26.10.2007 // Interfax

The cost of NPP construction in Russia has reached the world level

Established in 1986, Moscow Atomenergoproekt is presently one of the key engineering companies of Rosatom. The company has designed the reactors for Bushehr NPP in Iran and Kudankulam NPP in India and has modernized the reactor systems of a number of Russian nuclear power plants. It is also the chief designer of the Belene NPP project in Bulgaria.

Presently, Atomenergoproekt is implementing a pilot NPP construction project in the framework of the new nuclear energy development program and is preparing for corporization and incorporation into Atomenergoprom holding.

Director General of Atomenergoproekt Vladimir Generalov has told Interfax about the company’s activities and plans.

— Atomenergoproekt is the general contractor of the first two units of Novovoronezh NPP-2. This is the first “pilot” project of the federal target program for the development of the nuclear power industry of Russia in 2007–2015. The preparations were started this spring. What is going on on the site at present?

— You are right. Novovoronezh NPP-2 is the first project under Rosatom’s federal target program. Any construction project consists of two stages: preparation and construction. Today, we are preparing for the construction: we are preparing the area, building infrastructure for the site and housing for the constructors. We already have almost 600 workers and 200 units of equipment.

We also have problems, like any project does. First, we need labor force. Second, our sub-contractors have no experience of implementing such big projects. This is not a linear facility – not a pipeline – here we have to act within a limited area. The project is estimated at 130bln RUR.

— Is 130bln RUR enough for two units – is it a world standard?

— Any contract is a commercial secret but, for example, Aromstroyexport’s Belene NPP project in Bulgaria is estimated at 4bln EUR. That plant also has two units – so, the figures are almost the same.

Some 5–7 years ago 130bln RUR would seem to be a bit too much. But today the prices in Russia are growing so quickly that for some products they have almost reached the world level. So, 130bln RUR is an average world cost.

— The federal target program envisions a whole number of construction projects. Which of them do you expect to get?

— We will certainly get some of them. For the moment, our performance is 50/50: we have bid for two projects – we have won Novovoronezh NPP-2 but have lost the 2nd unit of Rostov NPP. In the latter case we were a bit unlucky. But we are not losing spirit and will bid for all NPP projects under the federal target program. Shortly, we are planning to bid for the construction of a thermal power plant.

— Could you specify the projects you are especially interested in? Will it be on Central Russia?

— I would rather not for the moment. But we are not going to focus on Central Russia only. We may build plants in Siberia as well.

For example, there are NPP projects in Tomsk region and Southern Ural. We are going to bid for them. We are not afraid of Siberia: if there is a project there, we are ready for it.

I am optimistic about our bids for TPP construction projects. To build a thermal power plant is much easier than to build an NPP. And the experience of Novovoronezh NPP-2 will certainly help us.

— Are you going to build water storage plants?

— Water storage plant is a very interesting subject. Such a plant is good when it is part of a complex. It is of little use when built separately but near NPP it is perfect.

Atomenergoprom is planning to launch a pilot project — Kursk NPP-Water Storage Plant complex. 500MW Kursk WSP is to be built in 2010–2015 under the general scheme for the construction of power facilities in Russia in 2007–2020.

Water power plant is a novelty for us. We have never built WPPs. But we could do it in cooperation with some other company.

— What is the potential of your company: how many plants can you build at one and the same time?

— We will build as many plants as many tenders we win.

— You mean that you can build 10 units one once?

— This year – no. But in 2–3 years we will be able to build, at least, 5–6 units at once.

— Are you planning any structural enlargement?

— We are planning to increase our personnel. First, we need experience. Novovoronezh NPP-2 is the first project we are implementing as an engineering company. Second, for building one unit an engineering company needs 200–300 constructors. Today, we have just 100 specialists at Novovoronezh NPP-2 – this is enough for the preparatory stage but next year we will have to do work worth 18bln RUR and we will need 200–250 people.

