Analysis
The world’s first Floating Nuclear Power Plant (FNPP), the Akademik Lomonosov, located near Pevek, in Russia’s Arctic region, built by Russia’s state-owned nuclear company Rosatom, began operations in December 2019. Its operations are significant because it is the world’s first operational floating nuclear plant (FNPP), wholly of Russian design and construction. The Akademik Lomonosov represents one of Russia’s most prestigious technical achievements of the last decade. Economists, engineers, politicians, and environmentalists have declared a brisk interest in the FNPP as technical innovation, export model and a potential geopolitical asset, while simultaneously representing an environmental hazard.
Eurasian Ventures published an analysis on Rosatom and its FNPP, “The Silent Giant – Why it is about time to look at Russia’s nuclear ambitions” in January 2019. At least one of the article’s foreseeable predictions has become a reality. On December, 19th 2019, the local Christmas tree in Pevek was symbolically lit by power produced from the Akademik Lomonosov, demonstrating its operational status.
Technological Advantages and Disadvantages
On a technical level, the location of the first FNPP is a peculiarity. Not only is the Akademik Lomonosov a nuclear power plant on the water, but it is deployed to one of the world’s least explored areas, the Arctic. Constructed in Saint Petersburg, the FNPP was transported via the Baltic and Barents Seas through the Arctic Ocean to Russia’s Far Eastern Chukotka Peninsula. The FNPP consists of two reactors mounted on a non-self-propelled barge that cannot maneuver itself.
A key feature of the FNPP is its ability to operate in remote areas under extreme weather conditions and sustain itself for long periods. The estimated lifespan of an FNPP’s reactors is 40 years. Maintenance will be required every 12 years and will likely entail removal to Murmansk for servicing. The FNPP has a special storage unit to store nuclear waste (solid and liquid), as well as a storage unit for nuclear fuel, possibly lasting for the same period of 12 years. The reactor is refueled every 3-4 years, which suggests a storage capacity 2-3 times the fuel needed for a fuel-cycle and a storage capacity of fuel-waste for 12 years. As the Akademik Lomonosov is a prototype of an FNPP, the procedure for refueling and maintenance of its nuclear reactors may not be a sophisticated process that a reactor exchange may be considered by the service contractor.
Rosatom’s ability to design, build and relocate the FNPP can be explained by the company’s experience in constructing small-scale nuclear reactors for icebreakers, submarines and other vessels of its Soviet period. The two KLT-40S type reactors mounted on the FNPP are modified versions of the standard reactors used currently by Russia’s icebreakers. The difference is that the FNPP uses low enriched uranium, while ice-breakers operate with highly enriched uranium. The FNPP uses low enriched uranium to meet the International Atomic Energy Agency’s non-proliferation requirements.
The two reactors can each produce 150 MW of thermal power, which is converted to 70 megawatts of electrical power (MWe) in total, or enough to supply a medium town of 100,000 people with electricity. The second FNPP is under development, according to Rosatom, without a scheduled completion date. The plan is to build at least 7 FNPPs. The new FNPP will be equipped with new RITM-200 reactors, which Rosatom developed for Russia’s modernized ice-breaker fleet. The RITM-200 is likely to have a similar power production capacity, but will be smaller and have a longer life-span and maintenance cycles than the KLT-40S. The next FNPP may replace the Akademik Lomonosov during the maintenance period to maintain continuous power.
Economic Considerations
It is necessary to also consider the economic viability of the FNPP and its location. The FNPP’s location is a technological and logistical effort to deploy and operate in the harsh environmental conditions of the Arctic. Is it worth it?
The Russian government has declared the development of the Arctic as a strategic priority. The FNPP affords the region important infrastructure of power and fosters increased investment in the region, especially for offshore drilling projects. Moscow assesses it will benefit from Arctic exploration and development. Russia has a long history of natural resource extraction infrastructure in its Arctic region, especially for oil and gas. Exploration of natural resources, including minerals and fossil fuels, on-shore, and off-shore, is part of Moscow’s strategy. Expansion of their explorative efforts for these resources is desirable and the development of the FNPP is part of this strategy.
