Most of the nuclear power plants in Central and Eastern Europe were constructed during the Soviet period, and Russian firms have continued providing nuclear fuel, technology and other services for the facilities. Currently, the Czech Republic, Bulgaria, Hungary and Slovakia all depend on TVEL, a subsidiary of Russia's state-owned Rosatom, for their nuclear fuel, while Ukraine depends on TVEL fuel for 13 of its 15 reactors. The company, which manufactures models for both Soviet-designed and Western nuclear facilities, accounts for 17 percent of the global nuclear fuel market and is seeking to increase that market share to more than 30 percent by 2030.
To lessen Russia's leverage in the region, the U.S. government has encouraged Westinghouse, a Pennsylvania-based firm owned by Toshiba, to expand its presence in Eastern Europe. The U.S. Export-Import Bank has offered significant loans for several Westinghouse projects in the region, and U.S. officials have lobbied governments to diversify away from dependence on TVEL. To provide nuclear fuel for reactors in Central and Eastern Europe, however, Westinghouse had to begin producing fuel assemblies that were compatible with Soviet-designed reactors. It is currently the only company in the world other than TVEL producing this type of fuel assembly.
Soviet-designed nuclear power plants use a type of light water reactor called a water-water reactor, while Western nuclear power plants use a slightly different design for their pressurized water reactors. The two models have several distinctions, including the shape of their fuel assemblies. The assemblies are often made from different metal alloys, and in the Western-style reactors, fuel rods are assembled in a square configuration, while the water-water reactors use hexagonal assemblies. Westinghouse's hexagonal-shaped assemblies have been used in Ukraine, and an evaluation conducted at Finland's Loviisa plant indicated that although TVEL and Westinghouse produced slightly different nuclear fuels, they are compatible.
Currently, Westinghouse either does business in or is negotiating for future work in Ukraine, the Czech Republic and Bulgaria. The company started negotiations in the region in the early 1990s and began some operations in the 2000s, but technical problems and competition from Russia's TVEL have presented challenges. Nevertheless, governments in all three countries are working to reduce their nuclear sectors' dependence on Russia.
Ukraine's Diversification Efforts
Ukraine relies heavily on nuclear power. About 45 percent of Ukraine's electricity production comes from nuclear power plants. Because of the fighting in Donbas in the country's east, Ukraine's coal production has fallen by about one-fifth, increasing the importance of its nuclear energy sector in limiting large-scale electricity shortages.
After the Orange Revolution, the political pendulum in Kiev swung toward the West with the Orange coalition government, then toward Russia with President Viktor Yanukovich's administration and then back toward the West in February 2014 after the fall of the Yanukovich government. The two pro-Western governments in Kiev since the revolution have prioritized diversifying Ukraine's nuclear fuel supplies away from Russia.
In 2008, under the pro-Western government led by President Viktor Yushchenko and Prime Minister Yulia Timoshenko, Ukraine's National Nuclear Energy Generating Co., better known as Energoatom, signed an agreement allowing Westinghouse to provide fuel assemblies for several of the country's nuclear reactors between 2011 and 2015, even though Westinghouse's fuel was reportedly more expensive than TVEL's offerings. However, in 2012, Energoatom announced that it had found structural damage in Westinghouse's fuel assemblies, though the damaged assemblies did not pose a risk of leakage. As a result, Ukraine suspended the use of Westinghouse fuel and returned to rely almost exclusively on nuclear fuel from Russia. Nevertheless, Westinghouse, in cooperation with Energoatom and Ukrainian regulators, began producing an improved design for its fuel assemblies and obtained licensing for the new design's use in Ukraine.
After the fall of the more Russia-friendly Yanukovich government, the new Western-leaning authorities once again began trying to find alternatives to Russian nuclear fuel. In April 2014, they reached a deal to resume Westinghouse nuclear fuel imports and to extend the original 2008 contract to 2020. On Dec. 30, Westinghouse and Energoatom reached an agreement to expand on this cooperation, allowing Westinghouse — in some cases, along with TVEL — to supply nuclear fuel to more reactors. Ukrainian authorities have declined to publicize the cost of the country's new agreements with Westinghouse, but in April, Ukraine's energy minister at the time said the price was competitive. The Russian Foreign Ministry reacted to the most recent deal between Ukraine and Energoatom by calling it "a dangerous experiment." Despite this warning and previous technical challenges with Westinghouse fuel assemblies, Ukraine is clearly working toward its goal to become less dependent on Russian-produced nuclear fuel.
