Russia's Hegemony in the nuclear power industry
The West depends not only on Russian gas and oil, but also on nuclear fuel and technologies for nuclear energy, writes Foreign Affairs. The nuclear industry in many countries has stalled, it is difficult and expensive to revive it. But the authors of the article really hope that Western countries will find money for this.
The Ukrainian conflict has plunged the world into an energy crisis. Since Russian troops crossed the border of a neighboring country, oil prices have jumped by more than a quarter, and gas prices have jumped by almost two. And the prospects for both markets are by no means rosy: since the West expects sanctions to undermine Russian oil and gas revenues and deprive Russia of funds for further hostilities, energy prices will certainly remain high and unstable. Uncertainty due to the conflict is compounded by fear of climate change and anxiety about the future of global energy. To protect the planet, countries should have started to abandon fossil fuels several decades ago. And now it involves additional expenses for the population.
In an era when states are trying to bring down energy prices at once, separate from Russia and fight climate change, many have become interested in nuclear energy again. And it's not hard to see why. Today, nuclear power is one of the world's largest sources of carbon–free energy, which accounts for 25% of the European Union's electricity. Unlike most types of renewable energy, whether it's solar or wind, nuclear power generates the right amount all the time. Thanks to it, Europe has already been able to partially abandon fossil fuels from other countries, including natural gas from Russia.
But in the short term, even an emphasis on nuclear energy will not protect Europe from Russian fuel. As much as Europe depends on Russian oil and gas, the rest of the world depends on its nuclear fuel. Russia accounts for almost half of the world's uranium enrichment capacity for nuclear fuel production, and 40% of nuclear energy in Europe is generated from uranium from Russia or its close allies Kazakhstan and Uzbekistan. Raw materials from these three countries feed about half of all American nuclear power plants – about 10% of the total electricity generation in the country (this circumstance explains why the US nuclear industry lobbied for the exclusion of uranium from the list of sanctions). Finally, Russia also dominates the market for the export and construction of nuclear power plants (NPP), especially in emerging economies. Its closest competitor is China, another autocracy. A contract with any of these countries is fraught with long-term dependence on nuclear fuel and services.
In order to put an end to Russian domination in the nuclear sphere (and not let China take its place), democratic countries must seriously support their own nuclear industry, especially when new innovative technologies enter the market. They should stimulate the demand for nuclear energy within the framework of extensive programs to combat climate change and invest in the creation of production facilities to supply the growing global market. This will not only help to fight climate change, but also limit the global power of authoritarian regimes.
Russian Energy and Power
Over the past two decades, Russia has become the world's leading supplier of nuclear technologies, especially for those countries that are building the first nuclear power plants. Russia has extensive experience in the construction and maintenance of nuclear power plants, and it offers everything turnkey: reactors, fuel, financing and even staff training. Since 2000, Russia has signed bilateral nuclear cooperation agreements with 47 countries and is building large power plants in Bangladesh, Belarus and Turkey. In addition, Russia is developing nuclear projects in Africa, Asia, the Middle East and South America.
Russia also has projects in Eastern Europe. For decades, Ukraine has been one of its main clients in the nuclear field. Before the 2014 Russian invasion, Ukraine received 95% of its nuclear fuel – or most of its electricity - from Russia. But after Moscow annexed Crimea and provoked an insurgency in the Donbas, Ukraine accelerated plans to diversify uranium imports. Other European countries have also thought about their dependence on Russian nuclear technologies. In February 2022, their fears were confirmed. Since then, the West has been hastily abandoning Russian resources, including nuclear energy. So, on May 2, the Finnish consortium announced the termination of the contract for the construction of a Russian reactor with a capacity of 1,200 megawatts.
Of course, European dependence on Russian coal, oil and gas is stronger than on nuclear energy. On the contrary, in its recommendations on how to abandon Russian fuel as soon as possible, the International Energy Agency emphasized the role of nuclear energy. The IEA called nuclear power "the EU's largest source of low-emission electricity" and noted that its expansion will significantly accelerate the transition from fossil fuels. But not everyone agrees with this. So, in the European Commission's plan to reduce imports of Russian gas, nuclear energy does not appear at all, and Germany is determined to close the three remaining nuclear reactors by the end of this year (at the same time, Berlin has imported about 10 billion euros worth of fossil fuels from Russia only since the beginning of the special operation). But other countries, such as Belgium and Japan, have already promised new investments in nuclear energy to reduce dependence on Russian gas. They continue a long tradition of developing nuclear energy for the sake of energy independence. Countries with dwindling domestic coal reserves – for example, Great Britain and Japan – turned to nuclear power after the Second World War for the needs of industrial enterprises. After the oil embargo of the 1970s, France and Sweden built their nuclear infrastructure to reduce dependence on the Middle East.
