The beginning of the nuclear race between the leading players in the industry
US nuclear power company Westinghouse Electric is close to winning a contract with the Polish government to build Poland’s first nuclear power plant, as per the prime minister’s statement at a conference on October 24.
Shortly before this, Poland and the United States entered into an agreement under which Warsaw is likely to buy nuclear technology from American companies in the amount of $18 billion. In response to this, negotiations are underway, in which Rosatom will submit tender documents for the construction of the first nuclear power plant in Saudi Arabia.
This situation makes it clear that a new race for leadership in the world in the field of nuclear energy is beginning.
Nuclear power is an important aspect of the overall assessment of the resources, capabilities and international influence of nuclear powers such as the United States, China and Russia.
The Russian invasion of sovereign Ukraine, along with China’s military build-up and threats to Taiwan, heralds the emergence of a new world order and a paradigm shift from great power rivalry to great power confrontation.
On the graph you can see the world leaders and the shares of participants in the nuclear fuel production market.
Rosatom – a new lever of pressure in the global energy sector
Rosatom is a Russian state corporation that unites more than 350 nuclear industry enterprises.
It is one of the world’s leading suppliers of nuclear reactors. In addition, it is responsible for the Russian nuclear power industry, the nuclear weapons division, the nuclear icebreaker fleet and nuclear research institutes.
Rosatom Corporation is an important source of income for Moscow. It was founded by Russian President Vladimir Putin in 2007.
More importantly, Putin can personally control the creation and maintenance of many countries of the world nuclear capabilities, in this way he creates new threads of manipulation and blackmail for himself in the countries to which his energy influence extends.
Looking at Rosatom’s financial earnings, according to its 2020 annual report, the corporation’s 10-year portfolio of foreign orders reached $138.3 billion. The construction of nuclear power plants abroad amounted to $89.1 billion. In 2021, revenue reached to 329.1 billion rubles, which is 26% more than the result of 2020 (261.7 billion rubles).
As of December 31, 2021, the portfolio of foreign projects included 34 blocks.
In October 2020, Rosatom Corporation became a member of the UN Global Compact. This is an international UN initiative for business in the field of corporate social responsibility and sustainable development.
An interesting fact is that in order to be a member of this organization, it is required to fulfill the ten principles of the United Nations Global Compact, one of the points of which is the fulfillment of the protection of human rights proclaimed at the international level.
And it is not clear how a country, which in Europe is already recognized as a terrorist country, can be a member of democratic countries organizations. The crimes of the Russian Federation in Ukraine, the murder of thousands civilians there, the suppression of mass protests against the war with Ukraine that took place in Russia itself.
And against the backdrop of everything that is happening, sanctions against Russia have not yet affected the nuclear industry precisely because of Europe’s strong dependence on Russian uranium.
As a result, Russia, with the help of the nuclear industry, can bring huge amounts of money to its budget and thus compensate for some economic losses from sanctions and channel money into the mainstream of the war.
Putin spins a web
The Soviet legacy still hangs over the nuclear power industry in some European countries. In the late 50s, the Council for Mutual Economic Assistance (CMEA) was created, which included a number of countries such as Albania, Bulgaria, Hungary, Poland, Romania, the USSR and Czechoslovakia. This has resulted in many countries in the region today, including the Czech Republic, Slovakia, Hungary and Lithuania, with the notable exception of Poland, inheriting Soviet-made nuclear infrastructure.
This legacy of Russian technologies and developments is now one of the instruments of influence now controlled by the Russian state corporation Rosatom. This has resulted in a continued dependence on Russia for both reactor maintenance and nuclear fuel supplies.
To date, the Russian state nuclear corporation Rosatom has begun to expand its influence in a number of countries, starting the construction of nuclear power plants in China and Belarus, as well as having more than 20 export orders for reactors in Iran, Turkey, Vietnam, Bangladesh, Jordan, Hungary, Egypt , India , South Africa, Armenia, Slovakia and other countries.
There are many mechanisms for financing Russian export nuclear power plants. China and Iran pay for them directly, India benefits from significant Russian financing, Belarus, Bangladesh and Hungary will rely on large loans, Turkey will operate on an ownership-operate basis using Russian financing but with a guaranteed long-term electricity price.
The EU is constantly negotiating new packages of sanctions against Russia, but the nuclear industry has not yet been subject to sanctions.
Europe is highly dependent on Russian uranium. The share of uranium that goes to Europe is 20 percent from Russia, another 20 percent from Kazakhstan, which is loyal to the Kremlin. Uranium is mined and processed by the same Russian state company Rosatom.
Against this background, there are countries that take advantage of the fact that there is no agreement on sanctions against nuclear energy.
For example, the Hungarian Atomic Energy Authority (OAH) issued permits for the construction of two new power units of the Paks nuclear power plant (NPP) on the so-called nuclear island, which are planned to be launched in 2030.
As in communist times, Hungary, under the premiership of Viktor Orban, is gradually turning into an economic vassal of the Kremlin, with the difference that, hiding behind populist political slogans, deceiving the Hungarians, some officials have the opportunity to personally enrich themselves excessively using gas, oil and nuclear energy in corruption schemes.
With Turkey, the situation looks a little different. Turkey is always looking for the maximum benefit for itself in any situation.
As for the same power industry, on May 12, 2010, the Governments of the Russian Federation and the Republic of Turkey signed a Cooperation Agreement providing for the construction of the Akkuyu NPP, consisting of four power units.
The total cost of the project is estimated at 20 billion US dollars, of which the share of the State Corporation Rosatom in the project is 99.2%.
On July 1, 2022, the construction of the fourth power unit was launched.
was marked by the pouring of the first concrete into the foundation slab.
A couple of months earlier, Erdogan said that Turkey could not join the sanctions on energy supplies from Russia, as it did not want its citizens to freeze in winter. For Erdogan, personal gain is higher than the position of the entire democratic world.
In relations between Iran and Russia, we see a situational partnership, when difficulties arise in both regimes with the West.
For this reason, a summit was held in Tehran, where major energy agreements were signed with Russia. With this gesture, Iran made it clear that it has other options and that it is not in a desperate situation and does not need the West.
Now Iran is ramping up the pace of uranium enrichment and has almost doubled its reserves in the last month. To date, Iran has 210 kg of uranium enriched up to 20 percent, and 25 kg – enriched up to 60 percent. In many ways, Russia accompanies Iran in this.
On November 11, 2014, Iran and Russia signed an agreement to build two new nuclear reactors at the Bushehr site, with the possibility of building six more at other sites later. The construction of power units 2 and 3 is planned to be completed in 2024 and 2026.
Now Iran is becoming dependent on Russian support. Putin immediately took advantage of this situation.
Iran has begun supplying drones to Russia for use in the war against Ukraine. Also, Russia launched the Iranian Khayyam satellite, which will participate in intelligence gathering in Ukraine.
The decline of Russia
The war against Ukraine forever removed Russia’s status as a leading energy power, hastened the end of its “golden gas age” and accelerated the transition to renewable energy sources.
Fossil fuel exports from Russia will never return to 2021 levels as Russia has lost its main customer – Europe, and it will not be easy for it to redirect flows to Asia, especially in the case of natural gas.
The United States and its European and Asian allies need to move quickly from research, development, and demonstration to efficient manufacturing, funding, and deployment strategies to counter emerging competition from Russia.