Subscribe to our free daily newsletters
  Energy News  

Subscribe to our free daily newsletters

The Russian Peaceful Atom Stages A Comeback In Europe

The Russians have gained their first contract to build a nuclear plant in Europe since the soviet era. It will be built in Belene, Bulgaria. Russia set to boost electricity exports to China in 2008
Shanghai (RIA Novosti) - Russia is planning to start large-scale exports of electricity to China in 2008, a source in the Russian delegation currently visiting China said Monday. Alexander Zhukov, Russia's deputy prime minister and the head of the Russian delegation, earlier said Russia was going to sign 17 agreements with China during the visit of the Russian Prime Minister Mikhail Fradkov to the fast-growing Asian country on November 9-10.

He said an agreement between Russia's electricity monopoly, Unified Energy Systems (RTS:EESR), and the Chinese State Power Corporation (CSPC) on large-scale supplies of Russian electricity to China will be one of the key documents inked in the framework of the visit. In early 2005, Moscow agreed to more than double electricity exports to China, to 800 million kilowatt hours (kWh), by 2006. UES is also courting Chinese investment in the development and renovation of Russia's electricity system. The source said that according to a new agreement Russia's electricity exports to China could total 60 billion kWh per year, with up to 4.3 bln kWh annually during the first stage of the electricity supply project (2008-2010).

by Tatiana Sinitsyna
Ria Novosti Commentator
Moscow (RIA Novosti) Nov 07, 2006
Russia has scored a prestigious victory, winning a tender for the construction of a nuclear power plant at Belene, a small Bulgarian town on the Danube. "This is a big day for Russia," said Sergei Kiriyenko, head of the Federal Agency for Nuclear Power. "Russia is returning to the European nuclear-power construction market. This is a great event because we have not built anything in Europe since the Soviet era, and now we're back."

Given that Bulgaria will join the European Union on January 1, 2007, the building of a power plant at Belene will be Russia's first construction project on the Union's territory.

The Russian company, Atomstroyexport, had to compete with powerful western corporations: the Czech Republic's Skoda, Japan's Toshiba and the Anglo-American Westinghouse consortium. The tender was very complex; the Bulgarian side invited more than 200 experts from eight countries to vet the projects, including such well-known consultancies as Parsons and Deloitte Central Limited. However, it became clear from the start that Russia was offering the best proposal - technologically effective, safe, durable (60 years of operation) and attractively priced.

What did Russia propose? The best it has to offer: the AES-92 project, which complies with the most stringent international standards. It is based on two new-generation VVER-1000 reactors (water-cooled and water-moderated power reactors with a capacity of 1,000 MW), updated using the latest technologies and ensuring the utmost level of safety, reliability and efficiency.

The project is a unique combination of active and passive safety systems, which guarantee maximum protection of the plant. Designers have anticipated the worst possible emergency scenarios, such as a sudden de-energizing of the plant, rupture of the reactor vessel, or even an aircraft crashing into the plant's building.

One important feature of the design is the reactor building's double protective envelope- steel inside and heavy reinforced concrete outside. The centerpiece of the safety arrangement is the so-called trap for the active zone melt - an original and purely Russian idea.

The world has not yet seen anything more advanced than the Belene project. But why is it cheaper than the foreign bids? The main reason is that the building site is not a green field, but an abandoned project that was launched in 1984 and terminated in 1991 for geopolitical reasons in the wake of the U.S.S.R.'s breakdown. By that time the scheme was 40% complete, with 60% of equipment already delivered, including a reactor, a steam generator and a turbine. It is this "starting capital" that dictated a low price of 2.6 billion euros (the Czech project was three billion euros).

Bulgaria's opposition press had a field day with the low cost of the Russian project, describing it as a "dangerous fact." The newspaper Bankir, for example, kept trying to scare its readers by saying that Russia is "bribing the Bulgarians to pursue its political and expansionist energy aims." But what can Bulgaria fear when it is under the European Union's protection?

Speaking of the historical past, what "awful" things did Russia do to Bulgaria except give it a taste for nuclear energy? It built the Kozlodui nuclear plant on the Danube and trained Bulgarian nuclear specialists at its colleges and universities. As a result, the country has not only guaranteed its energy security, but has also turned into a peaceful atomic nation, exporting, in addition to tomatoes and green peas, a high-technology product - nuclear power - to many Balkan countries.

