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Prepared by Martin Kelly
Edited by Tamara Robinson
August 1997
Introduction
Nuclear energy currently accounts for 44-45% of Ukraine's total
power production.[1, 2] In 1995 and 1996, Chornobyl Units 1 and 3 comprised
5-6% of annual, national electricity production.[3] Although Unit
1 shut down on 30 November 1996, these statistics imply that the nuclear
industry in Ukraine, specifically the Chornobyl Nuclear Power Plant (ChNPP),
plays a crucial role in Ukraine's energy production. However, current fuel
and energy issues at ChNPP, in particular Ukraine's reliance on Russia
for nuclear fuel, Ukrainian consumer debt to ChNPP, the Chornobyl shutdown
debate, and President Kuchma's decision to take Chornobyl-1 off line, reveal
the complexity of problems surrounding the Chornobyl facility and the shortcomings
of Ukraine's energy sector.
1991: Ukraine's Energy Woes Begin
Current fuel and energy difficulties at Chornobyl, and in Ukraine in general,
derive from Soviet-era economic planning. Before the collapse of the USSR
in 1991, Ukraine imported from Russia 10% of the coal, 50%
of the gas, 92% of the oil, and 100% of the nuclear fuel
that it consumed.[4] Ukraine's nuclear sector still depends completely
on Russia for nuclear fuel and essential equipment, since its Soviet-type
RBMK and VVER reactors only operate on Russian-made fuel assemblies. Ukraine
has no indigenous nuclear fuel cycle capabilities.[5] When the USSR collapsed
in 1991, it became clear that the history of dependence on Moscow for energy
commodities had created severe problems for Ukraine's energy sector, suddenly
faced with restructuring, privatization, consumer debt, market liberalization,
and innumerable power outages.
Also in 1991, Ukraine's nuclear power industry suffered from a serious
turbo-generator fire at Chornobyl-2, which disabled the unit and prevented
its further operation. Together with the infamous disaster at Chornobyl-4
in 1986, the incident sparked high-level international debate about the
safety of RBMK reactors and led the Verkhovna Rada to issue a moratorium
on the construction of new nuclear power plants in Ukraine. The Verkhovna
Rada (Ukraine's parliament) even passed legislation calling for the closure
of ChNPP by the end of 1993.[6] In 1993, the Rada repealed the moratorium
and decided to keep Chornobyl open in order to confront projected power
shortages in the winter of that year.[7, 8, 9] Nevertheless, the fire at
Chornobyl-2 focused international attention on Ukraine's nuclear power
sector, particularly the Chornobyl NPP.
Fuel Shortages and Consumer Debt at Chornobyl
Ukraine's nuclear fuel shortages began making headlines in 1994 and exacerbated
the energy sector's difficulties. Since then, a drama has played out between
Kiev and Moscow, with Ukraine periodically announcing it needs fuel and
Russia reluctantly providing it, since Ukraine has no other place to turn
to for its nuclear fuel needs. Accordingly, two key themes of this drama
have revolved around debt, including consumer debt to Ukraine's power sector
and, in turn, the Ukrainian power sector's growing indebtedness to Russian
fuel manufacturers. ChNPP is especially indebted to the Russian nuclear
fuel delivery company TVEL.
On 14 January 1994, the United States, Ukraine, and Russia signed the Trilateral
Statement, part of which included a deal to exchange nuclear fuel for the
return of nuclear warheads from Kiev to Moscow. The Trilateral Statement
stipulated that Russia would deliver 430 fuel assemblies to Ukraine in
1994. But, by October 1994, Ukraine had reportedly depleted its stock of
nuclear fuel at Chornobyl and only received 180 fuel assemblies from Russia.
