As renewable energy sources tend to regularly dominate the headlines in Western mainstream media, nuclear power remains all too often neglected in international relations. Especially since lobbyists and policymakers seems obsessed with the idea to replace all traditional sources of energy with renewables, in other parts of the world nuclear energy is actively encouraged to take over the gap left by the reduction of fossil fuels. Whereas the US (and parts of the EU) at the moment concentrate their efforts on renewable energy sources, China and Russia invest heavily in nuclear power. And by that, the latter two follow a broader global trend towards producing more power from nuclear reactors. The International Energy Agency published its projections in 2020 stating that the nuclear power generation shall increase by 60% until 2040 with a capacity growth of 43% in the same period (IEA, 2020).
This article will take a closer look at Russia’s nuclear power schemes. Moscow’s military capabilities and its use of fossil fuels for foreign policy goals have been discussed in length. In the last years, Moscow has stepped up its game in promoting its own nuclear energy knowhow. Russia is developing even floating nuclear power stations and fast reactors (Adams, 2016). This push into new areas of how to utilize nuclear energy shows Russia’s pioneering role as a world-leading power in the field. Nuclear innovation does not come from the West anymore which is an unsettling prospect.
Rosatom – Russia’s promoter of nuclear power
Russia’s nuclear energy sector is organized under a single player, Rosatom (Nakano, 2020). With over 360 subsidiaries, Rosatom serves as the direct arm of the state for both civilian and military nuclear energy work. Rosatom subsidiaries include Rosenergoatom (which operates the country’s nuclear power plants), Atomflot (which maintains Russia’s nuclear-powered icebreakers), and various component manufacturers as well as research and development institutions. In Russia itself, it operates 38 reactors covering 18% of the country’s energy needs (Nakano, 2020). The company is vertically and horizontally integrated, and hence, offers the whole plate from reactor technology, plant construction and operational capability as well as training, over used nuclear fuel reprocessing and regulatory support to financing debt and equity (ibid.). Their broad offer also attracts established countries in the nuclear sector and, for example, Rosatom counts under its customers for uranium enrichment the US, the UK, France and Japan (ibid.).
In fact, Rosatom is entirely under the control of the Russian state, with its strategic objectives being set by the president of Russia (Schepers, 2019). Therefore, nuclear power is an important element of Moscow’s Russian foreign policy and geopolitical strategy (GNI, 2017). Export undertakings directly receive government support in the form of Rosatom’s ability to place its personnel at key Russian embassies to facilitate signing agreements with the host governments. Rosatom aims at gaining long-term strategic and commercial relations with partnering countries as financing of such projects are time consuming, complex and expensive. Also, as any short-term dividends are usually small and long-term gains hard to quantify, this strategy entails many risks (Hersh, 2015).
Nevertheless, according to its own figures, Rosatom has over $133 billion in overseas orders on its 10-year agenda: about 70 percent from building nuclear power plants, 10 percent from uranium product sales, and 20 percent from nuclear fuel assemblies and other activities (Rosatom, 2018). Russia has placed 23 of 31 export orders with settled site selection around the world between 2009 and 2018; and around half of the 53 nuclear reactors currently under construction are built with Russian support, including Belarus, Finland, Slovakia, Turkey and Ukraine (Thomas, 2018). These numbers emphasize the plan to construct 42 nuclear reactors in 12 countries around the globe in the upcoming years (RIA Novosti, 2017).
Nuclear power as a foreign policy instrument…
For Russia’s national security apparatus civilian nuclear exports figure as an “important tool for projecting influence overseas” (Weiss & Rumer, 2019). The popular model to realize these projects is dubbed build-own-operate (BOO): Rosatom builds the nuclear plant, but also owns and operates it bearing all financial, technical and regulatory responsibilities as well as country risks (Nakano, 2020). Such an all-inclusive offer is very appetizing for newcomers in the market, in particular such which do not receive Western encouragement or investment.
Also, offering spent fuel reprocessing – a complex and expensive operation – and storing waste if the fuel has been of Russian origin, is, on the one side, bait for countries not capable of acquiring spent fuel management systems, on the other side, it helps stemming a recipient country’s ability to start a nuclear weapons program (Nakano, 2020).
Already in 2003, Russia recognized that “[its] significant energy resources and power fuel-energy complex were instruments for conducting domestic and foreign policy” and that “the role of the country on global energy markets to a great degree determined its geopolitical influence.” (Minin & Vlček, 2017). Then, rising energy prices turned energy exports (of almost any kind) into profitable endeavors that would strengthen Russia’s influence in the near abroad and farther afield (Weiss & Rumer, 2019). In 2018, Russia has reached an agreement to build a nuclear reactor in Uzbekistan and talks had started to plan one in Azerbaijan (UZ Daily, 2018).