— Are you planning any structural reforms?

— I think we can hardly avoid reforms, but, for the time being, our structure is quite enough for implementing the task we have. We have a project department with almost 1,700 employees who are drafting documentation for Novovoronezh NPP-2 and other projects. We have a construction department with 100 people who are supervising ongoing projects. And, finally, financial-economic department. No single big company can do without it.

The project department is very efficient. The construction department consists of four big divisions: directorate for ongoing construction projects – people working on sites; construction and installation division; planning division; and division for the purchase of equipment.

But now we are acting as an engineering company, which means that we have to commission the plant (Novovoronezh NPP-2) and to coordinate the construction and design activities. So, we have some work to do here. As regards the basic structure — the trunk of the company – we have no problems with it.

— Are you planning to buy start-up and maintenance companies? Perhaps, from RAO UES?

— Not from RAO UES. Our industry has a commissioning and start-up company – Atomtekhenergo. But there is no sense in buying it as it will also join Aromenergoprom holding. So, it will be easier for us to make a contract with them than to buy them.

Atomenergoprom is a self-sufficient system. It can build nuclear power plants on its own. The only exception is installation companies and suppliers of auxiliary equipment and materials.

— The industry has been instructed to switch to EPCM-contracts (complex construction – Engineering, Procurement, Construction and Project Management) under the federal target program – because the projects have tough deadlines and limited resources. Does Russia have EPCM services?

— I think that we have no such market yet, but in 2–3 years the situation will change.

But we already have such companies. Our company is one of them. Rosatom has four such companies and all of them are actively developing.

Historically, Atomstroyexport was the first. They promote Russian nuclear technologies abroad. We also have two more Atomenergoproekts – in Nizhniy Novgorod and St.Petersburg.

— Could you tell me about your cooperation with Atomstroyexport. You are cooperating under foreign projects, aren’t you?

— Atomstroyexport acts as an engineering company for its foreign partners. They provide the whole package of services for NPP construction: they order projects, integrate equipment, carry out commissioning and start-up activities. In fact, they are a typical EPCM-contractor. And they do this in cooperation with Russian companies.

For example, we help them with documentation. We have cooperated under Bushehr NPP project in Iran and Kudankulam NPP project in India. Now, we are working on Belene NPP project in Bulgaria. When it comes to construction, Atomstroyexport will start recruiting construction companies: Hydropress, Kurchatov Institute and other Rosatom companies. They may invite us too.

Now, Russia is negotiating with many countries. Lots of countries wish to have nuclear power plants.

— Some experts say that it is a risky venture to build nuclear power plants in countries having no sufficient safety culture, for example, in Vietnam. Do you agree with them?

— I can’t fully agree with them. In Vietnam they have no nuclear industry of their own but they have experience of operating an experimental nuclear reactor. Today, they have very serious plans to build a nuclear power plant and are training personnel for it. The same is for Iran – they are creating their own uranium enrichment system – so, they also have experience.

— And why don’t you establish direct contacts with foreign partners? Lack of experience only?

— The foreign market is extremely politicized. One can hardly imagine that any Russian company can win a tender somewhere in France, a country where 80% of electricity is produced by nuclear power plants of their own design. But we have very good chances in developing countries. Still, I don’t think that we should have several companies on one and the same market.

We know how to act in Russia but foreign projects have lots of peculiarities. For example, our female employees in Iran are forced to wear hijabs (Muslim headscarves). We have an office in that country and they inform us of local peculiarities beforehand.

But the key point is that we don’t see any sense in competing with our own colleagues. So, we have no such plans for the moment.

— Today, WWER reactor is the basis of the federal target program. But aren’t there any alternatives? Do other reactors have prospects?

— Western Europe spends a lot of money to develop the so-called alternative sources of energy: wind or solar energy. However, despite extensive financing, those sources yet have just a few percents in the total energy production.

