The article criticizes the decision of the Government of Uzbekistan on the construction of a nuclear power plant (NPP) in the Jizzakh region and the conclusion of an agreement with “Rosatom”. The author gives arguments of the economic plan and expresses concern about the security risks for both the plant itself and the whole country. In economic terms, alternative energy sources and especially renewable ones, will give Uzbekistan a much greater and faster economic effect than a nuclear power plant. From a security point of view, a revision of the construction decision is necessary in the light of the new realities associated with the recent drone attack on oil production complexes in Saudi Arabia.
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Construction of a nuclear power plant in the context of established decision-making practice: decision first, justification later
The construction plans of a nuclear power plant in Uzbekistan were first announced in December 2017, when Moscow and Tashkent agreed to work together on this issue. A corresponding agreement was signed between the two countries in September 2018. In line with the agreement, it was planned to build two power-generating units based on a pressurized water reactor conforming to the “Rosatom” project with a capacity of up to 1.2 GW of each power unit.
It should be mentioned that these plans had come as a surprise to the citizens of Uzbekistan. No public discourse on this topic were held either in expert circles or in society until the end of 2017.
Back in 2014, the “Uzbekenergo” state-owned joint-stock company (SJSC) officially denied speculation on the subject that appeared in the press at that time. The representative of “Uzbekenergo” has previously declared, that “in the future, the company does not provide for the construction of a nuclear power plant as part of Uzbekistan’s Industrial Development Program implementation and annual investment programs.”
The decision on building the station was similar to one of a series of impulsive initiatives that Shavkat Mirziyoyev had shown more than once from the very beginning of his reign. These are initiatives for the widespread growing of lemons in schools and kindergartens and hot peppers or for raising chickens in rural households. Significant funds were allocated for the implementation of each initiative, without any expert justification or business plans. As a rule, these initiatives turned into a waste of resources. After some time, banks simply stopped issuing soft loans for such projects.
A similar adventurous approach and the practice of hasty decisions are now observed in the energy sector. The government has not yet developed and adopted a comprehensive development strategy for this sector, which would be based on the assessment of several factors, including current trends in the global energy sector, risks to public health, the environment, and country’s security. Such a strategy should have been based on economic calculations, considering available alternatives and limited resources. At least, there have been no reports of such calculations so far.
At the same time, the leadership of the Ministry of Energy seems to have a certain strategic vision of the prospects for the energy development or had such a vision until recently. This can be seen from the speech of Deputy Minister of Energy Sherzod Khodjaev at the International Forum on Reforms in this Sector, held in Tashkent in July 2019.
In his speech, the deputy minister described the main problems facing the industry and ways to solve them, as well as outlined strategic guidelines. However, in his speech there was almost no mention of nuclear power plants, and its creation was not put in a list of priority tasks. To such tasks, he attributed the withdrawal of morally and physically obsolete power units at TPP with a total capacity of 6.7 GW, creation of solar and wind power plants with a total capacity of 6.7 GW with bringing their share in the total generating capacity to 21%, as well as the construction of 2.7 thousand km of high-voltage power lines with the simultaneous construction of nine new substations. All these plans would require more than one billion dollars.
Does this money exist in the country? Yes, there are: as of February 1, 2019, the country had 27.2 billion dollars in gold and foreign exchange reserves. However, it is by no means impossible to spend this reserve fund on various kinds of investment projects, it is necessary to cover the needs and obligations of the country for at least three months in the event of emergency, in order to prevent default and bankruptcy of the country. In addition, funds are also necessary for the development of other sectors and not only energy alone.
Apparently, the decisions of the president are not only impulsive, but are also taken based on the illusion of unlimited resources or in hope of borrowing them, without taking into account all the risks of their losses.
Returning to the topic of nuclear power plant construction, at least the following two blocks of factors should be distinguished: (1) financial and economic, (2) related to the safety of the facility and the whole country.
