial redundancy. Therefore the only motivations for export of electricity from Mochovce to western Europe are that it will enable Slovakia to repay the loans needed to complete Mochovce, and that the power can be produced more cheaply from Slovakia with a reactor with lower safety systems than those in Western Europe. ---------------------------------------------------------------------- 3) IS MOCHOVCE THE LEAST COST OPTION FOR ELECTRICITY IN SLOVAKIA? The estimated costs of completing Mochovce does not include all the costs. The cost estimate of the Slovak government to complete Mochovce units one and two is 26.5 billion Sk ($840 million). This figure does not include costs for medium or long term waste disposal or decommissioning of the reactor. The estimated cost of decommissioning the 440 reactors at Lovissa were $237 million.[16] The costs of a medium-term waste disposal facility has been estimated to be an additional 45 billion Sk.[17] Although the company claims that Units 1 and 2 at Mochovce are between 80-90% complete, government figures indicated that the investment made to date at the plant represent only 50% of the total costs needed to make the plant operational. Adding decommissioning and medium term waste disposal costs to the equation means that substantially less than 50% of the necessary investment has been yet made at the plant. Additional costs will also be incurred in finding a solution to the long-term waste disposal problem for which, remarkably, there is as yet no forseeable solution. An additional consideration in determining the actual cost for completion of Mochovce are the level of safety improvements that will be included. The current cost estimates for the safety improvements proposed for Mochovce are approximately one half (or less) than those considered necessary to achieve a desireable safety level at the Greifswald 5 reactor in Germany. Despite this much higher level of proposed investment, German environment Minister Klaus Toepfer, concluded, "Because of the high cost of backfitting and Germany`s higher safety standards" Greifswald 5 would remain shut.[18] Experience shows that the cost estimates of the Slovak government and the nuclear industry are not realistic. Past experience also indicates that the SEP and EdF estimates of the costs to complete Mochovce and the costs of producing electricity may be unrealistically low. A major international study of the costs of electricity from new nuclear power projects in Europe recently found: "If actual field experience and current cost and performance uncertainties are prudently accounted for, the cost of electricity from new pressurized water reactors (PWRs) increases by about 30 and 100 percent over official French and German estimates."19 Based on the findings of the study the authors warned that cost estimates for electricity provided in official Western utility and government assessments "cannot serve as a basis for prudent energy policy or utility investment decisions." The study also found, "When accident risks and environmental externalities of conventional reactors are monetized on the basis of conservative estimates, nuclear power costs rise further by large percentages, resulting in nuclear power costs as much as 185 percent above official estimates."20 a) Is it cheaper and safer for Slovakia to Invest in Demand Side Management? Current energy use in Slovakia is highly inefficient. The current energy problems of East European countries are not a problem of inadequate capacity they are a problem of the inefficient use of the existing energy. This energy inefficiency is reflected in the relation of energy use to GDP in Slovakia. In 1992 the ratio of total energy supply to GDP in Slovakia was 1.85 - this is over four times higher than Germany and over 6 times higher than Denmark.[21] Numerous studies indicate the substantial potential and cost effectiveness of efforts to improve energy efficiency in Slovakia. The company Power Smart (a consortium of 33 utilities and government agencies including Canadian, U.S. and East European members) completed an analysis of the energy saving potential in Slovakia. They found that despite existing low prices of electricity a total of 616 MW of installed capacity - or about 70% the total power to be produced by Mochovce - could be saved with an active energy saving program. The total cost for this program would be 3.2 billion Sk (approx $100 million). The cost for the energy saved would be between 0.86 and 3.86 Sk/Kwh.