In addition, the plant lacked funds to compensate Russian producers for
shipments of nuclear fuel, an ongoing problem.[10]
In the first half of 1995, Chornobyl-1 and Chornobyl-3 operated well, fulfilling
104% of the planned quota and reducing unscheduled repairs and errors
at the plant by 31%, according to then Chairman of Derzhkomatom
Mikhailo Umanets.[11, 12] Fuel problems stabilized somewhat until early
1996, largely because the two operable units spent a number of months off
line in the latter half of the year. For nearly four months, from 15 April
to 6 August 1995, Unit 3 was off line for repairs.[13] In August 1995,
Unit 1 was reduced to 70-80% of its capacity for safety reasons.[14]
Then, beginning in September 1995, Unit 1 was off line for maintenance,
including the replacement of 39 out of 1692 fuel channels[15, 16]. After
an unscheduled two-week delay, the reactor returned to operation on 6 November
1995.[17, 18] Given such stoppages and reduced operating capacity, fuel
shortages at Chornobyl during this period did not worsen terribly. Yet,
during first half of 1995, ChNPP received only 57% of consumer payments.[11,
12]
In January 1996, consumer debt increased further, and Ukraine received
payment for only 13% of its energy production. Derzhkomatom could
not afford to buy the reported $100 million of fuel needed to keep various
reactors on line and was threatened with taking Chornobyl-3 off line.[19]
Ukrainian operators fortunately received 160 fuel assemblies from Russia
on 3 April 1996 -- shortly before the Nuclear Safety Summit held two weeks
later in Moscow -- thereby averting Unit 3 closure for a few more months.[20]
Operators also concluded on 23 May 1996 an amendment to the 1994 Trilateral
Statement, in which Russia agreed to continue fuel rod deliveries, especially
to the ChNPP.[21] Adding to Ukraine's energy woes, however, Chornobyl-1
was shut down in June 1996 as much for a lack of fuel as for scheduled
maintenance, according to Derzhkomatom experts.[22] Russia once again delivered
a badly needed shipment of fuel on 24 June 1996.[23]
In March 1997, faced with another fuel shortage, Chornobyl operators were
forced to reduce Unit 3, the only operating reactor at Chornobyl, to half
capacity. Chornobyl-1 closed on 30 November 1996, in accordance with a
pledge by President Kuchma. (See the section below entitled "Chornobyl-1
Goes Off Line.") Without new fuel, Chornobyl operators were once again
threatened with the prospect of Unit 3 shutdown in two to three months.
ChNPP owed Russia's joint stock company TVEL $3.5 million for previous
shipments of nuclear fuel, while the consumer debt to the Chornobyl operators
had risen to approximately $108 million.[24, 25] Plant operators were considering
the use of 600 partially spent fuel assemblies still in the damaged Unit
2 reactor [26], when Russia's TVEL agreed once again to make a delivery
of new fuel, enough to last for 2-3 additional months, through summer 1997.[27,
28]
Ukrainian Minister of Power Engineering and Electrification Yuriy Bochkaryov
stated before the Verkhovna Rada in February 1997 that Ukraine's power
sector had "exhausted its capacity in supplying electricity to consumers
on credit and is facing bankruptcy." Bochkaryov added that the power sector
had lost its working capital, since in reality, consumers pay for only
two out of three kWh.[29] Further, in April 1997, Derzhkomatom Deputy Chairman
Vasyl Katko said that Ukraine could afford only 30% of annual repairs
to its NPPs in summer 1997 because of consumer debt.[30] While nuclear
fuel shortages and consumer debt to the Ukrainian power sector reveal the
depth of problems related to Ukraine's energy sector, consumer debt also
worsens the inability to purchase fuel and, ultimately, creates safety
problems.
Replacement Energy and the Chornobyl Shutdown Debate
Beginning in July 1994, the Group of Seven (G-7) spearheaded a movement
aimed at shutting down ChNPP. Thus, in the period from mid-1994 through
1995, Ukrainian and Western experts proposed a myriad of options for replacing
Ukraine's anticipated energy loss in light of efforts to close Chornobyl.
