According to a recent report in the Economist, the world relies on Russia to build its nuclear power plants. “And Russia is happy to oblige,” says the newspaper. The report sweeps the global market landscape with a quick read. Here’s a deeper dive into the intense competition between China and Russia for market share even as China buys four new reactors from Russia. This market consists almost entirely of light water reactor (LWR) designs, but by the end of the next decade some of it could shift to more advanced designs.

According to a Reuters report last week, a senior Chinese nuclear official said the nation could build 30 ‘Belt and Road’ full size nuclear reactors by 2030. Near term prospects for deals are few for now including UK, Romania, and Argentina. Clearly, China is feeling the competition for nuclear reactor exports from Russia, but it has a long way to go to catch up. Plus, after completion of the four Westinghouse reactors in China, where is the U.S. presence?

Reuters reports that Wang Shoujun, a standing committee member of the China People’s Political Consultative Conference (CPPCC), told delegates that China needed to take full advantage of the opportunities provided by “Belt and Road” and should give more financial and policy support to its nuclear sector.

He is reported to have said China needs to improve research and development, localize the production of key nuclear components, and grow both the domestic and foreign nuclear markets to give full play to the country’s “comprehensive advantages” in costs and technology.

Wang, also the former chairman of the state-owned China National Nuclear Corp. (CNNC), said “Belt and Road” nuclear projects could earn Chinese firms as much as 1 trillion yuan ($145.52 billion) by 2030, according to more details of his speech published by BJX.com.cn, a Chinese power industry news portal.

Can you build it if they come?

Policy is easy. Logistics are hard. Consider the supply chain and labor force needs of projects spread across the globe to build 30 reactors over the next 10 years. Each site will need several thousands of skilled craft workers and permanent staffs of about 500 each. Multiply that by 30 units and the question is raised, where are they going to get all these people?

Then there is the issue of long lead time components including reactor pressure vessels (RPVs), steam generators, turbines, etc. Does China have the manufacturing capacity to build them, maintain quality, and deliver them on time?

By comparison Rosatom and its main component contractor Atommash are ramping up for a major production run. According to this translated article (PDF file) from the Russian, the growing number of nuclear reactor export deals have resulted in a turn around for the firm.

Survey of Russian Nuclear Export Projects

A lot has been made on recent testimony to Congress, and in think tank reports, about Russia’s leading role in exporting nuclear reactors. While Russia has a lot of deals on paper, in the form of high level MOUs, here is a survey of some of the more interesting projects.

Clearly, Russia is in the lead, at least on paper, for commitments to build new nuclear reactors including its latest 1200 MW VVER. Russian nuclear reactor export projects include;

Hanhikivi-1 – In Finalnd the poject, a VVER-1200/V-491, is slated to break ground in 2021 and enter revenue service in 2028. According to World Nuclear News, Fennovoima CEO Toni Hemminki was quoted as saying by the YLE newspaper “the design has taken longer than expected.” AS a result Finland’s nuclear safety agency has pushed back the date for issuing a license to start work on the project.

According to the World Nuclear Association (WNA), the capital cost of the plant is estimated to be €6-7 billion including financing. In January 2015 Russia’s cabinet announced approval of RUR 150 billion (€2 billion) funding from a sovereign wealth fund, used to pay retirement benefits for Russian workers, for the project, mostly as a loan guaranteed by export credit agencies.

Paks 5 & 6 – In Hungary Rosatom is slated to build two AES-2006E: VVER-1200/V-527 with construction starting in 2020 for Unit 5 and completion planned for 2025. A second similar unit is expected to break ground a year after Unit 5.

According to the World Nuclear Association (WNA), a €10 billion financing deal from Russia was agreed to cover 80% of the anticipated project cost, with Hungary to repay the loan over 21 years of operation. In February 2017 the Russian President said that Russia was prepared to finance 100% of the plant if necessary. The startling commitment came after Hungary said it wanted a 100 % turnkey project based on the fact that none of new 1200 MW units had operational experience elsewhere.

Kudankulam 3 & 4 – In India Units 1 & 2, which are 1000 MW VVER, have been generating electricity at the site in Tamil Nadu for several years. Unit 3 & 4 are similar units in terms of power ratings and are expected to enter revenue service there in 2025 and 2026. India’s costs, according to the World Nuclear Association, are approximately USD$600 million (actual amount depends on currency fluctuations).

Russian is financing the rest of the costs. Labor and localization of the non-nuclear components like turbines, also are much less expensive than in western nations. If a WNA cited price of USD$1300/Kw is used, then each unit costs about $1.3 billion ($2.6 billion for both) with India paying about 23 percent of the total project costs. Localization will create thousands of skilled trade and construction jobs as well as payrolls for Indian workers in heavy industry firms.

Negotiations between NPCIL and Rosatom for unit 5 & 6 are ongoing at this time. A visit by Russian Premier Putin to India in October 2018 resulted in the agreement to pursue the project.

