Ukrainian nuclear utility Energoatom has made significant progress in protecting the interests of nuclear power generation and has received support from Western partners in the development of its domestic nuclear power industry, according to Energoatom vice president German Galushchenko.
In an interview on 19 October on the Energy Freedom talk show with Andrey Kulikov “Nuclear Energy: Problems and Prospects”, Galushchenko explained how Energoatom has managed to defend its interests in the new model of the electricity market.
“The conditions in which Energoatom found itself on the energy market is nothing less than complete discrimination of nuclear generation….Energoatom was being punished before entering the energy market: while other forms of power generation could trade on the market through bilateral agreements,this was closed for nuclear generation,” he noted.
“Now we have the opportunity to sell 40% of the electricity produced by NPPs on the bilateral agreements market at the RDD, and another 10% on the market a day ahead. Thus, we now have the opportunity to sell at least 50% of our products on the market, which was not the case until quite recently.
He added: “We see that the market provides a lot of opportunities for speculation to companies that are neither producers nor consumers of electricity. Therefore, one of the areas that we are trying to promote is the fight against speculation in the electricity market”.
Energoatom continues to work on solving the problem of debts to the Company for electricity produced by nuclear power plants. He noted that the new law On Measures Aimed at Repayment of Debt Arising on the Wholesale Electricity Market "is not perfect." It still requires a number of amendments to other legislative acts, and this is a rather long process. But it is important that Energoatom has begun this work, and now we are discussing various instruments for debt repayment, including the issue of government bonds for internal loans. We will definitely find a solution to this issue.”
Galushchenko noted that the start of electricity exports by by Energoatom is extremely important given the balance constraints still faced by nuclear power plants in the unified energy system (UES) of Ukraine. Answering Kulikov’s questions about export prospects, Galushchenko said: "Given the events between Belarus and the Baltic states, which have stated that they refuse to receive Belarusian electricity, we have a very good chance to enter the Baltic market by transiting through Belarus, which is what we are working on now."
Stressing the need to sell as much nuclear-genrated electricity as possible, he noted: "We sell only those volumes for export which, due to balance restrictions, we cannot supply to Ukraine's energy system at the moment. So we have to either stop units or supply electricity for export and earn currency, because the selling price for export is in any case higher than our cost." Other ways of overcoming market imbalances is also being discussed.
“If we have unused capacities, we need to look for an opportunity to use them as fully as possible. The company has already signed two memorandums with the aim of creating powerful data centres near NPPs, which will provide us with additional stable electricity consumption,” Galushchenko said. He said an urgent project for Energoatom is the disconnection of Khmelnitsky 2 from the UES and its transfer to the European power system ENTSO-E to enable further export of electricity.
Completing Khmelnitsky 3&4
Galushchenko added that Energoatom has different options for completing construction of Khmelnitsky units 3&4. The first option "is to take into account the investment component of 20 kopecks in the cost of producing a kilowatt-hour of electricity by nuclear power plants. This will make it possible to obtain the funds necessary for the completion of the power units within five years.” The second is switching Khmmelnitsky 2 to work in the EU energy system and to use the export revenue to complete the two units.
He recalled that the company has an investment project "Energy Bridge - Ukraine EU", which involved restoring the existing transmission line from Khmelnitsky NPP to Rzeszow substation (Poland) to enable power exports to Poland and other EU countries.
"The project has faced a number of obstacles, and there is an opinion that it is impossible to implement. On the one hand, we are told that the Polish side does not see the point of this project, on the other, they emphasise that in 2023 full synchronisation of Ukraine's UES with ENTSO-E is expected, which also makes it impractical. But I would not be so categorical in dismissing the Energy Bridge as the project is already five years in preparation and a consortium was set up for its implementation including leading Western energy companies, in particular France’s EDF, US Westinghouse and Polish Polenergia."
Despite Poland’s reticence, he said, opportunities for the project remain. "Its main advantage is the 750 kV direct transmission line from Khmelnitsky NPP to Rzeszow, built in Soviet times.” Galushchenko noted that such a line today would cost half a billion dollars.
"We recently discussed this project with Westinghouse and they expressed interest in making it happen — maybe not in the form in which it was originally planned, but in any case they are interested,” Galushchenko emphasised.
He said co-operation with Western partners is a strategic direction for nuclear generation. “We are negotiating with international financial institutions that could invest in our projects,” he said, noting he had recently held meetings in Washington with representatives of the US Department of Energy (DOE) and other professional institutions. “I can say that our American partners are very positive about the prospects of Energoatom and are ready to provide us with comprehensive support in the development of nuclear energy in Ukraine.”
Energoatom is the operator of four nuclear plants in Ukraine (Zaporozhye, Rovno, South-Ukraine and Khmelnitsky), which comprise 15 nuclear reactors. Thirteen are VVER-1000s and two are VVER-440s, and they have a total installed capacity of 13.8MWe.