Brazil’s government will make investments to upgrade unit 1 of the Angra NPP Angra and will study the feasibility of completing Angra 3, according to the new Growth Acceleration Plan (PAC - Plano de Aceleração do Crescimento).
For modernisation of Angra 1, which is close to completing 40 years of operation, an estimated investment of BRL1.9bn ($383m) was allocated. Angra 3 was included in the programme despite earlier speculation that it would be excluded, but no funds were allocated.
Angra NPP units 1&2 currently generate about 3% of Brazil’s electricity. Construction of Angra 3 with a Siemens/KWU 1405 MWe pressurised water reactor began in 1984 but was suspended after two years. The project resumed in 2006 and first concrete was poured in 2010. But work stopped again in 2015 following allegations of corruption involving government contracts. The unit was then 65% complete.
In November 2022, the newly appointed Eletronuclear President, Eduardo Grand Court, ordered construction to restart. However, in April the city government of Angra dos Reis ordered work to stop again. Mayor Fernando Jordão said he authorised the embargo “because Eletronuclear is executing a project that is not in accordance with what the municipality approved" including the promised payment of compensation. "We have to resolve this issue so that we can issue the construction permit for Angra 3," he noted. In May, Eletronuclear said it was committed to reversing the suspension of work and was seeking a constructive dialogue with the city of Angra dos Reis to clarify outstanding issues.
In the PAC, the status of the project remains undefined, as the government continues to assess the economic, technical and socio-environmental viability of completing a project that could require BRL20bn, while its cancellation could cost almost as much.
"Angra 3 is an extremely sensitive subject... It is a project that must be analysed from the technical point of view in an extremely careful way, and from the socioeconomic point of view as well", Minister of Mines & Energy, Alexandre Silveira told journalists after PAC presentation event.
In addition to the high cost of the project, the government also has to consider whether the value of the energy generated, which would be more expensive than energy from other sources. According to estimates previously presented by the Ministry, the average energy tariff for the plant would be around BRL700 per MWh - more than the tariffs for Angra 1&2 and also for energy contracted from other sources, such as hydro, wind and solar. "We need to have economic security that the energy that Angra 3 will supply… will also be economical for the consumer, because it is the consumer who pays the energy bill", said Silveira.
According to Celso Cunha, President of the Brazilian Association for the Development of Nuclear Activities (Abdan - Associação Brasileira para Desenvolvimento Atividades Nucleares), the high tariff projected by the government includes costs that are not associated with the nuclear energy, but with the problems the plant has faced in recent decades. He noted that work was inadvertently paralysed three times, and the costs of this should not be included in the calculations.
Some BRL7.8bn has already been invested in Angra 3, and the estimated cost to discontinue construction is around BRL13.6bn, according to an estimate by the Ministry of Mines & Energy.
Cunha also stated that it would be a waste to spend billions of resources to demobilise the work, and that a possible solution to reduce the financing for Angra 3, lowering the total cost of the work, would be to increase the capital of the project's controllers.
Eletrobras, which is a partner of state-owned plant owner Eletronuclear and maintains obligations related to Angra 3, said it is betting on the completion of the work, but indicated that it will carry out an assessment of possible impacts for the company should the project be cancelled.
"We always work with the perspective that this project, given its importance for Brazil, will be continued and completed", said Eletrobras President, Wilson Ferreira Junior, in a teleconference with analysts. He added that the project is independent of the government's decision. Currently, work still depends on studies requested during the period of privatisation of Eletrobras.
One of them is the modelling of the plant's new tariff, which will raise what is needed to complete the works. This process is being conducted by the BNDES (National Bank for Economic & Social Development).
Eletrobras is currently a partner of ENBPar in Eletronuclear, which operates the Angra NPP, and is guarantor of BRL6bn in loans taken out for the construction of Angra 3. Ferreira Junior pointed out that Eletrobras, although it is the majority stakeholder in Eletronuclear, has a smaller share in the voting capital, which gives the government control the company. He said Eletronuclear has a positive Ebitda today, but not enough to cover all costs.
Image: Angra unit 3
