Nuclear Renewal: Siemens Seeks to Cash In on Russia's Atomic Adventure

By SPIEGEL Staff

Nuclear power is back in vogue in Russia, with 26 new reactors scheduled for construction by 2030. German industrial giant Siemens has grabbed a piece of the pie. But safety and financial concerns threaten to overshadow the country's atomic ambitions.

Olga Kurochkina can hardly hide her delight at making her German guests squirm. She has just served them caviar and pirogies and is now triumphantly waving a document in their faces. "Our students recently debated whether Germany needs nuclear energy," says Kurochkina, a teacher at an elite Moscow high school. "The arguments, of course, favor electricity from nuclear energy."

Kurochkina insists that there are "significant disadvantages" to all other energy sources. Wind turbines? "They produce infrasound, which causes depression." Solar cells? "They cause local cooling of the air."

It is hard to believe, but German energy policy is up for debate in Russian classrooms. The students at Kuochkina's school pay rapt attention to a multimedia show in which a virtual professor praises the electricity generated by nuclear power. At the end of the film, a growing orange tree appears on the screen, symbolizing the growth of the Russian nuclear industry. The message is clear: Things are going uphill fast.

Nuclear power is back in vogue in Russia, as if the meltdown at the Chernobyl nuclear power plant had never happened. The giant country has plans to build 26 new domestic reactors by 2030, and 20 more abroad

Major Nuclear Projects

In India and Bulgaria, Russian nuclear engineers are currently erecting turbine buildings and reactor shells, and there are plans to build more reactors in China, the Middle East, Southeast Asia and North Africa. Russia will even start the series production of floating nuclear power plants designed to desalinate seawater in remote corners of the earth.

Russia's nuclear renaissance.
DER SPIEGEL

Russia's nuclear renaissance.

The Russians are now confident enough to embark on major nuclear projects, and are doing so under the aegis of a company called Rosatom. Sergei Kiriyenko, the head of Rosatom and briefly a prime minister under former President Boris Yeltsin, is considered one of the country's most competent managers. This year alone, he has €3.4 billion ($4.6 billion) at his disposal for new nuclear power plants. He intends to invest about €35 billion ($47 billion) by 2015, of which the government will contribute 40 percent.

Russia's nuclear energy czar is backed by solid political support. Prime Minister Vladimir Putin, in particular, is an avowed proponent of nuclear energy. He has announced that 25 to 30 percent of Russia's electricity will be generated by nuclear power within 20 years. Today nuclear power satisfies 16 percent of the country's electricity needs.

Kiriyenko scored his biggest coup to date in March, when he and Peter Löscher, the CEO of German electronics giant Siemens, agreed to enter into a "strategic partnership." The two companies envision the construction of a nuclear power plant in the Russian enclave of Kaliningrad as their first joint project.

The duo believes that there will be demand for about 400 nuclear power plants worldwide by 2030. "We want to be the global market leader," says Kiriyenko, "and one third of the market is a respectable target." Löscher anticipates "a market potential of €1 trillion ($1.35 trillion)" and "close cooperation for many years."

Siemens Market

Both sides have high expectations of the deal. Rosatom wants to benefit from German know-how in the fields of control technology, steam turbines and generators, and has high hopes for the "psychological" effect of the joint venture, as Kiriyenko calls it. In other words, nuclear power plants with a German seal of quality are more marketable. The Russians also hope to enter new markets. "Latin America, for example, is a traditional Siemens market," says Kiriyenko.

Siemens, for its part, which only recently ended a hapless joint venture with the French nuclear power company Areva, wants the Russians to help it quickly find its way back into the nuclear power business, an attractive field once again. Besides, an alliance with Rosatom would provide Siemens customers with reliable access to fuel rods for decades. Russia has more than 40 percent of worldwide uranium enrichment capacity.

But will it really work out for the Germans? The partnership is already stalling before it has even begun. In March, Löscher announced that the objective was to sign the final contracts by the end of May. Now officials at Siemens are saying that the contracts will most definitely be signed by the end of the fiscal year in September. The difficult negotiations over parting ways with Areva are said to be the main reason behind the delay.

On the other hand, the Soviet nuclear legacy could also get in the way of the partnership. Rosatom is struggling with various problems, including unresolved disposal issues, staffing shortages and countless breakdowns and accidents. More than a third of the country's 31 nuclear power plants are more than 30 years old.

The many contradictions in the Russian nuclear industry are in evidence in Sosnovy Bor, on the Gulf of Finland about 80 kilometers (50 miles) west of St. Petersburg. The road to the city passes through thin pine and birch forests, past sandy hollows and rustic wooden dachas, under a bright blue sky, to Koporskaya Bay.

Earthquake Proof

A special permit is required to pass through a checkpoint on the outskirts of the city. Sosnovy Bor, with its 68,000 inhabitants, is one of Russia's tightly controlled nuclear cities.

A blue sign labeled LNPP-2 points to the left, to a roughly 100-hectare (247-acre) construction site, where the first reactor of the Leningrad 2 nuclear power plant is being built. The reactor will be one of the modern pressurized water reactors, which made a strong impression on Siemens engineers. Even Western experts concede that the VVER-1200, the model being built here, is of the highest quality. The planned double containment shell around the reactor core is supposedly earthquake-proof and strong enough to withstand an airplane crash. As with French producer Areva's competing product, the EPR, if a meltdown occurs, the radioactive material flows into a collecting tank under the reactor pressure vessel to cool down.

The Russians can even passively cool down the reactor core if there is a total power blackout. If that happens, water from pressurized tanks would extinguish the resulting nuclear fire, which reaches temperatures of up to 1,200 degrees Celsius (2,192 degrees Fahrenheit). "Western safety standards are met or even exceeded," says Hannes Wimmer, an expert with the German technical inspection organization TÜV Süd, which tested the reactor model for Siemens.

Kiriyenko's team is not as eager to discuss a group of gray structures standing next to the construction site at Sosnovy Bor, the red-and-white striped chimneys of the Leningrad 1 nuclear power plant. They include four reactors of the same model used at Chernobyl, the RBMK, the oldest of which is 36 years old.

Eleven of these nuclear power plants continue to generate electricity for Russia today. Although their operators insist that all plants have now been upgraded, no amount of modern technology can fully correct the model's basic design flaw: As the temperature rises in the core of the RBMK, so does reactivity. Unless the reactor is cooled, conditions can escalate to the point of meltdown.

Twenty Tons of Plutonium

"These reactors pose a danger for the entire Baltic Sea region," says Oleg Bodrov of the environmental organization Green World. Bodrov, who once worked in the Russia nuclear industry himself, has documented dozens of leaks in the Soznovy Bor nuclear reactors. He believes that an overfilled storage facility for spent fuel rods contains 20 tons of plutonium. The site lies directly in the approach path to the St. Petersburg airport. "If a plane crashes here, it will be a disaster," says Bodrov. And St. Petersburg is downwind from Soznovy Bor.

But Bodrov's warnings always trigger the same reaction. "The plants are declared a state secret, and that's that," says the 57-year-old environmental activist.

This is precisely what could prove to be the biggest obstacle to the German-Russian nuclear pact. Glasnost has remained a foreign word in the industry, in which military and civilian elements remain tightly interwoven. Secrecy and the resulting corruption are widespread.

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