[22] In a similar study conducted by the Belgian firm Tractebel, the technically possible energy saving potential up to the year 2010 was found to be 8,179 GWh or 1841 MW of power plant capacity. They considered a realistic potential in the year 2000 (based on a gradual rise in electricity prices) to be 779 GWh (202 MW of capacity), and in the year 2010, 2,247 GWh (575 MW of capacity). A one million dollar study of the energy saving potential in the Czech and Slovak Republic by the Austrian Energie Verwertungsagentur (EVA) found that the technical electricity saving potential in the Slovakia in 1992 is about 5,000 GWh or approximately 1,100 MW of capacity. This amount is 25% greater than the total contribution that would be produced by the Mochovce Nuclear Power plant. Government support for low cost energy promotes its wasteful use. The continued government support for low cost energy in Slovakia contributes to existing inefficiency of energy use. In 1992 the price of electricity supplied to households was 0.8 Sk/Kwh and to industry the price was 1.5 Sk/Kwh.[23] These costs for electricity are relatively low in comparison to neighbouring countries and European standards and include government subsidies. The costs of production therefore do not reflect the full costs of production. The continued low price and excess supply of electricity (and other energy) in Slovakia promotes its wasteful use. Adding to the existing supply of electricity reduces further the already limited incentives in Slovakia to use electricity wisely and efficiently. The Energy Policy of the EBRD has noted, that most energy plans in its client countries "do not usually reflect the highest demand-side management priorities."24 The policy notes, "Too little regard is paid to the urgent need for efficiency improvement and associated investment requirements." Continual expansion of the existing excess of generating capacity exacerbates this failing. In a country with limited financial resources, funds spent on building new generating capacity reduce the funds available to reduce inefficiency. It is environmentally and economically better to reduce the existing excessive demand for electricity than to build new facilities that continue the old wasteful ways. b) Is it cheaper and safer for Slovakia to Invest in Combined Heat and Power? There is substantial potential for combined heat and power in Slovakia. Although demand side management is the most cost effective and environmentally appropriate means of meeting existing Slovakian electrical energy needs in the future it is likely that some new generating capacity will be needed. The existing energy system in Slovakia makes it ideal for meeting this need through combined heating and power plants. More than 90% of the heat for households in Slovakia is delivered by large centralised heating systems or small heating plants through district heating systems. Because of the high concentration of centralized heating, a recent Slovakian study found, "the situation is highly advantageous for installing combined heat and power."25 The study concluded, 790 MW of brand new capacity could easily be installed plus an additional 1,282 MW of power from converting existing heating plants. The total potential capacity is therefore greater than 2000 MW. In addition to the benefit of additional power necessary heat would be produced. The costs of building new combined heat and power plants are less than the costs of completing Mochovce. The cost of building 5 large combined heat and power plants in Kosice, Presov, Ziar nad Hronom, Zilina and Vojany, with a combined electrical capacity of 886.6 MW, would be 15.6 billion Sk. These costs for new plants are less than the official estimate of 26 billion Sk needed to complete Mochovce 1 and 2.[26] A study by an Austrian gas firm (VMV) identified a ten year amortization period for installing a 350 MW plant in Bratislava. An assessment (by the consulting firm EGU) of the cost of installing a complete set of gas combined heat and power plants in Slovakia found that such plants could be amortized in a 5 or 6 year period. The advantage of this option is that they provide both electrical power and heat and can be built quickly in response to actual need.[27] The costs of converting heating plants to combined heat and power are lower than the costs for completing Mochovce. The Global 2000 Environmental Research Institute found that the costs of a complete program of construction and rehabilitation of combined heat and power plants, that met electrical needs of Slovakia up to the year 2005, would be 41.2 billion Sk. This is 33.8% lower than the government estimates of the costs to complete Mochovce and to build the additional capacity needed to meet the projected demand. When decommissioning costs are added the costs for completing Mochovce and the other proposed options are almost 60% higher than the costs for an improved system of combined heat and power.