11.07.2007 // Rusnovosti.ru

Interview of Head of Rosatom Sergey Kiriyenko to 107 Minutes program of Russian News Service

Rustam Arifjanov: I am Rustam Arifjanov. And today our guest is the Head of the Federal Agency for Nuclear Energy Sergey Kiriyenko. Good evening, Mr. Kiriyenko.

Sergey Kiriyenko: Good evening.

R.A: The leading story today is, certainly, the meeting of Vladimir Putin and George Bush in the United States. Perhaps, this is one of their last meetings as presidents. People say they are friends; perhaps, they will meet afterwards but no longer as presidents. Political experts, including people from the accompanying delegations, say that the key topics of the meeting are Kosovo, ABM problems and also nuclear power engineering. What do you think, will they discuss this subject or not? Have you prepared anything for discussion?

S.K.: I think everything is possible. In any case, nonproliferation of nuclear weapons is a priority for both presidents. This concerns the Iranian nuclear program, but not only. The Iranian nuclear program is the first precedent, but I am afraid — not the last. Today, more and more countries are beginning to say that they are going to develop nuclear power engineering in their territories. But, unfortunately, today’s nuclear power technologies have a birthmark, a kind of birth injury: they are all of double purpose. Uranium enrichment and nuclear waste treatment technologies can help you produce not only peaceful nuclear energy but also nuclear weapons. In Jan 2006 President Putin suggested a way to prevent this possibility. President Bush appeared with a similar initiative a month later, in Feb 2006. Today, we all are trying to integrate these initiatives. So, I think that the presidents may well discuss possibilities of cooperation in nuclear power engineering: how to make nuclear energy accessible to all countries, but, on the other hand, how to guarantee the safety of the world. Let’s wait a bit and see.

R.A.: I think you know much already, don’t you? I am just back from Kazakhstan. People there are widely discussing the international uranium enrichment center, the project you are planning in Angarsk, Irkutsk region. They say that Kazakhstan will have a 10% stake in the authorized capital of that center. Who else? Russia — 90%, Kazakhstan – 10%…

S.K.: Yes, this project has two founders and I think this is right. This is the project of Russian President Vladimir Putin and Kazakh President Nursultan Nazarbayev. This is their joint project as President Putin was the first to mention the center – he did it at the EurAsEC summit in St.Petersburg last year – while President Nazarbayev was the first to actively support his initiative. So, it is the joint initiative of Russia and Kazakhstan. Today, Russia has a 90% stake in the center, Kazakhstan – 10%. They are the two founders of the center. And now that the center has been founded – the inter-governmental agreement was signed in May during Putin’s visit to Kazakhstan, the incorporation documents were signed last week – we are ready to admit any country wishing to take part in this project. Do we have requirements? Yes, we do. That country should be ready to develop nuclear power engineering but should also be committed not to create double-purpose technologies in its territory. I mean uranium enrichment. If it agrees, it is welcome to come and buy a stake in our center. We took 90% not to keep it but to have what to sell. We plan that each potential buyer will be able to get 10%, at most.

R.A.: Do you already have buyers or is it a secret?

S.K.: At least, two countries have already said that they wish to join the project and are already starting to prepare documents: Armenia — the Armenian President has said that Armenia is ready to join the international center and we are already preparing necessary documents – and Ukraine – their delegation visited Angarsk just 10 days ago and they also said that Ukraine wants to be in the project. We are planning to complete this process this year. There are 3–4 more countries who want to join, but this is a political decision and we are waiting for their governments to say it officially. We are open without any restrictions.

R.A.: I am not sure if my next question is political or not. I try to avoid political questions but once you mention nuclear energy you go into politics. Concerning Ukraine. You have just come back from France, where you have agreed with Alstom to set up a joint venture. You are going to produce turbines we have never produced before. But, if I am not mistaken, such turbines were produced in Ukraine, in Kharkiv. So, why haven’t we agreed with our brothers Ukrainians?

S.K.: You are not mistaken. But, to be more precise, they produced similar but not the same turbines. Today, we want to work with the best. Alstom is one of the best in the low-speed turbine production, they have the most advanced technologies. It is the first time we have got such technologies. We are not buying a finished turbine, we are importing the best available technologies and are setting up a production in Podolsk. We will have controlling interest in that company: Rosatom – 51%, Alstom – 49%. It means that everything will be here in Russia: tax revenues, investments, new jobs. It will be a Russian turbine produced on the basis of the best existing technology in the world.

