Volume I, Number 3; 24 October 2012

Eurasia Analyst                     Volume I, Number 3; 24 October 2012

Progresss — and problems — in Russian Nuclear Industry by Alexey Dynkin

On September 26, a formal ceremony was held at the Kalinin nuclear power station in Udomlya, Russia to mark the commencement of operation of Unit 4, a 950-megawatt VVER-1000 pressurized water reactor. (1) Construction of this reactor first began in 1984, but was put on hold during the 1990s due to a lack of funding; it only resumed in 2007. (2) The commissioning of the new reactor represents an important step in fulfilling Russia’s goal of actively expanding its nuclear energy output over the next two decades, but the long (over 25 years) and often tortuous path to its eventual completion illustrates the difficulties that Russia has faced in adapting a mostly aging, Soviet-era nuclear power generation system to 21st-century demands. Nuclear energy has long been prominent in Russia. The world’s first nuclear power plant to generate electricity for the grid began operating in Obynsk in 1954. Both the USSR and present-day Russia actively export nuclear technology abroad: controversially to countries like North Korea during the Soviet period and Iran today, but also to many other countries, including China and India, and recent negotiations with Turkey and Bulgaria suggest further expansion. One indicator of the special status that the nuclear power industry enjoys in Russia is the existence of RosAtom (formerly the Ministry of Atomic Energy in the Russian Federation), a state corporation and regulatory body for the nuclear complex that is entirely separate from the Ministry of Energy. While RosAtom oversees all aspects of the nuclear industry, from uranium mining and enrichment to technology research and development, a subsidiary, RosEnergoAtom, is responsible for the construction, operation, and maintenance of nuclear power plants. The result of this dichotomy in the overall energy regulation system in Russia is that overall state energy policy, for which the Ministry of Energy is responsible, can dictate only nuclear development in a very general sense, e.g. setting some theoretical goals and targets that are left entirely up to the nuclear energy bodies to decide how to meet. And, while a separate regulatory body channels expertise and focus on a particularly complicated industry, it also means an additional bureaucracy and the inevitable inefficiencies that come with it. It will be interesting to see in the coming decades how well this scheme is able to cope with the energy challenges the country faces. At present, Russia is the world’s fourth largest producer and consumer of electricity, with over 850 billion kilowatt-hours generated in 2008. (3) Thus, Russia’s electricity demands are somewhat disproportionate to its wealth and population: in the same year, Russia ranked only 11th in GDP and 10th in population (4) worldwide. At present, nearly half of this electricity (48% as of 2009) is generated by the combustion of natural gas in gas turbines, and only 16% from nuclear power plants (5) – a surprisingly small share considering the aforementioned long history and strong attention given to nuclear energy in the country. By contrast, the United States — a country not vaunted as a leader in nuclear energy production – produces about 19% of its electricity by nuclear power. (6) The very strong dependence on natural gas as a source of electricity generation in Russia (and, more broadly, as an energy source) is recognized to be a long-term liability by policymakers. In a publicly-available paper released in late 2009, outlining Russia’s energy strategy through 2030, the Ministry of Energy recommends a gradual reduction from 53% to 47-48% of the share of natural gas in the country’s total energy balance, while at the same time increasing the share of energy derived from nuclear, hydroelectric, and coal-based sources to fill the balance. (7) Specifically, the document recommends increasing the share of electricity generated by nuclear power plants from the current level of 16% to approximately 20% by 2030. At first glance, this may seem like a modest increase, barely exceeding the current US figure. However, because overall electricity consumption is expected to increase by as much as twofold, meeting this goal actually requires increasing total nuclear generating capacity by more than 200%, from the current level of 163 billion kilowatt-hours (kWh) to as much as 437 by 2030. (8) Since the 2009 document was released, the electricity demand growth projection has been scaled down pending a slowdown in economic growth, but even with the revised estimate, nuclear power generation must be increased by 43.4 GW, which is still nearly double the 24.1 GW of plant currently in operation. (9) In general, there are a number of ways that nuclear power generation capacity can be increased. These include: construction of new power plants; expansion of capacity of existing plants by the addition of new reactors; and increasing the output of existing reactors through technological improvements resulting in higher efficiency or higher capacity factor (the ratio of energy generated to maximum theoretical capacity). Currently, RosAtom plans to use all these methods to reach its 2030 target capacity. Specifically, two completely new plants – one in Kaliningrad, and one “floating nuclear power plant” in Viliuchinsk – are currently under construction, with a combined total of slightly over 1 GW of capacity; another seven are scheduled to begin construction within the current decade, with over 15 GW additional capacity; and yet another five are tentatively planned, with uncertain start dates. At the same time, at least 20 new reactors are under construction or planned at existing plants, and additional reactors are planned in future stages at the proposed new plants. Combined, these projects would yield more than 50 GW of new capacity by 2030, which, in theory, would more than meet the target set forth by the energy ministry in its 2009 study. But Russia faces a further problem in its quest to expand its nuclear capacity. Many of its existing reactors are nearing the end of their operational lifetime (typically 30 years for most existing units). This means that meeting the 2030 target is not simply a matter of adding a specified number of new reactors to those already in