Equally important for Moscow is the development of a shipping route that connects European markets with Asian markets via the “Northern Sea Route.” The Northern Sea Route already provides an alternative shipping route between both continents during ice-free months, with the potential for cost-saving for shippers. Russia invests heavily in both areas and is the most involved player amongst all Arctic littoral states. The Akademik Lomonosov replaces the older “onshore” Bilibino nuclear power plant (NPP), as well as the Chaunskaya coal-fired power plant (CPP), which supplies power for the Chukotka Peninsula. The Akademik Lomonosov’s energy production levels surpass the combined production of the existing power plants and is more efficient. The FNPP will also supply the resource extraction industry with electricity and heat. The 1974-built Bilibino NPP is set to be decommissioned by 2022. Decommissioning of the NPP was planned for 2020 but was likely delayed due to unfinished onshore infrastructure connecting the FNPP to the local grid.
For Rosatom, the construction of the Akademik Lomonosov is an investment in the Arctic infrastructure as much as an investment in public prestige. The estimated development and construction costs of the FNPP range between $232 million to $740 million, reported by the Norwegian Bellona Foundation. The original estimate was $140 million in 2006 when Rosatom finalized its plans to build the Akademik Lomonosov. There is doubt among Russian elites that the FNPP will recoup their investment costs.
Rosatom is likely less concerned by overrunning the budget for the FNPP’s construction as the company’s long-term objective demanded a prestigious and highly visible project like the Akademik Lomonosov. Rosatom is one of the largest nuclear energy companies in the world. Its success rests on a persistent acknowledgment of its accomplishments that it has established since the Soviet era. This is the preservation of state support in a country that relies on nuclear power. While the rest of the world downgrades its nuclear energy industry, Rosatom is in the process of modernization. According to Financial Times, The order books for new NPPs in Russia and abroad are therefore full until 2030, contracts worth $133 billion. The skyrocketing development costs for the Akademik Lomonosov are thus collateral costs serving Rosatom’s prestige to have built the first FNPP and ability to operate in the world’s most remote areas.
The ability to design and construct the FNPP for commercial purposes exceeds the economic costs associated with its development. For Rosatom, the benefit lies in the potential to lease or export FNPPs, or share its technology to third countries. The idea is to lease FNPPs to countries that either require a power supply in remote areas and along their coastline, or countries that do not have a nuclear industry, but whose fast-growing economies require power supplies, to provide energy quickly on a lower scale than conventional NPPs.
However, Rosatom faces global competition for FNPP technology. China is in the late stages of testing its first domestically developed FNPP. According to Asia Times, China National Nuclear Corporation plans to commission its FNPP in 2021. The plan is to provide artificial islands and drilling platforms in the South China Sea with power. Also, several companies across the globe are developing so-called Small Modular Reactors (SMRs). SMRs are nuclear reactors that provide all the advantages of the nuclear reactor technology used on the Akademik Lomonosov, which is the power supply for small grid systems, the potential for mass production, transportability, and remote operability.
Other current SMRs being developed, might have the potential but are not necessarily designated for the use on ships, nor on floating platforms. The US companies Westinghouse and NuScale, the US-Japanese company GE-Hitachi, the UK company Rolls-Royce, and the Chinese company Chinergy are actively developing SMRs. Also, South Korean, Canadian, Indian, and Argentinian companies have SMR development projects planned. The US, UK, and the Canadian governments support various SMR projects with funding, research support, or licensing.
The advantage of Rosatom is that its development costs remain low compared to China’s costs. Estimates for Chinese investment are roughly $2.1 billion, almost triple Akademik Lomonosov’s costs. Rosatom benefits from pre-existing or developing technology and materials from its ice-breaker fleet.
