Debate of the Assembly on the activities of the European Bank for Reconstruction and Development in 1995 in the field of nuclear safety
Doc. 7576
7 June 1996
CONTRIBUTION[1]
by Mr BIRRAUX, France, Group of the European People's Party
Introduction
First of all, it should be made clear that this contribution concerns the activities of the EBRD in the field of nuclear safety not only over the past year, but since the beginning of 1993, when the G7 asked it to set up the Nuclear Safety Account. This account, financed from contributions from donor countries, is used for grants to fund safety improvement projects for nuclear plants in the central and east European countries and the CIS[2].
The then President of the EBRD, Mr Jacques Attali, was pleased to be able at last "to move rapidly and effectively towards providing desperately needed hardware and equipment to upgrade those reactors which can be repaired and ultimately to shut down the most dangerous".
The meeting of the Sub-Committee on Technology Policy and Energy, held in London on 12 February 1996, at the kind invitation of the EBRD and attended by Bank representatives, was of great help in preparing this contribution[3]. However, it does not
cover all the problems relating to nuclear power plants in central and eastern Europe and the CIS, only the projects financed by the EBRD. A more far-reaching report on nuclear power stations is currently being prepared by the Committee.
Operation of the Nuclear Safety Account (NSA)
According to EBRD documents, the Bank functions as the NSA Secretariat and provides technical, management, financial, legal and administrative services. It reports to donors, through the Assembly of Contributors, which exercises a general supervision over NSA management, approves six-month programmes and decides on the funding of individual projects.
The EBRD prepares specific projects in close collaboration with the potential beneficiaries, firms, bilateral agencies, the G24 Secretariat, the IAEA and other institutions. It submits the preliminary projects to the Assembly of Contributors for approval. On the basis of the mandates given by the Assembly, the EBRD negotiates grant agreements with the beneficiary countries and seeks to find agreements on power plant safety improvement programmes. Once the agreement has been signed, the authority overseeing the operation of the power plant in question is responsible for implementing the NSA project. To this end, it sets up a Project Management Unit which looks after the daily implementation of the project. This unit usually includes consultants from western firms. The EBRD lends its assistance to the beneficiary in setting up the Management Unit, then monitors project implementation. It reports regularly to the Assembly of Contributors on the progress of projects.
The EBRD believes close co-operation has developed between it and the G24 Secretariat, as between the EBRD and the bilateral and European Union programmes.
Estimates
In 1993, it was estimated that rectifying "the most serious and most urgent" shortfalls required some USD 200 million (approx ECU 160 million[4]) per plant per year for plants using first- generation reactors[5] and USD 150 million (approximately ECU 120 million) for second and third-generation reactors. The German constructor Siemens wanted a fund of around USD 8 billion (approximately ECU 6.4 billion) to be set up to rebuild all Soviet-built reactors. The G7 set the mark at around USD 20 billion (approximately ECU 16 billion) to improve the safety of power plants in Russia and Ukraine alone. The EBRD estimated the cost at USD 5 billion (approximately ECU 4 billion) for the VVERs, USD 400 million (approximately ECU 320 million) for the RBMKs (the most urgent improvements) and USD 3 billion (approximately ECU 2.4 billion) for the plants under construction.
In 1995, a European consortium led by ABB estimated the cost of shutting down Chernobyl at USD 3.7 billion (approximately ECU 3 billion) to which must be added the cost of constructing a gas plant. The figures quoted by Ukrainian parliaments range from USD 4 to 8 billion (ECU 3.2 to 6.4 billion).
As regards environment decontamination programmes and epidemiological studies, some experts quote figures as high as ECU 80-90 billion[6].
Financial contributions
What has been the result of the setting up of the Nuclear Safety Account, approved by the EBRD Board in March 1993? At the end of 1993, 13 countries had pledged ECU 104 million[7]; at the end of 1994, 14 countries, in addition to the European Commission, had pledged a total of ECU 154 million[8]. Recently, the EBRD announced that 14 countries[9] and the European Union had pledged a total of ECU 190 million[10].
Concrete action
As of November 1995, four projects had been approved and grant agreements signed by the governments concerned, public services and the EBRD (on behalf of the NSA).
1. Kozloduy nuclear power plant (Bulgaria)
An ECU 24 million project for units 1-4 (VVER-440/230s) was signed in June 1993 and is still in progress. It includes measures for fire-protection, in-service inspection of critical components, control-room aids for operators, emergency feedwater system, etc. The project is scheduled to be completed in 1996.
The Bulgarian government had undertaken to decommission units 1-2 and subsequently 3-4 in the medium-term when a set of investments in the energy sector had been completed. These investments were primarily aimed at refurbishing units 5 and 6 (VVER-1000) and the Bulgarian thermal power stations. Recently, however, the new government has announced that it can no longer honour these commitments in view of the
energy situation in the country. International financial institutions (IFIs) and the international community have not accepted this change in position.
