The world’s first floating nuclear combined heat and power station is set to be built by Russian nuclear submarine builders The Northern Machine Building Enterprise (Sevmash).

The construction of the small-capacity power plant, based on a floating power unit with a KLT-40S reactor, follows the signing of four contracts and a protocol which came during a visit to Sevmash by the chief of the federal atomic energy agency, Sergei Kirienko.

Rosenergoatom, the direct project customer and investor, negotiated several contracts with Sevmash including one for the construction and supply of a non-self-propelled rack-mountable vessel, a floating power-generating unit with two reactors, and a general contract concerning construction and assembling operations for coast hydraulic structures and communications. Sevmash is expected to receive around 20% of the total contract cost of about Rb9.1 billion ($337 million) and, according to Rosenergoatom, the payback period is 11 years. Manufacturing and supply of the two KLT-40S reactors will be carried out by OKBM for around 27% of the investment, while the two steam-turbines will come from OJSC of Kaluga, for an estimated 11% of the total.

The station, which is expected to operational by 2010, is seen by Rosenergoatom as a pioneering project which will serve as a model for building similar stations in Russia and abroad, particularly in Asia and Middle East where demand for desalination plants is seen as a key future market.

Sergey Obozov, the acting general director of Rosenergoatom, responded to critics suggesting the station will be a ‘floating Chernobyl’ with the comment: “The reliability of [the] offshore nuclear power plant will be the same with the Kalashnikov gun.”

Obozov added: “These plants could be useful in the exploration of northern territories particularly new stores of mineral resources, development of the Northern sea route (energy for port infrastructure),the supply of the Navy bases of Northern and Pacific navies. All in all we have 11 regions of Russia (mostly far North and East) where these NPP can be used.”

The announcement followed comments from president Putin that the nuclear industry should assume a greater role in meeting Russia’s energy needs saying: “The percentage of nuclear fuel in the country’s energy balance is 16% and if we do nothing in this area, but just keep on moving at today’s pace, it will drop to 1-2% by 2030.” He has previously called for the government to draft a programme that will increase the proportion of nuclear capacity to 25%.