Ukraine’s nuclear impasse

Construction site of Khmelnitskiy NPP third power unit

The acting chairman of state-owned nuclear operator “Energoatom” Petro Kotin called construction of units 3 and 4 of Khmelnitskiy NPP “contruction of the century” in his blog in August and promised to end the project till 2025. A month later the President of Ukraine Volodymyr Zelenskiy signed Decree №406 / 2020 “On urgent measures to stabilize the situation in the energy sector and further development of nuclear energy.” With this Decree the President instructed the Cabinet of Ministers of Ukraine within two months to develop and submit to Verkhovna Rada a bill on the design and construction of units 3 and 4 of Khmelnitskiy NPP. But what is the problem within? To understand the situation around this it is necessary to have clear picture of Ukrainian nuclear sector in general.

Ukraine has 15 nuclear power units (13.8 GW) acting at four nuclear power plants: Rivne, Khmelnitskiy, South-Ukraine and Zaporizhzhia, the largest one in Europe. Nuclear energy provides up to 55% of total electricity generation in Ukraine.

Every year, some NPP units are shut down, but the share of nuclear electricity remains at roughly 50% of production. This trend can be observed in May almost every year. State-owned nuclear operator Energoatom usually uses this time to carry out preventive repairs that last several months.

The tariff of the nuclear power is the lowest in Ukraine among all other power sources. Nevertheless, the price tag does not reflect the reality. The cost of the electricity produced at Ukrainian NPPs is artificially lowered as a way to score easy political points. In April 2020, Energoatom sold electricity to the state enterprise Guaranteed Buyer for UAH 0.57/kW per hour what is less than 0.02 EUR.

However, this does not mean that nuclear energy is cheap. This tariff does not cover all costs and negative externalities related to the production of electricity at NPPs. For example, it doesn’t cover the cost of the radioactive waste and spend nuclear fuel management and the money collected to the Decommissioning Fund are exposed to inflation and are not enough.

Soviet heritage with a Russian twist

All of the Ukrainian nuclear power units were designed in the Soviet Union. 13 power units operate on VVER-1000 type reactors and two power units using VVER-440, which today no longer fully meet modern international safety standards.

12 out of the 15 power units have already expired their designed lifetime (30 years) and are operating with an extension of 10 (VVER-1000 type reactors) and 20 (VVER-440 reactors) years. The risks associated with the aging of nuclear power plants are increasing, as their modernization does not involve the replacement of some key equipment, such as reactor vessels.

In addition, the overtime operation of power units leads to additional accumulation of radioactive waste, including spent nuclear fuel, the mechanisms for safe disposal of which still do not exist.

Spent nuclear fuel from three Ukrainian NPPs is still being sent for storage and processing to the Russian Federation, which costs Ukraine around 200 mln dollars every year. Ukraine has facility to store spent nuclear fuel only from Zaporizhzhia NPP, and the opening of the Central spent fuel storage facility in the Chernobyl Exclusion Zone is constantly delayed.

At the same time, the fuel used at Ukrainian nuclear power plants is 100% imported. About 60% of the fuel is still produced by the Russian company TVEL, the rest of the fuel is supplied by the American company Westinghouse. Currently, Westinghouse fuel is used only in VVER-1000 reactors, but in September 2020 state-owned operator Energoatom signed a memorandum on the development of such fuel for two VVER-440 reactors.

Never-ending safety upgrades

After the Fukushima disaster in 2011 the world’s society had to reconsider the safety of nuclear power plants. In response to the accident risk and safety assessments (stress-tests) were caried out on all European NPPs, Ukraine participated as well. The aim of the assessments was to check whether the safety standards used when specific power plants received their licences were sufficient to cover unexpected extreme events. Specifically, the tests measured the ability of nuclear facilities to withstand damage from hazards such as earthquakes, flooding, terrorist attacks or aircraft collisions. After the assessment was accomplished, based on the results further actions were recommended. The implementation of the stress tests recommendations is a national responsibility and is ensured by operators and national regulators. As well, European Nuclear Safety Regulators Group (ENSREG) closely follows their implementation together with European Commission.