Financial and economic factors
Here is the comparative cost of the main types of energy in terms of capital costs per kilowatt of energy:
The comparative cost of the main types of energy in terms of capital costs per kilowatt of energy.
The indicated capital costs for nuclear energy generation most likely do not include indirect costs, namely the costs of decontamination of the station after the expiration date service life, the storage of radioactive waste and the creation and maintenance of a safety system throughout the life of the station and its decontamination.
Even representatives of nuclear energy recognize that the cost of deactivating a nuclear power plant should cost between 10-15 percent of the cost of its construction, which means at least one billion dollars in projection on an Uzbek nuclear power plant. But according to other estimates and in practice, the cost of decontamination is higher, and the time to complete it is much longer than predicted. So, in France, 480 million euros were spent on a small station in Brennilis with a total of 70 MW, 20 times more than the previously planned amount. In addition, radioactive elements were spilled into a nearby lake. In 2013, the UK Nuclear Decommissioning Authority predicted the need to allocate £ 100 billion to deactivate the existing 19 stations in the country, an average of 5 billion per station. At today’s prices and in dollars, this will be at least $ 10 billion per station. It can be assumed that the deactivation of the Uzbek NPP, if carried out considering all requirements and standards, will cost an amount comparable to the cost of building the plant.
It is known that the cost of construction and commissioning of an Uzbek nuclear power plant is currently estimated at $ 11 billion. This is the claimed amount. Practice shows that the declared amounts tend to increase with the construction of this kind of complex objects. And then this is the usual marketing tactic of the seller, deliberately underestimating the cost of goods at the first stages of negotiations, in order to then roll up the cost under various pretexts, when the decision has already been made by the buyer.
In terms of the cost of nuclear power plants, there is another important consideration. The commissioning of only its first stage is envisaged only for 2028, and it is not yet a fact that these deadlines will be met. This means that at least 9 years will have to wait until the station begins to produce energy. Therefore, it is not known when the costs of building the station, its decontamination and security systems will pay off. This is done just to produce only 2.4 GW of energy when commissioning both power units. This is not more than 15% of the energy generated in the country.
The cost of solar energy ranges from 32 to 40 euros per mW / h, while a megawatt-hour of nuclear energy costs 100-170 euros.
We are dealing here with a clearly missed benefit, and it is very strange that the country’s government does not take it into account, diverting significant resources to an expensive and economically inefficient project. For 10 years of building nuclear power plants, other sources could produce much more energy and much faster. So, the cost of solar energy ranges from 32 to 40 euros per mW / h, while a megawatt-hour of nuclear energy costs 100-170 euros (that is, the difference is 3-5 times!). It should also be borne in mind that recently wind and solar power plants have been increasing generating capacities faster than any other sub-sector of energy.
Thus, considering a number of factors, it can be concluded that Uzbekistan will get a very expensive nuclear power plant. In turn, expensive energy, if it is intended for industrial use, will inevitably affect the cost of production in the country and, consequently, will reduce its competitiveness in foreign markets. If households are the consumers of energy generated by nuclear power plants, this will hit their budget and living standards.
Let us dwell a little on the way of satisfying the population’s energy needs. Consequently, households in the country now consume 26% of all energy, agriculture – 20%, and budget organizations 11%. In total, 57% of all energy is consumed. If at least a third of these needs are satisfied by the solar energy, generated by small plants with maintenance by the owners of these households and objects, then this will be about to 20%. That is much more than the target figures for nuclear power generation (10-15%). Moreover, these 20% can be achieved much faster than relying on nuclear power plants.
Judging by the latest decree signed by the president on October 4 of this year on the transition strategy to “green energy”, the government understands the importance of renewable energy sources and even plans to increase this industry to 25% of the country’s total electricity generation.
