TL: RISK FINANCE:  Backfit vs. Shutdown of VVER Nuclear Reactors
Recommendations to the European Bank for Reconstruction &
Development on Short-term Nuclear Investments in East and Central
Europe
SO: Greenpeace International (GP)
DT: November 1991
Keywords: greenpeace nuclear power reactors safety cleanups banks
financial investments europe ussr east gp europe /

CONTENTS

1.  Executive Summary

2.  Introduction and Recommendations

     Introduction
     The Goals of Energy Investment
     Recommendations

3.  Nuclear Power in Eastern and Central Europe: Current Status
4.  EBRD Financial Policy on Nuclear Investments

5.  Methodology for Energy Investment Decisions

6.  Nuclear Backfits: The Road to Catastrophe?

     Pressure Vessel
     Emergency Cooling
     Containment
     Materials and Construction
     Lender Liability

7.  Conclusion

---------

Executive Summary

     Concern about the large risk of a major nuclear accident in
eastern Europe is well-founded, but has generated in some
international organisations an ill-conceived desire to arrange
for the 'backfitting' of western safety technology in VVER-model
reactors.  The European Bank for Reconstruction & Development is
considered a major source of funds for such programmes.

     The goal of energy investment policy must be the provision
of energy services at least overall cost to society.  Therefore,
it is argued here that energy efficiency improvements are a more
effective means to meet the needs of electricity consumers.
Investment in energy efficiency represents a more comprehensive
economic initiative by the Bank than does equivalent investment
in nuclear technology, influencing nuclear risk, the growth of
small- and medium-sized business, and the overall competitiveness
of the emerging economies of the region.

     The four key features of the nuclear risks posed by VVER
reactors in east and central Europe are reviewed:

     * substandard pressure vessel construction and advanced
state of embrittlement;

     * substandard emergency core cooling system;

     * substandard containment;

     * substandard materials and costruction.

     None of these features can be completely overcome by
backfitting.  The design of the reactors is the essential flaw,
as noted by the COMECON nuclear supervisory body in 1988,
commenting on the V-230 model:  "The design of the blocks is such
that current international safety levels cannot be met."

     Potential lender-liability for the costs of nuclear
accidents is a considerable disincentive for the EBRD to invest
in nuclear reactor backfitting, and to promote instead large-
scale energy efficiency improvement and the shutdown of the
unsafe VVER reactors of eastern Europe as rapidly as possible.
     The EBRD is urged in this submission to adopt the methods of
Integrated Resource Planning (IRP) for all energy-related
investments, including proposals for nuclear plant refurbishment.
The potential costs of nuclear reactor backfitting are reviewed
and used as a 'benchmark' against which to measure the possible
resources available immediately for energy efficiency
Keywords: greenpeace nuclear power europe safety risks gp reports
mprovement.    /