Russia: new nuclear tech titan
Sixty-one years on from giving the world its first-ever nuclear power plant, Russia is once again at the forefront of atomic energy. Dr Gareth Evans finds out how the country is shaping up to be the new titan in world nuclear technology.
According to recently published research from the World Nuclear Association (WNA), Russia is now a global leader in fast neutron reactor technology, with exports of nuclear goods and services described as "a major Russian policy and economic objective".
The report highlights the dramatic efficiency increase in Russian nuclear generation since the mid-'90s and concludes that Russia is moving steadily forward with plans to develop new reactor technology and expand the role of nuclear energy both at home and abroad. Having signed deals with a number of countries, including Finland, Egypt and Jordan, over 20 plants are confirmed or planned for export construction, and global demand is tipped to rise; Russia is fast shaping up to be the new titan in world nuclear technology.
State-owned Rosatom says that Russia's nuclear industry amounts to over 400 companies and more than 255,000 employees working across the fuel cycle, power generation and R&D sectors, 34 operating power facilities with an installed capacity of 25.2GW, and the only nuclear-powered icebreaker fleet in the world.
A succession of initiatives from Vladimir Putin has helped establish the continued development of this industry as a top national priority, both as a means to ensure future domestic energy security and as a key economic sector in its own right, with international projects forming a big focus area for growth. All of the thousands of reactor-years of experience gained since Obninsk - including the safety lessons learnt in the wake of the disaster at Chernobyl - have been effectively packaged to create a unique selling point for Russian expertise on foreign markets. While many critics felt that Fukushima would finally herald the demise of nuclear power, it seems that quite the reverse has turned out to be true. With its appeal now fast growing, particularly in Asia, Russia has been wooing prospective clients with a range of tempting incentives.
When it comes to competing for foreign business, Rosatom has one highly significant advantage - its unique role in managing Russia's nuclear assets makes it the only company in the world which can provide the industry's complete range of products and services. It can offer manufacturing and engineering services, construction, operation and management, used material handling - in short, customers can pick and mix everything from fuel to finance - and for a power plant, that is typically pitched at least 20% below Western-built prices.
It makes for a competitive offering, says Rod Adams, independent atomic energy expert and publisher of Atomic Insights, "especially if packaged with competitive financing, effective training programs, a good local supply strategy and a credible plan to support the power plant with spare parts and fuel supplies as needed."
A business model known as 'BOO' (build, own, operate) has been one of Rosatom's most successful ploys in this respect. Offered through its export division, Atomstroyexport, BOO was first used five years ago in a deal struck with Turkey and has featured in other agreements since. In effect, the purchasing country simply has to provide a suitable site and sign up to buying the electricity produced, with Russia covering the costs of building and operating the power plant. Particularly for developing countries which cannot afford the high up-front capital investment, the attraction of the BOO model is clear, and there are significant direct benefits for Russia too, not least in terms of the employment it supports.
Brilliant strategic move?
However, there is another side to consider - the push towards exporting nuclear power represents both a move to diversify income now, and a hedge against the future.
By channelling the income stream gained from oil and gas sales into long-term assets, the goal is to cement the country's future role as a major energy nation. With even Russia's vast hydrocarbon reserves set to run out eventually - assuming that the world does not abandon fossil fuels altogether, as some suggest it must, long before they do - recycling O&G profits into nuclear power generation against a background of rising demand makes good business sense.
Writing in January 2014, Adams said, "Russia's decision to invest in nuclear energy capabilities is a brilliant strategic move befitting a nation of chess players", but back then the Russian sovereign wealth fund was big, and getting bigger. Times - and gas revenues - have changed since then.
Russia is planning to deploy its first floating nuclear power plant in 2016, establishing a new way of powering remote Arctic communities.
Adams says that the recent fall in oil prices has seen a precipitous drop in income from hydrocarbon sales, and that will inevitably restrict Russia's ability to provide finance to other countries, which could have an impact on competitiveness.
"If parts of the complete package are not credible or lack sufficient financing, a Russian deal would lose some of its attractive features and might no longer compete with packages from other suppliers like the South Koreans, the French, the Canadians or the Japanese/American companies like Toshiba-Westinghouse or GE-Hitachi."
Nevertheless, he says that overall, the Russian nuclear strategy remains essentially the same.
Driving new developments
Export initiatives aside, there is considerable domestic scope for Russia's nuclear industry, with Moscow having set a target of increasing the share of electricity generated to 25% by 2030, and Rosatom focussed on developing new technologies, including types of reactors that will be able to burn some spent fuels.
The rising economic and strategic importance of the Arctic, too, provides a potential driver for atomic technology, as Russia looks to develop the Northern Sea Route and explore for energy and mineral resources in the High North. The experience gained with nuclear powered ice-breakers has already led to the production of the Academic Lomonosov - a 144m-long, non-self-propelled vessel, equipped with two reactors and able to generate up to 70MW of electricity. As the flagship of a planned whole new class of ship-based generators, it is destined to be the world's first mass-produced floating nuclear power station when it comes into service towards the end of 2016.
Mobile and capable of powering small cities, ports or industrial infrastructure, these floating reactors could be a huge asset in remote or inhospitable regions, and Rosatom say that 15 countries, including China, Indonesia and Malaysia, have already expressed an interest in the vessels.
According to the WNA, there are 70 nuclear reactors currently under construction - the most in a quarter of a century - and some 500 more are proposed. While not all of those will ultimately go ahead, it speaks to the world's growing appetite for nuclear power and for Russia, owning around 40% of the world's uranium enrichment capacity and a significant share of the proven global uranium reserves. The value of Russia's current tally of international deals already runs to over $100bn, and the new nuclear tech titan is really only just beginning to flex its muscles.