Notionally, the development of solar energy has already begun in Uzbekistan. According to the Deputy Minister of Energy of the Republic Sherzod Khodzhaev, by 2030 about 25 solar power stations (SPS) will appear in Uzbekistan. According to the ministry, the potential of renewable energy sources (RES) of Uzbekistan is about 51 billion tons of oil equivalent, the technical potential is 179.8 billion tons of oil equivalent. At the same time, demand for energy resources will amount to about 43.5 billion tons in oil equivalent by 2030, if GDP growth rates remain at the level of 8-8.5% annually. That is, renewable energy sources alone can fully satisfy the country’s demand for energy and allow directing the extracted gas for export. So why on top of that a super-expensive nuclear power plant is needed?
In 2018, an agreement was signed with one of the world’s leading companies in the construction of solar power plants, Canadian SkyPower, which is ready to invest $ 1.3 billion in the construction of a heliostation with a capacity of 1000 megawatts. This is almost as much as one of the two power units will be produce at the planned nuclear power plant. The comparison between these two projects is clearly not in favor of nuclear power plants. On the one hand, we have an energy block with an estimated value of 5.5 billion dollars (half from 11 billion for the entire station), which will be ready in at least 9 years from now. On the other hand, a station with a similar capacity, costing 4 times less, which will give current in 2-3 years.
However, until now, the government has paid attention mainly to the construction of solar power plants with a capacity of at least 100 megawatts each. However, it seems that, from the point of view of the population’s interests, it would be even more promising to develop small solar installations in individual households, buildings of various kinds of institutions, and in farms. These devices (panels and batteries for storing energy) can be quickly installed on the roofs of private houses and other small objects. Such installations require very minimal maintenance, only three or four times a year washing the panels from dust and contamination.
For example, in the UK, where the number of sunny days per year is much less than in Uzbekistan, already 840 thousand households have installed solar panels, saving up to half of their former energy costs on electricity.
It should also be borne in mind that renewable energy plants are rapidly becoming cheaper. For example, in the UK their value fell by 70% in comparison to 2010. We should expect their further reduction in price, considering the development of technology. Nowadays, one small installation in Britain costs from 1.5 thousand to 6 thousand pounds (or $ 1.8 thousand – $ 7.4 thousand). For example, a plant valued at $ 1.86 thousand to $ 3.7 thousand can generate 850 kWh. For comparison, on average, one family in Uzbekistan consumed 160 kW / h in 2018.
What is the obstacle to installing such small solar power generation systems for individual households? First, it is a financial barrier. The installation of such a small station requires a one-time investment. One should buy such a station and install it on their roof or in the yard. But this is like buying a house: one can take a mortgage and gradually redeem the house by paying a fee to the bank, or one can rent a house and pay the rent to its owner. The monthly fee may be the same, but in the first case, over time, you get back most of the money spent. Similarly, in this case: one can take money on credit and, by paying it gradually, become the owner of the station, reducing energy costs to zero. Or you can constantly pay for gas and electricity to suppliers who, additionally, are misleading You by putting all kinds of “ingenious” meters.
In the conditions of Uzbekistan, most households will not be able to independently spend the costs of a one-time installation of solar panels and batteries, even though then nothing will have to be paid for energy. Not every family will have 3-4 thousand dollars for this profitable investment. A bank loan for the population is underdeveloped in the country. Here, between banks there is still no genuine competition for the borrower, as we see in developed countries.
That is why the state should come to the aid of households, as European countries do, by providing in the initial period subsidies and grants to lower the installation price, as well as bank loans like mortgages. The population should be properly informed that this is a profitable investment which will make it possible to switch to almost free energy in 4-5 years, given that today, such plants are designed for 20 years of operation. This means at least 15 years of free energy and the absence of a headache associated with all kinds of meters that the Uzbek authorities impose on households, and with a constant increase in tariffs for the supply of electricity and gas, as well as their constant interruptions. The population needs to be convinced in thinking 20-year ahead, and not in a 2-3-year perspective. And of course, it is necessary to encourage producers and sellers of small power plants to entry into the country, and it is also necessary to develop appropriate infrastructure and establish regulation.
