As a result of previously completed work, a draft concept for work aiming at the practical preparation of the expansion of the Paks Nuclear Power Plant had been finished by February 2010 and was approved by the Board of Directors of MVM Zrt. on 26 February. The concept is aimed at summarising the preparation of the new units to be established at the Paks site, the performance of studies relating to its optimum integration into the electricity system, the obtaining of all licences and permits and the tasks of invitation to tender. Therefore, the concept contains not decisions, but principles relating to the preparation of obtaining approval and invitation to tender and includes the activities of the following period in a system.
As is known, on 30 March 2009, the Hungarian Parliament granted its preliminary consent in principle by a 94.5% majority of votes to the commencement of activities aimed at the preparation of the establishment of one or more units at the site of the Paks Nuclear Power Plant.
The decision was preceded by the establishment of a project by MVM at the request of the owner on 7 July 2007 to review the tasks that facilitate the Government’s preparatory work carried out under Section 7, subsection (2) of the Atomic Energy Act. These tasks included the assessment of implementation alternatives, the drafting of a preliminary environmental scoping document, and the assessment of the disposal of spent fuel assemblies and radioactive wastes. The expert assessments providing grounds for the decision also included an analysis of technical, economic, commercial, legal and social considerations. The expert documents required an input of about 300 engineer-years over a period of two years. After the decision has been made, the actual preparations, including the preparation of the procedures required for obtaining approval, may start on the basis of the foregoing.
The decision proposal was based, in technical terms, on the finding that the safe, long-term electricity supply to the country required the expansion of the Paks Nuclear Power Plant. This is supported by the following main arguments:
The majority of the old power plants have become obsolete by now, their operation pollutes the environment and is uneconomical, and the majority of them will need to be replaced in the coming decade. Domestic electricity demand is expected to rise in the future. Import possibilities may become more limited. It is possible to improve energy efficiency and to use renewable energy sources to a greater extent, but conventional power plants may not be replaced by those and carbon dioxide emissions cannot be reduced on the merits. Nuclear power plants are the most economical base load power plants, generate electricity at an affordable price, allow the provision of safe electricity supply, and the fuel for them can be procured from several sources at a stable and predictable price and can be stored for a long time. The new units can be integrated into the electricity system. Electricity supply which is competitive in the long term can only be provided with a nuclear power plant. On the basis of public opinion polls, the vast majority of society supports the construction of new units. Among conventional power plants, nuclear power plants represent the most environmentally sound energy type, their operation does not result in greenhouse gas emissions. The CO2 emission reduction undertaken by Hungary will only be able to be fulfilled through the use of nuclear energy even if energy efficiency is increased and more renewable energy sources are used.
Principles of expansion in the light of the completed analyses: Among the sites which may be considered, the construction of the new units, the expected useful life of which will be 60 years, may be carried out at least cost at the site of the Paks Nuclear Power Plant. The construction of the new units will not require any state subsidy. development objectives set in the Business Strategy of MVM in the interest of the safety of domestic supply can be scheduled in time and thus appropriately in terms of financing, and the MVM Group is prepared to implement the required projects essentially from its own funds, by mobilising the resources of the Company Group.
After the decision had been made by Parliament, technical work started, which is yet to answer a number of points raised, such as the financing and project scheme and the issues of technical parameters, competitiveness, possible integration into the electricity system, environmental impacts, or unit type and supplier. All these are required for allowing a decision which will determine the energy supply to, and, at the same time, environmental condition of, the country, for decades to come to be made indeed responsibly. Such a major decision with long-term effects must be made not according to the considerations of momentary conditions, but those expected in the long term. In the interest of the foregoing, MVM Zrt. and Paksi Atomerőmű Zrt. jointly established the Lévai Project for the preparation of the expansion on 8 July 2009. The project will include the invitation to tender and the assessment of the bids and is expected to last until the end of 2012. As a result of the work completed within the framework of the project, the draft concept for work aiming at the practical preparation of the expansion had been finished by February 2010 and was approved by the Board of Directors of MVM Zrt. on 26 February. The concept is aimed at summarising the preparation of the new units to be established at the Paks site, the obtaining of all licences and permits and the steps of the establishment itself. Therefore, the concept essentially contains not decisions, but includes the tasks of the following period and the principles to be followed during their performance in a system.
The most important strategic issues affecting preparation and implementation, which are analysed by the concept, are as follows: expected ownership structure of the new units and, accordingly, establishment of a company implementing the project; determination of the size and type of the units which may be economically integrated into the regional electricity system and meet the technical and safety requirements of the EU as well as their optimum commissioning; preparation of submissions for and obtaining approval, ensuring acceptance by society; group of suppliers which may be considered for implementation, requirements to be set for them and principles of selection; financeability of the project, expedient method of financing; preparation of the region and the national economy for the implementation of the project.
On the basis of preliminary analyses, the concept lays down the following in respect of the above issues: The project must be implemented in such a way as to remain owned in majority by the state (MVM) even after being financed. Financing must be prepared accordingly. It is advisable to establish the project company by involving the future minority co-owners as soon as possible, integrating the abilities of the integrated MVM Group and the nuclear know-how of Paksi Atomerőmű Zrt., and maintaining the operational safety and operational standard of the existing equipment of the nuclear power plant. On the basis of preliminary studies, the conceivable 1,000 to 1,600 MW unit class can be integrated into the Hungarian electricity system and the required additional grid developments can be carried out; at the same time, further detailed studies are also necessary. Conforming to the approval procedures of the authorities, they must be completed as soon as possible, within two years. When the unit type is selected for the purpose of the invitation to tender, domestic experience and expertise and the existing licences issued by the European authorities to the given type of equipment must be taken into consideration to ensure the efficiency of obtaining approval, establishment and future operation. The underlying regulations behind obtaining approval and the sphere of responsibilities and cooperation of the participating authorities must be harmonised within the framework already in place as soon as possible. In order to obtain the agreement of society, to fulfil the conditions prescribed by law, to meet the deadlines and to increase the value of the site, the site and environmental permitting processes, which represent the conditions of establishment and are independent ofthe unit type, must be commenced immediately. The above activities must be carried out in such a way that the invitation to tender can be issued within two years. The deadlines for delivery must be set according to the optimum commissioning date. When suppliers are selected, efforts must be made to maximise offsetting and the involvement of domestic suppliers and contractors. This may facilitate the preparation and development of domestic industry and may enhance political and public support. Financing will be provided primarily within the framework of company financing by the owners of the project company, but efforts must be made during the preparation of financingfor the maximisation of the provision of supplementary funds by guaranteeing bank loans to suppliers and for export purposes and by purchasing drawing rights. To maintain the financing ability of MVM Zrt., the profits generated by the existing activities must be reinvested to the greatest extent. It is a precondition of the successful implementation of the project to create a professional and human resource background and, in connection with this, in particular, to develop a specialist and university education providing special qualifications. To facilitate this, launching a separate target programme is to be considered. In order to ensure the transparency of the project, the financing, legal and other consultants must be selected in a transparent way. The operation of the four units of the Paks Nuclear Power Plant and the preparation and implementation of lifetime extension must be continued at the current high level.
| Expansion in figures | | | Reactor type: | Pressurised Water Reactor (PWR) | | Unit size: | 1,000 to 1,600 MW depending on the manufacturer | | Reactor types for consideration: | AES-2006 (Russian)
AP-1000 (US)
EPR (French and German) ATMEA (French, German and Japanese) | | Specific establishment cost: | EUR 2,000 to 3,000/kW | | Commissioning: | After 2020 (Unit I)
After 2025 (Unit II) | | Design lifetime: | 60 years |
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