Seemingly, the EU has almost exhausted the inventory of sanctions to impose on Russia after the invasion of Ukraine, but there is one sector of the country’s economy that has not yet been touched: the nuclear industry. The Russian state energy giant, Rosatom, has managed to evade sanctions and carries on business as usual. Moreover, Russia continues to dominate the market of nuclear materials, to export reactor technologies, and to bid for international contracts associated with the construction of power plants and equipment maintenance.
According to an analysis by Columbia University’s Center on Global Energy Policy, in 2021, out of 439 total nuclear power reactors, 38 resided in Russia and 42 operated in other countries using the Russian VVER type (15 of which were in Ukraine), and 15 Russian-designed reactors were under construction in other countries.
The Roots of European Dependency
Presently, two policy factors contribute to the increased interest in the nuclear technologies among the European countries. Battling climate change and reducing carbon dioxide emissions, the European Commission included natural gas and nuclear energy among “transitional activities” in the EU Taxonomy for sustainable activities. Facilitating investments in the nuclear industry and accelerating the shift from fossil fuels, the Commission considered the production of nuclear power to be in line with climate objectives. On the other hand, the European energy system was hit badly by the looming gas prices and the sanctions imposed on Russian petroleum products. Thus, given the growing European demand for energy and the volatile gas prices, nuclear energy provides a cheaper, stable and relatively low-carbon response. Nevertheless, there are a number of potential pitfalls in the production and supply of uranium (the main fuel for nuclear reactors). Despite a relative diversity of European uranium suppliers, Russia currently furnishes about 20% of the material necessary to supply the EU nuclear power reactors. Simultaneously, the subsidiaries of Rosatom, fuel companies Tenex and TVEL, provide circa 26% of Europe’s uranium enrichment services and 25% of its enriched fuel.
However, the most problematic issues of nuclear reactors are their high costs, the long term planning horizon (usually, over a decade), and their highly specialized designs. These designs require particular types of fuels, usually produced by a company related to the reactor’s producer. In other words, choosing a reactor’s constructor leads to further dependency on the suppliers, fuels, and components produced by a company collaborating or affiliated with the initial constructor. This way, the supply chains for nuclear fission are rigid and complex, whereas the market for the reactors, fuels, and components is less competitive and dominated by a few giant players. Thus, a state choosing one or another reactor’s constructor enters into a decades-long dependent relation with it, and it makes the shift to other providers of fuels, supplies, and maintenance highly untenable.
Consequently, the nuclear power plants constructed in collaboration with the Soviet Union or Russia placed some European states in a position of complicated dependence. The increasing demand for nuclear raw materials and the tight supply market even made Slovakia violate the already imposed sanctions, when two cargo planes of the Volga Dnepr Airlines landed in Bratislava despite the European skies being closed to Russian aircraft. To keep the restrictions in place, Slovakia had to organize the transit delivery through the Finnish border, so that the Russian lorries transported nuclear fuel to Lappeenranta Airport, from where the Spanish Swiftair cargo company took the uranium to Bratislava.
Even for France, the leader of the European nuclear sector, Russia renders irreplaceable services – as the Eastern European country owns the unique Seversk plant, capable of reprocessing used uranium. Orano, the French conglomerate specializing in nuclear power, concluded a partnership ensuring the conversion of its used fuel into reusable material. However, since Oranoterminated the contract with Rosatom under public pressure over the invasion of Ukraine and Greenpeace complaints over waste dumping in Siberia, the company has almost exhausted its storage capacities for nuclear materials. At the same time, the construction of a similar conversion facility in Europe may take at least 10 years, during which the potentially renewable nuclear fuel would be buried as ecologically dangerous waste.
Thus, European nuclear industry heavily relies on Russian exports of supplies and her enrichment facilities. Additionally, some countries of Central Europe still collaborate with Russia on joint nuclear construction projects. Since 2009, Slovakia has entered into a partnership with AtomStroyExport to design and complete units 3 and 4 at the Mochovce nuclear power plant and, by the beginning of 2023, Russia-designed plant is close to grid connection. According to the Slovak electric utility company Slovenske Elektrarne, reactor 4 alone would meet about 13% of Slovakia’s electricity consumption. On the other hand, in the case of Finland, where the commercial engagement with the Russian nuclear giant was at an early stage, the energy company Fennovoima terminated the construction of the Hanhikivi 1 nuclear power plant planned to be executed by a Rosatom subsidiary.
Bulgaria also faces a geopolitical dilemma concerning Russian nuclear equipment and fuel. The Kozloduy plant, the only nuclear power plant operating in the region, owned and managed by a subsidiary of state-owned Bulgarian Energy Holding (BEH), presently supplies over one-third of the country’s electricity. It uses two Russian-designed VVER-1000 reactors at units 5 and 6 (units 1 to 4 were shut down by 2007), and, in 2015-2017, Russia’s OJSC Power Machines and Rosatom Service have upgraded the equipment at unit 5 and extended its lifespan by 30 years. In 2019, Bulgaria signed a contract with the Russian TVEL to provide complete nuclear fuel supplies up to the end of 2025, and, in September of 2022, the Bulgarian government allowed, as an exceptional measure, Rosatom and its subsidiaries to operate in Bulgaria in order to support the maintenance of the Kozloduy NPP’s reactors and to refuel them. With the old supply agreements with Russia expiring, Bulgaria strove to diversify its suppliers and concluded agreements with the US company Westinghouse and French Framatome to provide fresh fuel for the years to come.
