Russia building nuclear reactors – and influence – around the globe

April 29, 2015
Russia's President Putin, his Egyptian counterpart Sisi and Russia's Defence Minister Shoigu attend a welcoming ceremony onboard guided missile cruiser Moskva at Sochi

Russian President Vladimir Putin (2nd L), his Egyptian counterpart Abdel Fattah al-Sisi (2nd R) and Russia’s Defense Minister Sergei Shoigu (L) meet onboard a guided missile cruiser at the port of Sochi, August 12, 2014. REUTERS/Alexei Druzhinin/RIA Novosti/Kremlin

Russia has been notoriously brazen in using state-owned companies as instruments of national power. President Vladimir Putin’s natural-gas wars with Belarus and Ukraine made headlines and sometimes left substantial parts of Europe in the cold. But Moscow’s exploits in other energy-related areas have been less noticed.

Recent revelations about the concerted Russian effort to buy up uranium resources across the globe may change that. For Moscow’s state-owned nuclear-energy company, Rosatom, has made successful inroads into markets around the world. It is Rosatom — not France’s Areva or the United States’ Westinghouse — that has 29 nuclear reactors in various stages of planning and construction in more than a dozen countries, the largest number of nuclear reactors being built internationally. In contrast, Areva, though largely owned by the French state, has not sold one reactor since 2007.

Much of Rosatom’s success can be ascribed to the strong support provided by the Russian government. Moscow recognized roughly 10 to 15 years ago that Rosatom’s work enables Russia to add another energy-related means of extending its long-term political influence throughout the world. Unlike oil or gas projects, Russia’s nuclear developments need not be in neighboring countries or even in its region — a fact that broadens the Kremlin’s investment options.

Globe-trotting deals

The countries that Russia and its state-owned nuclear company have signed agreements with in the past year are diverse indeed. The most recent deal is with Jordan, a land-locked, energy-poor Middle Eastern nation, which just agreed to have Rosatom complete two nuclear reactors by 2022.

Russian President Putin discuss with Hungarian Prime Minister Orban before a joint news conference in Budapest

Russian President Vladimir Putin talks with Hungarian Prime Minister Viktor Orban (R) before a joint news conference in Budapest, February 17, 2015 .REUTERS/Laszlo Balogh

Less than a month before the Jordanian agreement, Putin finalized a deal with Hungary for Rosatom to build and install two reactors to the already existing Soviet-built plant at Paks in south-central Hungary. The deal has come under intense scrutiny from the European Union over the source of the nuclear fuel, but looks set to go ahead.

Only days before the Hungary deal, Putin used his visit to Egypt to conclude a preliminary agreement with Egyptian President Abdel Fattah el-Sisi. Moscow is set to build Egypt’s first nuclear power plant, in the northern city of Alexandria.

In November, Russia signed a contract with Iran to build two more reactors at the Bushehr site, where Russia has already built one reactor that is now operational. The deal left open the possibility of Rosatom building an additional four reactors at a site yet to be determined.

India has long had a relationship with Rosatom, as New Delhi has worked desperately over the past years to increase its electricity production capacity. A Russian-built reactor came online at the Kudankulam Nuclear Power Plant in 2013, a project conceived under the Soviet regime. Another reactor is to begin operation at Kudankulam later this year. Two more nuclear reactors are planned for construction at the same site. When Putin visited India in December 2014, the two governments confirmed that their cooperation in the nuclear sector would continue, with at least 10 more reactors planned in the coming years.

In northern Finland, Rosatom has started preliminary work on a site where a new nuclear plant is scheduled to come online in 2024. Turkey’s first nuclear plant, also built by Rosatom, is set to break ground this spring.

Argentina's President de Kirchner talks to her Russian counterpart Putin in Buenos Aires

Argentina’s President Cristina Fernandez (R) talks Russian President Vladimir Putin at the Casa Rosada presidential palace in Buenos Aires July 12, 2014. REUTERS/Enrique Marcarian

Rosatom is also looking toward Latin America. While Putin was touring South America in July 2014, the Russian leader and Argentine President Cristina Kirchner signed nuclear energy cooperation agreements and in April 2015 agreed to have Rosatom build a reactor at the Atucha-3 plant outside Buenos Aires. In February 2015, Rosatom concluded an agreement with Brazil’s National Nuclear Energy Commission to provide supplies of Molybdenium-99, an element used in many nonmilitary nuclear applications.

