Russia begins building its first floating nuke plant amid pep talk for Medvedev from Kiriyenko

Publish date: May 18, 2009

Written by: Charles Digges

Russia began building its first floating nuclear power plant on Monday as Sergei Kiriyenko, chief of Russia’s state nuclear corporation laid out ambitious plans for the atomic sector in a meeting with President Dmitry Medvedev – plans which have already been given the lie by the Russian nuclear industry itself.

The nuclear double header was pitched to be another orchestrated PR move by Rosatom, which has been making unclear promises to use unavailable funding for several large scale projects that Kiriyenko himself has said would have to be scaled back.

The floating power plant – to be called the Mikhail Lomonosov –  which is being assembled at the St. Petersburg-based Baltic Shipyard by Energoatom, a subsidiary of Rosatom – is the first of seven floating nuclear power plants that the company plans to build, Energoatom head Sergei Obozov told reporters on Monday.

The Lomonosov project was moved to the Baltic Shipyard from Sevmash in July 2007 when it was revealed by a Bellona Web investigation that funding for the building of the floating nuclear plant was being diverted to other projects.

The misappropriations scandal set back the planned completion of the Lomonosov from 2010 to 2011.

Obozov said Monday that the first two power plants are to service the towns of Vilyuchinsk, in the far eastern Kamchatka region, and Pevek, located in the Chukotka autonomous district in far northeastern Siberia.

Rosatom has touted the utility of floating nuclear power plants as being able to bring energy to areas where power is in short supply. Yet neither Chukotka nor Kamchatka are running short on available energy.

Furthermore, neither region has the infrastructure or local capability to refuel the plants or store the waste they produce. It is therefore estimated that additional costs of towing the plants back to Murmansk every four years for refueling at the Atomflot facility will make their utility short lived.

Obozov rosily predicted that future floating nuclear power plants could be built for and sold to foreign buyers, but no other nations has of yet expressed interest, according to Russian environmental groups and a Rosatom spokesman.

The contract for building the first of the floating nuclear power plants is worth 983 billion rubles ($30.6 billion), Interfax reported.

This figure is a staggering increase over earlier estimates given by Rosatom to Bellona, which at first put the cost of building the plants at $251 million in 2004. This figure was revised upward to $387 million in 2006.

The price has now risen in 2009 by nearly 400 percent.

The report citing the most recent firugures included no indication of where the money would be coming from.

“There is no answer to that question today,” said Bellona’s Alexander Niktin, who heads Bellona’s St,.Petersburg offices.  

“Therefore all the announcements and memorandums of intent are nothing more than PR that has no economic basis.”

Indeed, the money has not materialised as hoped.

“The catch is that Rosatom doesn’t have any money of it’s own for expensive toys like nuclear reactors and floating nuclear power plants,” said Nikitin, adding that Kiriyenko had counted on investment from Russian businesses giants like Gazprom and Noriilsk Nikel, and well as an infusion from the Russian federal budget – investments that never came through.

In a March speech in Podolsk, one of Russia’s main industry cities for producing materials to build nuclear
power stations, Kiriyenko said that, “the demand for equipment for construction in Russia of three to four nuclear reactors a year will likely appear later than expected.”

But on Monday in his meeting with Medvedev, the tune was different, and Kiriyenko underscored that new nuclear energy facilities is a key priority for the atomic sector.

In remarks reported by Interfax, Kiriyenko said Russia’s atomic energy industry compared unfavorably with Western firms in terms of efficiency and promised that he would increase labor productivity by a factor of 4.5.

"When it comes to modernization, the key thing is labor productivity," Kiriyenko told Medvedev, Interfax said.

"We’ve set before ourselves parameters that were even tougher than the ones you set for the economy in general. We have made it our goal to increase productivity 4.5 times," said Kiriyenko.

Kiriyenko also said Rosatom was able to win back several key markets in 2008.

"We are back in the Czech Republic, in Hungary, in Slovakia and Finland," he said.

But Rosatom’s biggest financial flaw, according to leading Russian environmentalist Vladimir Slivyak, is that the state company builds out of country on credit, meaning that balance sheets only reflect money that is owed, not actual income.

Kiriyenko described an incident that occurred in the Czech Republic, where authorities were in such a hurry to use Russian nuclear fuel that they ordered US fuel to be unloaded from their reactors ahead of schedule.

The incident could not be independently verified by Bellona Web after placing calls to the Czech Republic Embassies in Moscow, London and Washington DC, and the United States Enrichment Corporation, America’s chief nuclear fuel producer.