[28] There are sufficient and secure gas supplies to Slovakia. Gas consumed in Slovakia is imported from Russia. The Slovak Republic has a very extensive pipeline network including the main Brotherhood pipeline (60 billion cubic metres (bcm)/yr) which transports the majority of Russian gas sold to the west. The 1994 contract with Russia is for the delivery of 5.75 bcm of gas. The fees paid by Russian to Slovakia for the transfer of gas are currently paid in gas credits. The current contract calls for an increase of the gas delivery to Slovakia by the year 2000 of up to 9-10 bcm.[29] Slovakia therefore has extensive gas available for expansion of the system of gas powered combined heat and power plants. According to the General Director of the Slovak Gas Industry: "Natural Gas in Slovakia has a great future ahead, not only from economic but also from environmental reasons....Slovak Gas Industry intends in the near future to invest into enhancement and enlarging of pipleline system and into gasification of new localities in Slovakia."30 The gas industry in Slovakia is so healthy that the current expansion and diversification plans are being financed solely by company cash reserves. In support of this optimistic view of the industry situation, the 1993 Annual Report of the company notes: "The strategic position of Slovakia in the transit of gas to western Europe enables SPP to have a favourable position in negotiations with Russia. Existing operating storage capacity of 1.6 bcm in connection with possibility to develop additional storage provides relatively reliable position as far as security of supply is concerned."31 The security of supply to Slovakia also does not appear to be in question. Continual concern has been expressed by Slovakian officials and EBRD staff about the need for independence from Russia and the concern about interruption of gas supply. The concern about this interruption appears unfounded. As the Slovak gas company notes: "Slovtransgaz is part of the European gas grid. For more than twenty years is Slovak international transmission system [sic] interconnected with the main European transport system and provides reliable service to the important continental gas companies, such as Ruhrgas, Gaz de France, SNAM etc. With existing capacity 74.1 bcm per year Slovak transmission provides the main gas transport line from the East to the West." ----------------------------------------------------------------------- 4) WILL MOCHOVCE BE SAFE? The Mochovce Nuclear Power Plant does not have secondary containment considered necessary by western safety experts. One of the key safety concerns with the Mochovce nuclear power plant is that it will not have the secondary containment considered necessary by western nuclear experts to prevent the realease of radioactive material in the event of an accident. The importance of containment was underscored recently by Morris Rosen, the head of nuclear safety at the International Atomic Energy Agency. In an interview with BBC radio journalists, he said, "Containment should be mandatory for Nuclear Power Plants." He called containment, "a final barrier against release of radioactivity". Asked by the BBC if the critique that the Mochovce reactors would not get a liscense to operate in the west is correct, he replied, "I would say it is true".[32] In addition to providing protection against radiation release, containment provides protection against external hazards such as an airplane crash. German Nuclear Executive, Dietmar Brauer, stated in a recent interview, "these reactors were built according to Russian safety standards, and they simply don't have the outer containment to prevent aircraft damage that Western blocks do."33 The International Atomic Energy Agency noted after investigating the Mochovce plant, "the structures of the plant have not been designed to withstand aircraft crashes" and that additional evaluation of aircraft impact on safety should be undertaken.[34] Questions about the quality of equipment and construction at Mochovce have been raised. Another of the significant safety concerns that have been raised is the ability of Mochovce to withstand an earthquake. In a preliminary analysis of safety at Mochovce the firm Riskaudit also suggested "An important item which needs to be examined by the utility concerns the qualification of equipment which will be used during an emergency situation."35 According to the CTK (Czech) press agency, Bayernwerke chief, Eberhard Wild, has criticized the supply of nuclear equipment to Mochovce. He noted, "No one would certainly allow this installation in Munich's surrounding." Important safety tests are planned at Mochovce after EBRD Board approval of the project. One of the central features of the safety systems at Mochovce is a bubble condenser which is intended to control radiation release in the event of an accident. Serious questions remain unanswered about the reliability and effectiveness of this bubble condenser. The IAEA, for example, has identified major deficiciences in the information available to evaluate the bubble condenser. A 1994 IAEA report notes