Crucial Moscow support

So why, tender after tender, are Russia and Rosatom having more success than Western nuclear firms? There are four key reasons:

Favorable financing. Though Russia may be hurting for cash because of international sanctions, Moscow is still willing to undertake projects that promise long-term gains. The returns are expected to be more than financial. The Putin regime sees these projects as part of its national strategy. It is willing to heavily subsidize Rosatom and also provide loans to countries too poor to afford its products. These subsidies mean that Rosatom can sell nuclear reactors at a far lower price than its competitors.

Rosatom’s Build, Own and Operate scheme. Many developing countries are keen to develop nuclear power as a source of comparatively cheap energy but are unable to raise the funds to build reactors. In addition, they have neither the desire nor the expertise to operate the reactors once they are built. The build, own and operate deals remove these obstacles and put the responsibility on the Russians. But they also hold the countries hostage to Russian desires and demands. Under these controversial deals, Russia and Rosatom provide nuclear fuel, processing when it has been depleted, education for workers and technicians, maintenance and installation of any needed upgrades. Turkey’s new plant at Akkuyu is the first set to be built under these conditions.

Russia's Rosatom group General Director Kiriyenko and Vietnam's Trade and Industry minister Huy Hoang exchange documents in Hanoi

Rosatom group General Director Sergei Kiriyenko (L) and Vietnam’s Trade and Industry Minister Vu Huy Hoang (R) exchange documents as Russian President Dmitry Medvedev (back L) and Vietnamese President Nguyen Minh Triet (back R) applaud ay a signing ceremony at the Presidential Palace in Hanoi, October 31, 2010. REUTERS/Hoang Dinh Nam/Pool

Rosatom’s relative freedom from governmental oversight. In comparison to the world’s other large companies engaged in nuclear construction, Areva of France, Westinghouse of the United States and Tokyo Electric Power Company of Japan, Rosatom is not dissuaded from building in certain countries. In contrast, U.S. companies are prevented from building reactors in all but the 46 countries with which the United States has already concluded so-called 123 Agreements on the sharing of nuclear expertise. Countries such as Vietnam and Bangladesh, where Rosatom is building reactors, are not on that list, effectively keeping U.S. companies from even competing for those deals.

Deal sweeteners. In certain circumstances, a nuclear deal with Russia is only part of a larger package. Vietnam’s collaboration with Russia, for example, has also allowed it to purchase submarines and other military equipment from Moscow.

West versus Rosatom

For all these reasons, competing against Russia and Rosatom has become increasingly difficult for Western corporations, which are steadily falling behind.

France’s Areva, for example, is in serious financial straits and must address recent revelations of technological problems with one of its reactor designs. Westinghouse is hamstrung by Americans’ reluctance to build new reactors. Foreign buyers often want to see how the reactor models they decide to build are running in a company’s base, and Westinghouse has nothing to show them. Japanese companies have been adversely affected by the 2011 meltdowns at the Fukushima power plant.

Meanwhile, Rosatom, backed by the full power of the Putin government, is expanding its international reach and, in doing so, widening the scope of Russian power. As it has begun to do in other arenas — media and finance, for example — Europe and the United States must identify and counter Russian influence in the energy sphere.

Sooner or later, Washington’s and Brussels’ instinct to ignore these challenges will not only seriously undermine Western businesses, it will also cede to Russia the international influence it so ardently seeks to purchase.

19 comments

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Can you please do an article on how IMF is used by the West.

Posted by Macedonian | Report as abusive

Sure. Helping countries develop and raise their living standards, and really dealing with climate change is so terrible. Bad Russia. It’s so much more productive to be looking for people to kill with drones.

Posted by SteveK9 | Report as abusive

Given the delays (5 years) and cost over-runs (€2 billion) of the Olkiluoto third reactor in Finland, being built by Areva, there should be no surprise that the Finns turned to the Rosatom for other reactors?

Posted by Don00 | Report as abusive

Sure – please tell us about how Russia is the bad aggressor in the “natural gas wars”. I was tempted to stop reading right there.

It would have been useful to add that Russia is the current leader in nuclear technology, and is already building the first reactor from project “Proryv” – which will usher in the era of closed-cycle nuclear power – that is – power generation without any nuclear waste. But you don’t see any coverage of that in the US, do you…

Read more: http://www.world-nuclear-news.org/NN-Rus sia-makes-fast-neutron-reactor-progress- 1909201401.html , http://atomproekt.com/en/activity/projec t_zyats/ , http://rt.com/news/188332-mox-nuclear-fu el-production/

Posted by nsanity | Report as abusive

A desperate attempt to deny the fact that nuclear helps reduce foreign energy dependence. Sorry, this is nothing like being dependent on a continuous supply of fuel that is piped/shipped in from a foreign nation (e.g., Russia), that they can shut off at any time.

