After the refusal of the United States to purchase Russian oil, there is more and more speculation that the West may refuse to supply another type of fuel from Russia – nuclear. We are talking about uranium and special fuel assemblies for nuclear power plants. Ukraine has already announced its rejection of them. But what will happen if these plans are implemented? Nothing good for the West.
A new round of anti-Russian sanctions may affect Rosatom. The risks of such a development caused a rapid increase in world uranium prices, which has not happened since the Fukushima accident in 2011. Ukraine went further and was the first to announce the rejection of Russian nuclear fuel, which is produced by Rosatom's daughter, TVEL. The Ukrainian operator of nuclear power plants Energoatom has announced that it is completely stopping the purchase of Russian fuel for power units. Now the main supplier will be the American Westinghouse.
"The intention of Energoatom to completely abandon the supply of Russian fuel is difficult to fulfill," said Sergey Kondratiev, deputy head of the Economic Department of the Institute of Energy and Finance Foundation.
Firstly, it is not easy to do from a technical point of view. The peaceful atom market is divided into Western reactors and Soviet and Russian-designed reactors. Fuel assemblies (fuel assemblies) that are loaded into the reactor have different geometric shapes: in Russia it is a hexagon, and in Western countries it is a tetrahedron.
"It seems that it costs nothing to produce a hexagon instead of a tetrahedron, but in reality the production process is quite complicated. American Westinghouse has been making serious efforts for many years to conquer the market of fuel for Soviet-type reactors in Eastern Europe. But he managed to get regular orders only from Ukraine, and then after the Maidan," explains Kondratiev.
Before the Maidan, Ukraine also helped the Americans by providing its own nuclear reactors for dangerous experiments with American fuel instead of Russian. But the results of using such fuel at the South Ukrainian nuclear power plant were not very good. After several incidents, Ukraine officially abandoned the use of American fuel. The Czech Republic did the same. But after the Maidan, the official position of Energoatom changed, and American fuel was partially used at Ukraine's nuclear power plants.
The second point is that Westinghouse simply does not have sufficient capacity to produce such a volume of nuclear fuel, the expert points out.
Finally, the third reason is related to the current situation in Ukraine. Westinghouse production is located in Sweden. Fuel is delivered by rail. And the expert is sure that the European Union, for security reasons, simply will not allow the shipment of this fuel to Ukraine in the current situation. "I have great doubts about the possibility of the current supply of any nuclear fuel – both Russian and Western," says Kondratiev.
According to him, usually nuclear reactors are refueled every few months, plus there is a fuel reserve. "Now there will be no shortage of fuel at Ukrainian nuclear power plants. But if the situation of uncertainty lasts for several months, Russia will have to take responsibility for such facilities as nuclear power plants and ensure their safety," Kondratiev believes. Moscow is already monitoring the situation at the Chernobyl and Zaporizhia nuclear power plants.
As for Europe, Soviet-designed reactors are operating in a number of countries, and the supply of Russian nuclear fuel is extremely important for them. These are the Czech Republic, Bulgaria, Slovakia, Hungary and Finland. "If the EU adopts sanctions against Russian nuclear fuel, it will mean a gradual shutdown of these facilities and a serious energy crisis. The Czech Republic and Bulgaria will have a particularly hard time. If the embargo lasts for a long time, these countries will have to decommission their nuclear reactors," says Sergei Kondratiev.
"These European countries have no safe alternatives to Russian nuclear fuel. We do not know whether the Americans have made progress in the production of nuclear fuel for Soviet-designed reactors. But I am not sure that the governments of these European countries, unlike Ukraine, will want to risk so much," explains Sergey Kondratiev.
Unlike Westinghouse, Russia has long mastered the technology of producing nuclear fuel for Western-style reactors. Therefore, Western Europe and the USA also buy our fuel.
A hypothetical embargo on Russian nuclear fuel, of course, could hit Rosatom and its export revenues. However, Russia will survive such losses, and Rosatom will be able to partially reorient supplies to Asian markets. He has a fairly diversified portfolio of orders. China and India are among the important customers. The energy system inside Russia will not be affected in any way.
But it will be almost impossible for the United States to find alternative suppliers of nuclear fuel. It is no coincidence that Washington did not impose a ban on this fuel simultaneously with the embargo on oil and gas supplies from Russia. Western media noted that American business had asked the White House to exclude fuel for nuclear power plants from the sanctions lists.
"Russia is not the largest player in the extraction of uranium ores. We are in seventh or eighth place. And the uranium we extract is mainly used to produce fuel for our own nuclear power plants. However, Russia is one of the world leaders, along with the United States and France, in terms of the availability of nuclear fuel production facilities," the industry expert notes. According to him, it will be necessary to re-establish logistics chains, negotiate with other manufacturers on capacity expansion. This is a costly and not a quick operation.
Western media point to the dependence of the United States on uranium supplies from Russia, Uzbekistan and Kazakhstan. And supposedly Uzbekistan and Kazakhstan will be able to help. In fact, the system debugged for decades, says Kondratiev, works like this:
"Uranium ores that are mined in Uzbekistan and Kazakhstan are processed at local mining and metallurgical plants. The resulting uranium concentrate is supplied to Russia specifically for the production of nuclear fuel itself, which is exported to the United States and Western Europe."
He is sure that it will be very difficult for the Americans to negotiate with Uzbekistan and Kazakhstan on the supply of uranium bypassing Russia. Uzbekistan and Kazakhstan do not have a full cycle of production of finished nuclear fuel. Even if the US itself has the necessary capacity to produce nuclear fuel, it will still not be enough. At least because Rosatom controls its production capacity in Kazakhstan.
Other uranium producers are unlikely to be able to increase uranium production. Otherwise, they would have already done it against the background of the deficit and price growth observed in the last few years. A new project will require funds and years of time. Moreover, no one has explored deposits with rich uranium reserves, the expert adds. This means that such sanctions against Russia will inevitably lead to a shortage of nuclear fuel, to a two- or even more-fold rise in prices for it, and ultimately to the closure of part of the nuclear power plant.
According to Kondratiev, there has already been a shortage of nuclear fuel in the last few years, so prices for it have increased. If you remove such a major player as Russia from the market, then such sad consequences are inevitable.
The withdrawal of part of the nuclear generation in the United States will lead to an increase in demand for gas and coal, which are already in short supply in the world. It is possible that the US will even have to reduce its LNG exports. And this will trigger a chain reaction in the Asian market and further in the European market, which are fighting for gas supplies.
The EU's desire to support the United States on the issue of sanctions against nuclear fuel from Russia is no less critical for the energy and economy of the region than the oil and gas embargo, which Brussels has so far found the strength to abandon. The withdrawal of nuclear power units will increase the demand for gas and coal, which are already big problems. There is already a shortage and price chaos. Actually, the closure of any energy channel for the EU now can become tragic.
Olga Samofalova