existence, but also replacing those aging units that will not be able to continue operating safely into the next two decades. There are two ways to address this problem: one is retirement; the other is lifetime extension for existing units. At present, only nine of Russia’s aging reactors are scheduled to be discontinued, while 12 are slated for lifetime extensions of 15 to 25 years. (10) While such extensions may be a relatively cost-effective solution into the medium term (that is, roughly in the 2030 timeframe for which current expansion plans are being made), in the longer term these units eventually will need to be retired, and replaced with newer units if capacity is to continue to be expanded. Thus, the current development emphasis is on the addition of newer reactors with a longer operational lifetime, gradually replacing the older models as the expansion of the nuclear power sector proceeds. In particular, the VVER-1200 AES 2006 reactor – of which the recently launched Kalinin 4 is an example – comprises the bulk (more than half) of the new units either currently under construction, or being planned, both in new and existing power plants. (11) With safety features such as a full containment structure and missile shield, a 1200 MW capacity per unit, and a projected lifespan of 60 years, these units are well-suited for the policy goal of simultaneous capacity expansion and modernization (meaning, primarily, improvements in safety and efficiency). They also have the advantage of being based on VVER (“vodo-vodyanoy energeticheskiy reactor,” or “water-water power reactor”) technology, which was originally developed in the USSR as early as the 1960s, and has been continuously developed and improved since then, meaning that it is a technology in which the Russian nuclear industry has a lot of expertise. On the other hand, the improved technological and safety features make the VVER-1200 both expensive and time-consuming to build. Current capital cost is estimated at $2100/kW, which translates to approximately $2.5 billion per reactor, while projected construction time is 54 months. (12) Of course these are only estimates, and as the nearly 30-year long history of Kalinin-4 shows, they are only applicable if the required funding is available – a condition that is by no means guaranteed given Russia’s fragile economy and shifting policy priorities, and the increasingly volatile international economic and financial climate. Current Russian projects and plans indicate that the country seems to be fairly serious about the expansion of domestic nuclear power generation through the next several decades, and that it has the expertise, the political will and, at least for the moment, the funding to make significant progress in this direction. Russia also has a distinct advantage over a number of Western countries and Japan in this regard in that it is much less constrained by anti-nuclear power sentiment – both because Russian policy is generally much less dependent on public opinion than that of Western and other developed countries, and also because the Russian public tends to be indeed less concerned – certainly less actively so – about the nuclear issue than the citizens of other countries. But nuclear power generation is a capital-intensive, technology-intensive industry with very high startup costs and long project timeframes – characteristics for which the Russian economy is historically not well suited. Thus, the realization of Russian nuclear energy policy will be possible only if the same economic growth that makes the proposed expansion necessary in fact materializes as projected. Otherwise, the government’s ambitious projects may well suffer the same fate as the long-neglected – and only recently revived and completed – Kalinin 4. End Notes: (1) “Kalinin 4 accepted for commercial operation,” World Nuclear News, 26 September 2012 via http://www.world-nuclear-news.org/NN-Kalinin_4_accepted_for_commercial_operation-2609124.html (2) “Unit 4 of Kalinin NPP released for commercial operation,” ROSATOM press release, 25 September 2012 via http://www.rosatom.ru/en/presscentre/highlights/0f61c4804cdb904fac40edb60f1aecb4 (3) “Country Comparison: Electricity: Consumption,” CIA, The World Factbook, via https://www.cia.gov/library/publications/the-world-factbook/rankorder/2042rank.html (4) “Country ranks 2008” via http://www.photius.com/rankings/index_2008.html (5) “Nuclear Power in Russia,” updated September 2012, via http://www.world-nuclear.org/info/inf45.html (6) Ibid, “Country Comparison” (7)”Energy Strategy of Russia for the Period up to 2030,” Ministry of Energy of the Russian Federation, 2010, Moscow via http://www.energystrategy.ru/projects/docs/ES-2030_(Eng).pdf. Note: Here the term “energy balance” refers to all forms of energy generated, whether electrical, mechanical or thermal, depending on the requirement. In the Russian Ministry of Energy’s document, this figure is calculated in terms of tons of coal equivalent, which means the mass of coal that would be required to produce the same amount of energy for each source. This figure is related to, but is not the same as, the percentage of electric energy generated by each fuel source. (8) Ibid. Note on units and quantities: watt-hours (Wh) are units of energy, while watts (W) are units of power. Since power is energy per unit time, watt-hours (or kilo-, mega-, giga-, etc) are power times time, which gives energy. In most applications, this quantity is expressed in joules or calories, but in electricity generation and distribution parlance, kilowatt-hours (kWh) are used by convention. The term “capacity” as used here means the number of kilowatt-hours generated in a year. While technically this is also an expression of power (power times time, divided by time!), these units are used to illustrate energy production and usage over a period of time, and should not be confused with megawatts (MW), which are the traditional units for power and are typically used to indicate the instantaneous rate of power generation of a plant or unit. (9) “Nuclear Power in Russia,” Ibid.2 (10) Ibid. (11) Ibid. (12) Ibid. ~~~ Copyright © 2012 resides with individual authors. All rights reserved. Send requests for permission to EurasiaAnalyst@gmail.com To subscribe or unsubscribe to the Eurasia Analyst, please contact EurasiaAnalyst@gmail.com

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