R.A.: You mean that you have preferred the French because they are better than the Ukrainians?

S.K.: First, because they are better. But, to tell the truth, we tried to agree with Ukraine some 1.5 years ago. I even went there last spring. But, at that moment, the Ukrainian authorities had made no decision on the future of Turboatom. We needed high-quality turbines, and, in order to comply with our criteria, that plant needed serious investments. Today, the situation has drastically changed: Ukraine is forming a concern Ukratomprom and we already have excellent relations with them. So, we will try to involve Turboatom in our program: they might supply components. Perhaps, you are right: had Ukraine been ready for such a project a year ago, we would probably have no need to set up a JV with Alstom.

But we already have this project and we will develop it. We can’t wait. We have a very serious presidential program: from this year on, we should start launching, at least, two new reactor projects a year. So, we had to choose. We have Power Machines company. They are our good partners. But, first, they do not produce low-speed turbines and, second, you can’t negotiate prices and terms when you have just one producer. Today, we have Power Machines, a JV with Alstom and partnership with Turboatom, we are ready to cooperate with the latter but on a bit different terms. Today, we have got an excellent opportunity to set up a JV. Last year we offered Ukraine the same – to set up a JV here – but they said that they would work at their own plant only. They refused, Alstom agreed and it was certainly better for us.

R.A.: Mr. Kiriyenko, you are so busy now, everything is boiling and seething in your industry. Suddenly, you have decided that you need more NPPs. Suddenly, you have preferred the French to the Ukrainians. What is going on? Is there something wrong with our other energy sectors?

S.K.: No, simply, we need to enlarge all types of energy production. I think that a very typical thing is going on. For as many as 15–17 years already we have lived on a reserve inherited from the Soviet Union. And not only in the nuclear power industry – everywhere! In the Soviet times we had a really huge reserve of power generating capacities. In the 1990s everything fell down, the economy was in ruins, we were quickly losing capacities but we still had plants. I mean all this time we have had a kind of back-up: we have had plants. Perhaps, they are not the best but they are still working. You need more energy? Go restart one more idle plant and you will get it. That’s exactly what we began doing in Moscow, St.Petersburg, Tumen, Yekaterinburg a few years ago. Today, this process is gaining momentum. Last year we consumed more energy than we did in the Soviet times! It means that the Soviet-time reserve is over and it’s time to start building new plants. The question is what kind of plants. I’m not going to say that nuclear power plants are the best and that we must build only nuclear power plants. It’s not a dogma. Different countries solve this problem differently: France gives preference to nuclear energy – 78% of total capacities. In Russia we have just 16%. The average share of nuclear energy in the countries having all necessary technologies – some ten countries, at most – is 34%-38%. We have just 16% … quite a low figure for the nation that built the first NPP.
 
R.A.: I just want to remind our audience that we have oil and gas. That’s, probably, why we paid less attention to nuclear energy.

S.K.: Not exactly. Simply, our oil and gas were very cheap. In Europe gas costs $250–300 per 1,000 c m; so, they start calculating, figuring out — what is better: to burn it or to build some alternative renewable sources: wind, tide or nuclear power plants. In Russia gas cost $30 per 1,000 c m – now $45; so, we never cared how much we burnt. But this is real barbarity. Even if gas was cheap, we could do something better than just burn it: we could process it into something more useful, something requiring more intelligence. We can’t just thoughtlessly waste what we have. If we can’t process it yet, let’s sell it for $300 abroad instead of burning it at home for just $45. So, what shall we do? The President has made it clear: we should attain optimal energy balance. There is no right or wrong source of energy, there is right or wrong balance of sources. Today, over 50% of our energy is a product of gas burning. This is barbarity.   

R.A.: We can make many useful things from gas, can’t we?

