Oxford Analytica

Oxford Analytica

10/30/2007 @ 6:00AM

Nuclear Renaissance In Russia?

Russia, the world’s second nuclear power, has long had an active nuclear-energy industry, including exporting reactors to countries such as India and Iran. Yet until recently, the Kremlin devoted far less attention to nuclear energy than to the country’s massive and profitable oil and natural-gas industries. In 2005, President Vladimir Putin indicated his interest in the sector by appointing former Prime Minister Sergei Kiriyenko to head Russia’s Federal Atomic Energy Agency (Rosatom).

Kiriyenko has called for a significant increase in the share of nuclear power in Russia’s electricity generation–partly to free up gas for profitable exports. He proposed doing this by adding 40 reactors to Russia’s 31 existing plants by 2030 and by raising the share of nuclear energy in generating electric power from 17% to 25%.

Russia is also currently developing an innovative prototype of a floating nuclear-power reactor.

Moscow has long provided all the services needed to make nuclear fuel. Its companies specialize in converting uranium into uranium hexafluoride–the feedstock for enrichment (Rosatom); enrichment (Tenex); and fuel fabrication (TVEL).

Since 1992, a “megatons to megawatts” program with the U.S. government and the U.S. Enrichment Corp. (USEC) has allowed for the down-blending of former Russian weapons-grade uranium to supply about half the fuel needed for U.S. reactors. However, the “suspension agreement” was put in place after the U.S. Commerce Department found the former Soviet Union to be dumping low-enriched uranium (LEU) in the U.S. market. Other Russian nuclear imports have been subject to prohibitive 112% duties.

Kiriyenko has been positioning Russian fuel-services companies to benefit if global use of nuclear power grows significantly. The proclaimed goal is to capture 20% of the world market. Particular efforts have gone into growing fuel services:

Enrichment–Russia houses about half of the world’s uranium enrichment capacity. Enrichment increases the concentration of the rare uranium-235 isotope from 0.7% to about 4% to 5% to make LEU, the predominant fuel in modern nuclear power plants.

Fuel-cycle control–Russia and the United States have spearheaded efforts to ensure that the growth in civil nuclear power does not lead to the spread of uranium enrichment and spent fuel-reprocessing facilities, which can provide either fuel for military nuclear power or fissile material for nuclear weapons. Moscow’s contribution has been the conversion of an underused enrichment facility in the Siberian city of Angarsk to a proposed multinational enrichment facility. Under the scheme, other countries would share in profits from the facility but would not have operational control. Kazakhstan, one of the world’s largest uranium providers, has already agreed to participate in the facility. Russia is now trying to persuade Ukraine, Belarus and South Africa to join. Iran has rebuffed Russia’s invitations to participate.

Russia has also offered to establish at Angarsk in the first half of 2008 a global fuel bank under the control of the International Atomic Energy Agency (IAEA) and provide it with two reactor loads of LEU (worth around 300 million dollars). IAEA Director-General Mohammed El Baradei has supported the idea of establishing such a reserve as an international body to which states can turn if their supplies are cut off for reasons other than commercial disputes or non-proliferation violations.

Russia’s global reputation as a nuclear supplier is likely to hinge on how the crisis over Iran’s nuclear program is resolved. Generally, it has sought to play for time and to avoid antagonizing either the West or Iran. To support the Western stance, Moscow has dragged its feet in finishing the construction of the Bushehr nuclear reactor. It has also supported two sets of limited sanctions resolutions in the UN Security Council (UNSC). Yet it has blocked tougher measures and recently stalled the drive for a third round of sanctions in the UNSC, pending a November report to the IAEA board from El Baradei.

During a visit to Tehran earlier this month, Putin declared there was no proof that Iran was building a bomb.



Comments are turned off for this post.