that the existing analysis "suffer from a number of shortcomings" and says that "more comprehensive analysis are not expected soon."36 Even the safety assessment of Mochovce prepared for SEP and EdF by Risk Audit has identified this concern. An interim report from Risk Audit noted, "The load bearing capability of the BC (bubble condenser) structure has yet to be proved." SEP officials plan an analysis to determine the safety and reliability of the bubble condenser. EMO (SEP) International Relations representative Robert Holy has stated, "A full scale experiment will be done to prove the function of this bubble condenser and then if it is proved that the function is as it designed, then there will be no more need of building the secondary containment."37 The company, however, will conduct this test of the bubble condenser after funding approval has been received from the EBRD. The experimental backfitting of western safety technology to a Soviet nuclear design has never before been achieved. Mochovce will be a mix of western and eastern technologies. Modifying this type of nearly completed Soviet reactor with western technology has never before been undertaken and is a dangerous experiment with unknown and uncertain consequences. At Loviisa in Finland a VVER-440 reactor was completed with additional western technology, including a containment facility. In this case, however, the design changes were made prior to the beginning of construction and involved close cooperation between Soviet and western designers over an eight year period. Germany decided it was too costly to upgrade an existing VVER-440 reactor at Greifswald. In the only other example of attempting to backfit an existing VVER-440 reactor, German officials closed unit 5 of the East German Greifswald plant after reunification because it was deemed too costly to upgrade it to meet West German safety standards. At Greifswald 5, similar in design to Mochovce, the estimated cost of adding the necessary safety features to one already operating reactor was between 500 million and 2 billion DM.[38] This estimate is comparable to the amount planned to be spent to complete and upgrade the two units at Mochovce - the costs of additional safety elements at Mochovce will therefore be at least half of what was considered necessary at Greifswald. The costs for safety measures at Greifswald do not include anything but safety improvements. At Mochovce the costs for completion of the plant include additional construction. Importantly as well the plans for additional reactors at Greifswald in various stages of construction were all cancelled. ---------------------------------------------------------------------- 5) WILL BOHUNICE V-1 BE SHUT DOWN BECAUSE OF COMPLETION OF MOCHOVCE? The Bohunice Nuclear reactor is currently being upgraded. Without additional upgrades it would be necessary for SEP to close the Bohunice V1 reactor in 1995. A "gradual safety upgrading of Bohunice V-1" is therefore currently underway for the "plant to continue operating beyond 1995."39 In May 1994 it was announced that the Slovak government: "approved a plan to backfit the early VVER-440 units at Jaslovske Bohunice for operation until 2000...The backfits would be the most ambitious modifications yet to model 230 reactors (costs: 190 million US-$)."40 The Worlds Nuclear Industry News Agency reported on June 13, 1994 that Siemens had been awarded a $150 million contract to do the work which must be completed by a 1997 deadline.[41] Bohunice 1 and 2, also known together as the V-1 plant will continue operating while the work is being carried out. SEP claims this investment in the upgrades is considered worthwhile, even if the two units are stopped in the year 2000. The significance of this investment is clear. As an EBRD staff member told Nucleonics Week, "It's obvious that if SEP decides to invest $200-million in Bohunice V-1, no one will be convinced that they'll shut it down in 1999 or 2000, and nobody on the (EBRD) board would believe us if we said so."42 Continued contradiction and confusion from Slovakian officials about the closure of Bohunice. Although Mochovce is now being promoted as a safety improvement project that will involve shutdown of the Bohunice nuclear reactors, continuing contradictory and confusing statements from Slovakian officials make it difficult to really believe that this is the intent. "Operation of V-1 should continue at least until 2000". K. Bodorik, Director of SEP, in "Argumente" an Austrian TV-program, September 9, 1993.[43] "Regarding the supply of electricity it is from our point of view a good advantage if V-1 of Bohunice will not shut down as soon as Mochovce 1 and 2 will start to operate.....We will do everything - measures to upgrade the safety systems - to operate V-1 until the third unit of Mochovce will be in operation" F. Parimucha, Director of SEP, Pravda, September, 18 1993.