S.K.: Of course, we can. Just remember the saying: to burn gas is like to burn money. You can burn money and get the same effect. Our goal is balance: 25%-30% for nuclear energy, 25%-30% for coal. Today, our water power plants produce just 16% of our energy. We can raise this figure, but, unfortunately, we can’t build WPPs in European Russia. Most of our WPPs are situated in Siberia and the Far East: those regions have necessary reserves for hydro energy. And 25%-30% for gas, no more. But we have one more problem: since everything was fine — we had plenty of gas to burn, we have built no single NPP in as many as 20 years. In the last 15 years we have just finished three units. And what we have as a result? All of our existing NPPs were built in the 1970s-1980s and must be gradually decommissioned in the coming 10–15 years. So, we must build new ones in their stead. For example, Leningrad NPP, which gives St.Petersburg 40% of its energy, must be decommissioned. So, how are we going to cover this gap? By building coal plants? Just imagine what they will do with the city and its ecology. This is not a solution.
   
We need a substitution – a worthy substitution. For building one unit we will need 5–7 years. So, we must start beforehand. This is a very serious project. We need to replace the existing NPPs and to increase their share from 16% to 25%-30% — and we should always keep in mind that the energy consumption is constantly growing. Today, people perfectly understand what means getting connected to an electricity network. You can build anything you like – house, plant – but to connect them to an electricity network is a quite different story: you must know how much it will cost you and how to do it better. Today, the whole world is changing its attitude towards electricity. Developing countries are beginning to actively consume electricity. The demand for electricity is quickly growing. Just one example: once you can afford more, you start buying things: fridge, TV, PC. And this all needs more electricity. Today, the world is beginning to realize that oil and gas are exhaustible and that we need alternatives. But we have no worthy substitutes yet: renewable sources – Sun, wind – give just 2%-4%: they do have prospects and they must be developed but they can’t solve the problem right now. So, today, access to a cheap and stable energy source is a guarantee of safety and development. The country who has such access will be the leader, the country who doesn’t have it will lag behind. And, more importantly, in the coming 30–40 years we will hardly have energy stability without nuclear energy. So, “nuclear renaissance” is inevitable. 

R.A.: Mr. Kiriyenko, but I remember the late 1980s and the wave of mass protests against nuclear energy – even in your native Nizhniy Novgorod. Many people made quite good political career on it… Don’t you think that now too some people will start explaining – just as clearly as you are doing now – that there was Chernobyl, that nuclear energy is bad and dangerous. Are you ready for such a reaction?   

S.K.: You know, I think this is a normal reaction. I don’t expect anything else. In fact, we need hard requirements to nuclear energy. On the one hand, we should have hard requirements for safety by the government and the public, on the other, we should have professional answers to the question: how we can ensure that safety. Today, ecological examination and public hearings are compulsory prerequisites for any NPP project. This year we are starting two projects: Novovoronezh-2 and Leningrad-2 and we have conducted public hearings on both of them. We invited all ecological and public organizations of the regions and provided them with all necessary information about the plants. One more important problem is technological changes. The plants that were built in the 1980s and the plants that are being built today are absolutely different things. Today, we set quite different safety standards. Present-day plants have four independent protection systems: so-called active and passive safety systems. In the 1970s-1980s there have been lots of nuclear incidents worldwide. Today, we have a passive protection system: system that does not need to be switched on, you don’t need to push the button to set it working. Quite new technological solutions, quite different materials, control systems, everything is different. Even after the most tragic air crash – whatever its cause: human factor or equipment (oftentimes it is a combined cause: the man makes a mistake, the equipment allows him to) – we don’t put the shutters on aviation, we don’t stop flying, do we? What we do is try to find a way to make planes safer. The same is for nuclear energy: I think that the only way to develop nuclear energy is to make it open, transparent and safe. I think this is the right direction.    

R.A.: Concerning directions. You are about to set up a corporation Atomenergoprom, is it true?

S.K.: Yes, it is.

R.A.: While you are centralizing, your neighbors, RAO UES, are decentralizing. You are moving in different directions. You are going to the right, they are going to the left…

S.K.: Yes, you are quite right: they are decentralizing, we are centralizing. I think each industry should decide for itself what the market means to it. There is a company producing some product. What is that market about? There is one thing I know for sure: monopoly is always bad; competition is always good. Let’s just take the same example: the turbine — we produce it! The same question should be asked for RAO UES. What does RAO UES sell? Electricity. Where does it produce it? In Russia. Are there other producers of electricity I Russia? Almost no producers. We, Rosenergoatom, Rosatom companies produce 16%, RAO UES sells 84%. What is it? Monopoly. That’s exactly why the government is going to retain control over networks, nuclear and water energy and to let thermal energy free so it can develop on its own so as to create competition. Do you follow the logic? Now let’s ask the next question: “Where is the market of nuclear energy?” It consists of electricity sold in Russia. Is it monopolized? Of course, no. Just 16% — what monopoly are you talking about? Everything under 30% is not a monopoly.