The Czech Republic Also Wants to Diversify
Like Ukraine, the Czech Republic has struggled to address the technical challenges that come with integrating Western nuclear technology and reduce its dependence on Russia's nuclear energy industry. The Czech Republic relies on nuclear energy to produce about a third of its electricity and currently imports all of its nuclear fuel from Russia.
In the 1990s, as the Czech Republic opened up to Western investment, the country took steps to diversify its nuclear power sector. Czech utility firm CEZ Group signed a deal for Westinghouse to build the instrumentation and control systems at the country's Temelin nuclear power plant and provide nuclear fuel supplies once the plant became operational in 2000. However, six years later, the Czech Republic signed a long-term deal with Russia's TVEL to resume Russian nuclear fuel supplies for the Temelin facility starting in 2010. The decision to sign a contract with TVEL was made amid reports of repeated shutdowns at the plant. The contract with TVEL returned the country to complete dependence on Russia for nuclear fuel.
Nevertheless, Russia's dominance in the Czech Republic's nuclear sector could be contested again as the Czech government pursues plans for a potential expansion of the Temelin plant. Westinghouse — possibly along with Russian, French, Chinese and Korean firms — is competing for contracts to construct the country's new reactors, though domestic political factors have led to delays and a cancellation of a planned bid early last year.
The Czech Republic, like some of its Central European neighbors, has worked carefully to maintain strong commercial ties with Moscow. Meanwhile, for the United States and some EU countries, keeping Central European countries as strong allies is critical because of their geographic position relative to Russia and their potential ability to derail future sanctions against Russia. Thus, a successful bid by Westinghouse or France's Areva for the construction project would carry a strategic advantage for the West by uprooting some of the Kremlin's influence in the Czech Republic.
Bulgaria's Plans for a New, Western-Style Reactor
In Bulgaria, negotiations regarding diversification away from Russia center not on providing nuclear fuel for the country's existing Soviet-style water-water reactors but on the construction of a new AP-1000 Western-style pressurized water reactor. Bulgaria's sole nuclear power plant at Kozloduy generates about a third of the country's electricity. Before joining the European Union, Bulgaria had to close four units at Kozloduy because of EU safety concerns, leaving only two reactors of 1,000 megawatts each operational. Thus, Bulgaria has long sought to build a new reactor to boost its nuclear energy capacity. Bulgaria originally was set to cooperate with Russia's Rosatom on the construction of a nuclear power plant at Belene, but in March 2012 Bulgaria's government suspended the $8.27 billion project because of its perceived financial unfeasibility. Rosatom then sued Bulgaria over its failure to pay for work already completed on the project.
Disagreements over the canceled Belene project, coupled with Bulgaria's aim to reduce its energy dependence on Russia, led the country's government to enter exclusive negotiations with Westinghouse in 2013 for the construction of a new 1,000-megawatt AP-1000 reactor at Kozloduy, with costs for the project estimated at $5 billion. The outgoing Socialist-led government approved the agreement with Westinghouse in August 2014, but the enforcement of the agreement is up to Bulgaria's ruling center-right Citizens for European Development of Bulgaria, better known as GERB. The new government will likely support the plan to increase Bulgaria's energy capacity and to lessen the country's dependence on Russia.
For some Western countries, especially the United States, displacing TVEL's monopoly in Central and Eastern Europe would bring strategic benefits. Russia would still have important economic levers in the region — most importantly its natural gas exports — but cooperation between the region and Westinghouse would reduce the Kremlin's influence there. As competition between TVEL and Westinghouse continues, the United States will keep supporting Westinghouse projects, both politically and financially, to diminish the Kremlin's influence.