Brazil Delays Decision on Angra 3 Nuclear Plant Completion
Brazil’s National Energy Policy Council (CNPE) has postponed decisions on Angra 3’s construction, which has a troubled history of delays and corruption. With significant financial implications, Eletronuclear is under pressure to restructure for efficient management. The abandonment of Angra 3 could result in severe economic ramifications for Brazil’s energy sector.
The National Energy Policy Council (CNPE) in Brazil has delayed decisions regarding the completion of Angra Nuclear Power Plant’s Unit 3. Angra NPP currently operates two pressurized water reactors: Angra 1, which has been online since 1985 with a capacity of 640 MWe, and Angra 2, operational since 2001 with a capacity of 1,350 MWe. The construction of Angra 3 commenced in 1984 but was halted until 2006, then again suspended in 2015 amid corruption allegations, with 65% of the construction completed at that time. In 2022, construction was ordered to restart but was halted once more by local government in April 2023, citing compensation issues.
In February, Eletronuclear, part of Eletrobras, initiated strategic measures aimed at enhancing management and financial stability to ensure the continuation of Angra 3’s construction. Minister of Mines and Energy, Alexandre Silveira, emphasized the nuclear sector’s significance but insisted on a broad evaluation of Angra 3’s situation. He noted that Eletronuclear must be restructured adequately to manage the complex work associated with Angra 3 efficiently.
A financial analysis conducted by the National Bank for Economic & Social Development (BNDES) assessed that the total cost of abandoning Angra 3 would exceed BRL 21 billion (USD 3.5 billion). In contrast, finalizing the plant’s construction is estimated to require about BRL 23 billion, with nearly BRL 12 billion already expended. The BNDES study noted that BRL 800 million worth of Angra 3 equipment had previously been utilized by Angra 2. Industry analysts contend that reviving the project is crucial given the increasing reliance on renewable energy sources.
Despite the strategic significance of Angra 3, Eletronuclear concludes 2025 with debts approximating BRL 7 billion and annual operational costs around BRL 800 million. The privatized Eletrobras holds a 35% voting stake in Eletronuclear, complicating the situation further. Minister Silveira warned that any failure to complete Angra 3 would incur immediate costs of BRL 14 billion, jeopardizing the operations of Angra 1 and 2, which could struggle to secure fuel supplies.
State-owned ENBPar, formed to ensure state control over NPP operations following Eletrobras’s privatization, may incur accounting losses of BRL 3.3 billion due to asset devaluation. Eletrobras’s discussions with the Federal Government have produced a conciliation agreement addressing governance matters and clarifying the government’s role in Eletrobras post-privatization. This agreement also potentially influences Angra 3’s financing and lifespan.
New governance adjustments will augment the Union’s representation on the Eletrobras Board, with the government appointing three members. Guarantees of BRL 6.1 billion for Angra 3’s financing remain intact, but agreements related to Eletronuclear’s investment in Angra 3 will cease upon this conciliation’s ratification. Furthermore, stakeholders have requested BNDES to establish a new project framework for Angra 3 while planning to issue BRL 2.4 billion in debentures intended for Angra 1’s life extension.
Brazil’s CNPE has postponed decisions regarding the resumption of construction at Angra 3, highlighting significant financial implications linked to the project. The complexities surrounding Eletronuclear’s structure, governance, and financing pose considerable hurdles. The failure to finish Angra 3 could lead to significant financial losses and disrupt the operations of existing power units, underscoring the crucial need for strategic planning moving forward.
Original Source: www.neimagazine.com
