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Energoatom leads Ukrainian integration with EU energy markets

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26.02.2015

EU Today

The recent opening of the nuclear energy company Energoatom’s Brussels office - the first Ukrainian state owned company to establish such a presence in the city - can be seen not only as a sound commercial decision, but also as a strong political statement. Traditionally dependent on Russia for both fuel and technical support, the company is now actively diversifying it’s suppliers, and working towards further integration with the European Union energy sector, a move that is being very well received in Brussels.

Already the company can boast two major successes. The previous dependency on Russian fuel has been addressed by the signing, in Brussels, of a contract with US company Westinghouse. Already, one Ukrainian reactor is using Westinghouse fuel, with more to follow.

Interestingly, Energoatom is the first company to successfully use two different fuels in one reactor, something that the Russian suppliers had previously claimed to be impossible. The company has expessed it’s willingness to share this experience with it’s European parntners. This, and other recent developments, have clear implications for other EU member states whose nuclear sectors may still have heavy Russian involvement, such as Bulgaria. This, and the fact that Westinghouse fuel destined for Ukraine will be produced in the EU, have highly positive economic implications for the European nuclear sector.

Speaking to EU today, Andrii Tiurin, Brussels Permanent Representative of Energoatom, said “The priority of this office is increased coordination with the EU in terms of regulation, safety, and our ecological responsibilties. The goal of the Ukrainian government, and of Energoatom, is integration. We want to act as a totally European company”.

Energoatom also recently signed a contract with US firm Holtec for Construction of a Central Spent Nuclear Fuel Storage Facility (CSFSF) to receive spent fuel from three of Ukraine’s Nuclear Power Plants (NPPs). The President of NNEGC Energoatom, Yuriy Nedashkovskyi, and President and CEO of Holtec International, Dr. Kris Singh, signed the contract on January 26 in Brussels.

When constructed, the CSFSF will eliminate the problem with spent fuel removal Ukraine presently exports almost half of its spent nuclear fuel to Russia for technological storage with further reprocessing - This fuel is, in any case, due to be returned to Ukraine in 2018, meaning that the need for additional storage capacity was already a pressing issue. The estimated costs of the construction and operation of the CSFSF are expected to be four times less than the total costs which Ukraine now pays to transport its spent nuclear fuel to Russia; the investment into the facility will be paid off in less than four years of operation.

“This will lead to cost savings for Energoatom of more than $250 million per year,” said Mr Nedashkovskiy. “The project is in line with our global strategy to constantly improve our technological base and diversify our suppliers.”

At present, some 63% of Ukraine’s electricity comes from nuclear generation. Life extensions on existing reactors are being implemented, and new sites are under consideration for new build units, with the involvement of EU based companies.

The possibility of export of power from the Khmelnytski plant to Poland and Hungary is under consideration, with the possiblity of as much as 7 billion kW-h per annum being supplied.

The process of integration into the European energy market might be considered an inevtible response to the new geopolitical reality now faced by Ukraine. However it is a process that follows years of negotiation, and which is clearly seen as highly desirable by both sides, and which is proving now to be the way forward for all of Europe.