So, our 16% is not a monopoly. So, we have no problem. In our country we have  very tough competition on the electricity sales market. So, everything is OK here. And now the key point: our major resource is export. Today, we are holding as much as 40% of the word nuclear fuel market. 50% of the fuel used by the US NPPs is produced in Russia from low-enriched uranium. We have a unique potential. Today, we are building more NPPs abroad than any other country in the world. We are building as many as seven units: two units in China, two in India, one in Iran, two in Bulgaria. And we have, at least, 10 potential orders in Eastern Europe and South-Eastern Asia. This is a huge market and we are successfully competing there.

R.A.: Well, let’s return to Atomenergoprom. Why are you establishing it?

S.K.: I have already said that our major resource is export. But we if want to be successful on the foreign market, we should observe its rules. What is going on there? It is a global market. Some 5–7 years ago each country producing nuclear energy formed one big national company – national champion – like Siemens in Germany. 1–2 years ago national companies began to merge into trans-national corporations. Today, Japanese Toshiba and US Westinghouse are one company. General Electric and Hitachi are also merging. So, today, we have 4–5 global players representing 3–4 countries. What we have against them: 20 small companies? We have no chances.

R.A.: Are all of our companies state-owned?

S.K.: Yes, all of them are state companies. But state ownership is not the problem, the problem is they are many and they are rivals. Each company fights for its own market.

So, we have one single chance left: to form a vertically integrated state company. Atomenergoprom is a 100% state-owned JSC – the law says that this status cannot be changed. It is a unique company: any decision on it, on its assets and property needs preliminary approval by the President of the Russian Federation. Atomenergoprom does everything: from mining and enriching uranium and building power machines to designing, constructing, operating and decommissioning NPPs and treating waste. In fact, it will be the biggest player on the world market and will help us to expand there. I think this is the very format we need. We will no longer sell raw materials but a product of intellect, a renewable resource.     

R.A.: When are you planning to cut the ribbon?

S.K.: I think it is early yet to cut the ribbon. This is just the beginning. But this is a good start and it is a kind of springboard into the foreign market. Now, we will be able to protect our positions in the world. We have been producing nuclear energy for 60 years already; we have invested colossal intellectual, financial and material resources in the sphere. One of our biggest achievements is our nuclear shield. It is an absolute guarantee of protection for many years ahead. But we have one more result: the unique potential of our nuclear power industry. We are simply obliged to use it.

R.A.: That’s exactly what I was going to ask you about. You have just held the 2nd innovative forum. Before the forum, I spoke with the director of VNIIAES Pyotr Schedrovitsky and he also said that we are obliged to use our potential in the sphere. How are you doing it? What are the results of your forums and all your efforts to apply the achievements of the nuclear power industry in civil sectors?

S.K.: First of all, we apply nuclear energy itself. Once it was just a side-product of the nuclear weapons complex. Today, it is an independent industry. Second, in the Soviet times we invested huge money in fundamental science and our fore-fathers said: “We must always know tens times more than we are using at the moment.” They meant everything: processes, technologies. This is a guarantee of safety and stability. But this also results in excess of knowledge – a reserve, potential, we may not need today, but may need tomorrow – and may well use in other spheres. Just a couple of examples. 

First, we can use it in the Soviet and Russian reactors – WWER – water-cooled water-moderated reactors. Why water-water? Because in those reactors water is both coolant and moderator. Here we set unique requirements to the quality of water. As a result, in the last 60 years we have developed lots of technologies for water treatment and water quality control. Do we need them? Of course, we do — but not only we. Today, when we are beginning to give our water canals to private owners for long periods, many people come and say: we are ready to give money for improving these technologies because they are exactly what we need for high quality.

