Not to finish Angra 3 would represent savings of R$ 12.5 billion to the country, a study says

On October 23, the Ministry of Mines and Energy (MME) published a resolution that makes it feasible the completion of the Thermoelectric Power Plant (UTE) Angra 3, stopped since 2015. And the future minister of Mines and Energy, admiral Bento Costa Lima de Albuquerque Júnior, recently announced that the completion of the nuclear plant will be one of the priorities of his manager.

To assess the costs and benefits of Angra 3 to the country, Instituto Escolhas compared the option of having the nuclear source in the electricity system with the costs of not proceeding with the work, concluding that the better option is not to terminate it. According to the research, not to proceed with Angra 3 and replace the production of nuclear energy for solar energy would represent saving of R$ 12.5 billion over 35 years.“Angra 3 is a bleeding to the public coffers that needs to be stopped. At fiscal adjustment times and presence of new options to the country to supply its energy needs, the completion of the plant is not justified”, affirms Sergio Leilão, executive officer of Instituto Escolhas.

For the calculation, Escolhas used a pioneering methodology released on October of this year in the report. What are the real costs and benefits of the electricity generation sources in Brazil? The study is an achievement of the Institute, in partnership with PSR Soluções e Consultoria em Energia.
The methodology considers the total cost of the energy generation in Brazil through assessment and valuation of the attributes of five components: costs of investment and operation; services provided by the source in addition to the production of energy itself; costs of infrastructure caused or avoided by the generator; subsides and exemptions; and environmental costs, such as emission of greenhouse gases.

When the construction of Angra 3 was stopped in 2015, R$ 6.6 billion have already been invested with a progress of 67% of the works: 88% of the engineering part; 78% of supply of equipment and materials; 82% of the civil works, and 19% of the electromechanic assembly. Currently, the protection systems for the structure of the plant are already ready and there are monthly costs for the preservation of the components and materials.
The option of abandoning the project requires the payment of fines for contractual terminations, early settlement of the funding, costs with demobilization of the team, termination of national contracts, termination of contracts with the supply of equipment (Areva), social-environmental compensations, and contingency reserves. According to Eletrobras Eletronuclear – body responsible for operating and constructing thermonuclear plants in Brazil –, the costs amount to 11.9 billion reais.

According to MME resolution, the investment to conclude the works is estimated at R$ 15.5 billion, therefore, R$ 3.6 billion more than discontinuing it.
“A first cold analysis of the numbers may simulate that the best decision would be continuing the construction. However, as our methodology shows, it is needed to assess the attractiveness of such plant in comparison to other expansion alternatives, and not only with the option of abandoning it”, Sergio Leitão observes.
For such, the study analyzes the replacement of the energy produced by the thermoelectric power plant for energy of the solar plants of the Southeast, which have the same attributes of Angra 3: it generates energy “on the base”, does not emit CO2, and is located in the same region, next to the large load centers. The difference is the intermittence of the solar source, which increases, for example, the costs associated to the need of an operational reserve and to the need of power.

The assessment of Escolhas shows that resuming the works of Angra 3 will cost to the system 528 R$/MWh during 35 years, over R$ 480/MWh published as reference by the government in October resolution. Institute’s calculation assesses the sum of all attributes indicated in the methodology, so considering the great subside given to the plant from the low financing rates of BNDES and Caixa Econômica Federal, cost that is transferred to the consumers and taxpayers.

But the cost to the society of the solar source in Southeast is R$ 328/MWh in the same period. Therefore, the study concludes that the abandonment of the work of Angra 3, with the settlement of all costs and the construction of solar plants, would bring savings to the electricity sector of R$ 12.5 billion until 2045, which means R$ 103/MWh over such 35 years. “It is applicable that this analysis is conservative under the technological point of view, since it does not consider the possible reduction in the investment of the solar energy after the 20 years of operation, since it was considered the same cost of solar energy over the analyzed period”, Sergio Leilão completes.