Sonia Ben Ouagrham
August 17, 2008
Under former Minister Adamov, the Ministry of Atomic Energy did not have a coherent regional policy. Its actions in the regions consisted of a collection of separate measures, which mostly served the Minister’s political objectives. Under Rumiantsev, little has changed. The new minister essentially endorsed his predecessor’s policy without real attempts to improve the coherence of the Ministry’s policy in the regions. Like his predecessor, Rumiantsev is concentrating most of his efforts on the development of the civilian energy sector and pays little attention to the defense sector. From this point of view, Rumiantsev has appeared only as an executor of projects developed by Adamov. Significant changes, however, were made in Minatom’s personnel. This action may lead to a change in the balance of power within Minatom. Yet, it is still unclear how this will affect Minatom’s regional policy.
Minatom’s Policy in the Regions
Under Adamov, the pillar of Minatom’s policy in the regions was the development of the civilian energy sector. At the core of this policy was the increase of electricity generation by nuclear power plants (NPPs). This decision lead to plans to expand the civilian energy sector by building new NPPs or new reactors in existing NPPs. To reach that goal, however, Minatom had to solve two tasks: (1) find a solution to the problem of spent fuel that has accumulated over the years and will continue to accumulate should the sector expand, and (2) find the resources to finance the expansion of the sector. The long-term storage and reprocessing of imported spent fuel was seen as the solution to these two problems. By storing and reprocessing foreign nuclear spent fuel, Russia would be able to raise enough capital to finance Minatom’s expansion policy, tackle the environmental problems inherited from the FSU, and develop the technology to reprocess foreign and domestic nuclear spent fuel. The project was also seen as a means to boost exports of civilian nuclear technology, as Russia would be able to build new reactors abroad and supply fuel that would be re-imported for reprocessing. This proposed solution has received support from the Duma and the Russian government. Unfortunately, the spent fuel project has not received favorable responses from abroad. This, in turn, could compromise the whole logic of Minatom’s policy.
Development of the Energy Sector
Among the projects developed under Adamov, two have come to fruition under Rumiantsev. The commercial operation of the first unit of the Rostov NPP (at Volgodonsk) started in December 2001. The Rostov NPP became the 10th operating nuclear power plant of Russia and the first to be commissioned since 1993. Another important event in 2001 was the life extension of the Novovoroniezh NPP’s third unit, which was authorized by GAN until 2006.
Minister Rumiantsev also confirmed the construction of six other reactors at five NPPs between 2002 and 2010 (Kursk NPP, Kalinin NPP, Balakovo NPP, and Beloyarskaya NPP), and the modernization of eleven NPPs by 2005. This decision was made in order to increase the share of nuclear energy to 20% of the total electricity production nationwide.
Other projects with no definite time frame have also been launched by the new Minister. These include the construction of floating NPPs at Severodvinsk, in the Arkhangelsk Oblast, and at the closed city Viliuchinsk on Kamatchaka. A new heat generating NPP is planned in Arkhangelsk and another NPP in Bashkeria.
According to Minatom, these projects will be financed with off-budget sources, including profits from nuclear power plants and fuel cycle enterprises. Minatom also expects to increase exports profits from $2.5 billion to $5 billion by 2005.
Long-Term Storage and Reprocessing of Imported Spent Fuel
On 10 July 2001, President Putin signed new laws endorsing the amendments proposed by Minatom and approved by the Parliament in spring 2001. These amendments would allow the import of foreign spent fuel for long-term storage and reprocessing.
So far, however, Minatom has not been able to secure new contracts with foreign partners. This difficulty is due to the fact that 90% of the foreign spent fuel that Minatom has targeted is of U.S. origin and requires U.S. authorization to be exported to Russia. Washington has not ruled out the possibility of allowing export of this fuel, but has conditioned its agreement to the termination of contracts with countries of concern like Iran. Minatom’s attempts to expand in Europe were also unsuccessful. In June 2001, the German government rejected Russia’s offer to import and reprocess its nuclear spent fuel.
The recent import of 41 tons of spent fuel from Bulgaria is part of an agreement signed in 1995 and cannot be considered as the first contract obtained by Minatom for reprocessing foreign spent fuel. This contract totals $25.7 million, 25% of which should be transferred to the Krasnoyarsk region for ecological programs. According to Minister Rumiantsev, part of the funds have already been transferred to Minatom and the rest should be paid after 90 days. However, details on the payment conditions (share of cash and barter) have not been disclosed and it is not clear whether part of these funds could be used to finance the construction of new NPPs.
Exports of Civilian Nuclear Technology
Like his predecessor, Minister Rumiantsev considers the export of civilian nuclear technology as a major source of funding for the nuclear energy sector. Russia’s main clients remain India, China, and Iran. Minatom is also trying to expand its markets to other countries and increase cooperation with former Soviet satellite states. At the end of last year, Minatom announced that it expected to get orders for the construction of eight or nine NPP units abroad within the next two to three years. If successful, these projects would generate a profit of about $10 billion. These orders would include two new potential reactors in Iran, two in India, and two in China.
Minatom is also trying to obtain orders from Finland, Vietnam, Egypt, and Kazakhstan. Discussions with Burma are also under way for the construction of a research reactor in Myanmar (light-water reactor), which will be used to produce isotopes for medicine.
In addition, Minatom plans to complete the construction of two NPPs in Ukraine, while an agreement has also been signed for the supply of nuclear fuel to the Ukrainian units. At the end of 2001, Minatom discussed extending the service life of Armenian nuclear power plant with the Armenian Energy Ministry.
By increasing reactor construction abroad, Minatom expects to supply units with fuel and later reprocess the spent fuel. For instance, Minatom will provide fuel assemblies for the reactors built in Iran, India, and China. As part of the agreement, the spent fuel from these reactors will be returned to Russia for reprocessing.
The Regional Response to Minatom’s Plans
As under Adamov, Minatom’s plans seem to enjoy the support of regional leaders, especially in regions plagued by energy deficits. Recently, several governors have asked Minatom to consider the construction of NPPs on their territories. The extension of the nuclear sector in other regions was also made easier by the Duma. Recently, the Duma lifted previous restrictions that linked the construction of new NPPs to the density of the population in the regions.
Environmental groups remain Minatom’s main opponents in the regions. So far, their protests have not generated significant changes in the Ministry’s policy. These groups, however, have recently won a major battle by obtaining an annulment from the Supreme Court. This annulment involves a 1998 government decision allowing the conservation of waste generated by the reprocessing of nuclear spent fuel imported from Hungary.
The Supreme Court ruling has the potential to hurt the foreign nuclear spent fuel project that is the foundation of Minatom’s entire policy. Its impact on Minatom will depend on two major factors: (1) how well the Supreme Court ruling will be implemented and used as a precedent; and (2) how much support Rumiantsev receives from President Putin. As far as the first factor is concerned, history has shown that the Supreme Court remains influenced by the executive branch. It is very likely that this situation will be maintained, considering Putin’s regular efforts to impose a vertical chain of command. Therefore, the main question that remains is whether Rumiantsev will retain Putin’s support.
Minatom’s Politics
Under Adamov, the underlying motivations of the Ministry’s regional policy were of a political nature. By expanding the civilian energy sector, Adamov sought to increase his support base and exert greater influence within and outside the ministry. Adamov considered as secondary the problems related to the numerous inconsistencies of Minatom’s plans, and more particularly, the economic soundness and the financial uncertainty of these projects.
The main reason for the continuation of such policies lies in the fact that President Putin and the government view the development of the nuclear energy sector as a way to save other valuable energy resources (e.g., oil and gas) for export. Minatom’s exports and the nuclear spent fuel project were also considered as good sources of additional hard currency. Therefore, Rumiantsev has inherited Adamov’s policy and his mandate is to fix its inconsistencies and give it more coherence.
One year is certainly not long enough to judge the results of Rumiantsev’s work. Some of his decisions, however, tend to indicate that he is using the same approach as Adamov. For instance, the new plans to build floating nuclear power plants do not make sense from the economic and security standpoints. These types of small power plants are usually very expensive. (Minatom estimates each plant would cost RR20billion). Furthermore, ensuring the plants’ security when they are transferred from one region to another would dramatically increase their operating costs.
Rumiantsev is also entangled in power struggles with Adamov supporters within Minatom and the MDM bank over the control of Minatom’s funds and money-making agencies. It is quite normal for him to try and obtain greater control over the ministry in order to be able to make decisions. It is not clear, however, whether greater control will serve the ministry’s or Rumiantsev’s personal interests. Yet, unlike Adamov, Rumiantsev has to develop his authority in a more restricted framework. This will likely constrain his decisions.
Direct Involvement of President Putin in Minatom’s Affairs
One of the major innovations of 2001 is the direct involvement of President Putin in the affairs of the Ministry. For example, Putin nominated members of the St. Petersburg team within the Ministry. In addition, he placed restrictions on Minatom’s ability to make decisions independently on major issues like the import of nuclear spent fuel.
Restrictions by the Duma
Additional restrictions on Minatom’s decision making power were introduced by the Duma. Indeed, on 30 November 2001, the Duma passed a bill providing that the proceeds from the HEU deal be disclosed with a breakdown in accordance with the standard classification of budget items. Until 2001, Minatom disposed of these funds at its discretion. Another amendment was set forth in order to cancel any special procedures for spending the money from this fund. Since the adoption of this bill, these funds have become a normal budget item. Therefore, the funds are subject to control by the Russian GAO, in order to verify that the money is spent on designated purposes.
The Unclear Role of PM Kossyanov
In February 2002, First Deputy Prime Minister Illya Klebanov was demoted to Minister of Industry, Science, and Technology, and his former duties were reassigned among various ministers. Minatom, which originally fell under the former Deputy Prime Minister (PM), is now directly dependent upon PM Kossyanov. This reassignment introduces an additional actor in nuclear affairs whose influence over Minatom is still unknown.
Conclusion
The import of nuclear spent fuel and exports of civilian nuclear technology are important to Minatom, the government, and the President. The export of civilian nuclear technology to countries like Iran, not only are one of the few sources of cash payments for the Ministry, but will also provide additional funds through the supply of fuel assemblies and the reprocessing of nuclear spent fuel, which are now part of these contracts. Therefore, The US policies to condition authorization for the export of US-origin nuclear spent fuel to Russia might be counter-productive. It may encourage Russia to seek other controversial contracts (North Korea).
On the other hand, the United States, could encourage Minatom to clarify the obscure points of the nuclear spent fuel project, by determining more precisely the storage, transport and security conditions of these shipments. The United States may also ask Russia to provide a clear list of countries that would be interested in sending their spent fuel to Russia. On the basis of these results, the United States could adopt a case-by-case approach and allow exports of U.S. origin nuclear spent fuel only when conditions defined by the United States are met.