As a state-owned monopoly, Rosatom will likely struggle to compete in the small-scale nuclear energy sector. The company appears to maintain its focus on FNPPs and ice-breakers, as well as the Arctic region. Conversely, commercial SMR producers perceive their product as a replacement for CPPs, or a supplement power supply, called “baseload” for national energy mixes with a larger share of renewables. Rosatom centers its efforts on the Arctic region. The company plans to invest $7 billion into the development of the Arctic shipping route and acquire a 30 percent stake in the Arctic-focused shipping company Delo. Separately, Rosatom intends to purchase 55 ice-class container ships and modernize Arctic port facilities.
The problem of SMRs is the potential high operating cost. The factory production of SMRs will likely have a cost advantage over on-site constructed NPPs, but according to the Nuclear Energy Agency (NEA) and the Organisation of Economic Co-operation and Development (OECD), operation and maintenance costs for SMRs will be higher than NPPs and CPPs. Especially for the Akademic Lomonosov, NEA calculated a cost of $200 of MW per hour (MWh). This a considerably higher cost than the average cost of $34 MWh for nuclear energy in the US. Rosatom’s FNPP, however, will operate in an area where there are limited resources of power production for a low price, especially the development of a grid system, which balances its higher operation costs.
Environmental Debate
The Arctic’s Akademik Lomonosov provides a broad target for environmental and safety concerns. Concerns are directed against the FNPP as it is located in an environmentally fragile habitat, as well as the overall concern regarding the safety of nuclear reactors. Rosatom is aware of two groups of environmentalists, nuclear opponents and climate change activists, and their public concerns.
Nuclear opponents are mostly focused on a potential future nuclear accident; referring to the Akademik Lomonosov as a “Chernobyl on ice”. These opponents view its remote location as problematic. They argue that a nuclear accident is more likely in a sea-based NPP. If a tsunami occurs, the FNPP is unprotected. The accident would be disastrous for the very fragile environment. Furthermore, the FNPP’s remoteness makes it more challenging for technical auxiliaries to reach the site in time to limit or deter damage.
Environmentalists have noted that irradiated cooling-water will inevitably harm the environment as well. Rosatom assesses that the FNPP safety features are robust and modernized, its barge tsunami-proof. Rosatom states that the FNPP would be safe in the event of an accident. Thee effects on the population and infrastructure are assessed by Rosatom to be moderately low as the Arctic seawater has a plentiful capacity to cool down a melting reactor. According to the company, the FNPP’s operating and maintenance crew is skilled and experienced. Rosatom’s argument, that the water for cooling to avert a meltdown is plentiful, is comforting, but considering the chemical properties of water, a consequential steam explosion could contaminate the water and air.
Concerns from nuclear opponents also arise for Rosatom’s intent to sell FNPPs to third countries, which do not possess experience in handling nuclear energy. Sudan, a potential user of FNPPs, has neither nuclear expertise nor a stable government. Insufficient safety standards, combined with the threat of terrorism against nuclear facilities, create an environment where a nuclear accident is more likely to occur.
Rosatom endures a different type of opposition from climate change activists. The FNPP is less concerning. Climate activists are more focused on the exploitation of the Arctic region. The Arctic is more sensitive to climate than most other regions in the world. Activists see that Russia and Rosatom take advantage of a region that requires more environmental protection than elsewhere. Also, the FNPP’s purpose to support fossil fuel extraction runs counter to Russian commitments to reduce carbon emissions. Rosatom argues that the FNPP is climate-friendly and its purpose to replace the Chaunskaya CPP will help reduce carbon emissions. Also, the development of nuclear energy in the form of SMRs is a positive signal rather than a negative signal. The technology can replace coal and, as a baseload power provider, is able to support renewable energy production.
Geopolitical Perspectives
Moscow likely perceives that the Akademik Lomonosov steep developmental costs for the FNPP will be countered by its geopolitical gains. Again, the world’s first FNPP serves two of Russia’s political and foreign political objectives, the dominance of the Arctic region and becoming a global nuclear leader. The Arctic Sea is a highly contested geopolitical region. Russia, which boasts the longest coastline in the Arctic, is the frontrunner amongst the Arctic littoral states to claim, secure, explore, cultivate, utilize and ultimately profit from the region’s development.
