Russia forms state nuclear giant to compete with overseas rivals
The Kremlin is seeking to restore Russia as a leading player in the global atomic power industry with a drive to create a state nuclear energy giant to compete directly with Areva, of France, and Westinghouse, which is owned by Toshiba.
President Putin is consolidating Russian civilian nuclear assets, including everything from uranium mining and enrichment to the design and construction of power stations, into a single company - Atomenergoprom.
With annual sales of about $8 billion (£3.9 billion), Atomenergoprom is designed to be a nuclear equivalent to Gazprom, the state-controlled Russian gas monopoly, and forms part of a strategy to bolster the country’s position in key international industries in which it has resources and expertise.
Atomenergoprom is set for rapid growth over the coming years, assisted by plans to build two nuclear power stations every year within Russia, starting in 2012 - a policy that will nearly double the share of nuclear energy capacity from 16 per cent to up to 30 per cent - as well as a renewed effort to land big nuclear contracts overseas.
Sergei Kiriyenko, the head of the Russian atomic energy agency, said: “Atomenergoprom was created to compete on the global market and boost nuclear power generation within the country.”
He said that the group’s key competitors would be “transnational giants”, including a partnership between Areva and Siemens, of Germany; Toshiba, the Japanese group that owns Westinghouse, the United States-based group formerly owned by BNFL, of Britain; and GE Hitachi, the nuclear subsidiary of General Electric and Hitachi, of Japan.
Mr Kiriyenko said: “It will be a company encompassing the full cycle, from mining uranium to the generation of electricity at atomic stations and decommissioning them.”
Kirill Komarov, the deputy director of Atomenergoprom, said that the group was seeking to forge a strategic partnership with an overseas company in an effort to crack into lucrative international markets for new-build nuclear facilities and related services. Mr Komarov said: “If Russia forms a strategic partnership, then that partnership will become the leader of the world atomic market.”
Alongside Australia and Canada, Russia has some of the world’s largest reserves of uranium. One deposit alone, at Elkon, in the Russian Far East, contains an estimated 7 per cent of global reserves.
Max Layton, a Macquarie Capital Securities analyst in London, noted that Russian uranium enrichment operations tended to be significantly more efficient than those of their rivals. He said: “Russia has an advantage in the fuel cycle. They use their uranium 15 to 20 per cent more efficiently because they filter it better.”
Mr Layton added that this technical edge could have big commercial value in securing nuclear deals with energy-hungry countries such as China, which signed a $12 billion contract with Areva last month to build two state-of-the-art nuclear reactors, each capable of generating 1,700 megawatts of electricity. The creation of Atomenergoprom also represents an effort to rebuild Russia’s reputation as a provider of civilian nuclear power, which suffered huge damage after the Chernobyl reactor disaster in 1986.
— Shares in Gazprom surged by 3 per cent after President Putin named Dmitri Medvedev, the chairman of the state-controlled Russian gas monopoly, as his likely successor, cementing the powerful ties between the Kremlin and the energy group. Mr Medvedev, who is First Deputy Prime Minister, will stand for the Russian presidency in an election to be held on March 2, but the support of Mr Putin is regarded as a virtual guarantee of victory