In this material, we will not dwell on the ecological aspects of using nuclear power stations, on the unsolved problems of radioactive waste, and so on.

We will, with reference to materials of Russia’s former Minister of Nuclear Energy, Bulat Nigmatulin, (including his article “Nuclear Energy in Russia – A Time of Missed Opportunities”), and materials from other respected experts, refer again to how the nuclear “renaissance” is going forth in a specifically chosen country: the Russian Federation.
 
To be very brief, matters concerning a “renaissance” are, mildly speaking, unimportant.

The programmes of the Russian state nuclear corporation, Rosatom, to build nuclear power plants are not being fulfilled, costs for construction of nuclear power plants are soaring, and even Russian construction of nuclear plants abroad is losing money. Altogether, according to experts’ evaluations, the “renaissance” of nuclear energy in Russia will lose the country $36 billion by 2015.

Effective production of electric energy
On the effectiveness of the production process of nuclear electrical energy – Russian nuclear power plants cede 10 percent of the utilisation factor of maximum capacity to the world average, which constitutes around 20 billion kilowatt hours per year of under-runs in electric energy.

“Russian nuclear energy in effectiveness of use of its power remains at 2003 levels, with losses to the industry of $2.3 billion in revenues for the last five years,” Nigmatulin said.

Completing construction of reactors at Russian nuclear power stations
In the “Strategy for the development of nuclear energy until 2050,” during 2000 to 2007 period, it was planned that the construction of five reactors that were begun in Soviet times would be completed.

In reality, only two were successfully brought on line by 2008 – the first reactor of the Vogodonsk Nuclear Power Plant (which was launched in 2001) and the third reactor of the Kaliningrad Nuclear Power Plant (which was brought into use in 2005). As a result, the country lost no less than $3.5 billion in profits, and paid for this loss with investments from the state budget of no less than $2.9 billion – money that included Russian taxpayers’ funding.

New reactor construction in Russia
In accord with a federal target programme, the construction programme up to and including 2015 encompassed eight reactors for a total output of 7.8 gigawatts. According to the same programme, it is planned that one gigawatt will cost 66.7 billion roubles ($2.7 billion). However, the engineering organisations of the nuclear industry are announcing the necessity of increasing the budget estimate by one and a half times – that is, to more than 100 billion roubles ($4 billion) per gigawatt.

Conclusion:  Overstatement of the budget estimate cost of the construction of a series of energy reactors by one and a half times leads to a $10 billion inflation of Rosatom’s investment programme until 2015.

Construction of nuclear power plants abroad
According to the programme for the development of the nuclear industry confirmed in 2000, it was planned that before 2007, five reactors would be built abroad. What ensued was that work deadlines at all construction sites were broken. Take, for example, the construction of the reactor at Bushehr in Iran. Construction was to be completed by 2004.

In practice, its construction is still ongoing. Realistically the reactor will be brought online in 2010. But even these deadlines are in doubt given the political aspects of this project. Reactor construction in China and India is also progressing with enormous delays.

Conclusion: Planned construction deadlines for one reactor are five years, and costs are $3 billion in lost revenues in connection with a two-year delay in signing contracts for the construction of phase two reactors, equaling $6 billion.  

Prognoses and conclusions
The nuclear industry is winding the flywheel of price inflation. The financial abundances of the last few years will give rise to uncontrolled demand and equally unprecedented growth in the price of equipment and construction. Not one private company is prepared to shoulder an order for a nuclear power plant without federal credit guarantees because of the risks associated with nuclear energy.

According to studies by the Keystone Center for Science and Public Policy, with offices in Denver, Colorado and Washington, DC., combined capital expenditures on construction, taking into account credit percentages, consist of $3,600 to $4,000 per kilowatt. If expenditures for fuel and current usage expenses (1.5 to 2 cents per kilowatt) are added, along with decommissioning radioactive waste and spent nuclear fuel (0.1 cent per kilowatt), as well as taking nuclear power plants out of operation (more than $500 million), then the price of one kilowatt of nuclear electricity will be equal to 14 cents (3.5 roubles). Today the price to the user of the electricity is 1.65 roubles.

The cost of the mistakes made by the Russian nuclear establishment is huge. Conservative estimates of revenues the industry is letting slip through its fingers until 2015 are about $17 billion. Possible losses connected to ineffective management and incompetent use of investment funding for this period exceeds $19 billion, for a total of $36 billion.

Are Russian taxpayers prepared to bail out the tangled nuclear industry, and pay a double cost for its “renaissance” from their own pockets? Is it not more reasonable to put these finances into renewable energies, energy efficiency and clean production technologies? All the more so, because since 2004, investment in renewable energy has increased by 60 percent a year, and in 2007 totaled $148 billion (according to the August 12th 2008 Economist article Investment in renewable energy is booming.)

Andrei Ponomarenko, Anna Kireeva, and Andrei Zolotkov in Murmansk, and Igor Kudrik and Alexander Nikitin in Oslo prepared this comment.