Russia has been a major international player in the nuclear sector and a leading exporter of nuclear power plants. But as many nations look to distance themselves from Russia it opens up opportunities for other suppliers, says Jeremy Gordon.
It is impossible to take stock of the situation regarding nuclear energy in Ukraine in the midst of Russia’s invasion and the fighting that followed. There has been a real or imagined nuclear crisis every few days, from the capture of Chornobyl and then of Zaporizhizhia to the realisation that Russian forces really did dig trenches in the highly contaminated Red Forest. We still don’t know all the details of what Russian forces did at Chornobyl, and we will probably never know the impacts on their health, if any.
New myths and legends about that site are being written every day.
Only one aspect has become clear: the first loss to the nuclear sector was trust in Russia, and the second was Rosatom’s export prospects.
I have nothing but respect for the Russian nuclear energy professionals I have met over the years, who are now seeing their careers and successful businesses being turned upside down through no fault of their own.
The world is going to miss out as well. Russia’s commitment to Rosatom and its hundreds of subsidiaries over many years built it into a full-scope nuclear giant. It was a leader in innovation and the world’s top exporter of nuclear power plants. It was able to build them reliably for a good price — or at least more reliably and for a better price than others. Russia kept its faith in nuclear during the decades when other pioneer countries allowed their industries to start to crumble and Rosatom reaped the benefits. Russia’s commitment had many facets.
In communications, for instance, it was clear that Rosatom faced head-on the fact that ‘Russian nuclear’ had an image problem. It invested in the people, tools and campaigns needed to project an image of its own making instead. It did that at home, as well as in countries it was keen to export to.
Rosatom studied the International Atomic Energy Agency’s Milestones Approach for newcomer countries and created training offers for every part of it, leveraging Russia’s universities and technical centres. Rosatom acted as a mentor to newcomer countries, starting their long nuclear energy partnership as early as possible. It offered the research reactors and cancer treatment centres that might represent a newcomer’s first items of nuclear infrastructure.
With support from the Russian government, Rosatom was able to bring innovation to its export model. For example, the ‘build-own-operate’ model — previously used for conventional plant — enabled Turkey to commit to the four-unit Akkuyu plant, paying through a long-term contract for the electricity. For some countries, Rosatom’s export deal included long-term management and disposal of used fuel, eliminating one of the biggest headaches for decision makers.
Because of these and other factors, Rosatom tabled a far more attractive offer than the other leading nuclear vendors and their host governments — but an attractive offer for countries prepared to make a 100-year deal with Vladimir Putin. Now, because of him, that list of countries is a lot shorter, while the list of countries wanting to increase their energy security is much longer. Even beyond the horrors of a cruel and unnecessary war, intentionally jeopardising nuclear safety as Russian forces did in Ukraine is simply unforgivable. And the presence of Rosatom staff at Ukrainian sites has left a very sour taste in the mouth.
Rosatom’s exclusion leaves a huge gap in the industry for its rivals to fill.
After a decade in a doldrums, junior uranium miners are already leaping into action in response to price signals as Russia’s share of uranium production is phased out. The West is figuring out its options to replace Russian conversion and enrichment services, which might take longer.
Within days of the invasion, Ukraine’s Energoatom called on Westinghouse to ramp up production of VVER-1000 fuel and to begin supplying fuel for its VVER-440s as well. The US firm can also count on buyers for its fuel in Slovakia, Finland and the Czech Republic, even if Victor Orba´n’s Hungary might stick with Rosatom and TVEL.
But if the fuel cycle seems like it will sort itself out within a couple of years, the issues of energy security extend to the long-term trajectory of the industry. Several of the advanced reactor concepts in development, as well as two planned for demonstration in the US, use high-assay low-enriched uranium (HALEU), for which there is no ready supply outside of Russia. The US Department of Energy thinks it will need as much as 40t of HALEU: now that purchasing it from Russia is out of the question a fire has been put under US plans to create its own supply chain.
Commercial fuel cycle firms want to see certainty of demand before they invest hardware and licensing for HALEU solutions across transport and conversion as well as enrichment. A US$2 billion national strategy is needed, according to think tanks in Washington DC, otherwise the US stands to lose its lead in commercial advanced reactors.
More immediately, the impact of the war on the Russian economy and Rosatom’s supply chain is surely undermining its new-build projects in Bangladesh, Belarus, China, Egypt, India and Turkey, as well as those in Russia itself. By my reckoning these projects at various stages of completion add up to 21 reactors, 17.2GWe and about one third of current global new-build. Losing those would be a huge setback for the global industry and yet another example of how politics always outpaces nuclear construction.
However, with the biggest exporter effectively off the scene, the market opens up for other players grateful for the opportunity. For a few years the US has been supporting countries in Eastern Europe looking to invest in nuclear and phase out fossil fuels and Russian imports. Those corporate coalitions could be the basis of a ‘Team USA’, if the Biden administration wanted to take some of Rosatom’s former share — and if it can go on improving its offer to newcomer countries.
Other countries are well positioned, with positive home governments. In the 2020s we will probably see the reformed Team France, Team Korea, and a new entry — Team UK. All three of these key countries have decided to build nuclear at home and have strong nuclear export businesses. Although it is supposed to facilitate new large reactor projects at home, the fact that the UK government named its new body Great British Nuclear signals its attitude.
I’d like to see these countries adopt a common stance on how countries should operate in the international nuclear space. Both sellers and buyers will be motivated by national energy independence, economic development and cutting emissions to zero. Those are the touchstones of new nuclear build for the next period.
While state-supported domestic build will be needed to get the programmes going, and some state-to-state exports will follow, these should not be the long-term business model. Although it worked for Russia, chaining nuclear energy to national politics eventually turned into a disaster. At only 5% of global energy, the nuclear sector is too small to afford setbacks like this. It’s also too important for the future of the world to allow them.
Around those national teams, nuclear needs a thriving international ecosystem of commercial product and service providers enabling diversity of supply and supporting everyone’s energy independence. This would also help create the conditions for innovation, especially as new products arrive on the market — small reactors, advanced reactors, floating reactors, nuclear batteries and fusion. We have to believe that nuclear will grow significantly and there will be more than enough projects for everyone.
Rosatom exemplified the best of what a full-scope nuclear giant could achieve with consistent state backing. But in the end Russia exemplified the worst implications of dependence on foreign countries for energy resources. With its example, the era of large nuclear power plant exports might be waning, and opening the door for a new and more dynamic, competitive and commercial nuclear industry. For countries hoping to fill the space Rosatom leaves there is a lot to play for. Not just exports, but a chance to reshape the industry.
Jeremy Gordon is an independent communication consultant with 18 years of experience in the international energy industry. His company Fluent in Energy supports partners of all kinds to communicate matters of clean energy and sustainable development.