While almost all neighboring Arctic littoral states are NATO members, Russia has achieved the most to build its military presence and capabilities in the Arctic. This includes upgrades to existing military bases and assets, such as the Northern Fleet, the establishment of new bases such as the military air-force on the Franz Josef Land archipelago, and conducting large-scale exercises. Russia’s annual military exercise held in 2019, “Tsentr 19,” occurred across most parts of the Arctic. The exercise comprised of roughly 300,000 troops. In addition, Russia routinely conducts strategic bomber flights along the Arctic Circle to deter NATO members, especially the US. In terms of strategic interests, NATO does not compete with Russia over the Arctic. Due to the lack of a suitable icebreaker fleet, the US Navy would struggle to even reach the area.
Russian security efforts serve the higher strategic goal of economic utilization of the region, as Russia is aware of the potential civil uses of the Arctic. Due in part to climate change, shipping routes will attract other nations to claim their stake in the Arctic. Among them is China, a self-proclaimed “Near-Arctic-State,” outlined in China’s Arctic Policy of 2018. Beijing would benefit most from the Northern Sea Route, which the Chinese already refer to as the “Polar Silk Road.” Moscow is aware of Beijing’s interest. The Akademik Lomonosov, as one of many symbols of Russia’s Arctic claim, sends an invitation and a warning to third nations to use the merits of the Arctic only directed with and through Russian government approval.
In a different geopolitical perspective, FNPPs serve Russia to maintain a strategic foreign political relationship between Moscow and countries that strive to obtain small scale nuclear energy. Rosatom has several NPP projects in foreign countries. Those NPP projects have and will help Russia in the future to maintain political leverage over third countries. The most prominent example is Rosatom’s NPP construction in Turkey, which came under scrutiny during the Syrian war in 2019. Turkish and Russian troops supported opposite forces in the Syrian war. This has led to frequent armed clashes between Turkish and Russian troops, as well as diplomatic disputes. The threat to abandon several Russian infrastructure projects in Turkey, including the NPP, has aided in achieving rapprochement between the two countries. The establishment of FNPPs in additional countries will provide Russia with a wider range of diplomatic influence in continents such as Africa and South America.
Outlook
Development of the Akademik Lomonosov is a major achievement for Russia. Although the total development costs outpaced the initial investment costs, diplomatic and long-term gains have the potential to counter start-up costs for this venture.
Rosatom, as an emerging company, has expanded and diversified its portfolio in the nuclear sector. Its portfolio includes large NPP projects, uranium mining, and a modernized nuclear ice-breaker fleet has and now added FNPPs. The potential for export of FNPPs and FNPP technology is of the most strategic importance for Rosatom. FNPPs are ideal for emerging economies in medium-populated countries without a domestic nuclear industry. Countries like this are most frequent on the Asian, African, and South American continents. China and other mature economies as they develop their nuclear technologies, will not be the target markets.
The Akademik Lomonosov is just the beginning of an innovative process. The concept of small-scale nuclear reactors to use for low electric consumers, such as ships and submarines, has existed for almost 50 years. The commercial usage and development of this concept have been revived, with Rosatom as its pioneer. The opportunity to combine the advantages of an FNPP that are mobility, flexibility, low-scale power production, and availability in terms of a low cost-time factor for the production of a reactor, has the potential to fill several market niches. As an example, Rosatom re-commissioned a nuclear-powered icebreaking cargo ship, the Sevmorput in September 2019. It is scheduled to ferry along the Northern Sea Route.
These large-scale technological projects are likely an homage and revival of the Soviet past. The construction of the world’s largest cargo-lifter and submarine are just a few examples of former Soviet glory. It is to some degree possible that the outlook of international political prestige for Russia will trigger similar technological innovations in the coming future. In this context, it is noteworthy that the Akademik Lomonosov has been developed and produced in a state-owned Baltic Shipyard in Saint Petersburg, mostly by Rosatom subsidiaries. Rosatom initially ordered the Finnish-owned United Shipbuilding Corporation to build the FNPP, but the company was added to the international sanctions list in 2014 following Russia’s annexation of Crimea.