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Beginning of Working Meeting with Director of the Federal Atomic Energy Agency Sergei Kiriyenko

January 20, 2006

Moscow

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PRESIDENT VLADIMIR PUTIN: There are two questions: the results of the sectors work over the last year and the prospects for development.

And, of course, I would also like to know how the nuclear energy sector is coping with the current cold spell. The sector has never let us down, and I hope that this time too it is proving up to the task. 

SERGEI KIRIYENKO: Most important of all is that the sector has met in full its state defence procurement commitments within the set deadlines. This part of the sectors work has been fully completed.

Regarding industrial output figures for the year, output was at 105-105.3 percent compared to the figure for 2004. The sector met its energy export targets in full, exporting energy for a total of $3.16 billion.

Russias nuclear power plants produced a total of 149.4 billion kilowatt-hours of electricity in 2005, up 4.7 billion on the figure for 2004.

As for the peak energy demand we are currently experiencing, the nuclear power plants are working effectively and are running at full capacity.  

Regarding the question you raised concerning prospects for the sectors development, our task today is to increase the share of nuclear energy in our energy production. Today nuclear energy accounts for 16 percent of total electricity production in the country. Almost all the developed countries that have a nuclear energy industry are making the decision now to raise the share of nuclear energy in their energy supply. France, where nuclear energy accounts for 75 percent of electricity production, has made this decision, and the U.S. is planning to raise the share of nuclear energy from 20 to 25 percent. A share of 25 percent is a realistic figure for nuclear energy today, from the point of view of security, energy security, development strategy, and taking into account the cost of hydrocarbons today.

For this reason, we have drawn up a development programme for the nuclear energy industry based on the fact that we must at the very least fulfil the objective set out by the national energy strategy of raising the share of nuclear energy to 23 percent of total electricity production.

Our programme covers the period through to 2030. We have set the goal of having nuclear power plants produce a quarter of the countrys electricity by 2030.

The key task in this respect is to restore the full technological cycle. The Soviet Unions nuclear industry was divided throughout the different republics and after the collapse of the Soviet Union parts of the technological cycle ended up in the CIS countries.

This is what you were just discussing at your recent meeting in Kazakhstan. The most interesting uranium mining enterprises were left in Kazakhstan. On your instructions, I am going to Ukraine tomorrow where, following your talks with the President of Ukraine, we will discuss the question of some of the machine-building enterprises located in that country. Our objective is to restore the technological chain that the Soviet nuclear industry had developed. The system operated as a unified chain and was probably the most effective in the world. We can, of course, create this chain anew. Each of the countries that were once part of the unified chain could now build the elements they are missing, but this is not an effective solution. It would make more sense to try to rebuild the technological chain we used to have. This is one of the most competitive technological sectors in the world.

As things stand today, the entire Rosatom system accounts for from 25 to 47-50 percent of enriched uranium supplies and construction on world nuclear energy markets. We are currently building five nuclear power plants abroad and three in Russia. Today we have examined the forecasts, taking into account the Kyoto Protocol and the world hydrocarbon prices. Everyone agrees that if economic growth continues at this pace, these resources will not last for long. All countries accept this view. Today more and more countries are making the decision to increase construction of nuclear power plants.

Many of these countries, particularly in the Asia-Pacific region and in Europe, are traditional markets for Russia, and in terms of our specialists and our experience in this sector we can say that at least 20 percent of this huge world market should be completely accessible for us.

This is the goal we need to set ourselves today. According to our strategy, over the next 25 years, that is, over the period through to 2030, we need to build at least 40 nuclear power plants or power plant units in Russia, and we have the possibility of competing for orders to build at least just as many 40-60 on the world market.  

Of course, in order to be able to do this, we first have to see through these projects here at home, so as to show potential clients that these are technologies and projects that have been fully tried and tested. Second, we really have to restore this technological chain that the Soviet Union possessed, and ensure its functioning today. This process will take place in new, market conditions, probably, because the situation has changed today, of course. 

We cannot restore it exactly as it was, but in accordance with todays conditions we could create a unified, vertically-integrated structure that would be one of the most competitive in the world in this sector.

VLADIMIR PUTIN: With respect to these development plans, and they are serious plans, we always need to keep in mind safety issues, security issues. What is the situation in this area today?

SERGEI KIRIYENKO: We have drawn up two special programmes and presented them to the government. One programme is the development programme for the Russian nuclear energy industry through to 2030, and the second programme is a targeted federal programme on nuclear and radiation security.

We have carried out an analysis that shows that the current safety regulations and standards in force in Russia are even more stringent than on average around the world. This is a result of the lessons and the serious consequences of what happened in the 1980s. Today our safety regulations are among the toughest in the world. Our programme therefore covers several different areas. The first section concerns security at facilities currently in operation, ecological security and personnel safety. A very important part of the programme concerns security with regard to preventing the proliferation of dual-purpose technologies and weapons of mass destruction. In this respect, the programme that Russia has presented to Iran in the nuclear sector is an example of how nuclear energy should develop in the world. There are two dangerous elements involved in developing nuclear energy the enrichment and processing of spent fuel. Regarding the situation in Iran, Russia has concluded a contract with this country under which spent fuel from the nuclear power plant we are building there will be returned to Russia and in this sense, in accordance with all the international regulations, there is no security risk involved, and this is something that all countries recognise.

The second proposal that Russia has made is to provide Iran with facilities for a joint enterprise in which they will participate. Everything is already ready for this project. We are already prepared. 

VLADIMIR PUTIN: This would be a joint enterprise working on uranium enrichment?

SERGEI KIRIYENKO: Yes, on enrichment.

VLADIMIR PUTIN: What stage are these talks at now? When are our Iranian partners expected in Moscow for further talks?

SERGEI KIRIYENKO: We expect a delegation to arrive within the coming days. The talks are going on constantly. The Iranian sides position is that they see Russias proposal as being of great interest and are ready to begin detailed discussion. For our part, we are completely ready and have even prepared production facilities.


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