The first energy replacement options considered included building a gas-fired
power plant [31, 32], modernizing coal and oil plants, [33] or constructing
two new nuclear reactors in the town of Slavutych, located very near Chornobyl.
Ultimately, in December 1995, Ukraine and the G-7 signed a Memorandum of
Understanding (MoU) which provided for closing ChNPP in exchange for Western
funding for the completion of Khmelnytskyy-2 and Rivne-4. (For more information
see Background Report: Chornobyl
Shutdown, Western Aid.) The MoU shortens the lifetime of reactors at
ChNPP, originally projected through 2011, permitting operation until the
year 2000. As it turned out, Chornobyl-1 and Chornobyl-3 produced 6%
of Ukraine's total electric energy in 1995 while generating at half capacity,
according to the Verkhovna Rada press service;[34] another source reported
the units working at 69% generating capacity.[35] Yet, even while
generating below full capacity, the reactors at ChNPP contributed a significant
amount of energy to Ukraine's output. The debate surrounding shutdown demonstrates
Ukraine's reliance on ChNPP as an important part of its energy production;
hence, Chornobyl shutdown is inextricably linked to the energy problems
in Ukraine.
Chornobyl-1 Goes Off Line
Faced with pressure from the West to close the plant as well as nuclear
fuel shortages at Chornobyl, Ukrainian President Leonid Kuchma pledged
at the April 1996 Nuclear Safety Summit in Moscow to take Chornobyl-1 off
line by November 1996.[36] Kuchma presented the move as a good will measure,
indicating to a Western audience his country's serious commitment to closing
ChNPP only if Western funds were forthcoming. However, given that the unit
was scheduled to shut down soon anyway, the timing of Kuchma's statement
led many observers to wonder whether his promise was purely political.[37]
The safe life of Unit 1 ended in 1997, at which time the fuel channels
needed replacing. Since no funds for modernization were available, Kuchma
closed the unit [37, 38], and Ukraine lost a reported 4.8 billion kW/h
per year as well as 1600 jobs in the Slavutych region.[38]
Kiev has reserved the option of restarting Unit 1 and has considered refurbishing
Unit 2 for continued service. Restart of Unit 1 is prohibitively expensive,
estimated at $225-$450 million, nearly the cost for completing Rivne-4
or Khmelnytskyy-2 at the highest estimation.[38] Bringing Unit 2 on line
presents a more likely alternative for power generation with estimates
for restart ranging from $85 to $280 million.[38, 39, 40] Unit 2 refurbishment
funds would likely be allocated for safety backfits, replacement of isolation
valves on the inlets to the fuel channels below the reactor, and borrowing
turbines and fuel from Unit 1.[41] The latest reports, however, have expressed
some pessimism about Unit 2 restart, placing the earliest possible on-line
date in the second quarter of 1998.[39] Taking Unit 1 off line, but reserving
the right to restart Unit 2, suggests that Ukraine cannot function without
the power from Chornobyl or from a comparable replacement source. This
fact complicates the shutdown debate and seems to worsen the dilemmas in
the energy sector.
Conclusion
To date, Ukraine has no clearly articulated plan for fueling Chornobyl-3
until 2000, the year when the reactor will go off line in accordance with
the December 1995 MoU. In light of current financial difficulties in fueling
the unit, the need for Ukraine to work out a deal with the G-7 to finance
the completion of Khmelnytskyy-2 and Rivne-4 seems more pressing. Yet if
the current level of consumer debt in the electricity sector continues,
the value of obtaining new reactors is seriously questionable. Without
a comprehensive re-evaluation of its electricity market and energy sector,
unresolved issues at Chornobyl will continue to plague Ukraine's energy
sector.
This material is produced independently for NTI
by the Center for Nonproliferation Studies at the
Monterey Institute of International Studies and
does not necessarily reflect the opinions of and has
not been independently verified by NTI or its directors, officers,
employees, agents. Copyright © 2002 by MIIS.
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