Mochovce expansion faces more cost overruns

09 June 2016, Week 22 Issue 813

The price tag for the long-delayed expansion of Slovakia’s Mochovce nuclear power plant (NPP) continues to balloon beyond government projections.

New Slovakian Economy Minister Peter Ziga recently told international media that increased safety measures would push the cost of building two reactors at the Mochovce NPP above the 4.6 billion euros (US$5.3 billion) approved by the government. That figure was already well beyond the expansion’s initial price tag of 2.4 billion euros (US$2.7 billion).

Ziga’s comments followed a meeting with executives from state-owned utility Slovenske Elektrarne, which operates Mochovce. The minister did not say how much the project was over budget.

The Slovak state owns 34% of Elektrarne Slovenske and must approve any budget changes at the utility. Italian energy giant Enel, which owns the rest of the company, said it was developing a new cost analysis for the Mochovce expansion, according to international media reports.

The cost overruns come amid tough times for Slovenske Elektrarne. In 2015, the utility reported its worst profit result in a decade owing to soft global electricity prices.

The Mochovce expansion has been delayed for years, largely because of European safety concerns about nuclear power after the Fukushima disaster, driving up the price tag and infuriating the Slovak government.

In 2016, Slovak Prime Minister Robert Fico threatened to block Enel’s efforts to sell its 66% share in Slovenske Elektrarne if it did not complete the expansion.

Largely as a result, Enel decided to sell in two stages – a minority stake initially and the rest after Mochovce’s two units are built, currently projected for 2018.

In December, Enel reached a deal to sell its stake to Czech power firm EPH under these terms.

However, Bratislava has negotiated a deal whereby it can raise its share in Slovenske Elektrarne to 51% within six months of the completion of Mochovce expansion. If EPH ever decides to cash out of Slovenske Elektrarne, meanwhile, the Slovak government has priority to buy the stake.

Edited by

Richard Lockhart


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