Ukraine Nuclear Safety Upgrade

Ukraine Nuclear Safety Q & A

What the opponents say – and how the Bank responds

The programme is basically a lifetime extension of nuclear reactors which instead should be shut down.

Nuclear safety is a consideration of the utmost priority at any time  regardless of whether a unit has just been connected to the grid or has been  producing electricity for decades. The upgrade programme includes measures to  address well-known generic safety issues with reactors of this design  irrespective of their age. The K2/R4-project illustrates this approach: The  modernisation and upgrade were implemented even though the units had just been  completed. This shows that safety always comes first for us. Furthermore, the  K2/R4 loan covenanted that a nuclear safety upgrade should be required for all  nuclear units operating in Ukraine. Energoatom has already started this  programme and the EBRD and Euratom are joining now.

Unit 1 at South Ukraine NPP initially did not get a licence beyond 2012.  Does the EBRD have confidence in the independence of Ukraine’s nuclear  regulator?

Energoatom has made a case to the nuclear regulator (SNRIU) for a longer  operation period of SU1 arguing that the design life of the plant had not yet  elapsed. Energoatom provided documentation, including information by the design  institute, to substantiate the claim. After review SNRIU granted the extension  of the licence until the end of the current fuel campaign. Due process was  followed and we have no indication that any pressure was put on the regulator to  influence its decision.

SU1 will go into a long outage at the end of its current licence, Energoatom  will perform (safety and other) upgrades and seek a new licence. We have  confidence that such a request will be duly reviewed by SNRIU and Energoatom  will get a new licence if it can demonstrate that SU1 meets all the  requirements. This process, however, has nothing to do with our project.

The Bank did not use its leverage sufficiently to bring Ukraine to a  commitment to a fixed date for the phasing out of nuclear power production

The Bank has no policy basis for forcing the closure of any source of energy.  The EBRD’s energy policy is mainly geared towards bringing about greater energy  efficiency. However, the Bank has been given a clear mandate by its shareholders  that: “it may provide financing to an operating facility in relation to nuclear  safety improvements” (EBRD Energy Operations Policy). Ukraine is currently  reviewing its own energy strategy but has made it clear that it will continue to  use nuclear power generation. Consequently, addressing the safety issues and  raising of standards is the EBRD’s primary concern and its due role.

Energoatom illegally uses the water cooling reservoir at the South Ukraine  NPP. How does the EBRD’s due diligence address such facts?

South Ukraine NPP does not require additional cooling water for its  operation. It is cooled using aeration ponds and water from the Tashlyk  reservoir, a small reservoir located on a little tributary of Pivdenny Bug. It  does not directly use water from Pivdenny Bug for cooling needs. In parallel,  Energoatom operates a pumped storage scheme for peak energy production with an  upper mini-reservoir located against Tashlyk reservoir and a downstream  reservoir located on Pivdenny Bug named Olexandrivsk. The EBRD’s environmental  assessment did not identify any non-compliance in relation to South Ukraine NPP  or Olexandrivske reservoir.

How confident is the EBRD that Ukraine can bring its nuclear programme in  line with international safety standards?

The fact that the nuclear power plants in Ukraine do not yet fulfil all  international standards and regulations only underlines the crucial importance  of the upgrade programme. A detailed work schedule has been developed which is  due for completion by the end of 2017. The tendering of contracts in accordance  with the EBRD’s Procurement Policies and Rules will ensure a transparent,  competitive and cost-efficient process.

It also has to be mentioned that Ukraine has come a long way in nuclear power  generation. A joint report by the International Atomic Energy Agency, the  European Commission and the government of Ukraine published in February 2010  confirms that in most areas Ukraine complies with international standards. Where  this is not the case the required corrective measures will be implemented now by  the upgrade programme. This programme has been reviewed by leading local and  international independent experts whose additional recommendations have also  been taken into account.

Lastly, it is also important to stress that Ukraine has made substantial  progress with the institution of an independent nuclear regulator. The authority  has won high recognition and respect and the new loan will lead to its further  strengthening which is critical for trust in the nuclear power sector in the  country.

The EBRD should rather invest in renewables and lessen Ukraine’s  dependency on imports of gas and oil and nuclear power.

The Bank is taking a very active role in the promotion of “green” energy in  Ukraine and in many cases serves as a forerunner. In 2012 alone the Bank  invested over €200 million in energy projects based on renewables sources such  as wind or water. At the same time, the Bank is a leading force in the drive to  improve the country’s energy efficiency. Ukraine still has an energy intensity  which is three times higher than the European average. The EBRD therefore  strongly supports the present review of the country’s energy strategy and the  commitment to reach an 11 per cent renewable energy target by 2020.