[44] "The shut-down of Bohunice is not the business of the West European partners. The desicion depends on the energy situation of Slovakia".- J. Klincok, SEP, November 25, 1993.[45] "It is possible to promise the shut-down of the V1-reactors in general. But it is not possible to understand it like it will be realized at once after the launch of the Mochovce Units" .- R. Kvetan, Director of SEP, Pravda January, 20, 1994.[46] "The gradual backfitting of the V-1 plant of Bohunice could extend the operation of this NPP at least until 2002, hopes the Slovak Minister of Economy, Peter Magvasi." Austrian Press Agency, March 5, 1994.[47] May 1994 the Slovak Parliament passed a resolution saying that Bohunice would be taken out of operation in the year 2000. EBRD staff have also said that an agreement to close Bohunice will be made with Slovakia that will guarantee the shut-down. The continued political changes in Slovakia and contradictory statements from Slovakian officials about this matter, however, raise significant questions about assurances that this guarantee will be possible. A September 1994 report of the U.S. Government General Accounting Office reported also that based on past experience there is some doubt about the reliability of agreements with East European countries to close nuclear reactors.[48] Bohunice can be closed without the opening of Mochovce. An August 1994 research report from the Global 2000 Environmental Research Institute found that the two most dangerous reactors at Bohunice (V1) could be shut immediately without endangering the capabililty to meet existing and expected future electrical needs into the next century.[49] A study of 6 east European countries (including Slovakia) by the World Bank, the EBRD, and the OECD's International Energy Agency concluded also that with appropriate investments "it would be technically feasible to shut down the highest-risk reactors in these countries and replace them with alternate energy sources by the mid-to-late 1990."50 Completing Mochovce is therefore not necessary to shut Bohunice. ---------------------------------------------------------------------- 6) WILL RUSSIOA COMPLETE MOCHOVCE IF THE EBRD DOES NOT FINANCE WESTERN INVOLVEMENT IN THE PROJECT? Opposition to completion of Mochovce in Slovakia exists whether Russian or western firms want to build it. EBRD President Jacques de Larosiere and staff have expressed the view that the EBRD should support completion of Mochovce by western firms because if they don't do it the Russians will. As Tomas Kolenka, of the Slovakian organization Deti Zeme, has said, "I cannot believe that the EBRD would make a decision to fund Mochovce based on rumors about possible Russian cooperation to complete the plant".[51] If such a decision were to be made, many people in Slovakia and elsewhere would continue to oppose completion of the plant and would especially oppose the lowering of nuclear safety standards. Lubica Trubinova of Greenpeace Slovakia has pointed out, "it is ironic that one of the arguments the EBRD staff uses to build Mochovce is the need for independence from Russian gas when at the same time they argue western firms should build it because if they don't the Russians will."52 Over fifteen thousands Slovak citizens have signed a petition against the completion of Mochovce The requirement of the EBRD for public comment and discussion of the funding for the Mochovce project has been a catalyst in helping develop important public debate about energy policy issues in Slovakia. This debate has been important in encouraging development of greater democracy within Slovakia and has made an important contribution to a more rational evaluation of alternatives. This debate about completion of Mochovce has already prompted over 15,000 Slovak citizens to sign a petition against the completion of the plant. The active opposition to completion of Mochovce in Slovakia is not opposition to EBRD involvement but opposition to completion of the plant. If the Russians were to participate in completing the plant the opposition would remain. All the arguments about the fact the plant is not needed, is not safe, and is not the best use of funds for meeting the energy needs of Slovakia apply regardless of who wants to help build the plant. A decision on the part of the Slovak government to allow Russian to finish the plant would create political controversy in Slovakia and serious conflict with neighbouring governments and the international community. Slovakia is actively promoting and seeking membership in the European Union. Completion by the Russians of Mochovce to completely inadequate safety standards would create political controversy in Slovakia. In addition, international controversy created by completion of an unsafe nuclear reactor in Slovakia would likely disrupt