EXISTING FINANCIAL SOURCES FOR PHASING
                     OUT NUCLEAR POWER IN CEE





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Despite the internationally sought objective of reducing the risk from reactors in Central and Eastern Europe (CEE) and the former Soviet Union, the past decade has not seen significant improvements in nuclear safety. Furthermore, despite the specific target to close the most dangerous reactors in the region, they continue to operate today and are likely to continue operating unless new measures are taken to facilitate their closure. This will require a united approach from Western Governments, institutions and companies as well as recognition from the owners and operators of these reactors that the present situation is unsustainable.

Within the European Union there are many programs which offer energy grants and loans. In one year alone (1996) the EU and its associated institutions awarded €7.5 billion of grants (€1.47 billion), loans (€5.77 billion) and credit guarantees (€270 million) for energy projects, the majority of which were for projects within the Union. Despite a stated policy objective to reduce nuclear risk in CEE and the former Soviet Union only €123 million less than 10% of the total grants given in 1996 was allocated for nuclear safety projects. While for the same period €200 million was spent on fusion research and development. It is therefore clear that re-prioritisation of the energy grant program could be used to facilitate the closure of reactors.

The current proposal to enlarge the Union will include countries that have operational Soviet designed reactors. The accession process will open up new sources of funds to applicant countries. Significantly, €7 billion will be available through the PHARE program for pre-accession aid. While following entry up to €38 billion will be available for the first wave countries (Czech Republic, Estonia, Hungary, Poland, Slovenia and Cyprus) through the structural programs. Given that the European Commission has repeatedly stated that environmental protection and nuclear safety in particular are a fundamental part of enlargement funds should be prioritised to reduce the nuclear risk in the most effective way, by closing reactors.

Despite the clear opportunity that the enlargement of the Union can bring to close reactors there are also a number of problems that unless addressed will reduce the likelihood of closure.

  • The reactors in CEE generate substantial revenue for the countries concerned. In total during 1997, they generated nearly 75 TWh of electricity, worth about ECU 3 billion.

  • The enlargement of the European Union and the simultaneous liberalisation of the western European electricity market offer increased opportunities for the export of electricity.
  • Electricity generated in Eastern Europe, in part due to the lower environmental standard, is a cheap source of power for western consumers.
  • It is clear that by prioritising the existing energy grants and loans and accession programs the nuclear power stations in the region could be closed. However, unless a clear decision is taken they will become a cheap source of electricity for western consumers and operate well into the next century.