Rosatom celebrates first floating nuke plant, stumps target customer with unwanted present

Publish date: July 2, 2010

Written by: Anna Kireeva

Translated by: Maria Kaminskaya

The world’s first soon-to-be-completed floating nuclear power plant (FNPP) was floated last Tuesday at St. Petersburg-based Baltiisky Zavod, to much official fanfare, worried head-shaking in the environmental community, and concerns over as yet dim commercial prospects. The Russian nuclear authority is jubilant over orders it anticipates from abroad as ecologists stress the many safety risks and the first potential customer begs off, citing prohibitive prices of the future energy.

A group of top-ranking state officials took delivery of Russia’s first floating nuclear station during a solemn ceremony at the shipyard Baltiisky Zavod in St. Petersburg on June 29. In 22 months, the newbuild, christened Academician Lomonosov, is expected to be completed, with all necessary equipment fully installed and its two 35-megawatt reactors loaded with nuclear fuel at a facility of the nuclear fleet operator Atomflot in the northern Russian city of Murmansk. From there, the station – designed to supply electricity to locations far removed from conventional energy sources – will be transported via the Northern Sea Route to the Far East and deployed in the waters off the coast of the small town of Vilyuchinsk in Kamchatka. As of now, though, the region of Kamchatka hardly knows what to do with the costly present.

At Baltiisky, the Russian state nuclear corporation Rosatom’s head Sergei Kiriyenko called the event “a day of celebration for the entire Russian atomic industry,” adding that the floating took place six months ahead of schedule.

“The works carried out to build the generating unit signify the reclamation of technologies lost, of the qualifications of the yard’s workers, since nothing like this has been built here for 15 years,” Kiriyenko was quoted by the Russian news channel Vesti as saying. He said “many potential buyers of future floating nuclear thermoelectric power stations are already coming to see this station for themselves.”

The FNPP is a non-propelled flush-decker equipped with two reactors of the type KLT-40S used on Russian icebreakers. The vessel measures 140 metres in length and 30 metres in beam. It has a displacement of 21,000 tonnes and a draught of 5.6 metres. The shift personnel on board will number 64 people. Academician Lomonosov is expected to remain in operation for 38 years, or three 12-year cycles with maintenance periods in between, after which the station is to be decommissioned.

The energy generating unit comprising two reactors is the newly completed main component of the FNPP. The other two elements – hydraulic installations serving as a barrier between he station and the surrounding environment, and onshore facilities to supply the electricity to consumers – will be assembled once the plant is delivered to its site of deployment.

The construction: A short history

The order for the FNPP was first placed by Rosatom at the shipyard Sevmash, in the northern city of Severodvinsk, which the government touted as production “tailored” for mass-scale manufacturing. Work on the Academician Lomonosov started at Sevmash in April 2007 and proceeded until the summer of 2008. Yet, despite Rosatom’s assurances that the project would attract scores of commercial orders, no funding was allocated from the federal budget for large-scale production at the time.

In July 2008, a source told Bellona that work was halted at Sevmash because the yard had spent all the money earmarked for the project before even starting the actual construction. The yard was by then five months behind schedule. A Rosatom representative told Bellona at the time that there were “issues in the relations with the contractor, who is running somewhat late on the deadline. The chief contractor that is building the actual platform… is a defence ministry yard and has priority military orders. So for now we are not pressuring them on this subject.”

Sevmash’s excessive workload was the official reason cited when the decision was made to move those hull structures that had by then been completed over to Baltiisky in St. Petersburg. Unofficially, there was talk that Sevmash had overpriced its costs and was failing to deliver on time.

At the time, the contract’s value stood at $200m, with 80 percent of funding coming from Rosatom’s coffers.

Floating NPP’s environmental risks

According to Alexander Nikitin, head of Bellona’s St. Petersburg branch, all odds are against FNPPs when compared to the already significant safety risks of a conventional nuclear power plant.

“For the [floating nuclear power plant], there are additional factors of both objective – tsunami, storms, [issues of ensuring] floatability – and subjective risks: Floating facilities are more vulnerable to attacks by terrorists, pirates, etc,” Nikitin said. “Besides, the experience we have operating onboard nuclear reactors is far from rosy. There has been a very large number of accidents on board of nuclear vessels. There are no grounds to assert that all of that is in the past and cannot happen again.”

Furthermore, increasing the number of floating NPPs in the world – which is what will happen if Rosatom lands the international construction contracts it is after – is highly unfavourable from the point of view of nuclear proliferation, including the threat of weapons of mass destruction. The highly enriched uranium loaded into the two reactors on board of a floating nuclear power station is enough to make dozens of nuclear bombs.

Even if FNPPs are leased out, rather than sold, to other states by Russia, it is still Russia that will have to repatriate and handle the resulting spent nuclear fuel, and the world is yet to come up with safe methods of disposing of such materials. In other words, the quick cash that Rosatom is looking to make with this project will eventually turn into a permanent headache of dealing with radioactive waste. 

The faulty finances

Rosatom’s official information sources say one floating nuclear power plant costs the nuclear authority RUR 16 billion (around $513m). In 2007, overall costs for building the plant itself and the infrastructure needed to operate it at the site of deployment came to almost twice as little: RUR 9.1 billion. The pay-off period mentioned by Rosatom at the time was seven years.