However, the situation is not as simple as it looks at first sight. The Kozloduy units have two different fuel assemblies; unit 5 operates on the TVSA type, whereas unit 6 uses a more advanced design, TVSA-12, with 12 spacer grids instead of 15 in TVSA. Moreover, both these units utilize Russian-type fuel, but differently made, as the TVSA-12PLUS fuel has a higher uranium content and an elongated fuel column. The US-based Westinghouse develops fuels specifically for the old Russian-style nuclear plants, including the ones in Ukraine, however to develop nuclear fuel only for one NPP unit with TVSA-12 seems unviable economically. In this sense, the French Framatome relies on Russia’s Mashinostroitelny Zavod (MSZ, Elektrostal), a subsidiary of Rosatom’s fuel company TVEL, to manufacture parts of fuel assembly and uses its licensed technology in the framework of the cooperation agreement between Framatome and MSZ.
The Hungarian Business as Usual
If Bulgaria and Slovakia collaborate with the Russian nuclear industry out of necessity, the Hungarian nuclear project, Paks II, is a conscious political decision advanced by Viktor Orbán’s government. Presently, Paks nuclear plant consists of four Russian-style VVER-440 units that account for more than 50% of the Hungarian energy demand. These Soviet reactors built in the 1980s were re-evaluated in the 2000s, and their service life was extended for 20+ years. However, to replace the old units in the future, in 2012, the Hungarian government decided to create two new units, Paks II. In 2014, this project received priority status for the national economy and Russian Rosatom was selected for the construction and commissioning of the power units. The Russian government granted a EUR 10 billion loan to Hungary to finance the construction of the plant and later extended the credit use period by 5 years. The Russian invasion to Ukraine did not affect the Hungarian plans and, in the summer of 2022, the government issued a license to implement the project, despite possible problems with the European technologies that are banned for Russia but necessary to construct the plant. As a consequence, Viktor Orbán promised to veto any European sanctions against the Russian nuclear industry and expects the plant to be completed by 2032.
A Call for Sanctions
The representatives of Ukraine call on the international community and, especially, the governments of the EU to include sanctions against Rosatom and its administration in the next round of punitive measures over the war in Ukraine. Besides the obvious association of the corporation with the Russian government, the Ukrainian party gives two additional arguments: Rosatom’s role in the seizure of the Zaporizhzhia nuclear plant and its assistance to the military industry in the production of arms and the evasion of sanctions. In March of 2022, the employees of the Russian nuclear giant took part in the seizure of the Zaporizhzhia power plant in Ukraine, exercised violent pressure on Ukrainian personnel and facilitated the shutdown of the plant that used to cover circa 13% of Ukrainian electricity needs. Additionally, Ukrainian intelligence warns the public that Rosatom provides components for Russian arms such as rockets, armed vehicles, and tanks. Lithuania, Estonia, Latvia andPoland backed these calls for sanctions, whereas Hungary insists that it will veto any further sanctions on Russian nuclear sector.
Russian Nuclear Politics
In this situation, the most advantageous partner in nuclear fuels for Central Europe could be Kazakhstan, the world’s leading uranium producer, whose technologies and fuels are compatible with those of the USSR and Russia. However, such collaboration also seems affected by the Russian war in Ukraine, as Rosatom participates in the mining and production of uranium in Kazakhstan through its subsidiary Uranium One having shares in Kazakhtan’s joint ventures: Karatau – 50%, Khorasan-U – 30%, JSC JV Akbastau – 50%, JSC JV Zarechnoye – 49.98% and LLP JV Southern Mining and Chemical Company – 70%. Rosatom’s TVEL is also a majority stakeholder in the Uranium Enrichment Center in Angarsk where the Kazakh fuel is enriched and, since Kazakhstan is a landlocked country, the transportation of nuclear products depends on the neighboring Russia and China.
While the European Parliament contemplates the effects of possible sanctions on the Russian nuclear industry, Rosatom and its subsidiaries also broaden their presence in non-European countries. Despite the ongoing war, Turkey supports the Akkuyu Nuclear Power Plant project near Mersin, the so-called “largest joint venture between Russia and Turkey,” where Rosatom holds a 99.2% stake. In 2022, Armenia signed a cooperation agreement with the Russian company to construct new nuclear power units in the country. In 2017, Egyptian President Abdel-Fattah el-Sissi and Vladimir Putin agreed to build the el-Dabaa nuclear plant and, in 2022, the Russians commenced the works on the site. In the course of 2022, the company has expanded its activities in Bolivia, Serbia, Morocco, and Myanmar, and it continues to collaborate with Asian ex-Soviet countries. Taking into consideration the long-lasting commitments associated with the supplies of nuclear fuel and component maintenance, Rosatom’s initiatives also reflect Russia’s willingness to bond with non-western political partners and to create strong relations of dependency that guarantee the country’s constant presence on the international energy market.
Thus, the Russian invasion of Ukraine has initiated serious changes in the global energy structures. The European energy market experiences the most drastic and significant re-allocation of its shares together with the green transition to the renewable sources and clean energy, greatly accelerated by the ditching of Russian gas and oil. In these circumstances, nuclear energy offers a range of viable options, but also a number of complex political, economic, and ethical challenges caused by Russia’s strong presence on the global nuclear scene.
Perhaps, more innovation and R&D investment will result in the development of environmentally friendly, independent and sustainable energy production in Europe. And, such projects as the Small Modular reactors (SMR) by Rolls-Royce or Equinor’s low-carbon hydrogen production plant offer a glimpse of hope in these times of war, uncertainty, and climate crisis.