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Future of Brazilian Nuclear Energy May Suffer Major Impact After Eletrobras Positioning. Nuclear Power Plant Angra 1, Managed by Eletronuclear, Could Be Shut Down by December.
A letter sent on March 14 by Eletrobras President Ivan Monteiro to the President of the Board of Directors of Eletronuclear, Thiago Guilherme Ferreira Prado, surprised everyone at the company, which is responsible for managing Brazil’s nuclear power plants. Check below for all the details and the future of the Angra 1 nuclear power plant.
Understand Eletrobras’ Position and How It Will Affect the Brazilian Nuclear Energy Sector
In the document, the President of Eletrobras states that the company has no obligation to invest in the completion of the Angra 1 Life Extension Project, the country’s pioneer, which has been operating since 1985.
Without investment, Eletronuclear could be forced to shut down the nuclear plant on December 24, when its license expires. This way, Eletronuclear will lose its revenue, in addition to weakening the national system by 640 MW of firm nuclear energy close to the load center (Southeast region), a volume sufficient to supply a city like Belo Horizonte.
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The Angra 1 Life Extension Project is part of the “New PAC,” and the investments for 2024 are around R$ 800 million.
In the same letter, the President of Eletrobras expresses his concern regarding the operational continuity of Eletronuclear, as stated by the independent auditors of Price Water House Coopers (PWC) in the context of last year’s financial statements. According to him, the uncertainties are not new, and the same concern was already noted in the financial statements of 2022, the year Eletronuclear ceased to be a wholly owned subsidiary of Eletrobras.
Eletrobras Has Already Invested Billions in the Nuclear Energy Sector
In the letter, Monteiro claims that the company, before its privatization in June 2022, had already invested R$ 3.7 billion, directly and indirectly, in Eletronuclear and expresses concerns about the operational continuity of the company, as the worsening of its cash situation and its economic-financial imbalance have been exacerbated by the inefficiencies in containing personnel, material, and service costs, as well as by repeated delays related to the structuring of the Angra 3 nuclear plant.
The executive concludes that he continues to monitor the actions and initiatives of Eletronuclear’s management to address the economic-financial imbalance, including measures for management rationalization, cost reduction, proper interaction and follow-up with the Grantor Power and the agencies responsible for modeling the Angra 3 project. The issue is that the Angra 1 Life Extension Project was approved by Eletrobras itself in 2019, years before its privatization.
How the Agreement Between the Companies for the Nuclear Energy Sector Works (Angra 1)
The Board of Directors of Eletronuclear, in which Eletrobras has seats, approved in November 2023 and again in January 2024, a “bridge” loan from the shareholders (Eletrobras and ENBPar) in the amount of R$ 800 million, until the long-term financing from the American bank Eximbank is approved.
According to sources close to the matter, the investment agreement signed at the time of Eletrobras’ privatization governs “new investments and Angra 3.”
Through it, the parties commit to resuming the Angra 1 nuclear power plant and new investments are only mandatory if both parties agree. However, the Angra 1 Life Extension Project was approved by Eletrobras itself in 2019 and is not considered a new investment. When contacted, Eletronuclear did not comment on the letter from the President of Eletrobras.
