Repairs of Nuclear Power Units to be Put Off

Addressing the ceremonial meeting in honor of the eighth anniversary of Ukrainian independence the Monday before last, President Leonid Kuchma noted, «It is to the economic sphere that the possible threats to national security have shifted» and stressed the importance of power- supply security, reminding the audience that Ukraine imports more than 55% of the total energy resources it consumed, with it coming through a single channel, which makes this country dependent on one exporting country.

Meanwhile, the Ukrainian energy industry is being decisively topped by nuclear power plants, which produced 46.7% of this country's energy in January-July. But, as Ukrayinski Novyny reports, the Russian TVEL-Energia Company claims that the national nuclear-power company Enerhoatom paid as little as $16 million out of the planned $300 million, as of mid-August, for the Russia-supplied nuclear fuel. «We may be left without four nuclear power units this winter due to foiled purchases of Russian nuclear fuel,» chairman of the Enerhoatom trade-union Oleksiy Lych told Ukrayinski Novyny.

To check up on this information, The Day's correspondent conducted an exclusive interview with president of the Enerhoatom national power- supply company Mykola DUDCHENKO .

«Mr. Dudchenko, what is the state of affairs in the nuclear power sphere, which now meets almost 45% of Ukraine's energy requirements? Are the nuclear power plants sending out warnings about power supply in this country?»

«Now six units are furnished with fuel, one more fuel loading has been paid for, with another two being paid for. We can say nine units are prepared. Two units are scheduled to be closed for repairs in mid-winter. Most of the units will be ready for work by the time in the fall and winter when the power load reaches its peak. To be more precise, ten units will be prepared in October.»

«A part of nuclear units have constantly been under routine maintenance lately. Thermal power engineers are said to have taken up some of your tasks...»

«The situation in thermal generation is far worse than in the nuclear one. In the latter, the production cost of commercial electrical energy is higher, and the condition of fixed assets, as they put it, leaves much to be desired. The thermal stations were mainly built in the 1950s and sixties. In fact, all units have already passed their anticipated service life, and they work now exactly as long as they are repaired, which tells on operating expenses. Accordingly, the shortage of funds does not allow making payments for the fuel, even though it is mostly of Ukrainian origin (coal, domestically extracted natural gas) and is rather cheap today. Still, the situation in this industry is hard; no fuel has been stocked for winter.»

«When will the energy units of the Rivne and Khmelnytsky power stations be able to get into operation if they continue to be built without Western aid?»

«It is realistic within two years, i.e., by 2002.»

«And if aid comes in?»

«Much earlier: by 2001.»

«How are the aid negotiations going on?»

«Conditions for the return of loans are now being negotiated and coordinated. This is a very crucial and complicated issue. The EBRD imposes a great many challenging conditions on us. We are simply unable to meet some of them. But fundamental decisions have been made, and the negotiations continue. However, it will take at least another year for the document to be finalized.»

«Is Ukraine in debt for the nuclear fuel supplied in 1998?»

«We do not in fact have such debts. The amount of $500,000 is negligible, as far as the scale of our company is concerned. As to the dwindled purchases of nuclear fuel last year, the blame should be put on the Russian financial market collapse. No contractual obligations have been met since the fall of 1998. There was no stable ruble exchange rate, so we were not in a position to buy anything.

«Nuclear fuel deliveries resumed only in May. So it would be incorrect to blame us for anything: we eschewed Russian supplies not because of a whim but because there was no system of settlements.»

«Why has the fuel been bought and paid for this year only to cater to the Rivne nuclear power station?»

«It is a bit different. We have paid money for the fuel delivered to one unit at the Rivne station, two in Zaporizhzhia, partially to one unit in Khmelnytsky, and one at the South Ukrainian Station. As I said, six units are now furnished with fuel.»

«What links Ukraine to Russia as the only supplier of fuel-bearing elements? Are there other options? Is it possible to set up a nuclear cycle of our own?»

«There are three factors that have linked us to Russia. Firstly, traditional ties: reactors were designed to use Russian fuel (Western fuel needs adaptation to our conditions and carrying out certain procedures, such as certification and verification. Western firms have been doing this for several years and still not completed the job). Secondly, dispatching the used fuel to Russia. This is a very complex process. And the Russian side, naturally, only accepts the wastes left after processing the fuel it supplied. And this is not the least factor: Russian fuel is cheaper. I am leaving aside the questions of quality and many other things, but we have to take what is cheaper.

«As to the prospects for a cycle of our own, only complementary production in this field seems realistic. Today, we already supply Russia with uranium and zirconium concentrates and we are able to manufacture tubes for fuel-bearing elements. There also are other ways of cooperation.»

«Does politics intervene in all this relationship?»

«Surely. The frequent change of political vectors and legislation gravely affect the relationship between the two countries' nuclear experts. Any kind of tension immediately reflects on our field.»

«Until recently, the Enerhoatom national nuclear-power company was a virtual monopolist on the unregulated market of electric energy sales. Now another four power-generating companies have been allowed to work on this market. What kind of consequences can this have? In what way will this change electrical energy market prices?»

«We were no monopolists, although we did have a considerable share of sales. But why were we let into this market? Just because someone had to ensure the purchase of an annual $300-million-worth nuclear fuel. Where could the money be taken from if total monetary earnings on the wholesale energy market exceed the amount I mentioned? If everything is to be given us, nothing will be left to pay wages with, as well as to cover coal and gas costs... This is why we sell a cheaper energy on the unregulated market. But even on this market, no one but we has ever earned money over the past seven years.»

«Is it not a monopoly?.. So what will happen to the market when another four companies enter it? Will the supply increase and the price fall?»

«The whole point is what price the newcomers will offer on this market. They can, of course, declare prices close to ours, which might become a normal and fair competition. But these power-generating companies have a number of serious problems, which makes me question their ability to compete with us as equals. They will have to drop the price so much that they will be losing money. For the production cost of their energy is higher than our selling price. To compete, they must cut their fuel (oil products, gas, and coal) expenses approximately twofold, for fuel accounts for 80% of their price.»

«An unpleasant question. As is known, Enerhoatom operates nuclear power stations without due permission of the nuclear regulation administration. Your predecessor was scathingly criticized for this. How is this problem being handled?»

«We do not have a license not because the national nuclear-power company, unlike the stations, cannot get one. The stations have always had such temporary permissions. But the policy of a regulative body is that, to ensure nuclear safety, a license should be granted without any rule-breaking or point-stretching. First of all, as a relatively new organization, we must put our structure and our documents in order and bring our skills up to par. I do not understand why the question is unpleasant. We violate nothing, we have coordinated everything with a regulative body. By the way, the nuclear regulation administration is authorized to grant us a license only after Verkhovna Rada passes the law on permissible activities, now under consideration.»

«How do you assess nuclear safety at Ukrainian power stations?»

«As satisfactory.»

«Is it higher than it was in 1986 or approximately at the same level?»

«About the same. On the one hand, the equipment is being aged (the youngest nuclear power station has worked for ten years). Concurrently, the equipment is being replaced, retooled and modernized. There is not enough money, of course, but nobody economizes on safety. As to Chornobyl, you know that the operating units have already been modernized to a large extent. The other stations' indices are a cut above that of Chornobyl. Radical enhancement of safety requires the investment of very large funds, while we only have enough money to maintain the level laid down by the design. If a world safety rating list were to be drawn, our reactors would be somewhere in the middle. We proceed from the balance of risk and profit. But who will allow expenditures if the profits they give exceed probable risk-related losses?»