After installing a small solar station, it can generate free energy even more than the family needs. To do this, mechanisms are provided for exporting energy to other consumers, say neighbors or various institutions and firms. It is possible to use excess energy for your own farm or small business, which is especially important in rural areas, say, for heating greenhouses or rooms for poultry and livestock in winter. Such an approach, in addition to providing the population with heat and electricity, would also contribute to an increase in agricultural production.
The cost of security systems is still difficult to estimate, but it is safe to say that these costs will now increase significantly in connection with the attack in September of this year, where18 battle drones attacked oil complexes in Saudi Arabia, which led to a drop in oil production in this country by half . The problem is that conventional methods of protection against combat drones did not work there – neither radar devices, nor jamming systems of radio frequencies, which are used to control drones, nor the Patriot air defense system. This is despite the fact that Saudi Arabia has an annual military budget of $ 67 billion and that the country’s defense system is provided with the most modern weapons of American production.
Now the Saudis are puzzling over how to defend themselves against such attacks in the future. This will require a new generation of drone protection and this will involve significant expenditures. It is difficult to assume that Uzbekistan will have enough money for this new generation of security systems to protect strategic facilities on its own territory. Therefore, the question of protecting the future nuclear power plant from such attacks remains unclear. There is no answer to it yet, neither by the effectiveness of security systems, nor by their cost. Nevertheless, the costs of these systems must also be taken into account when calculating the cost of nuclear energy.
Let us dwell on the existing threats to the safety of nuclear power plants. We must be aware that as a result of attacks on Saudi oil complexes, we have entered a new era of military use of drones. As noted above, the novelty of the situation is that the high-tech means of protection against air attacks available to Saudi Arabia did not work. And this is despite the fact that the Saudis were expecting these attacks on their oil complexes. So, September attack was preceded by a series of attacks by rockets and drones launched by Hussites from Yemen at various targets in Saudi Arabia, starting at least since January 2018.
The Middle East is now “packed full” with all kinds of military drones. They were widely used by all parties to the conflict in Syria. The Islamic state (IS) also has military drones in service, the main forces of which, after the defeat in Iraq and Syria, moved and concentrated in Afghanistan. According to Russian sources, there are about five thousand of them in the north of Afghanistan alone, and according to the UN Security Council (but as of July 2018) – from 3,500 to 4,000 thousand, with a tendency to increase in numbers.
At the same time, IS has accumulated enough money over the years of its stay in Iraq and Syria to acquire drones of any generation if they appeared on the black market. Or they can assemble them on their own, because at one time many citizens of European countries joined the ranks of the Islamic state, some of whom have graduated from Western universities.
While the local section of the Islamic State of Iraq and the Levant – Khorasan Province, (Afghanistan) and the Taliban are engaged in intra-Afghan disassembly. They are not yet particularly interested in Uzbekistan, although IS forces have already appeared and are operating in the area bordering with Turkmenistan. Nonetheless, we do not know what will happen over the next decade, especially in light of the fact that the Americans are already leaving. Soon 5 thousand will leave the country and there will remain a contingent of about 9 thousand US soldiers.
If the Taliban and the current government do not unite against ISIS, it will finally strengthen in Afghanistan, especially in the north of the country. In addition, the direct distance from the northern borders of Afghanistan to the Farish region of the Jizzakh region, where the construction of nuclear power plants is planned, does not exceed 400 km. This is a much shorter distance than that available for battle drones at the disposal of the Hussites (1700 km), and therefore for ISIS in Afghanistan.
Some experts argue that drones, missiles and even air bombs do not pose a threat to nuclear power plants. Indeed, the power unit dome has many layers of durable material. However, terrorists do not have to aim at the reactors themselves. In addition to them, there are other more vulnerable objects for attacks on the territory of the station.
First of all, we are talking about the periodic replacement of nuclear fuel, which occurs once a year or two. It will be necessary to store some of it for refueling the generators somehow, and transport it. Most importantly, spent fuel will be stored at the station for several years in order to cool and decontaminate it, before being sent to its destination. The cooling of discharged nuclear fuel (DNF), which still has radioactive properties, is carried out in special reservoirs, in the so-called swimming-baths (water-cooled power reactor WCPR), and it takes from 2 to 5 years for “redemption” of radioactivity in this fuel.