The first expert "screening" left two strong contenders: Russia's Atomstroyexport and the Czech Skoda-Allianz consortium. Next, the tendering commission worked for 17 more months to compare the finer points of both offers. According to Kiriyenko, "the organizers have gone through the contractors' proposals with a fine-tooth comb." They made 1,580 written inquiries and got the participants to agree on 1,840 points. The Russians provided a total of three tons of documents. But there was still no progress. The Bulgarians wanted more.

In July of this year, Bulgarian Economy and Energy Minister Rumen Ovcharov issued a virtual ultimatum to Atomstroyexport and Skoda-Allianz demanding that they modify their bids once again. The Bulgarians were pressing for the impossible goal of shortening construction time and reducing building costs. Saying they wanted to see the Belene plant incorporate the best technology in the world, the client was also making overtures to French companies. But Europeans, for whom construction of a nuclear plant is above all a business, were not prepared to meet the Bulgarians' price.

The time when politics took precedence over everything else was gone, and Russian nuclear firms did not want to build for prestige against their own interests. There was even a moment of apathy after waiting so long for Sofia's decision. But in the end, the balance tipped in favor of the Russian project.

The first Belene reactor will be completed in five and a half years. The second reactor will be finished a year later. As a result, Bulgaria will again recover a sense of energy security following the decommissioning of the Kozlodui units, which occurred not for engineering reasons, but under political pressure from the EU. The Belene plant will allow the Bulgarian treasury to go back to nuclear power as a traditional source of export revenue.

The contract for the building of the Belene Nuclear Power Plant is an important moment for Russia: It is returning to Europe. In Soviet times, it built nuclear plants in Hungary, Czechoslovakia and Finland. But the Chernobyl tragedy and the radiophobia it unleashed tarnished the image of nuclear power and slowed the development of the nuclear industry. To maintain its scientific and technological capital, Russia refocused its efforts on nuclear construction in India, China and Iran. But today, Russia's hiatus on the European nuclear market is over.

earlier related report
Russian power-generation company holds successful IPO MOSCOW. (RIA Novosti economic commentator Vasily Zubkov) Russian utility giant RAO UES (Unified Energy Systems), which owns 72% of the country's power-generation facilities and almost 100% of its power transmission networks, plans to raise nearly $81.5 billion in order to build new thermal power plants and overhaul existing facilities.

The company has to build over 20 gigawatts in new power-generating capacity in 2006-2010 in order to stave off rising power shortages resulting from economic growth.

The Russian economy has never before implemented such an ambitious investment program. However, the Fifth Power Generation Company's (OGK-5) successful pilot IPO on October 30 shows the power industry can attract billions of dollars in investment.

The entire RAO UES reform was conceived several years ago as a means for attracting private investment, including substantial foreign capital. According to the plan, the state will gradually relinquish control of the national power industry.

Although the market value of RAO UES shares increased last year, the Russian power industry lags behind the West in terms of its capitalization and main efficiency parameters, making it less attractive to investors.

The correlation between investment and power-generation volumes (expressed in millions of dollars per one gigawatt/hour) is only five points in Russia, whereas the equivalent figures for France, the United Kingdom, Germany and the Czech Republic are 250, 50, 40 and nine points, respectively.

However, the reform's authors are quite optimistic about the unexpectedly good results of the energy sector's first IPO, which netted $459 million.

RAO UES CEO Anatoly Chubais said this sum exceeded the average annual investment in the industry over the last few years.

RAO UES, which had owned an 87.7% stake in OGK-5, will now control 75.03%. Russian Industry and Energy Minister Viktor Khristenko said the shareholders consisted of strategic foreign investors, including energy companies, as well as Russian financial and energy companies. Strategic investors, including the European Bank for Reconstruction and Development, received 5% of OGK-5's shares, while institutional and portfolio investors were given a 9.4% stake. Not a single IPO participant received more than 1.1% of the company's statutory capital.

Interestingly, top RAO UES executives turned down an offer by energy giant Gazprom, which wanted to buy OGK-5's entire 14.4% stake in the company. Vnesheconombank, Vneshtorgbank, Russia's largest independent gas producer NOVATEK and some other companies also wanted to acquire these shares.

Russia's oldest and largest private investment company, Troika Dialog, handled the OGK-5 IPO together with Western investment banks. According to Chubais, demand for shares exceeded supply several times over. Experts said demand was eight times greater than the number of available shares.

