ANALYSIS: Chronically delayed Nizhny Novgorod nuke plant project still lacks principal go-ahead – but planning drags on

ingressimage_pic0.jpg

No investment decision for Nizhny Novgorod station

For several years now, the Russian nuclear authority – the State Atomic Corporation Rosatom – has been eyeing Nizhny Novgorod Region, an area on the Volga River in Central European Russia, as the location for a new nuclear power plant (NPP), despite inappropriate geological conditions  in the area, the locals’ vocal opposition, and continuous delays with the project itself.

The siting decision has been made in favor of a site on the border with the neighboring Vladimir Region, near the Volga’s tributary of Oka River and the town of Murom. Murom residents have been vigorously protesting the project.

Now seven years in the making, Rosatom’s new venture is yet to get off the ground – or even obtain the principal decision on future funding.

A RIA Novosti report of June 14 (in Russian) cited two sources – an unnamed industry source and a nuclear industry expert – as saying no investment decision has yet been made regarding the site.

Meanwhile, a Nizhny-Novgorod-based Rosatom enterprise, the engineering company NIAEP, keeps developing the design project, which it hopes to finish in 2014. RIA Novosti’s report quoted NIAEP head Valery Limarenko as saying his company was expecting the investment decision pending, apparently, issuance of the construction license.

“We have set ourselves the task of working until we have the license issued. As soon as the license is issued, we will be expecting the investment decision to be made,” Limarenko said, according to RIA Novosti.

A story reported by RIA Novosti a day earlier (in Russian) had Limarenko saying: “We are continuing our design work on Nizhny Novgorod NPP [and] planning to complete it in a year.”

Costs sunk in sinkholes and a trip up the garden path for regional government

Askhat Kayumov, chairman of the board of the Nizhny-Novgorod-based Ecological Center Dront, called the constant delays plaguing Rosatom’s venture in the region a “very telling situation.”

“Rosatom has long been promising Nizhny Novgorod Region a great deal of money for the construction of a nuclear power plant. And now it turns out that there is no investment decision. That is, in effect, the region’s governor and the government have simply been misled,” Kayumov told Bellona in an interview.

“It’s not even certain yet whether the construction money will be there or not, and all the while the design work, by the way, is going ahead. And it is going ahead, furthermore, for one of the most ill-suited places in Nizhny Novgorod Region, in a high-risk karst area. The impression is that the designers simply want a hefty budget allocated, and at the end of 2014, we could be told that it had turned out during the planning that the construction is impossible at this site due to the karst risk,” Kayumov said.

bodytextimage_pic1-20..jpg Photo: Source: State Television and Radio Broadcasting Company Rossiya-Vladimir

The risk of karst collapse – simply said, sinkholes, or land surface depression, that are formed when soluble rock underneath is eroded and dissolved by groundwater – is one of the fundamental problems with the location chosen by Rosatom. Karst formation may in fact intensify with the start of construction – digging of foundation pits for the future reactor buildings, as well as other works at the site – and because of the static and dynamic loads on the ground should the nuclear power plant in fact be built. The resulting risks are potential disruptions in the future NPP’s operation, or even, possibly, accidents caused by sinkholes, uneven patterns of precipitation loads, ground subsidence, or tilt in the buildings housing the reactor units, including the reactor buildings proper.

Nizhny Novgorod NPP: The background story

The idea of building a nuclear power plant in Nizhny Novgorod Region has been actively discussed since 2006.

The site of the future plant was first selected in Uren District, in the region’s north. Then, Rosatom changed its choice for the village of Monakovo in Navashino District, a location 26 kilometers from Murom (a town of 12,000), 105 kilometers from the regional center of Nizhny Novgorod, and 126 kilometers from Vladimir, the center of Vladimir Region.

Initially, this was an AES-2006 (NPP-2006) project – one of Rosatom’s latest designs, which is based on the VVER-1200 reactor and is yet to be proven in practical operation; it is currently being used in several projects under construction both in Russia and abroad. Nizhny Novgorod NPP was to have two VVER-1200 units, with possible addition of another two in the future.

On September 4, 2009, Rosatom held a public hearing in Navashino to present the project to the residents. The event was accompanied by a scandalous detention of a group of ecologists who had arrived to take part in the hearing (the author of this report was among them). At a later hearing in Murom, which was organized on September 28 by the town’s administration, the majority of participants spoke against the new plant.

bodytextimage_pic2-9..JPG

A poll conducted in December 2007 in Nizhny Novgorod Region by ROMIR, a major Russian private independent research company, revealed over 50 percent of the respondents were against the construction. There is likewise little support for the new site in Vladimir Region. Murom’s residents hold regular protest actions stating their opposition to the project.

And though these protests are ignored, the promised construction still never started.