2. Ignalina nuclear power station (Lithuania)[11]
An ECU 33 million project relating to two RBMK reactors was signed in February 1994. It is due to be completed in 1996 or early 1997 and includes the most urgent technically feasible upgrades, whereas a few important safety concerns may justify a second-phase project once the safety and operational problems have been studied in greater depth. The project includes the installation of new emergency reactor trip signals, fire-protection devices, a training simulator and environmental monitoring equipment.
The Lithuanian government has agreed not to operate the power plant beyond the time when the pressure tubes will have to be replaced (after 15-20 years of use), and to allow an in-depth safety analysis of the plant to be made under the supervision of a panel of international experts. Unit 1 will be decommissioned around summer 1998, unless it is relicensed on the basis of this analysis by the Lithuanian Safety Authority (VATESI). The analysis is funded by the Nuclear Safety Account at a cost of ECU 7.3 million and should be completed in 1996.
3. Russian nuclear plants
On 9 June 1995, agreements were signed for the Leningrad nuclear plant, which comprises 4 RBMKs (ECU 30 million) and the Novovoronezh and Kola plants which comprise 4 VVER-230s (ECU 45 million). The Russian nuclear safety authority will be given ECU 0.9 million. The situation of all the VVER-230s (of which there are four in Russia) and the oldest RBMKs (there are a total of 11 RBMKs in Russia) will be systematically reviewed by the Russian authorities to assess their safety and the economic need for their continued operation at enhanced safety levels. Russian and western experts are to co-operate in these assessments.
4. Chernobyl nuclear power plant (Ukraine)
Preparation of the project began in December 1994 and was part of the action plan proposed by the Ukrainian authorities at the G7 Naples Summit (July 1994). The main objective of the action plan is to prepare for the decommissioning of the plant in the context of a comprehensive energy strategy. The activities foreseen include short-term safety improvements for unit 3 pending closure in 2000 and preparations for the decommissioning of units 1, 2 and 3.
The project is to fund the equipment and labour for urgent operational improvements, technical short-term safety improvements, decommissioning equipment, consultancy services for project administration and technical work, and consultancy services for public information and project explanations.
As far as the shutdown of the plant is concerned, there appears to be something of a battle of wits underway between Ukraine and the West. Ukrainian officials refer to the country's deplorable economic and financial situation; parliamentary circles emphasise
the cost of the shutdown which Ukraine is in no position to afford. It is estimated that 10-12% of the country's budget is spent on solving the problems caused by Chernobyl. Parliamentarians do not rule out a possible shutdown in the year 2010, 2007 or even as early as 2000 if Ukraine were given financial support.
The Ukrainian President and the Prime Minister recently restated the commitment to shutting down the Chernobyl plant in unequivocal terms: this would take place by the year 2000 if there were sufficient financial assistance. For the moment, the G7 has increased the offer to USD 3.1 billion (approximately ECU 2.5 billion).
Balance Sheet
A review of the financial estimates, the amounts available to the NSA and the projects in progress and in preparation lead to a number of somewhat unsatisfactory conclusions.
By comparing the various estimates of the cost of increasing the safety of the nuclear power plants in the countries of central and eastern Europe and the CIS together with the contributions to the Nuclear Safety Account, we reach our first conclusion: the ECU 190 million pledged are not enough to cover even the most urgent requirements.
Furthermore, the cost of the projects currently in progress is as follows:
Kozloduy nuclear plant (Bulgaria)
Ignalina nuclear plant (Lithuania)
Leningrad nuclear plant (Russia)
Novovoronezh and Kola nuclear
plants (Russia)
TOTAL
A second conclusion may be drawn: despite the insufficiency of contributions, the Nuclear Safety Account still has reserves which could be used for other projects (provided that the Chernobyl project does not take up the whole of the almost ECU 50 million so far unused).
Examination of the EBRD 1993 and 1995 reports shows that the dates specified for the completion of projects have not been adhered to. The Kozloduy plant project was due to be completed by the beginning of 1996, having been put back on several occasions. The Ignalina project should be completed in summer 1996[12], but the date has been put back to "1996 or early 1997"[13]. It has not been possible to give a date for completion of the projects for the Chernobyl and Russian plants.
It is time to sound a note of warning because it seems the initial aims are being forgotten.
Following the alarm raised by the IAEA itself - and it can hardly be claimed that this is an anti-nuclear organisation - in connection with the Kozloduy plant, the G7 meeting in Munich in 1992 highlighted the urgency of taking action to improve nuclear safety in the East. Some claimed a right of environmental and safety intervention and called for a new nuclear safety Marshall plan.
Were these good intentions for the benefit of the media alone? Or was this political will merely a fa�ade which rapidly crumbled when confronted by the procedural realities of a victorious technocracy putting its talents into practice under the alarmed gaze of those who believed they had struggled for forty years to get rid of communist bureaucracy?