Reactors run on a single batch of fuel for 1.5 to 2.0 years. Not only that, but nuclear fuel is so tiny in volume and so cheap, that you could easily buy more than a decade’s supply in advance, if you really wanted to (were that concerned). Finally, all these reactors can switch to assemblies from different suppliers (e.g., Westinghouse) if they need to.

With respect to price spikes (vs. outright cutoffs), nuclear fuel is a tiny fraction of the overall cost of nuclear electricity (unlike the case with fossil fuels). Thus, even a dramatic spike in nuclear fuel costs would have a tiny effect on the final, overall electricity cost.

Posted by JimHopf | Report as abusive

A desperate attempt to deny the fact that nuclear helps reduce foreign energy dependence. Sorry, this is nothing like being dependent on a continuous supply of fuel that is piped/shipped in from a foreign nation (e.g., Russia), that they can shut off at any time.

Reactors run on a single batch of fuel for 1.5 to 2.0 years. Not only that, but nuclear fuel is so tiny in volume and so cheap, that you could easily buy more than a decade’s supply in advance, if you really wanted to (were that concerned). Finally, all these reactors can switch to assemblies from different suppliers (e.g., Westinghouse) if they need to.

With respect to price spikes (vs. outright cutoffs), nuclear fuel is a tiny fraction of the overall cost of nuclear electricity (unlike the case with fossil fuels). Thus, even a dramatic spike in nuclear fuel costs would have a tiny effect on the final, overall electricity cost.

Posted by JimHopf | Report as abusive

Jordon, although energy poor, is not landlocked. Aqaba is a port on the Red Sea.

Posted by Kleos44 | Report as abusive

Russians have mastered the safety aspect making so many plants the world over.More than price,the safety aspect and insurance terms are more acceptable unlike those of US and France.Not only as a clever politician Putin has proved as a good business man.The deal with China for oil is an outstanding achievement.He handles all these openings of business by himself.Even with Ukraine he is continues selling oil.He takes business as business,politics apart.That’s how he could withstand sanctions.

Posted by gentalman | Report as abusive

Beware of Greeks bearing gifts. Only time will tell. Many countries need a cheap source of energy and I hope the intentions here are all good.

Posted by brd893 | Report as abusive

Remember Chernobyl anyone? Russians are terrible at building nuclear power plants.

Posted by pumpkinsoftruth | Report as abusive

Yes, the country with the most sunken and dysfunctional nuclear submarines is a good provider of nuclear technology. You get what you pay for, Egypt :)

http://en.wikipedia.org/wiki/List_of_sun ken_nuclear_submarines

Posted by AlkalineState | Report as abusive

I wouldn’t buy a reactor from the country that brought us Chernobyl.

Posted by EthelGoodhill | Report as abusive

I wouldn’t buy a reactor from the country that brought us Chernobyl.

Posted by EthelGoodhill | Report as abusive

I wouldn’t buy a reactor from the country that brought us Chernobyl.

Posted by EthelGoodhill | Report as abusive

Eh..another Rusophobian articles from the Western mass media. Rather than inspire economic development and revival of hi-tech companies in Russia for the greater collaboration with the West and better living standards, Reuters ignite anti-Russia hysteria. This is a shame and more importantly detrimental for people and the World.

You are wondering why Russians, Putin are so concerned about the West. This is the answer. No one in the West wants to see us as a developed and respected nation.

Posted by Ch63 | Report as abusive

Haha. No wonder Putin wants Ukraine back. He needs to comb through Chernobyl for parts.

Posted by AlkalineState | Report as abusive

Europe and the United States must identify and counter Russian influence in the energy sphere

must?

Posted by Jingan | Report as abusive

Funny.

Old slogan:
The business of America is business.

New slogan:
The business of America is sticking our noses in OTHER peoples business.

I applaud Russia’s effort to sell nuclear power.
If only President Obama would do the same here in the USA.

Posted by Bombadil | Report as abusive

Smart moves by Russia… let the West commit economic suicide. The Chinese and Russians are eager to work with the developing world and have taken international leadership on global development projects.

Meanwhile, predatory Western oligarchs only offer NAFTA and TPP corporate exploitation, basically New Dark Age fare.

Posted by NBresht | Report as abusive