Poland was very upset because Russian Rosatom was able to avoid sanctions in the new 10th package. Hungary and France defended the right to work with Russia. But even Germany, which abandoned its nuclear power plants, was not on the side of Warsaw's tough position here. Why is it even more difficult for Europe to abandon Russian nuclear energy than to abandon coal, oil and gas?The European Commission has abandoned plans to impose sanctions on the Russian nuclear sector or its representatives in its 10th package of sanctions, three unnamed European diplomats told the European edition of Politico.
The main opponents of the introduction of restrictions against the Russian nuclear industry were Hungary and France. In turn, Poland expressed its disappointment that the draft of a new package of EU anti-Russian sanctions does not affect the Rosatom state Corporation.
How did the Russian nuclear corporation divide the European Union and why does Rosatom manage to avoid European sanctions?
The countries of Europe can be divided into three groups. The first group demands to ban the supply of nuclear fuel from Russia. These are Poland and the Baltic States, which do not have their own nuclear power, so sanctions against Rosatom will not directly affect them.
The second group of countries takes a neutral position – for example, Germany and Austria.
The third group of countries opposes any restrictions in the nuclear sphere. These are Hungary, Bulgaria (which takes an anti-Russian position on other issues), Finland, the Czech Republic, Slovakia. The reason is simple – these countries depend on the supply of Russian fuel to their Soviet-designed reactors.
There are six VVER-440 nuclear power units operating in the Czech Republic, four VVER–440 units each in Hungary and Slovakia, and two such power units in Bulgaria. And all of them are 100% fueled with Russian fuel. In Finland, Russian nuclear fuel occupies 36% of the market.
Rosatom's fuel company TVEL is the world's only licensed supplier of nuclear fuel for VVER-440, which simply has no one to replace, says Sergey Kondratiev, deputy head of the Economic Department of the Institute of Energy and Finance. Moreover, a unique fuel is produced for each customer, in fact, based on the fuel cycle strategy of each NPP operator.
"In recent years, Rosatom has received 0.34-0.4 billion dollars annually from the sale of nuclear fuel to EU countries, which is 40% of its revenue from the sale of fuel in general. Russian nuclear fuel accounted for 25-28% of all European imports of nuclear fuel, a number of old," says Kondratiev.
"In most cases, these countries simply cannot switch to alternative fuel sources. An alternative can only be offered by the American company Westinghouse, which produces fuel for Soviet-designed reactors in Sweden. However, the plant's capacity is limited. But the main problem is that this fuel is not certified in countries where Soviet-designed reactors operate. And it will take years to pass the certification procedure",
– Kondratiev explains.
It is impossible to completely replace one fuel with another immediately. First you need to load a test batch into the reactors, see how the new fuel behaves. Then the share of American fuel should be increased very slowly and gradually. "In Ukraine, this process took years, and in European countries, most likely, it will last even longer. Because European regulators are more strict about the fuel replacement process because of the security threat," explains Kondratiev. Therefore, he concludes that under current conditions, Rosatom fuel for Soviet–type reactors is irreplaceable for a long time - 10-15 years.
"Therefore, most likely, Soviet nuclear power plants in Eastern Europe will run on Rosatom fuel until decommissioning due to old age, otherwise they will simply be closed due to sanctions. This means a full-scale energy crisis for at least a few countries, and at most for the whole region of Eastern Europe.",
– the expert predicts.
Traditionally, VVER-440 units provide half of the electricity generation in Hungary and more than half in Slovakia. Due to this, according to European regulators, electricity prices in these countries are among the lowest in the EU. Therefore, without a nuclear power plant, a crisis is inevitable.
Only it will not happen immediately after the sanctions, but in six to nine months, when it will be necessary to overload the fuel, and it will no longer be possible to buy it. Fuel at nuclear power plants is usually overloaded once a year.
If the EU decides to impose a ban on Russia's participation in the construction of power units in European countries, Hungary will lose the project of Rosatom's construction of the second stage of the Paks NPP. A construction license was already issued last year, and the Hungarians are preparing to start work on the site.
According to the expert, if only such a ban is introduced, the energy crisis in Hungary will not happen immediately, since the existing reactors will continue to work. However, the crisis is guaranteed to occur in 8-10 years, since the old reactors will be decommissioned, and new ones will not appear to replace them. Because even if a new developer is found, it will be unrealistic to go through all the stages of approval again and build the station in ten years, and most likely, this project will stall without Rosatom.
In fact, even Germany does not support sanctions against Rosatom, although there is a strong anti-nuclear lobby and anti-Russian rhetoric of the current authorities in Germany. Moreover, Germany has long ago independently decided to abandon nuclear generation. However, the country has a large share of gas generation.
"Germany looks at the energy market globally, and understands that it can also suffer from these sanctions. If European countries have to shut down their reactors at the beginning of the winter of 2023-2024 due to the lack of Russian nuclear fuel, this will mean one thing - everyone will have to increase gas consumption, which will lead to shortages and an increase in gas prices.",
– says Kondratyev. This will be a new blow to the European economy, which is already breathing hard.
France, on the contrary, has a large share of nuclear generation. Moreover, the French have their own competencies and reactors and provide themselves with fuel by purchasing raw materials in Africa (former colonies). However, they also buy fuel from Rosatom, since Rosatom is able to produce fuel for Western-style reactors. But if necessary, the French will be able to cope on their own, the expert believes.
"However, such sanctions do not go unnoticed for the global market. We have already seen this in the coal and oil markets in 2022. Rosatom produces more than a third of all enriched uranium products in the world and occupies 17-20% of the global fuel fabrication market. He controls mining facilities in Kazakhstan, has contracts for the supply of uranium from Uzbekistan. In any case, the sanctions will affect the entire chain, not just Russia. Therefore, sanctions against Rosatom will lead to an increase in prices on the global nuclear fuel market. France is not ready to create strong turbulence in the world uranium market with unpredictable consequences. Since the competitiveness of its economy directly depends on the French nuclear industry," explains Sergey Kondratiev.
Another important point. Rosatom does not just supply nuclear fuel, it is the only one in the world that simultaneously supplies fuel and takes spent fuel for reprocessing and disposal. From the French, he takes, among other things, spent fuel that is not his own.
"This is a very profitable option for consumers, because there is no need to invest in the development of waste processing and storage technologies and build a permanent storage facility for spent nuclear fuel. It's all expensive, it takes a lot of time, including certification, search and coordination of the territory with local residents for the construction of a permanent storage facility," the source says. The same Americans do not even take their fuel back.
In reality, even Poland and the Baltic States will indirectly suffer from these sanctions against Rosatom. "Because Poland, for example, is now buying electricity in the Czech Republic and Slovakia, which is also generated at nuclear power plants. And the Baltic countries – Finland, where there may also be difficulties with the production of electricity at old nuclear power plants," says Kondratiev. Not to mention the fact that the shutdown of nuclear power plants will worsen the gas crisis in Europe as a whole.
Olga Samofalova