Although nuclear power is crucial for freeing Europe from Russian gas, it is associated with Russian influence. And even if countries cancel nuclear projects with Russia, China will soon overtake France and become the second largest producer of nuclear energy in the world – and Beijing has its own ambitions about dominating the export market.
In addition, moral dilemmas lurk in almost all environmentally friendly energy sources. The Democratic Republic of the Congo currently produces 60% of the world's cobalt – this mineral is of key importance for the automotive industry – but the country has come under the scrutiny of human rights activists for non-compliance with human rights and the use of child labor. In 2021, the Biden administration blacklisted a number of Chinese solar panel manufacturers for using forced labor and other abuses. And Russia is a major producer of nickel, which is used in car batteries. Concerns about impending sanctions and other supply disruptions have already caused the price to jump to an eleven-year high.
Chain reaction
To get rid of dependence on Russian energy, the world will have to closely monitor the environmental friendliness and ethics of the entire supply chain. But this does not mean a return to energy isolationism. Modern energy production systems are complex and interconnected – especially those that use strategic resources that are unevenly distributed around the globe. This suggests that genuine energy independence with a full cycle of production within one state is primarily impractical. Therefore, democracies, on the contrary, should strengthen energy interdependence with reliable partners.
In a sense, this process has already started in the nuclear power industry. Romania terminated an agreement with a Chinese state-owned firm to build two nuclear reactors in 2020 because it preferred a NATO ally. China and Russia have applied to participate in a nuclear tender in the Czech Republic, but the government has crossed out both, explicitly stating that their participation is "undesirable." Chinese firms are major investors in two nuclear projects in the UK. However, in September 2021, the British government announced that it would try to get rid of China General Nuclear Power Group's stake in one of them. In 2019, an American nuclear company with Bill Gates among its co-founders announced the cancellation of the construction of an experimental reactor in China after President Donald Trump imposed additional trade restrictions.
However, the West's own nuclear industry has stalled in recent years, and American and European nuclear companies are only trying to find suitable replacements for Russian and Chinese state suppliers. To catch up, governments had to recall long-standing policies and invest in domestic production facilities throughout the supply chain. And in order to sell their technologies around the world, they will have to demonstrate real success. In other words, Western countries should increase financing of export projects through banks and development programs, as well as convince those to support nuclear energy.
It will not be easy to achieve this, and it will not be cheap. But the West will only benefit from a dynamic and innovative nuclear sector. Although traditional large-scale nuclear projects in the United States and Europe have failed, new technologies will change the balance of power in their favor. In the USA alone, more than 60 companies are working on advanced reactor technologies, including NuScale Power, which sells small modular reactors and has already signed agreements with Poland and Romania. (The latter also agreed to import reactors from Canada). The British company Rolls Royce is developing its own small modular reactors and has signed a memorandum of understanding with the American utility company Exelon and enterprises in the Czech Republic. Finally, the American energy company Westinghouse, which has helped Ukraine dramatically reduce its dependence on Moscow, has recently expanded cooperation with the Czech Republic and Slovenia, which are exploring the possibility of buying new large AP1000 reactors. And in April, the US State Department announced that it would help Latvia study the benefits of using nuclear energy.
Such cooperation of the allied democracies is exactly what the planet needs to create safe, ethical and environmentally friendly energy supplies. They will help the West to actively resist the whims of authoritarian regimes. In this case, even by abandoning fossil fuels, states will still happily avoid supply shortages and price spikes. But this cooperation also speaks to the understanding that the fight against Russia's energy dominance and climate change is by no means a step towards "green" nationalism. On the contrary, it is necessary that the allies develop energy systems and technologies together in the name of reliability and interdependence.
Authors: Jessica Lovering, Howard Halland
Jessica Lovering is the executive director of the Good Energy Collective, a progressive research organization developing a promising nuclear policy. Researcher at the Energy for Growth Hub and the Fastest Path to Zero initiative at the University of Michigan.
Howard Halland is a senior economist at the OECD Development Center. Former Senior Economist at the World Bank and Visiting Fellow at Stanford University
