Saving Americans from bankruptcy. How Ukraine to pay for five nuclear power units from US?

Author : Oleksiy Kushch

Source : 112 Ukraine

On the very first day of the visit to Washington, Ukraine, represented by our Energoatom, with the blessing of the President of the country, signed an agreement with the American company Westinghouse on the construction of five new nuclear reactors in Ukraine, four of which will be built from scratch, and the fifth will be completed on the basis of the already begun construction at the Khmelnytsky nuclear power plant. The total cost of construction will be $ 30 billion
21:30, 6 September 2021

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Taking into account the collapsing model of the Ukrainian industry and the corresponding "collapse" of the energy complex, even a school student understands that the commissioning of five new nuclear reactors will create a colossal surplus of power and there will be nowhere to direct this electricity (and the deficit of balancing capacities will worsen even more).

Subsequently, the total capacity of nuclear power generation may be halved, and nuclear power in Ukraine from the category of the cheapest will become the most expensive.

What to expect from a company on the verge of bankruptcy

The launch of even one reactor in Belarus forced this country to dump surplus into Ukraine at bargain prices. Therefore, it is obvious that these power units will be put into operation to replace the old, Soviet ones, the service life of which is nearing completion.

Recall that at the moment we have four nuclear power plants with 15 power units, and the Zaporizhya nuclear power plant with six units is the largest in Europe. Our country ranks 10th in the world and 5th in Europe in terms of nuclear energy potential, and Energoatom provides 50% + in the total generation balance and performs a social tariff function for the population.

The American company Westinghouse is already familiar to Ukraine, providing it on a par with the Russian Federation with nuclear fuel worth hundreds of millions of dollars. Its AP1000 reactors are considered to be among the most modern and safe, although concerns have been expressed about the strength of the containment (isolated loop). The company recently went through bankruptcy proceedings, caused, among other things, by the fact that after the accident at the station in Fukushima (Japan), its Japanese owners (Toshiba) began to experience problems.

At the moment, the company is taking part in the construction of nuclear power plants in China, but at the same time it still cannot complete the construction of nuclear units in the United States itself (Vogtl units). Initially, they were planned to be launched in 2016-2017, but as a result of a number of postponements, the commissioning date shifted to 2021-2022, and the construction estimate doubled to $ 27 billion.

Thus, the construction period of the AP1000 reactors in America itself will be almost 10 years (starting in 2013), and the price will be $ 12-13 billion per reactor. It should be noted that the project of the AP1000 reactor itself is innovative. In addition to the fact that it allows you to obtain savings during operation, and this also means the factor of unknown in the process of operation. So far, the world's first AP1000 has been launched at Sanmen Station in China. At another station, Haiyan, reactors of this type were created with the active participation of Chinese specialized companies in the technological process.

In fact, the AP1000 is the first American reactor, the design of which was developed after the accident at the Three Mile Island nuclear power plant in 1979. As you know, for 30 years in the United States, the construction of nuclear power units was prohibited, as a result of which the capabilities of the American electrical industry and engineering companies in the field of nuclear energy were significantly reduced. Westinghouse's current developments are the result of synergies with Japanese investors.

To close mines and create nuclear repositories

There is active competition in the world for sales markets and for contracts in the nuclear energy segment: nuclear fuel, reactors, related equipment, design, engineering. Mostly Americans and Russians compete, but South Koreans, Japanese and Swedes (fuel) are already actively involved.

Ukraine has its own unique potential, both raw material (uranium ore deposits) and scientific, technical and production.

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But Westinghouse is unlikely to buy uranium concentrate from us to produce its fuel. It is for the same reason that Ukraine is not allowed to develop its own closed cycle for the production of nuclear fuel, although there are all the possibilities for this. But we are actively encouraged to build our own nuclear waste storage facilities. The "logic" is clear here: the Russians, supplying us with their fuel elements, undertake to remove the spent nuclear fuel to storage facilities on the territory of the Russian Federation, which is a unique option for Ukraine for its own benefit, because we do not deal with nuclear waste and minimize environmental risks.

But Westinghouse, supplying us with nuclear fuel, does not undertake such obligations - the Americans do not export spent nuclear fuel to their territory. That is why, buying it from the Americans, Ukraine needs to create its own SNF storage facilities, which are so generously “sponsored” and lobbied from abroad, breaking through any barriers in the form of local “greens”.

And it is precisely the reorientation to American fuel that explains the pre-bankruptcy of Ukrainian uranium mining and processing enterprises (as one of the current functionaries said to Ukrainian uranium miners - "go to Poland"). Westinghouse does not need our uranium concentrate, and therefore, in order to reorient to American fuel, it needs to close its own mines in Ukraine. This explains the relative "cheapness" of fuel from the United States, the price of which does not include the disposal of spent nuclear fuel and does not include the costs of mothballing uranium mines in Ukraine.

The question of where to buy fuel will always be overgrown with speculation. We must unequivocally advocate the creation of our own closed cycle for the production of nuclear fuel, then the environmental risks of the functioning of SNF storage facilities will at least be compensated for by the country's energy security and economic effect.

But the construction of five nuclear power units in Ukraine is fraught with other risks.

What else will we pay for working with the Americans?

At the moment, Energoatom performs the functions of a project which provides the population with affordable electricity. But even with low prices for electrics, 40% of Ukrainians consume up to 250 kW per month, which speaks of colossal "energy poverty". In addition, Energoatom sells part of the electricity to our industrial enterprises and thereby minimizes the market tariff, which is “lifted up” by thermal generation and “green energy”. It is clear that Ukraine does not have $ 30 billion to pay for the construction of five blocks. They probably won't be built. In the best case, they will complete the construction of one unit at the Khmelnitsky NPP, the estimate of which may increase significantly during the construction process.

In the future, we still have three units that were launched in the years of independence (construction began in 1986), and several units that were put into operation in the 80s of the last century in the event of an extension of their service life. The total capacity of nuclear power generation may be halved, and Energoatom will no longer be able to perform the function of the project, as well as provide the industry with affordable electricity as a factor of global competitiveness.

Billions of debts for the completion of one power unit will be borne by Energoatom, which operational capabilities will be reduced by that time. And this is a direct path to bankruptcy and its transfer into the hands of private corporations, which will be able to include the costs of capital investments and SNF disposal in the cost of electricity. And then nuclear power in Ukraine from the category of the cheapest will become the most expensive.

By the way, in August 2021, the Cabinet of Ministers prepared a bill on the corporatization of Energoatom, which was reported by the Minister of Energy. Ahead is the audit and "disposal of non-production assets".

And all this is on the eve of the signing of the "memorandum" with Westinghouse. Coincidence? I do not think so…

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