The IAEA itself acknowledges that contrary to what had originally been thought, there are no signs that the old nuclear plants (VVER 440/ 230s) are about to be shut down. Indeed, some countries are taking improvement measures to justify keeping these units in operation.
Solemn undertakings, duly written and signed by certain countries, do not appear to be worth the paper they are written on. Who does anything about it? Who makes any attempt to ensure that these commitments are honoured? Life goes on as though nothing had happened and the Assembly of the Council of Europe holds an emergency debate on Chernobyl ... ten years after the event!
Proposals
After creating the Nuclear Safety Account, EBRD became the leading financial element of a whole which includes the G7 and the G24 - as political element - and organisations as the IAEA or the NEA of the OECD, which represent the scientifical element. This whole, supposed to treat a matter of global importance, as nuclear safety, must be characterised by a perfect coordination between its elements and by the complementarity of their actions.
Responsibility for monitoring the arrangements governing the funding of the various EBRD projects falls at present exclusively to the Assembly of Contributors, ie those countries which have directly contributed to the Account. Nevertheless, it is imperative that these funding arrangements do not become untenable with each and every contributor adding their own criteria, thereby creating a number of obstacles defeating the ultimate aim. It is essential to identify a common core of principles with regard to funding arrangements and leave a certain amount of flexibility of application to take account of the specific nature of each situation. For example, why should American-style hearings be imposed on the Slovak Republic?
There should be at least a retrospective assessment of the action undertaken which should be circulated to all the donor and non-donor countries concerned.
In order to achieve the original objectives set when the Nuclear Safety Account was established and to improve this initiative significantly, the following measures are in our view essential:
i. Studying the possibility of abandoning the voluntary system for contributions to the Nuclear Safety Account and encouraging EBRD member countries (with the exception of the countries of central and eastern Europe and the CIS) to make payments in proportion to their GDP;
ii. Increasing the minimum amount of contributions - at present ECU 1.5 million - both from EBRD members and voluntary donor countries;
iii. Reviewing the arrangements for providing aid to the countries of central and eastern Europe and the CIS in order to speed up procedures and make them more effective, if necessary by revising the current system of raising contributions;
iv. Drawing up schedules for the honouring of commitments by beneficiary countries and where necessary penalising failure to honour these undertakings, for example by suspending other Bank action in other fields or making the honouring of commitments a precondition of any new involvement by the EBRD.
v. Encouraging the countries of central and eastern Europe and the CIS to adopt legislation in the nuclear field adapted to the implementation of EBRD projects and strengthening the authority of the governments concerned in respect of the arrangements for the implementation of the Account's projects by the authorities responsible for the operation of the power plants;
vi. Including the field of nuclear safety in the activities of the EBRD monitored by the Parliamentary Assembly of the Council of Europe, in its capacity as a forum for representatives of the majority of European countries;
vii. Setting up a system to improve the already close co-operation between the EBRD and the Parliamentary Assembly through an enhanced flow of information on the Bank's activities in the field of nuclear safety.
Reporting committee: Committee on Economic Affairs and Development (Doc. 7564)
Contributing committee: Committee on Science and Technology
Reference to committee: standing mandate
Contribution approved by the committee on 30 May 1996
Secretaries to the committee: Mr Perin and Mr Torc�toriu
[2] Commonwealth of Independent States (former Soviet Union)
[3] The subject of energy efficiency, which was also discussed in London, will be dealt with later by the Committee.
[4] At April 1996 rates.
[5] It is customary to divide Soviet-designed power plants into two categories:
a) RBMK reactors (Chernobyl-type)
b) VVER reactors.
VVER reactors can be further divided into three groups:
i) VVER-230 (440 MW) - first generation
ii) VVER-213 (440 MW) - second generation
iii) VVER-320 (1000 MW) - third generation.
[6] Parliamentary Assembly of the Council of Europe. Report by Mr Bassinet on nuclear power plants in Central and Eastern Europe (Doc. 6736 and Recommendation 1209 (1993))
[7] EBRD: Annual report 1993.
[8] EBRD: Annual report 1994.
[9] Belgium, Canada, Denmark, Finland, France, Germany, Italy, Japan, the Netherlands, Norway, Sweden, Switzerland, the United Kingdom and the United States.
[10] Dr Manfred Banaschik (EBRD): "The activities of the EBRD Nuclear Safety Account", statement to the meeting of the Sub-Committee on Technology Policy and Energy (London, 12 February 1996).
[ 11] The Ignalina plant accounts for between 76 and 90% of Lithuania's energy production (according to data supplied by the International Atomic Energy Agency (IAEA) in 1995 and the EBRD in 1996, respectively).
[12] EBRD: 1994 Annual report and statement by Mr Manfred Banaschik at the meeting of the Sub-Committee on Technology Policy and Energy (London, 12 February 1996).
[13] Statement by Mr Manfred Banaschik at the meeting of the Sub-Committee on Technology Policy and Energy (London, 12 February 1996).