Even today, as energy prices have fallen, those energy deals make the EU’s own consensus building over energy issues and projects tricky. Most prominently perhaps, the Orban government in Hungary had bypassed an open tender process to expand the nuclear plant in Paks and assigned the project to Rosatom having received an 80% loan for the €12 billion price tag (Nakano, 2020). The value of Russia’s nuclear power strategy becomes also clear when considering Rosatom’s project at the Akkuyu plant in Turkey. This project has introduced further complications into US-Turkish relations. Even though a bilateral nuclear cooperation agreement has existed between Turkey and the US since 1955, political instability and economic crises thwarted a Turkish nuclear power program. In 2008 finally, Ankara opened a tender, for which Rosatom was the only bidder, because American enterprises did not consider it a commercial opportunity (Varnum, 2016). Leaving issues of a foreign power-owned nuclear plant in a NATO member country in case of an attack aside, the Akkuyu deal may have speculatively opened the door to other trade agreements with foreign policy ramifications, like the purchase of the S-400 anti-missile system (Nakano, 2020).
Signing agreements with host countries establishes firm ties and, importantly, keep out competiton (Nakano, 2020). Through technological exchanges and long-term relationships due to the construction and operation of nuclear power plants, diplomatic relations between states are built (GNI, 2017). Rosatom provides technical training as well which contributes to create networks and familiarize technical experts and policymakers with Russian technologies increasing the likelihood that host countries will opt for Russian-led projects (Nakano, 2020).
…bringing economic advantages
Besides the foreign policy factor, Russia has also economic and commercial goals in mind with its nuclear power strategy. The nuclear industry views the export of nuclear power as a way to balance the domestic slowdown of construction after the financial crisis of 2008-09 when earlier plans were drastically reduced (WNA, 2021). Rosatom has used exports and expansion outside the borders of Russia to maintain intellectual and technical skills inside Russia and to finance other important programs (Weiss & Rumer, 2019).
The nuclear power sector contributes lavishly to the Russian state budget adding $2.83 billion paid in taxes with projections to increase its revenues from business abroad from $6.6 billion (in 2018) to $15 billion by 2024 (World Nuclear News, 2019). Furthermore, the nuclear sector also assists the modernization and enlargement of Russia’s nuclear-powered icebreaker fleet, the only in existence worldwide. As the Arctic may become a feasible transportation route, Moscow is set on exploiting their unique position to develop commercial trade along the Northern Sea Route (a third shorter than the traditional route through the Mediterranean Sea and the Indian Ocean), since Russia is also developing its export capacities of liquefied natural gas from its Northern exploration fields (Nakano, 2020).
A last point of interest is that the nuclear power sector diversifies Russia’s export profile, otherwise based upon fossil fuels which made up 59% of exported goods in 2018 (Central Bank, 2019). Hence, in order to forego losses from price fluctuations in the fossil sector, nuclear power exports may counteract Moscow’s overreliance on tax income from fossil fuel exports.
Concluding considerations
It remains unclear if nuclear power deals can lend geopolitical leverage to Russia in a comparable way as pipelines do (Nakano, 2020). There is reason to believe that the relative shortage of nuclear fuel producers and exporters means that Russia’s nuclear power strategy is more potent than gas exports. While risks related to gas supply can be mitigated by excess storage and supply diversification, countries which have signed long-term contracts with one supplier find themselves in a bind as they cannot simply look for replacements.
However, some cases show that host countries are not helplessly at the mercy of Russia; nuclear fuel can be sourced from other countries. To illustrate this point, consider the case of Ukraine, where the American Westinghouse has provided nuclear fuel compatible with Russian reactors since 2005 to reduce Kiev’s dependence on Moscow (Burmistrova, 2014). Hence, by staying at least on a par level with Russian nuclear(-related) technologies leaves the West with space to outmaneuver Moscow’s schemes.
Better still, if Western powers would invest more into nuclear research, not only to be able to offer a valuable alternative to Russia, but also to contribute to the de-carbonization of Western economies. This would have the positive side effect of giving the West another aim for sanctions. The danger that safety, security and non-proliferation standards may erode if the US and the EU leave Russia (and China) the world leader’s position, should be a cause of concern (GNI, 2017). Nuclear power is here to stay so it would be beneficial then to uphold the highest standards to preclude catastrophes leading to loss of life and environmental destruction.
Of course, if Russia’s nuclear power strategy will pay off in the long run will depend on many variables and may well steer Moscow into deeper economic troubles; however, betting on this cannot be the West’s preferred strategy.
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By Andreas Rösl : The European Institute for International Law and International Relations.
