RUSSIAN NUCLEAR INDUSTRY ON PATH OF SYSTEMIC CHANGE


30.11.06
MOSCOW. (RIA Novosti commentator Tatiana Sinitsyna.)

"This year has been important for the nuclear industry from two points of view," said Sergei Kiriyenko, head of the Federal Agency for Nuclear Power, at a news conference at RIA Novosti.
"This is a year when strategic decisions have been made that will divide the nuclear industry into military and civilian parts. The former will remain unchanged, while the latter will become independent and subject to universal transparency standards."
The nuclear industry, a conservative heavyweight which has preserved Soviet traditions longer than any other, can be pushed forward only by systemic change. Kiriyenko, a prominent politician and manager, initiated the sector's restructuring. The agency has surprised the country with the scale of its transformation. On December 6, the Russian parliament is expected to consider a bill that will finalize the division of the nuclear industry.
Civilian enterprises will be reincorporated as joint-stock companies, and legal entities will receive access to nuclear materials. At the same time, the state will maintain total control over the sector. The change will allow the fuel cycle and power generation to be combined into one process and to compete on the industrial market, which will eventually make the end product, kilowatt-hours, cheaper. It is also important that the industry will be able to attract private capital to meet some of its huge financial demands.
The new bill will also eliminate obstacles to foreign trade. For example, Australia, a major exporter of uranium, is willing to sell it to Russia only if it is not used in the defense industry.
The size of Russiaís nuclear industry means that it needs significant amounts of uranium, but its own reserves will soon be exhausted. This year, the agency has managed to improve the situation. It set up a Mining Company that consolidated all uranium-producing assets in Russia and even international projects, which include a joint venture with Kazakhstan. This has allowed Russia to take a new position on the global market and to obtain additional opportunities of implementing innovative technology and boosting the construction of nuclear power plants (NPPs).
The NPPs that are currently in place were mostly built in the 1960s-1970s, and their service life is coming to an end. Together, they produce 16% of the electricity generated in Russia. Now the agency has set itself the task of maintaining this share until the 2020s-2030s. There is only one way to do this: to build at least two (or better three or four) nuclear generation units a year.
Kiriyenko's plan is based on the assumption that the reform of the nuclear industry has to be coordinated with the government's strategy and endorsed at the top level. This is why his agency drafted a federal target program for the nuclear sector's development, which was signed by President Vladimir Putin last July. In accordance with the strategy, the federal draft budget for 2007 allocates 17 billion rubles for the first couple of new reactors.
Digging deep into corporate problems, Kiriyenko found out that Atomstroiexport, a company that builds NPPs abroad, had been sold to private investors for $20 million, while its order portfolio stood at several billion dollars and was guaranteed by the state budget. The situation was inexplicable and illogical: a private company was an operator under intergovernmental agreements. Efforts were made to return a controlling stake (50.8%) in Atomstroiexport to the government. This move helped to dispel any doubts the companyís foreign partners may have had.
Perhaps, these developments influenced Bulgaria's decision, which after a long delay chose Russia in a tender for the construction of an NPP in Belena. This victory signaled Russia's "return to the European market," Kiriyenko said. The country also won other European tenders, including ones for supplying nuclear fuel to the Czech Republicís Temelin NPP and to Finlandís Loviisa, defeating a powerful rival, Westinghouse, on its traditional market.
"Russia is a member of all international organizations, including Generation IV, a global partnership which seeks to develop the nuclear reactors of the future," said Yevgeny Velikhov, president of the Kurchatov Institute Research Center and member of the Russian Academy. "We are members of an unprecedented global program to construct the International Thermonuclear Experimental Reactor in France. Overall, the agency is making notable progress." -0-