The IPO set the company's value at $3.2 billion. Moreover, one kilowatt generated by its power units exceeded the average market value of one kilowatt generated by RAO UES companies by 10-20%.

OGK-5 will use the proceeds from the IPO to help build 1.2 gigawatts in additional power-generation capacity under a $1 billion five-year investment program. Notably, 0.42 gigawatt steam-and-gas power units will begin operation at the Sredneuralsk state district power plant, and 0.412 gigawatt plants will be brought on line in the Moscow Region. Both areas are plagued by power shortages, and OGK-5 plans to borrow another $500 million to help solve this problem.

Domestic and foreign investors do not consider OGK-5, with only four thermal plants, as the best buy. Another six power companies plan to hold IPOs by late 2007, and the shares of ten wholesale and regional generating companies are now traded on Russian stock exchanges.

Viktor Khristenko, whose ministry oversees the Russian power industry, said the reform of the energy sector had reached the point where there was no going back.

Source: RIA Novosti

Email This Article
Comment On This Article

Related Links
Civil Nuclear Energy Science, Technology and News
Learn about Climate Science at
Powering The World in the 21st Century at
Powering The World in the 21st Century at

Memory Foam Mattress Review
Newsletters :: SpaceDaily :: SpaceWar :: TerraDaily :: Energy Daily
XML Feeds :: Space News :: Earth News :: War News :: Solar Energy News

Hi-Tech The Key To Boosting Oil Reserves
Abu Dhabi (AFP) Nov 5, 2006
Officials and experts at an oil and gas conference in Abu Dhabi said Sunday that advanced technology was essential in boosting oil reserves to meet increasing global demand. "We will be soon facing a challenge of producing difficult oil. Easy oil is slipping away from our hands," Omani Oil and Gas Minister Mohammad bin Hamad al-Romhi told the Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC 2006).

  • The Russian Peaceful Atom Stages A Comeback In Europe
  • India Says 16 Percent Of Power To Come From Wind By 2030
  • Hi-Tech The Key To Boosting Oil Reserves
  • Z Machine Melts Diamond To Puddle

  • Czech Temelin Nuclear Reactor Hit By Fuel Problem
  • German Uranium To Be Flown To Russia
  • Russia, Kazakhstan To Open Uranium Enrichment Center
  • New Lithuanian Nuke Plant Will Cost Up To 4-Bln Euros

  • Indonesian Rain-Making Stymied As Haze Lingers Over Region
  • Haze Hits Unhealthy Level In Malaysian Capital
  • Haze Hits Unhealthy Levels In Singapore, Alert Maintained
  • Pressure Intensifies On Indonesia As Meeting Sought Over Haze

  • Danish Christmas Tree Shortage Threatens Prices Across Europe
  • Ancestor of Modern Trees Preserves Record Of Ancient Climate Change
  • Cork And Oak Trees Dying For Unknown Reasons
  • Global Forests Disappearing For A Pittance

  • Governments Worldwide Cast Doubt On Radical Threat To Fishing
  • All Current Seafood Species Projected To Collapse By 2048
  • Saving The Global Farm One Crop At A Time
  • Wealthy Amenity Ranchers Taking Over The West

  • General Motors To Build Hybrid Cars In China By 2008
  • European Carmakers Oppose New EU CO2 Emissions Laws
  • London Buses To Get Green Makeover
  • London Borough's Parking Permit Plan Could Punish 4x4s

  • Silent Aircraft Readies For Take-Off
  • Global Aviation Industry Gathers For Key Chinese Air Show
  • China Marks 50th Anniversary Of Aerospace Industry
  • German-Chinese Aviation Opens New Horizons For Cooperation

  • Could NASA Get To Pluto Faster? Space Expert Says Yes - By Thinking Nuclear
  • NASA plans to send new robot to Jupiter
  • Los Alamos Hopes To Lead New Era Of Nuclear Space Tranportion With Jovian Mission
  • Boeing Selects Leader for Nuclear Space Systems Program

  • The content herein, unless otherwise known to be public domain, are Copyright 1995-2006 - SpaceDaily.AFP and UPI Wire Stories are copyright Agence France-Presse and United Press International. ESA PortalReports are copyright European Space Agency. All NASA sourced material is public domain. Additionalcopyrights may apply in whole or part to other bona fide parties. Advertising does not imply endorsement,agreement or approval of any opinions, statements or information provided by SpaceDaily on any Web page published or hosted by SpaceDaily. Privacy Statement