According to Nikitin, the project’s economy is indeed the weakest link in the whole chain.

“At present, capital investments into [floating nuclear power plants] twice exceed capital investments into stationary [nuclear power plants]. Over $7,000 per one kilowatt – this is more expensive even than today’s solar energy,” Nikitin said.

For instance, costs of the Baltic NPP project, currently in development in the westernmost Russian region of Kaliningrad, are estimated at around $3,000, while fossil-fuel energy sites cost even less. 

To a degree, Rosatom head Kiriyenko himself admits to the problem by indicating the corporation is counting on what it sees will be a considerable chunk of foreign nuclear energy orders to start and maintain serial production and thus drive down the costs.

At the June ceremony in St. Petersburg, Kiriyenko stressed the competitive advantages of the project, which he said were its mobility and transportability to the remotest locations.

Kiriyenko was quoted in the press as saying that such stations “can be very effective in equatorial latitudes for purposes of desalination of seawater, especially on islands or in small states where there are no other energy sources. Many countries can only afford a 100- to 200-megawatt generating unit, maximum. If we start serial production and can offer a good, competitive price, we could get no less than 20 to 30 percent of all orders placed in the global nuclear industry.”

Baltiisky head Andrei Fomichev told Reuters commercial production will see the yard building one FNPP every two years.

However, criticism of the project’s economic flaws has not been uncommon even in government quarters. German Gref, the former Minister of Economic Development and Trade, said at a government meeting around the time that the order for Academician Lomonosov first went to Sevmash that he was doubtful of the idea’s commercial prospects. Electricity produced by such a low-capacity nuclear plant was far more expensive than that generated from other energy sources, not to mention other costs, he said. This is reported to have been the reason why Rosatom, then a federal agency and not yet a government-owned commercial corporation, was so hard-pressed to obtain federal budget funds for the project when Sevmash started construction.

For Kamchatka, where Academician Lomonosov is expected to towed – in St. Petersburg, Kiriyenko mentioned six potential deployment areas in the Russian north, including two in Chukotka and also naval bases of the Russian Northern Fleet – prices for the electricity produced by the plant will be higher than those for energy generated at other sites operating in the region.

According to Atomenergo, the St. Petersburg-based designing organisation in charge of the FNPP project, the prime cost of energy generated by the plant – calculated in 2009 prices – will reach RUR 5.6 ($0.18) per kilowatt-hour, excluding VAT. Currently, electricity prices in Kamchatka stand at RUR 3.89 (0.12) per kilowatt-hour

Andrei Zolotkov, chairman of the board of Bellona-Murmansk, says Rosatom is using the current political and economic situation in Russia aggressively to force its projects through. According to Zolotkov, the underlying principle is that the more “nuclear tags” it puts on the Russian map the more comfortable the nuclear industry is going to feel in the near decades, and neither economic indicators, nor the public opinion are being taken into consideration.

“Sometimes, as you listen to these optimistic speeches by Mr Kiriyenko, the impression is that they’re trying to addict Russia, like a future junkie, to some sort of ‘nuclear dope,’” Zolotkov said.

Kamchatka’s reaction: Governor at sea as to what to do with the costly present

The FNPP project has been developed with a view to use these stations in remote areas which pose a financial and logistical challenge in terms of installing electric power lines or delivering fossil fuels. As Rosatom’s official website said, “building and operating an FNPP has a significant financial advantage compared to building and operating land-based electric power plants.” Yet, the first projected customer, the region of Kamchatka in the Russian Far East, is completely at a loss as to what it is supposed to do with it.

“At the very beginning, when the project was just being considered, a declaration of intent was signed: We were to make a decision – to build or not to build. In two years, the draft of a [federal] government instruction came down, but I have not signed it yet. The problem is that the government of the region never received the main documents – there were neither the technical characteristics, nor the costs of electric power and heat,” Kamchatka Governor Alexei Kuzmitsky told journalists at a press conference in late June, Fishkamchatka.Ru reported.

“In response to our inquiry, [Rosatom] sent a clarification: The prospective price of electric power is 5 roubles 60 kopecks, which is expensive and unacceptable. Upon my initiative, the Regional Security Council was gathered, we listened to specialists. I became convinced that the safety and ecology issues of the project have been settled, but the economic ones have been not!”

The governor added that the FNPP is planned to supply electricity into the regional grid, but the region has an excess of generating capacities as it is, and surplus power is already creating a problem. If the region cut down on its electricity purchases from the energy suppliers – that would come to about a third of all electricity currently produced, with he FNPP taken into account – it would lead to rising prices for both power and heat. “We cannot permit that,” Kuzmitsky said.

Kuzmitsky has raised these issues with both Kiriyenko and Minister of Energy Sergei Shmatko. In a letter to Shmatko, he reminded the minister that plugging Academician Lomonosov into the Kamchatka energy system would require additional investments into building high-voltage power lines and other works on the existing infrastructure.

“I have been accused of first, purportedly, backing passionately the construction of the FNPP, and then changing my position drastically… This is nonsense and it’s not true. Before making a decision, one needs to make sure that the FNPP is economically necessary and expedient,” Kuzmitsky told the press. “I also insist that a public hearing be conducted… the construction of the FNPP is a very serious step, and I cannot make my decision without taking the opinion of the population into consideration.”