These swimming-baths, according to some experts, can become the object of drone attacks. The danger of these attacks is that DNF has significant radioactivity due to the content of a large number of fission products. In these reservoirs, water serves as an obstacle to the emission of radiation from discharged fuel. If rapid evaporation of water is achieved (say, under the influence of a long enough ongoing fire), then the consequences will be dire – the environment, including sources of drinking water, will be exposed to radioactive contamination. Renowned American nuclear technology expert Kevin Crowley (the Nuclear and Radiation Studies Board) also raised questions about WCPR’s vulnerability in terms of their safety.
What prevents Uzbekistan from making the most rational decision on development of the energy sector, in the best interests of the country? Apparently not economic considerations dictated the decision to build a nuclear power plant. Understanding the motives behind this decision is possible only on a political plane. This is essentially not an economic decision, but a political one, and it is most likely adopted under foreign policy pressure. This is a project imposed by Moscow contrary to the current and long-term interests of Uzbekistan, opposing to a conscientious analysis and forecast.
This political component becomes even clearer in the light of the news that has just been heard -Shavkat Mirziyoyev gave way on preparing Uzbekistan’s accession to the Eurasian Economic Union. This decision should also be considered in the context of Moscow’s systematic pressure on Uzbekistan in order to tie it to the supranational structures initiated by the Kremlin in various ways.
Since the start of construction of the nuclear power plant is scheduled for 2022, and the state loan for it, promised by the Russian government, has not been allocated and received by Uzbekistan yet, it is not too late to freeze this project. This needs to be done in order to expand its public discourse with experts in various fields of knowledge, as well as with international partners.
First, it is necessary to comprehensively discuss the development strategy of the country’s energy sector, its priorities, taking into account existing needs and resources, as well as global trends in the energy sector. It is necessary to understand why one developed country after another is gradually phasing out its nuclear energy sector. So, as of 2016, countries such as Australia, Austria, Denmark, Greece, Ireland, Italy, Latvia, Liechtenstein, Luxembourg, Malaysia, Malta, New Zealand, Norway, the Philippines and Portugal no longer had their own nuclear power plants. They continue to oppose nuclear power. Belgium, Germany, Spain and Switzerland also abandoned nuclear power, gradually phasing out their nuclear power plants. In the USA, too, they began to curtail nuclear energy, primarily because of their low profitability. Investors simply stop investing in such projects.
It is also necessary to trace trends in other sub-sectors of the energy segment, especially renewable sources, and on this basis to assess the prospects for their use in the climatic conditions of Uzbekistan. Above, we noted the advantages of solar energy, the conditions for which are very favorable in Uzbekistan. In this area, it is necessary to both accelerate and expand its development by including in the energy program the introduction of a system of small solar stations for households, farms, and various social infrastructure facilities. It is necessary to include appropriate adjustments in the standards of civil and industrial construction, so that newly constructed facilities create lightweight opportunities for installing solar panels.
Finally, it is necessary to include in the subject of consideration the possibilities and expediency of purchasing electricity from neighboring countries where the hydropower sector is growing. So, Uzbekistan already buys electricity from Tajikistan and plans to buy 1.6 billion kilowatt / hour of electricity from the latter in 2019, which is almost 200 million more than last year.
At the same time, ongoing external pressure impedes the implementation of a rational approach to energy development. Moreover, in the face of such a check-out, Uzbekistan is vulnerable because of its weak economy and dependence on remittances sent by Uzbek labor migrants from Russia. Nevertheless, the weak economy of the country is made by precisely such poorly thought out and economically unfounded projects as the construction of nuclear power plants. It turns out a vicious circle, which Uzbekistan can break out of only with the political will to follow an independent course in the country’s development. Unfortunately, we do not observe such political will so far.
The opinions expressed in the article do not reflect the position of the editorial board or donor.
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