“Since 2006, we’ve been constantly hearing that the region needs the NPP and that it will be built in the near future. But this “near future” keeps slipping further and further away from us. Thankfully so, of course. The Nizhny Novgorod NPP construction schedule is constantly being pushed back, and I’m not even deluding myself that it’s somehow connected with the protests (though in Murom, the protests were something else, I’ll tell you, quite at the level of the 1990s),” Tatiana Levashova, coordinator with the Nizhny Novgorod Anti-Nuclear Movement (in Russian), said, referring to a highly socially and politically seismic period in recent Russian history, when the country, a burgeoning democracy replacing a stifling Soviet state, was undergoing vast reforms.

“But such is the objective reality: Nuclear energy is economically unprofitable, and not even with the help of the state can the industry develop the way the industry people themselves would like it to,” Levashova said.

Nizhny Novgorod NPP and Rosatom’s other money sinkholes

At the very beginning of its campaign to secure approval for the Nizhny Novgorod NPP project, Rosatom asserted the station’s first unit could be launched in 2016, followed by the second unit in 2018. This, according to a detailed project timeline available on the Nizhny Novgorod Anti-Nuclear Movement’s website, was confirmed, for instance, by Rosatom head Sergei Kiriyenko during a press conference in Moscow on September 26, 2007. He said preparatory work would begin at the site in 2009 and the start of foundation laying would take place in 2011, according to this chronicle.

The timeline also features Nizhny Novgorod Region Governor Valery Shantsev saying on October 10, 2007 that he didn’t rule out the plant’s first reactor could come online as early as 2014. But no construction work had even started at the site yet, nor did any start after Shantsev’s statement.

Four years later, on December 8, 2011, the chronicle further reads, Rosatom issued a decision on developing a VVER-TOI project for Nizhny Novgorod NPP’s chosen site.

Instead of building the two VVER-1200 units it previously intended for the project, Rosatom now changed its choice of reactor for an even more experimental model to be built  in an area known for being at risk of karst collapse.

The model in question is a design that the developer, Nizhny Novgorod-based NIAEP, refers to on its website as a “further development” on the AES-2006 project aimed at creating “a typical VVER project optimized by technical and economic parameters and performed in modern information environment.”

This sharp turn should mean, in effect, a dramatic alteration of the Nizhny Novgorod project and must be the design work that keeps NIAEP busy with the new station even as the investment decision for the project is still pending. When this work is finished, it will have to be followed by a licensing procedure, an environmental impact assessment report, and new public hearings, among other necessary and money-consuming steps.

But this – coupled with the history of repeated, year-after-year delays and hesitation with making a definitive investment decision – reasonably looks as if by having been delegated for “re-designing,” Nizhny Novgorod NPP was effectively allowed to drop off the list of projects pushed for implementation long before a similar series of events drove the last nail in the coffin of the Baltic NPP project in Kaliningrad Region, Russia’s westernmost exclave wedged between the Baltic Sea and the EU nations Lithuania and Poland.

The primarily export-oriented project of Baltic NPP, under development since about 2007 – and with designing and construction overseen by the same NIAEP – ran aground after years of fruitless negotiations in Europe to secure a co-investor, loans from European banks, or even customers willing to buy the plant’s future energy. Late last May, reports came that Rosatom was considering an exotic choice of a naval reactor and an older VVER design to replace the VVER-1200s already chosen for the site, where construction had been afoot for some years now. When a leaked internal NIAEP order was made public early last June, indicating the project was on a mothballing track – and countered, bafflingly, by a contradictory version of the exact same order posted within hours on Rosatom’s website – there was little trust left that Baltic NPP would ever see the light of day.

Still, as both Kaliningrad and Nizhny Novgorod sagas would suggest, Rosatom does not seem to be in the habit of cutting its losses. According to the chronicle of the Nizhny Novgorod project’s story published on the Nizhny Novgorod Anti-Nuclear Movement’s website, Rosatom representatives keep promising to build the station – with the launch dates pushed now to 2023 (for the first unit) and 2025 (for the second one). This was stated on January 30, 2013 by NIEAP’s Senior Vice President for Economy and Finance Vladimir Kats, that timeline said.

“In the past six years, tons of documents have been signed, projects prepared, buckets of propaganda showered on the heads of Nizhny Novgorod’s residents, and they’ve even already spent some time pottering about in the lot near Monakovo, but construction never started after all. And, hopefully, it never will, or if it does, it goes nowhere,” the Nizhny Novgorod Anti-Nuclear Movement’s Levashova said.

“You can’t help being reminded of the fourth unit of Beloyarsk NPP, which is now almost thirty years ‘in the process of completion.’ I think Nizhny Novgorod NPP can expect the same fate – if the construction at all starts, of course,” said Levashova.

