Minatom seeks increased production

30 June 2000

Russia plans to promote nuclear energy and increase production by 2030 from the present 14% of the country’s electricity requirements to 33%, or from 130 billion kWh to 372 billion kWh, according to a Ministry of Atomic Energy (Minatom) report on development of the industry up to 2030 and for the period until 2050.

The plan sees nuclear generating 160 billion kWh annually by 2005, 205 billion kWh by 2010 and 235 billion kWh by 2020. In 2000-2001, nuclear energy production should increase by 20 billion kWh to 140 billion kWh.

Russia’s nuclear power industry has significant reserves for growth, the report said; uranium reserves and nuclear infrastructure are sufficient to increase the existing capacity of nuclear power plants fourfold. Sites are available for nuclear plants totalling 12GWe, which would require capital investments of $680/kW. Designs for new reactors are ready which could be built for investments of $900/kW. Russia’s current strategy is to extend the period of use of nuclear reactors by 10-20 years and to build new plants in the European part of Russia as as a substitute for gas and oil-based generation.

Minatom estimates that the nuclear industry will require the following investments for 2000-2005: R17.5 billion (about $550 million, or $80-90 per kWh) for modernisation and extending the design life of first-generation reactors; R65 billion ($2bn or $350-400 per kWh) for completing five partly built reactors. The total estimated demand for investments for the period from 2000 to 2010, including expenditures on preliminary work for development of this industry after 2010, is R380 billion (about $12 billion), or R60 billion annually.

The programme is to be financed from the following sources: an increase in electricity tariffs to 1 cent per kWh provided payments are cash; improvement of depreciation payment regulations, and an increase of the sum of such payments. Funds will also be available from a special extra-budgetary investment fund for energy industry development, comprising consolidated funds from payments for products and services of natural monopolies, including funds from gas exports. Other suggested sources of finance include legal tax privileges for the return on investments in the nuclear industry; state guarantees for investment projects to complete partly built reactors; direct financing of measures to improve the safety of nuclear power plants from the state budget; and services to foreign nuclear power plants dealing with nuclear fuel handling.

Prime minister Mikhail Kasyanov told a government meeting at the beginning of June that the government must ensure that the nuclear sector takes its rightful place in Russia’s power industry. He said: “The nuclear power industry is one of the major components of the country’s fuel-and-power balance and ensures the energy security of the country”. He also pointed out that the government members discussing this matter must pay special attention to tariff policy, cross-subsidization, and ensuring the reliability of nuclear power.

Two weeks earlier, nuclear energy minister Yevgeny Adamov said Russia planned to build 40 new nuclear units by 2030. He recalled that this year a new unit would be put in operation at Rostov, and units at the Kursk and Kalinin nuclear plants will be in operation before 2005. Adamov noted that there are currently 12 unfinished units in Russia, in which about $2 billion was invested in previous years. New units will cost $900-950/kW.

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