To implement the recommendations The Cabinet of Ministers of Ukraine approved Complex Consolidated Safety Upgrade Program (CCSUP) with initial deadline of 2017 and funded with EBRD/Euratom 600 mln euro loan. As of today, after a number of consecutive postponements, the deadline was shifted to 2023.

This means that Ukrainian NPPs are not completely safe as some of the safety measures are still not implemented. One of them is retrofitting of back-up diesel engines at Zaporizhzhia NPP and providing them with modern electronic controls. According to the initial CCSUP plan agreed by the nuclear regulator, diesel engines should have been retrofitted, tested and certified as operational by 2017.  In accordance with CCSUP implementation report for 2 quarter 2020, as of the end of June, none of the six units at ZNPP has retrofitted its diesel engines.

Will/won’t they eternally “new” power units

Khmelnitsky nuclear power plant (KhNPP) is situated near Netishyn town, approximately 250 km from the border of Poland. It has two nuclear units of VVER-1000 type commissioned in 1987 and 2004 respectively. Construction of units 3 and 4 at Khmelnitsky NPP started in 1985-1986 but was never completed, following the Chernobyl accident and subsequent collapse of the USSR. Since 2005 Energoatom has been trying to revive the project but construction work has not begun yet.

According to Energoatom, up to 75% of building works are already completed at unit 3, and up to 28% at unit 4. The expected installed capacity of both units is 2094 MW, and technical projected lifetime is 50 years.

In 2008 Russian company Atomstroyexport won the tender for the construction of the revived project, and it was agreed that Russia would provide a loan to Ukraine to finance the construction. However, works have never started and the loan has not been granted by Russia once the Ukrainian Parliament denounced the respective agreement with Russia in 2015, after it became clear that further cooperation with the Russian company was impossible in light of Russia’s aggression against Ukraine. Energoatom adjusted the feasibility study for the KhNPP 3,4 completion in 2016-2017, envisaging the use of a VVER-1000 reactor by a “European” supplier of reactor technology Czech company Skoda JS. There was no tender conducted to choose the supplier. The decision was taken “as a result of negotiations with potential suppliers”. At the same time Skoda JS is conrtolled by the Russian Gazprombank, bringing the project back to Russian footprint.

To finance the construction Energoatom planned to implement the so-called “Energy Bridge” project to connect Khmelnitsky NPP unit 2 to the EU grid and start selling electricity to Poland. Money from this deal were supposed to finance completion of KhNPP unit 3. However, Poland didn’t show interest in project implementation. This means that Energoatom has to find now a new source of financing which, given the ever-increasing cost of this projects (from 15 bln UAH in 2008 till 73 bln UAH in 2020), seems almost impossible.

As well the implementation of the project will lead to a number of risks.

1.      The project may increase Ukraine’s dependency on Russia in the energy sector. Ukraine has been always heavily dependent on Russia for energy supplies, especially in gas and nuclear fuel. It is among Ukraine’s key priorities set in the revised Energy Strategy up until 2035 to decrease the country’s dependency on Russia via diversification of energy supplies and increasing efficiency of energy use. Skoda JS is being part of OMZ, Russian private heavy engineering corporation, since 2004. OMZ is owned by Gazprombank, which holds 98,622% of company’s stocks. Ukraine’s cooperation with OMZ and Gazprombank is impossible due to these companies being in the Ukrainian “sanctions” list.

2.      The stability of the existing building structures at the construction site is not confirmed. The existing building structures at the KhNPP 3 and 4 were built in the mid 1980s and they have been standing open-air for 30 years, partially flooded and corroded. The adjusted feasibility study and project’s proposed budget are grounded on the idea of using existing structures for the construction of the units. However, no comprehensive examination of the conditions of those structures has been made in the last 10 years. At the same time, newly created working group examined the site in the last week of September 2020 and based only on observation without comprehensive technical expertise concluded on possibility of 3 and 4 units construction.

3.      The possibility of integrating the existing structures into the new project is not confirmed, neither is its compliance with current safety requirements.

By Oleksandra Zaika, Energy policy expert, NGO “Ecoaction”