Spending taxpayer money on broken promises

Rosatom, a state-owned corporation, keeps spending significant amounts in federal funds on its new NPP projects – with hardly any tangible results to show for it. For the Russian energy sector, these perpetually incomplete nuclear power projects are a serious problem. If, for instance, a cogeneration power plant or a gas-fired power station are usually built within the timeframe promised, nuclear construction in Russia reveals a different picture: Failure to keep to the adopted schedule of launch dates can add up to dozens of years for a project, while some projects – such as the sites in Kaliningrad and Nizhny Novgorod Regions – seem like they might never come to fruition.

The example mentioned by Levashova, the fourth unit of Beloyarsk NPP (near Yekaterinburg in the Urals), is a BN-800 sodium-cooled fast breeder reactor that has been under construction for 26 years, since 1987. In 2007, Rosatom promised that this unit, as well as the first unit of the AES-2006-based Novovoronezh NPP-2, the second line of the Novovoronezh station (Voronezh Region in Central European Russia), would be ready in 2012. Neither of these promises were fulfilled, and the new reactors are not expected to be launched before 2014.

Similarly, it now seems evident that the first unit of Leningrad NPP-2, the second line of the Leningrad plant near Russia’s second largest city of St. Petersburg, will unlikely come online in 2013, and the second unit will not be completed by its scheduled deadline of 2014 (both units are VVER-1200s).      

Further, 2015 will unlikely see the launch of the third unit at Leningrad NPP, or of the first units of Seversk and Tver NPPs – projects planned for construction in Seversk, in Southwest Siberia’s Tomsk Region, and Tver Region, near Moscow, respectively. Construction of these two, both based on VVER-1200s (the Seversk project is expected to replace the old Siberian NPP, shut down in 2008), has not even started.

Obviously, the first and second units of Nizhny Novgorod NPP will not start operation in 2016 and 2018, as Rosatom earlier stated.

All of these, promised to be completed on schedule, were included into various state-approved plans, programs, and policies, and considerable amounts were dispensed to finance new planning and construction. 

The conclusion one draws from the story of Nizhny Novgorod NPP is very simple. Russia’s nuclear power industry remains one of the country’s largest recipients of federal funding, but at least where its new capacity launch schedules are concerned, the corporation systematically fails to deliver on its promises.

As for how this situation develops further, two scenarios are possible. Either Rosatom continues to avail itself of the steady flow of political and financial support that the Russian government keeps extending in return for empty promises – or the Russian government wakes up to a more pragmatic approach and diverts state funding toward implementation of less costly and unreliable and more ecologically sound energy projects.

Especially because most Russian regions do in fact have non-nuclear energy options at their disposal, and the same is true for Nizhny Novgorod.

Cogeneration plant a more solid prospect

A modern and efficient steam-gas combined heat and power plant with a capacity of 900 megawatts can be built in Nizhny Novgorod Region’s Kstovo District already by 2016. An April 11 RIA Novosti story (in Russian) reported that the first 450-megawatt unit is slated for launch in 2016, and the second in 2018.  

The investor is Itera International Group of Companies’ Verkhne-Volzhskaya (Upper Volga) Generating Company, the report said, and the project is estimated at RUR 28.68 billion (around $872 million).

One megawatt of installed capacity thus comes to around RUR 32 million ($973,000). This is some three times as cheap as one megawatt of installed capacity of a two-unit VVER-1200 nuclear power plant, estimated at over RUR 110 million ($3.34 million). This cost follows from the capital cost given for a station of this type – RUR 270 billion ($8.21 billion) – by the minister of industry and innovation policy of the Republic of Bashkortostan, where such a plant is also being considered (in Russian).    

The situation in Nizhny Novgorod Region is well illustrated by one of the conclusions made in Bellona’s extensive 2011 report, The Economics of the Russian Nuclear Power Industry: “[…] the power produced by nuclear power plants already now costs more to the Russian consumer than the electricity generated by power plants running on gas […]. […] the state […] essentially provides cost‐free capital to the industry, bears liability for those nuclear risks that are not covered by insurance premiums, and participates, to a significant degree, in direct subsidization of the nuclear fuel cycle.

There is one more important detail to this story. In early July, RIA Novosti ran a report (in Russian) quoting Russia’s Minister of Finance Anton Siluanov’s warnings about a growing budget deficit in the next three years and pessimistic forecasts regarding budget implementation, and describing a number of tough measures the government is planning in order to remedy the situation – including, possibly, tapping into Russia’s Reserve Fund, a step it resorted to during the recession of 2008-2009.

Abandoning such desperately money-draining ventures as the Baltic and Nizhny Novgorod projects would definitely help mend the budget holes that Russia’s finance minister is worried about.

Andrey Ozharovsky

idc.moscow@gmail.com

Charles Digges