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The economics of the Russian nuclear power industry

Nuclear Monitor Issue: 

The economy of the Russian nuclear energy industry is the least known and most opaque of all the many facets that make up the vast dominion that is the Russian State Atomic Energy Corporation Rosatom. There is, today, plenty to learn about the environmental, technological, safety, and other aspects of Rosatom’s operations – but economic information, if it is revealed at all, is only made available in relative figures and general data whose accuracy it is impossible to verify. A new report, researched by Leonid Andreev and published by Bellona, offers some estimates of the levels of expenses the Russian nuclear industry bears in its operations.

Still, many experts have made attempts lately to understand and estimate just how much exactly generating electricity from nuclear sources comes to, what it costs the Russian state budget – i.e. the Russian taxpayers – to build new nuclear power plants, including those built by Russia abroad, how big the spending is on managing spent nuclear fuel and radioactive waste, and, ultimately, if it is even worth it to invest billions of dollars into developing an industry that is hardly a cure -all for existing energy woes but instead carries with it an enormous potential threat of killing everything alive on the planet.

The economics of Rosatom’s varied activities has become a topic of interest not just to the public – the ordinary taxpaying citizens, that is – but the Russian financial oversight agencies as well. For instance, one of the reasons that the newly minted draft law “On Management of Radioactive Waste” has not yet been passed, even as it remained on the legislators’ tables all throughout 2010, is the ambiguities in the economic concept of the waste management system the new law was supposed to establish. The Ministry of Finance of the Russian Federation is yet to work out a  definitive position with regard to what sort of expenses the state budget will bear in order to dispose of the radioactive legacy Russia has inherited from the Soviet Union and if the system suggested by the bill – the idea that the management of radioactive waste will be the responsibility of those who produce it – will prove economically effective.

Whichever provisions have been approved in those regulatory and legislative documents that have been adopted since the State Corporation Rosatom was established – starting with the Law “On the State Atomic Energy Corporation Rosatom” – and that have to do with the nuclear authority’s economic activities have, as a rule, been such as to cater to the interests of Rosatom itself, rather than the public or even the Russian state. For instance, a passage in the Law “On the State Corporation Rosatom” stipulates that the Accounts Chamber of the Russian Federation – the federal body with a mandate to exercise oversight over fulfillment of the federal budget – can only perform external control over the corporation’s activities. As for the audits of Rosatom’s internal financial and economic operations, the efficiency of spending government-allocated financial resources or those held in special reserve funds, and other aspects – those are carried out by Rosatom’s own Audit Committee. The public has a stake in knowing how much money has been accumulated on the accounts of special reserve funds that are maintained in order to finance decommissioning of old nuclear power plants and management of radioactive waste, but that, alas, is restricted information.

Rosatom and its daughter enterprises keep to a bare minimum what financial  information they disclose in reports made available for public access or during events such as public discussions or so called forum dialogues. If questions are asked during such events – for instance, how much does reprocessing of one ton of spent nuclear fuel cost? – the answer, as a rule, is: This is commercial secret.

By adopting its financial reporting policy, Rosatom took upon itself the obligation to disclose, in annual reports made available for the public, the results and efficiency of spending funds disbursed from the state budget and other sources. But though they are posted on Rosatom’s website, these reports say almost nothing on the industry’s economy save for some general references or percentage figures which impart information of little practical use.

All of the above would indicate that everything is not as hunky-dory as the upper management’s cheerful reports would have it – something that is furthermore confirmed by many expert studies both in Russia and abroad.

The present report offers some estimates of the levels of expenses the Russian nuclear industry bears in its operations and some arguments that explain why nuclear energy is a loss-making industry today. But the main purpose of this report is to initiate a broader discussion of nuclear energy economics in expert circles and the public domain alike in order to work out a better understanding of whether developing nuclear energy and committing enormous financial resources to this end is ultimately in the public’s interest.

The full report called 'The Economics of the Russian Nuclear Power Industry' (August 2011) is available at: