Mr Kiriyenko briefed the President of the corporation’s performance in 2013 and its plans for the future.
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President of Russia Vladimir Putin: Mr Kiriyenko, let’s talk about the corporation’s performance in 2013 and its short-term plans, which we have discussed on numerous occasions in the past. Incidentally, I discussed possible cooperation with some of our foreign partners today; we will touch upon that in detail.
CEO of Rosatom State Atomic Energy Corporation Sergei Kiriyenko: Mr President, here are the results of the year. The main thing is that we have fully met the State Defence Procurement Order. I will provide a detailed report a bit later.
Apart from complying with the State Defence Order, in line with the goals we were set, we are expanding the scope of additional operations performed by the nuclear weapons complex facilities with the purpose of creating new jobs and increasing pay. In the past year, the volume of additional orders grew by 22%, which means that the additional revenue generated by facilities of the nuclear weapons complex made up 67 billion rubles [over $2 billion].
In terms of electricity generation, we have over-fulfilled the plan and resolved all the problems we had with RBMK reactors, i.e. we produced 700 million kilowatt-hours of electricity more than the planned – a total of 172 billion.
Vladimir Putin: How much has your productivity grown?
Sergei Kiriyenko: Productivity has grown by 25% in the two years since 2011 when this goal was set.
The key issue is, of course, the commissioning of new power plants. We are currently building 9 power units across the country. This is what we expect of the new year: a series of reactors are being commissioned at a truly Soviet pace at the Beloyarskaya NPP, these are next-generation fast neutron reactors. In March, we will reach minimal controlled capacity, and by the end of summer, we plan to start generating electricity.
We expect to commission two more plants this year. We are to commission a power plant in Rostov, and its launch will be ahead of schedule. Initially it was planned for 2015; however, progress is such that we will be able to launch it by the end of 2014. Besides, we will also commission the Novovoronezh NPP. That makes three power units in one year – just like in the Soviet times.
As for commissioning power plants abroad, in 2013 we put into service the power plant in Iran and launched the first power unit of the Kudankulam NPP in India: it is now in operation and we will commission the second power unit of Kudankulam in 2014. Besides, of ultimate importance is that we are doing our best to make sure we have one and a half to two units in our portfolio of orders for every single unit we commission.
In addition to the units that have been commissioned, we have started pouring the first concrete on the third and fourth power units of Tianwan NPP in China. The first concrete has been poured into the foundation of the Ostrovets NPP in Belarus.
Besides, we have signed contracts, completed all preliminary work and began surveying the site in Vietnam. We are working to prepare the infrastructure in Turkey. We are surveying in Jordan and doing preparatory work and laying the necessary infrastructure there. We won the international tender in Jordan, and we have already launched preparatory work on the site.
On the very last days of December, we signed an agreement on Finland – we earlier reported this to you in our plans. It is important that this is a truly commercial project. Finland is represented by a group of commercial companies that are fully funding the project.
It is important to note here that along with the contract to build the nuclear power plant we also signed a contract on fuel supplies and an operating agreement, which makes up a full set of documents covering the life cycle of the power plant.
As a result, the overall number of contracts is for 20 power units; after Fukushima we have doubled the volume of orders, despite the fact that the market has gone down. We are working on another 40 contracts. Our goal here is to bring at least every second project to contract stage. I will give you a proper report country by country.
As you may remember, Mr President, you passed a resolution last year to support our work on uranium. This led to the following result: in the past, we used to produce 3,200 tons of uranium a year. In 2013, we produced 8,400 tons, which is almost three times more natural uranium. The cost of production is different as well due to the deposits we managed to secure.
I would like to demonstrate, Mr President, that, very importantly, this increase has not been achieved at the cost of safety: all safety parameters are growing. We are often asked to compare the safety of Russian nuclear power plants and those of other countries. This diagram reflects data obtained not by us, but by the World Association of Nuclear Operators. The main parameter is the number of safety system alerts per year, that is per 7,000 hours of operation. In 2013, our column is traditionally low: our figures are two times lower than in Europe and about two and a half times better than in the United States. On an annual basis, we have the best rate (shows diagram): the European centre is in blue, the American – grey. We have reached our production rates while maintaining high safety standards.
Vladimir Putin: What about importers? We were negotiating with our friends in China, in India; we proposed work on new units and new sites.
Sergei Kiriyenko: Yes, Mr President. Here is what we have. We have built two units in China, as I reported. As you may remember, our Chinese partners said they would first observe them in operation and then decide on whether they would like to continue.
It is very important that they have made these decisions, because the Chinese are building nuclear units themselves, they can do it. These are power units of the previous generation, but they are building them. Competition there is very tight: they have Americans working there, and the French. However, even given this competition, they placed an order for two more units with us, and we are working on them.
We have drafted a contract for the next two units in India. The Indian Government is now conducting the final review of the public liability clause.
Vladimir Putin: We discussed this with the prime minister.
Sergei Kiriyenko: We handed them our draft in line with your agreement. We expect a response shortly. It is noteworthy that following your conversation with the prime minister, our partners confirmed compliance with the road map that was signed during your visit.
Next is Vietnam. We have signed a contract for 4 power units. Besides, the Government of Vietnam plans to increase the number of sites.
As for the project in Turkey, we are already ordering the main equipment. We completed the design stage in late December and are now submitting the documents for compliance monitoring.
Vladimir Putin: When are you planning to begin work in Finland?
Sergei Kiriyenko: We have to submit the first feasibility study in Finland this year. They are in no hurry, therefore they take two years for all the necessary approvals and licensing pursuant to the EU rules. In two years’ time, we will start the actual work on site.
Vladimir Putin: You will be in competition with Gazprom.
Sergei Kiriyenko: In a way, yes, Mr President. On the other hand, this is very important for Russia’s economy. We get a contract. The plant itself is rather costly. Besides, all the equipment will be made at Russian facilities. Thus, though this is a contract outside the country, it will all come back to us. In addition, there is the fuel supply contract. This is a new generation power plant with a guaranteed life span of 60 years; in reality we believe it will actually operate for at least 80 years. This means we will be able to supply fuel and perform maintenance and repair work for 80 years.
Vladimir Putin: And recycling.
Sergei Kiriyenko: Yes, and recycling. In other words, we can triple the cost of the plant. This is a huge export capacity. Besides, pursuant to your approval of the possibility to have an equity share in Finland, we expect significant revenue, because we will receive both pro rata dividends and the right to buy electricity at cost, and the plant will be producing cheaper electricity that even the current market rate in Finland. That can be another source of revenue.
Vladimir Putin: OK. Thank you.