energy market

Kyiv not out to reinvent reactors

21.11.2014 | By Andriy Starostin

At the end of October Prime Minister Arseniy Yatsenyuk said that the Czech-Russian Skoda JS would be involved in completion of construction projects at the Khmelnytskiy and Rivne NPPs. The Prime Minister stated that the National Commission for State Energy and Public Utilities Regulation (NCSEPUR) raised the tariffs for the National Nuclear Energy Generating Company Energoatom to improve investment opportunities of the company

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A bit later the prospect of cooperation with Kyiv was confirmed by the CEO of Skoda JS Miroslav Fiala. He said that they the company had two deals with Ukraine and the rate of their implementation depended on the decision of the Supervisory Board of the Czech stateowned export insurance company EGAP. Until recently it has not insured transactions with our country because of the armed conflict in the Donbas, but now it has changed the stand. By the end of the year we have to finish negotiations on the amount of insurance of supplies for Energoatom, specified representatives of the EGAP.

On October 27 Skoda JS and the NNEGC concluded a confidentiality agreement for the upcoming deals, failing to inform the media. As a result, Ukrainian politicians accused the government of insincere promises to relieve Ukrainian nuclear energy from monopolistic technological dependence. Ukrainian nuclear market remained the domain of the TVEL Corporation and the OMZ (UralmashIzhora Group), a private company registered in St. Petersburg, which has been owning 80% of shares of Skoda JS since 2004, prior to the beginning of construction of the ADS Accelerator Driven Systems (UkrainianAmerican research hybrid electronuclear unit) in 2011 2013.

Czech plants are the sole producers of nuclear reactors of Soviet design outside Russia. In the past century the Czechs designed 21 VVER 400 reactors and 3 VVER 1000 reactors for Finland, Slovakia and Bulgaria, and now they are involved in a contract with the PRC.

Ten years ago the sale of Skodas nuclear division promised Czechs quite high profits as a share in foreign markets previously reserved by the TVEL and Uralmash. But Pragues expectations were justified only partially.

In particular, in 2008 Uralmash decided to get rid of producer of special steels Skoda Steel technologically connected with Skoda JS. But it was not sold to the investor associated with nuclear energy, but to the buyer involved in the pulp and paper industry. This was a loss for the Czech nuclear engineering.

The situation turned to worse in 2014, when international sanctions were imposed on private shareholders of UralmashIzhora Group, as well as on the company itself. After that, Skoda JS faced a severe prospect either completely shut down its operations, or voluntarily change its owner.

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Emergence of such a large order for construction of power units for the KNPP and the RNPP in this historic moment is at least promising to speed up long contemplations of Czech authorities on such a difficult choice. Notably the pie, which the Czech nuclear engineering may eventually get from Ukraine, could be even sweeter than it looks. The next step would be the reequipment of reactor facilities at Ukrainian NPPs. Except for a few relatively new power units, the period of operation of most of other reactors in Ukraine will expire in a few years.

Kyiv is running out of time to order their design and construction, although Ukraine chose the core technologies for reequipment of its NPPs back in the mid2000s. Our authorities preferred Canadian reactors Candu (Canada Deuterium Uranium), which Ottawa wanted to insure at the expense of a cheap interstate loan. Other alternatives (purchases of American, Korean, French and Russian reactors) yielded to the seductive Canadian proposal.

At that time Skoda JS was not even mentioned as a possible supplier, because back then the Power Machines company was left by its former owner Kakha Bendukidze and underwent restructuring for the needs of the new investors the United Heavy Machinery Plants.

Today everything has changed greatly. For example, the former founder of the Power Machines and Georgia´s economy minister Kakha Bendukidze tried to advise Petro Poroshenko on economic reforms. And one of the most urgent tasks for Prague is finding a way around international sanctions, and the change of owners of Skoda JS. If no solution is found, Kyiv will have to postpone the already welldeveloped projects for construction of the new units, and go back to alternatives. As a result, Ukrainian NPPs could be reequipped by Canadian AECL, French Areva, USJapanese Westinghouse or South Korean KEPCO. Who knows what might await Kyiv on such path.

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