Second, for many years we have been working with pipelines under high pressure. As a result, we have systems of control and testing that allow us to test any pipe at work and to see if it has any problems. Today, such systems are widely applied in chemistry, oil production and refining. What else? Medicine. We have lots of interesting projects with accelerators and charged and neutral particles. The past forum has discovered no less interesting projects. For example, the project with Roskosmos, where we provide modern accelerators and capacities to model heavy cosmic particles. This is really important: to be able to check up if our space electronics are resistant to heavy particles. Just imagine what a waste it would be to send electronics to the orbit and then to find out that it has been broken to pieces by heavy cosmic particles. Today, we have modeled such particles. In fact, we can model anything on the earth and thereby save millions. We have interesting testing systems with specific radiation: you can X-ray any equipment. In fact, you can see what is going on inside the engine of your car. You can put a system of sensors under a carriage and in 1–2 minutes say what there is in any container inside the carriage.  

R.A.: You mean they can replace customs officers?

S.K.: At least, they can give exact information. I have mentioned just some of the projects exposed at the forum. We have even more in reserve. What we can’t do yet is commercialize them: I don’t mean selling a product dear, I mean making a product that will pay off. Today, we are actively cooperating with the Economic Development Ministry and their venture fund. So, there are lots of projects.  

R.A.: There is one more interesting project. Floating NPPs. Is it a promising project? Is it expensive?

S.K.: Today, more and more countries want to develop nuclear energy but they don’t need the huge NPPs we have in Russia, Europe, America . Today, we are building plants with 1,200 MW reactors. Each plant has, at least, two reactors – so, its minimum capacity is 2,500 MW. This is too much for a remote northern territory or a small country with no networks or big demand. What they need is small plants. And we have what to offer: we have the unique experience of our submarines and icebreakers. Nobody else has such a potential. And you can only imagine how much the Soviet authorities spent on their nuclear fleet. What I want to say it that those technologies are absolutely reliable. Just one example. The tragedy of Kursk submarine. 

It was a horrible accident: a submarine with a nuclear reactor explodes at the depth of over 200 meters. No other reactor in the world has ever been “tested” like that. And what happens? A blast – it works like a piston: a heavy blow, decompression, blackout. The crew die, nobody can push the bottom or pull the lever. But the reactor survives! It just automatically stopped with no radiation let outside. Even more, we have inspected it and have seen that it can go on. So, you see how reliable these reactors are. And they are exactly the reactors we can use at floating NPPs.    

We are already building a floating NPP in Severodvisnk. It will have two icebreaker-type reactors 40 MW each. These reactors are very safe and efficient: they have worked for thousands of hours with no single incident. The method is very simple: you just moor a floating non-self-propelled pontoon to an area needing electricity and heat and put the plant on it. What is the advantage of this plant? The key advantage is that you carry out no single dangerous operation on-site. Once you need to refuel the reactor, you just bring a new pontoon and tow the old one to its mother factory for refueling. Once your plant stops working – in some 25–30 years – it is taken away and you have just a beautiful green field left in its place. No waste, no consequences. Just a green field. What is its disadvantage? This plant has only one disadvantage: the smaller it is the higher its price. In power engineering, we have a concept like installed load tariff. For floating NPPs it is high: simply, you have to build special infrastructure and lots of other things. What does it mean? It means that there is no sense in building them in Central Russia, where we can build a gas plant or a bigger nuclear power plant or in areas with water power plants or in Ural, where we have plenty of coal. We can build them in the Far East…

R.A.: Somewhere in Kamchatka, in Pevek, Chukotka…

S.K.: Yes, you are absolutely right. After Severodvinsk, we are planning to build two NPPs in Chukotka, one of them, exactly, in Pevek. Today, we spend huge money to carry fuel and tons of masout there. So, floating NPPs are best for this area. They are more expensive than ordinary NPPs but they pay off. We have made one important decision about these projects: they will not be subsidized. The first plant is receiving subsidies because it is a pilot project, but the next ones will not – they will be commercial projects: if it is sure to pay off, it will be built, if not – no. Still we have lots of orders and not only at home. We are receiving orders from abroad: what is expensive for us is manna for others. We are also considering the possibility of using submarine reactors. It is not a must that all such facilities should be floating. It can be just a modular plant. My basic profession is ship building and I know what it is to build a submarine: on land you can afford any volumes and distances, in submarine you are crammed into small space and have to cram all necessary equipment there. Submarines are made under very rigid control. This is a very interesting project and we will carry it out.

