RUSSIA - Nuclear Energy.

Nuclear power generation is 100% controlled by the Ministry of Atomic Energy, through its federal atomic energy agency RosEnergoAtom which operates the country nuclear power plants. These plant's total capacity is over 41m t/yoe but most of them are very old and some are grossly inefficient.

Former prime minister Sergei Kiriyenko has been at the centre of Putin's atomic energy ambitions. He was made head of RosEnergoAtom in November 2005 and was tasked with revitalising the nuclear power industry, in particular ridding it of its rampant corruption. Allegations of pervasive corruption go all the way to the top. Yevgeny Adamov, the Russian atomic energy minister between 1998 and 2001, was arrested in May 2005 in Switzerland for allegedly diverting up to $9m of US funds earmarked to improve Russian nuclear safety into personal projects in the US, Ukraine, and Russia. Adamov was extradited in December 2005 to Russia, where he is also indicted on charges of embezzling $17m of Russian state funds.

Putin has entrusted Kiriyenko, who previously was presidential envoy to the Volga Federal District, with leading negotiations with Iran about the construction of a joint uranium-enrichment facility in Russia. And since his appointment, Kiriyenko has announced that RosEbergoAtom should not be privatised. (Most Russians, however, remember Kiriyenko for his brief term as prime minister in 1998, when Russia experienced its financial meltdown. Reflecting on this, a Feb. 4 article on the nuclear scientists' website proatom.ru stated: "It was as easy to believe that communism will be built by 1980, as it was promised [by Soviet leader Nikita Khrushchev], as it is to believe that 40 new nuclear power stations will be built and Russia will become an energy superpower").

Kiriyenko says the country needs to build another 40-50 nuclear reactors by 2030. He says the new reactors are essential if Russia is to increase the share of energy produced by nuclear sources to 25%, from the current 16-17%. He says Russia would need to restore production ties with nuclear-related industries in other former Soviet republics "to the maximum extent possible".

While the former Soviet Union's major nuclear-related industrial facilities are located in Russia, Kazakhstan is home to key uranium mining facilities and Ukraine manufactures turbines for nuclear power plants. Kiriyenko also says his agency will be transformed into a joint-stock company in early 2007, but will remain fully state-owned.

Mikhail Beskhmelnitsin, a member of the Audit Chamber which is Russia's financial watchdog, in early 2006 said that the development of nuclear power was the country's best energy option. His statement echoed the national energy strategy until 2020 which ranks nuclear power as one of the main guarantors of the country's energy security. He said: "Our objective is to ensure that within 10 to 15 years nuclear power plants account for at least 25% of overall electricity generated in the country. We have to build 40 to 50 energy units during that period".

Beskhmelnitsin said safety measures at nuclear power plants needed to be addressed and sources of funding for those measures and additional construction identified. He said the federal budget and loans had been the main sources of financing for nuclear power plants and that a study had shown that safety had been continuously improving at nuclear facilities.

The Audit Chamber released the results of an inspection of the Federal Agency for Nuclear Power earlier this year, saying it had failed to break even in 2002-2004. The chamber also said the domestic wholesale electric energy market's debt to the agency in the first nine months of 2005 had totalled $353m. In 2004, he said, nuclear power plants produced 15.6% of electricity in Russia.

Nuclear power occupied a special place in President Putin's national energy strategy meeting which took place in December 2005. At that meeting, Putin told the country's Security Council that Russia had "competitive, natural, and technological advantages" and must become an "energy superpower" to regain political leadership in the world. Putin stressed that, while now Russia exported mainly hydrocarbons, it should develop nuclear, hydrogen, and other alternative sources of energy. Putin emphasised the research and development of so-called fast breeder reactors (FBR), which produce more fissile material than they consume.

On Jan. 30, 2006, Kiriyenko said the planned expansion in the nuclear energy sector would cost the state about US$60 bn. He said all the new plants to be built will be to satisfy the domestic market. But he also said RosEnergoAtom had keen interest in exporting nuclear power plants around the world.

The Kremlin-backed World Development Institute is playing a key role in this respect. According to the institute's director, Yury Krupnov, Russia's Asian neighbours plan to increase their nuclear power output in the next 15 years. The report predicts that China is to have up to 30 new reactors, while India, Iran, South Korea, and potentially Indonesia are planning on increasing their nuclear power capacity tenfold. That, Krupnov says, gives Russia the opportunity to sell its FBRs on the Asian market.

Russia is negotiating with Ukraine and Kazakhstan to restore a shared nuclear infrastructure which in Soviet times was supervised by the secretive Ministry of Medium Machine Building (Minsredmash).

The Energy Commission is presiding over implementation of Russia's energy doctrine. The commission, chaired by Prime Minister Mikhail Fradkov, brings together high-ranking cabinet officials, business leaders, and energy lobbyists, including the Industry and Energy Minister Viktor Khristenko, Gazprom head Aleksei Miller, Unified Energy Systems (UES) chief Anatoly Chubais, and Yury Bornikov, who leads the economic security within the Federal Security Service. The only major oil company not included in this body is TNK-BP, because "it is controlled by foreign capital".

The commission deals with the exploration and energy "colonisation" of eastern Siberia and its continental shelf. It is responsible for selecting routes for new pipelines as well as setting taxes for energy companies.

The Electric Power Sector: Russia's power sector includes over 440 thermal and hydropower plants, about 77 of which are coal-fired, plus 30 nuclear reactors. The system has a total generation capacity of 205.6m kilowatts, and can generate 850.6 bn kilowatt hours (kwh). Since the collapse of the Soviet Union, power generation has shown both a dramatic decline, (down 18% between 1992 and 1999), and a gradual recovery (up 8% between 1999 and 2002).

Power generation, transmission and distribution are controlled by the state monopoly United Energy Systems (UES). This controls 72% of the total power generation capacity in Russia, and owns 2.7m km of transmission lines which account for 96% of the total in Russia. The Russian government owns 52.6% of UES.

UEA Holding consists of 73 Energos, 32 large generation plants, 59 R&D companies, 35 affiliates responsible for the maintenance of the energy complex, and 26 non-profile affiliates. UES does not include IrkutskEnergo (2.6% of total domestic generation) and TatEnergo (6.4% of total generation).

Thermal power (oil, gas & coal) accounts for about 63% of Russia's electricity generation, followed by hydro-power (21%) and nuclear (16%). The Russian government has stated that it intends to expand the role hydro-power in the future in order to allow for greater export of fossil fuels (see background in Vol. 63, DT No. 7).