Of course, we can cover the whole country with small 5 MW plants but, in order to meet our energy demands, we need big plants. WWER is the longest-operated and, consequently, the safest reactor. Safety is our priority. So, WWER will be our principal project till 2020–2025, at earliest. I can’t say for sure if we will have any alternatives in the near future – everything depends on financing.

The federal target program stipulates that our industry should build as many nuclear power plants as to be able to support itself. As soon as we become self-sufficient, we will be able to finance new projects. But this is not our priority for the moment.

Today we have two promising projects: floating nuclear power plants with an absolutely different type of reactor and fast breeder nuclear power plant. Floating NPPs are optimal for littoral energy systems. Such plants can be built not only in Russia but in Indonesia and China. Floating NPPs can also have desalination systems. As regards fast breeder reactors, particularly, BN-800, they can help us to solve the problem of fuel supplies. 

The rest is just theoretically attractive projects requiring deep analysis. You need a very deep analysis when attempting to apply military technologies in the peaceful nuclear industry. Still, this is a very interesting activity and we are going to take an active part in it.

— Are you involved in Rosenergoatom’s NPP modernization and service life extension program?

— Without construction of new units and modernization of the existing ones, our industry would stop supplying us with energy in the next decade just to start consuming it itself so as to be able to ensure the safety of its unprofitable units. That’s why the decision to extend the service lives of our existing units was an absolutely justified step – both economically and technologically.

Modernization is a constant process. True, there was a time when we had no money for modernization, but, today, we are actively modernizing our NPPs. Our key goal is to enhance their safety and profitability.

There are two ways to enhance the capacity of our units. First, we should improve our knowledge of the process. For example, in Ancient Rome the safety factor of bridges was much higher than it is today. The same is for nuclear power plants – formerly, there was a lot of conservatism in designing an NPP, today, we have fewer restrictions and are freer in enhancing the capacity of our units.

Besides, today, we have better equipment, new turbine systems. You don’t have to change them completely — replacing a blade or optimizing a cooling water system might be enough for enhancing the capacity. 

We are doing this work on a systematic basis and we expect that in a few years the enhanced capacity of our nuclear power plants will give us additional 7.5–8bln KWh. This is very good.

— Experts say that you have a problem of personnel. Do you have such a problem?

— This problem has two aspects. First, the demographic situation in our country – experts say that the active population of Russia will be gradually decreasing and we will be running increasingly short of labor force.

Second, there was a time when we built nothing. As a result, we have lost many professional workers of middle age – people who have done something with their own hands and have experience. Today, we have either experienced veterans or inexperienced youths. 

But once you start a big cause, there are always people who support you. As for present we are still forced to recruit foreigners. In the nuclear industry the situation is a bit different – here we have lots of young specialists. They will gradually gain experience and in due time we will have highly-qualified workers.

For example, when we announced the construction of Novovoronezh NPP, lots of local universities began to revise their curricula and to train necessary specialists. Our youths are beginning to understand that intellectual work is a much better way to earn money. 

There is one more serious problem: it is still hard to predict the growth of wages in Russia and, sometimes, this growth is not very well grounded. In productivity we are still behind Europe, but in remuneration of some specialists we are already catching up with them – mostly because we are short of such specialists.

But I am sure that the situation will change. We have much to learn yet – particularly, how to use new technologies and organize construction more effectively and how to enhance our productivity. For example, formerly, we needed 10,000 people at the peak of a construction project. But now that we have modern technologies, we don’t need as many workers. For example, in Finland they need just 2,000–2,500 people for building a nuclear power unit. 

We also need special personnel: people who will design nuclear power plants and necessary equipment and people who will operate them. This is a very serious problem and the Rosatom managers are going to meet shortly to discuss it.

— Before joining Atomenergoprom you company is supposed to be corporized? When will this happen?

— Yes, we are already in process. In Nov we are planning to complete all necessary procedures.