relations with European Union countries and other neighbours. It is unlikely that Slovakia would risk such international controversy especially when other less costly options for meeting energy needs are available. -------------------------------------------------------------------------- 7) HOW DOES MOCHOVCE AFFECT NUCLEAR SAFETY IN CENTRAL AND EASTERN EUROPE? Mochovce is the foot in door of the Eastern European energy market for the Western Nuclear industry. In almost all of North America and Western Europe (N.A. and W. E.) the construction of nuclear power plants has ground to a halt. Between them, N.A. and W.E. have 65% of the world's operating reactors, but only 15% of those under construction. The nuclear industry in these countries therefore needs new markets to compensate for the industry stagnation in their own lands. Lord Marshall of Goring, the former chairman of the World Association of Nuclear Operators (WANO), recently stated, "I don't think the British will build any more; the Germans are not building any more; the Italians and the Spaniards are not building, so all these companies are saying it's the only work they have a chance of getting".[53] Jean-Alain Veaujour, head of EdF's Central and Eastern European operations stated, "If we can start in Slovakia, we won't stop there."54 KWU (Kraftwerkes Union) spokesman Wolfgang Breyer predicted that following initial support from the EBRD "this business is going to expand in the 1990s."55 As Austrian energy expert Dr Manfred Heindler has said, support for Mochovce "is forging the future energy policies of these countries before they ever have a chance to rethink whether the nuclear option was really to their benefit."56 The Mochovce project will help maintain the old communistic structures. One of the major problems with the old communistic structures of Central and Eastern Europe was the authoritarian decision making that prevented innovation and creativity and supported a highly centralized and inefficient economic system. In order to transform the economic system it is widely recognized that the break-up of former state monopolies are needed in conjunction with the development of modern flexible and efficient companies. The magazine Business Central and Eastern Europe concluded recently that the major sectors providing growth and innovation in the economies of the region are the small and medium sized business sectors. Rather than providing support for innovation in the energy sector, support from the EBRD for Slovensky Energetiky Podnik (SEP) will add unnecessary surplus to the electricity system and prevent energy sector competition and innovation that is needed to reduce the inefficiency and waste in the energy sector. Safety upgrades at existing plants are needed completion of new plants are not. It is widely recognized that there is need for investment to improve the safety of existing operating nuclear power plants in eastern Europe. The Mochovce Nuclear Power Plant, however, is not an existing power plant - it is a partially constructed plant which at present presents no danger to people or the environment. It is interesting to note that although the official estimate is that Mochovce is 80-90% complete, the money needed to finish the plant is equal to the amount already invested. This means that only 50% of the money needed to finish Mochovce has actually been spent. EBRD funding for Mochovce will be a sign that the EBRD is the nuclear bank. Nucleonics Week reporter Ann MacLachlan called Mochovce, "A crucial test case of whether the international community is ready to lend money for completion of Soviet-design reactors in eastern Europe."57 If EBRD goes ahead with this loan, it will be the first by a multilateral development agency. The World Bank, Asian Development Bank, and other lending institutions have not lent directly for a nuclear power station. The World Bank has stated, "Once a plant has been operational, or even when it is partly constructed, such a safety audit cannot be performed in a way that would meet normal Bank criteria."58 As the Environmental Assessment Source Book of the World Bank says "Nuclear Plants in the power sector would not be economic: they are likely to be large 'white elephants.' " Rather than supporting expansion of nuclear power, officials in the Slovak office of the World Bank recently confirmed that they are currently discussing support for an energy efficiency program in Slovakia. Environmental organizations have applauded the increasing attention give by multinational development banks to energy efficiency, including the EBRDs formation of an Energy Efficiency Unit. As Zsuzsa Foltanyi of the Hungarian Energy Club, has said, however, "If the EBRD funds Mochovce, people in Central and Eastern Europe won't see the EBRD as the Energy Efficiency Bank but as the Bank for Nuclear expansion".[59]