R.A.: You have been talking about equipment and technologies. Let’s talk about people as, first, we can’t do without people, and, second, all the reforms you are carrying out in Rosatom – Atomenergoprom, international enrichment center, rise from 16% to 25% — all this requires new people – more precisely, new mentality. You are known to be a very good team-maker. I remember Privolzhky district, when you where the president’s plenipotentiary: you recruited people from all over the country – you selected federal inspectors through contests and later trained them. It was really huge work but I think being the head of a big and rather closed industry is a bit different thing. How are you making your team now? I don’t think you are holding all-national contests here, are you?

S.K.: No, I am not but not because the industry is closed, it is not: its weapons sector is closed, but the civil part is open. Commercial secret, security – yes, we care for it, but we also care for competition. We need professionals. We need specialists: the number of people coming from outside must be limited, we can’t enlarge it but we still should have such people as our present tasks require knowledge of markets, investments and design. In fact, the core of my team is people who are professional nuclear power engineers but have worked in other spheres in the last 5–10 years due to merely economic factors: they were better paid there. Many of them have worked in oil and gas industry, banking sector… They are really invaluable: they are highly competent, they love their industry and, most importantly, they know how to work under new market conditions.   

On the other hand, we are recruiting people from inside. They are great: those people are loyal, they have given their whole lives to nuclear power engineering, they are ready to work for as much as necessary and salary is not their key motive. What they really care for is the idea: they feel themselves a part of a big project. They are really helpful but we also need new specialists. Last year, Rosatom and the Moscow Engineering Physics Institute formed a consortium of specialized universities. It won a tender and now is receiving grants for training specialists. We have quite good training centers but we need to revive the system of professional training and we should start from technical colleges. Today, our industry is reviving, we have huge orders and we need highly-qualified personnel. So, I would like to use this opportunity and to appeal to all young people: if you have not yet decided what profession to choose, I advise you to choose nuclear power engineering: in the next 30–40 years you will have enough work to satisfy you professional and personal ambitions.
 
R.A.: Presently, you are starting up two new enterprises: the International Uranium Enrichment Center in Angarsk and the JV in Podolsk. These are quite big plants and they will also need specialists, won’t they?

S.K.: In Angarsk we already have an electrolytic chemical combine: it is our best enrichment company, they have very modern equipment and a very professional team. So, we will have no problems with the center. In Podolsk the situation is much more complicated… 

R.A.: If I am not mistaken, they also have some plant.

S.K.: Yes, they have ZiO Podolsk. Formerly, that plant was not from our industry: they produced steam generators and heat exchangers for all types of power plants. Today, it is our plant we have appropriated it because it is the only such producer. Of course, we prefer competition to monopoly. But when you have just one producer in the whole country and you further work depends on its production you have no other choice but to make it you own so you can control it. That’s why we have obtained controlling interest in that plant. And now we have taken one of its workshops and are setting up a Russian-French JV there.

I mean our 300mln EUR joint project with Alstom. This is an unprecedented project: we are obtaining a unique technology: today Arabelle turbine is the best in the world and we are going to produce it here in Russia. The controlling interest is ours, the personnel is ours. At the initial stage, we will make, at least, three turbine systems a year. 

R.A.: Do we have the right to sell them?

S.K.: It’s a good question. We are making them for our own needs, for the plants we are going to build, but we can sell them all over the world, wherever we decide to build an NPP. From now on, all our new NPPs abroad will work on the turbines produced by the Podolsk JV. 2–3 systems a year will be enough for the time being, but, considering our export plans, we are going to enlarge our production to 5 systems a year. Our sales will make up, at least, 1bln EUR a year. And, of course, we will have a highly qualified team. We are already recruiting specialists in Podossk, while Alstom has promised to bring its personnel training system. You know, they have very high standards. Now they are inspecting the premises and are setting some parameters. I saw the reaction of our specialists: they could never imagine anything like that. For example, Alstom requires that no single unit should be exposed to sun light throughout its production lest this might damage its quality. You know, I am really happy: with such turbines we will have no problems.     

R.A.: My congratulations. You have made a very profitable deal! Thank you very much. Our guest today was Sergey Kiriyenko, the head of the Federal Agency for Nuclear Energy. Thank you very much.

                                                                                                                                          Interview by Rustam Arifjanov