March 2008 Archives

Ukraine continues its efforts to diversify nuclear fuel supply. Westinghouse Electric Sweden AB signed a contract with Energoatom to supply 630 fuel assemblies (estimated to fuel three VVER-1000 reactors for five years) in 2011-2015. Energoatom expects that it will complete licensing of the Westinghouse fuel assemblies in 2010.

The agreement reportedly specifies that the natural uranium for the fuel will be supplied by Ukraine and enrichment services by the multinational center in Angarsk. Westinghouse will manufacture fuel assemblies.

Energoatom representative speaking about the Westinghouse contract said that it will provide Ukraine with important leverage in negotiations with Russia's TVEL, which has been the sole supplier of fuel so far (after winning a tender in 1996). TVEL has been raising price of fresh fuel as well as of the fuel take back recently. The Westinghouse fuel is estimated to be about 25% more expensive than the one supplied by TVEL (up to 40% according to TVEL estimates). However, according to Energoatom estimates, by 2011 there will be no difference in cost.

Russia earlier voiced its disapproval of the Energoatom's intent to diversify its fuel supply and threatened to void warranty on its fuel assemblies if they are irradiated alongside with those supplied by Westinghouse. Although Westinghouse has some experience with fuel assemblies for VVER-100 reactors, they have reportedly proven unreliable, with 51 out of 61 assemblies failing in 2007, according to one source.

Energoatom announced that it reduces the number of spent fuel shipments that it will send to Russia in 2008 from six to four. Earlier, it planned five shipments of VVER-1000 fuel and one of VVER-440 fuel. According to Energoatom, Russia has raised the cost of spent fuel storage and the announced move will allow the company to reduce its cost from $106 million to $60 million in 2008.

It was reported earlier that Russia raised the cost of spent fuel take back by about 18% in 2008.

Speaking about Russia's plans to build enrichment facilities abroad, a representative of Rosatom mentioned that Russia will add another 0.5 million SWU/year facility to the three (with total capacity 1.5 million SWU/year) it has already built in China.

In a wave of enthusiasm that followed the signing of a U.S.-Russian agreement that will make it easier for Russia to sell enrichment services in the United States, Rosatom expressed interest in building a centrifuge enrichment facility in the United States. The projected facility would provide about 3 million SWU/year.

Confronted with a substantial increase in the price of fresh fuel supplied by Russia, Ukraine is trying to create a reserve of fuel for its nuclear stations and to diversify the fuel supply. Energoatom, the Ukrainian operator of nuclear plants, got an approval from the government to seek a contract with Westinghouse to supply fuel for Ukrainian VVER reactors starting in 2010. (Earlier reports indicated that Ukraine would like Westinghouse to supply fuel for three of its four VVERs.)

Licensing of Westinghouse fuel elements was underway in 1996-2003 with U.S. assistance, but then was discontinued. The process was restarted in 2005, when Energoatom placed 6 fuel assemblies into 3rd reactor of the Yuzhno-Ukrainskaya power plant. Additional 42 assemblies are expected to be loaded in the reactor in 2009.

TVEL, which apparently did not welcome this development, warned Ukraine that it would void its warranty on fuel elements if they were irradiated alongside the U.S. ones. TVEL representative quoted the experience of the Temelin plant, which switched to the Westinghouse fuel only to switch back.

At the same time, Ukraine and TVEL have been discussing a possibility of setting up a joint fuel fabrication facility in Ukraine.

According to a report in The Washington Post, the U.S. administration pulled back from signing an agreement on nuclear cooperation (usually known as a 123 agreement) at the last moment last month (most likely, it was expected to be signed during Kiriyenko's February visit, when he signed an agreement on uranium). The agreement was initialed in July 2007.