Rosatom woos EU with guaranteed low electricity price

Friday, April 17, 2015

An official of Russian state nuclear firm Rosatom told a Brussels audience that his company could guarantee a levelized price for electricity of $50/MWh from new nuclear plants it builds, if the client chooses the firm's services for their lifecycle. According to EU policies, however, fuel supply should be diversified.

Speaking at an event organised by New Nuclear Watch Europe, Kirill Komarov, First Deputy CEO of Rosatom, said that his company was the only one able to guarantee a low price for electricity, if European countries chose the full package of its services.

Komarov said that all power plants in the EU are ageing, and that almost half of the electricity generation capacities was likely to be shut down in the coming decades.

“Half of the 131 European nuclear power plants have been operating for more than 29 years. This ageing nuclear fleet requires immediate decisions regarding new plant construction or the life extension of existing ones,” he said.

Organising investment for a nuclear plant is a major challenge for European countries who wish to develop nuclear energy, said several speakers at the conference. Komarov argued that the best way to organise investment is by being able to guarantee the levelised cost of electricity during the entire lifecycle of a nuclear power plant.

“We at Rosatom have the target to arrive at $50/MWh as a levelised cost of electricity, covering everything,” he said, explaining that this would fuel supply for 60 years of operation, and eventual decommissioning.

‘All in one package’

The Rosatom official argued that such a price, which is very competitive compared to other energy sources, can be guaranteed if “a lot of efforts and technologies are combined in one package”, with Rosatom not only constructing the plant, but “guaranteeing its future”.

He said that Rosatom is constructing nine nuclear units on the territory of Russia, each with a capacity of 1000 or 1200 MW and eleven abroad.

“If you have such big package, if you have serial construction, you can be on time and in budget,” he conteded.

However, the EU policy regarding fuel security is that countries should have at least two sources for supply of nuclear fuel.

Komarov said Rosatom was against politicising issues and stood for a free and fair market.

“When people are talking about dependency from Russia and monopoly from Russia, they maybe don’t know, that in the last ten years, there were more than ten tender procedures in five countries that are using nuclear technology, so it’s not direct supply, it was tender procedure. Yes, all these tender procedures were won by Rosatom, thanks to the fair market procedures. We proposed good price, good quality, good conditions for the customer,” he said.

“Sometimes we hear some interesting ideas that it’s obligatory that there should be a second supplier for each and every nuclear power plant. If you have a fair competition, somebody will win and will supply the plant. If you are obliged to have a second supplier, this is not a competition. We are strongly against this approach,” Komarov commented.

The Rosatom official said his company was also developing the capacity to supply fuel to Western-built plants, but expressed the concern that “special efforts” to distort the market could make such efforts obsolete.

Euratom: No contract is valid without our signature

Euratom Director-General Stamatios Tsalas said that according to the Euratom treaty, which is binding for member states, it is this agency who should buy the nuclear fuel and then give it to the utilities. But in reality, a simplified procedure has been used where the utilities look at what producers offer. When they make their contracts, they send them to the agency for approval.

“Without our signature contacts are not applicable according to EU law,” he said.

Tsalas explained that the European nuclear market underwent a change with the accession of the new member states, because in the older member states, it has always been the case that building a reactor and supplying the fuel were separate issues. All old member states that use nuclear energy use more than one supplier, whereas all new member states with nuclear power plants use Russian nuclear fuel.

For technical reasons, if a country loses its supplier, it would take years before it would find a new one, the Euratom director stated.

“We cannot go so far to say that you should not get Russian fuel. To the contrary, you should always have the possibility to buy Russian fuel, but there should be an alternative, so in case you need it, you can have it,” he said.

But he added that an alternative was not possible without a market. He used the example of Bulgaria, who recently turned to Westinghouse as an alternative supplier for its Kozlodui nuclear power plant.

“If Westinghouse would produce fuel for a Bulgarian reactor, they would like to know that they would have a chance to sell it. They would not make an investment to develop it in order to have it in petto, just in case that Russian supplies do not happen. This is why we believe that it is necessary to have developments in this direction, to have alternatives for supply, and to have a market,” Tsalas said.

He also argued that Bulgaria did wrong by approaching Westinghouse for building a new reactor at Kozlodui, instead of calling an open tender. Westinghouse has rejected the offer, and Bulgaria has lost valuable time in the process.

Towards the end of the conference, after Komarov had left to catch his plane, Tsalas commented:

“Russia is a difficult partner. We don’t consider Russia someone who should be expelled from the European market, that’s unimaginable. Nevertheless their market is not in the game. And we don’t see any evolution in this respect,” he said, alluding to the fact that Russia has 18 Russian-made nuclear reactors on its soil, while Western firms are excluded from building nuclear plants on Russian soil.

He also referred to the new Russian-built Finnish nuclear power plant at Fennovoima, in the country’s north. The planned fuel supply for Fennovoima was recently passed by Euratom, and requires no further attention from the European Commission.

“We discussed the Finnish reactor before there was a geopolitical discussion about Ukraine. And I’m very happy about that. Because we have the positions we have taken concerning the openness of the market, after a certain time, for the supply of nuclear fuel, before there was any political problem with Russia,” Tsalas stressed.

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