Akkuyu-1 to 4 – Turkey Unit 1 poured 1st concrete earlier this year but there are news media reports, denied by Rosatom, of the basemat concrete having to be done over. Supposedly, Unit 2 will break ground later this year. The next two units are slated to break ground in the early 2020s. All of 1200 MW VVER are targeted for revenue service by 2025.

According to WNA, Atomstroyexport is general contractor for construction, though Turkish companies are expected to take 35-40% of the work. Financing is still an issue with Russia having started work on the project with a 51% equity stake and no Turkish investors. Several Turkish consortium have considered partnering with Rosatom on the project, but none have signed on to date.

Negotiations were reported to be ongoing with potential investors in the remaining 49% of the project as recently as April of this year. In February 2019 it was reported that the Cengiz-Kalyon-Kolin consortium had pulled out of the project citing the high rates the plants would charge for electricity, about USD$0.13/kwh. Estimates reported at different times put the cost of the four 1200 MW units at between USD$20 to $25 billion.

Xudabao-3 & 4 – In China the ink is barely dry on the contract which was signed in June during a state visit by Chinese President Xi Jinping to Moscow. The contract terms sheets were signed by representatives of Rosatom’s engineering subsidiary ASE and China National Nuclear Corporation (CNNC). The project has not broken ground plus China will demand a lot of localization especially for labor and for turbines and other large, long lead time components.

According to WNA in June last year, Russia and China signed four agreements, including the construction of two VVER-1200 reactors as units 7 and 8 of the Tianwan plant. In addition, two VVER-1200 units are to be constructed at the new Xudabao site. Signifiantly, the Xudabao project was originally expected to comprise six Chinese-designed CAP1000 reactors, with units 1 and 2 in the first phase. Rosatom said it expects to commission Tianwan units 7 and 8 in 2026-2027 and Xudabao units 3 and 4 in 2027-2028.

Uzbekistan-1 and 2 – WNA reports that in May 2019 Rosatom and UzAtom, Uzbekistan’s nuclear development agency, signed a contract to perform engineering surveys for the Central Asian country’s first nuclear power plant. No site has been selected and a contract to build reactors is still in the future. The country relies heavily on huge deposits of natural gas which it uses for electricity generation.

Egypt El Dabaa-1-4 – In April 2018 Egypt and Rosatom placed a USD$30 billion bet on construction of four 1200 MW VVER with Egypt putting up just USD$5 billion. The nuclear plant will be built with a Russian loan of up to $25 billion at an annual interest rate of three per cent. The payment schedule will be 35 years. Actual costs may turn out to be as much as double this estimate. Many western contractors, especially in defense industries, have learned to their dismay that getting work done in Egypt doesn’t always follow normal expectations.

It is one of the largest nuclear energy deals (4800 MW) inked so far this century and is similar in scale as a project in terms of electricity generation capacity to the four 1400 MW units being built by South Korea in the UAE

Russia will also build factories in Egypt for the domestic manufacture of nuclear plant components, bringing in the required expertise; and Rosatom will service the plant with fuel and staff for 60 years.

According to the Egyptian energy minister, Mohamed Shaker, the plant is due to be completed by 2026-2027. The Dabaa coastal site is located about 200 miles west of Cairo.

China Plans SMRs for District Heating

Reuters reports that China plans to build a pilot small-scale nuclear reactor that could replace steam generation by coal or gas plants to heat towns and cities in its colder northern regions, according to an official with the state-owned developer in charge of the project.

The small heating reactor is planned for the city of Jiamusi in northeastern Heilongjiang province (Map 46.57N; 121.38W), one of two proposed units with a combined capacity of 400 megawatts expeted to be completed by 2024 according to Wang Xujia, a senior engineer with the State Power Investment Corp.

The report did not specify the design of the SMR. The ACP-100 (125 MW electrical) is China’s go to SMR design intended for domestic use and also exports to Africa.

China has been exploring the use of small modular nuclear reactors as alternative heating systems in its smog-prone northern regions. The state provides heating throughout northern China from November to March, using predominantly coal- or gas-fired boilers.

Reuters reports that State-owned China National Nuclear Corp (CNNC) has already conducted trial runs for a “district heating reactor” (DHR) design, which it says can supply heat to 200,000 urban households.

The DHR model is likely a modified ACP100 which is a PWR type design. It is estimated to require investment of 1.5 billion yuan ($217 million) and take three years to build, making it cheaper and quicker to construct than conventional reactors. This would bring the unit in at about USD$1700/Kw.

There are no reports that a 250 MW HTGR which has been under development for similar use in Shandong provice, is being considered for this project.

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Nota Bene: Hat tip to Dave Walters, a frequent commentator on nuclear energy issues, for a link to an Atommash report, translated from the Russian, showing them ramping up production of steam generators and other long lead time components to meet the needs of these Russian export deals.